COPT Defense Properties Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Earnings Per Share ("EPS")

Earnings Per Share ("EPS")

3 Months Ended

Mar. 31, 2022

We present both basic and diluted EPS. We compute basic EPS by dividing net income available to common shareholders allocable to unrestricted common shares under the two-class method by the weighted average number of unrestricted common shares outstanding during the period. Our computation of diluted EPS is similar except that:

•the denominator is increased to include: (1) the weighted average number of potential additional common shares that would have been outstanding if securities that are convertible into common shares were converted; and (2) the effect of dilutive

potential common shares outstanding during the period attributable to redeemable noncontrolling interests and share-based compensation awards using the if-converted or treasury stock methods; and

•the numerator is adjusted to add back any changes in income or loss that would result from the assumed conversion into common shares that we add to the denominator.

Summaries of the numerator and denominator for purposes of basic and diluted EPS calculations are set forth below (in thousands, except per share data):


	For the Three Months Ended March 31,
		2022		2021
Numerator:
Income (loss) from continuing operations		$	31,251	$	(6,894)
Income from continuing operations attributable to noncontrolling interests		(1,084)		(580)
Income from continuing operations attributable to share-based compensation awards for basic EPS		(116)		(172)
Numerator for basic EPS from continuing operations attributable to COPT common shareholders		30,051		(7,646)

Redeemable noncontrolling interests		(39)		—


Adjustment to income from continuing operations attributable to share-based compensation awards for diluted EPS		18		—
Numerator for diluted EPS from continuing operations attributable to COPT common shareholders		30,030		(7,646)
Discontinued operations		29,573		815
Discontinued operations attributable to noncontrolling interests		(421)		(10)
Income from discontinued operations attributable to share-based compensation awards for diluted EPS		(83)		2
Numerator for diluted EPS on net income (loss) attributable to COPT common shareholders		$	59,099	$	(6,839)

Denominator (all weighted averages):
Denominator for basic EPS (common shares)		112,020		111,888


Dilutive effect of redeemable noncontrolling interests		132		—
Dilutive effect of share-based compensation awards		426		—
Denominator for diluted EPS (common shares)		112,578		111,888

Basic EPS:
Income (loss) from continuing operations attributable to COPT common shareholders		$	0.27	$	(0.07)
Discontinued operations attributable to COPT common shareholders		0.26		0.01
Net income (loss) attributable to COPT common shareholders		$	0.53	$	(0.06)
Diluted EPS:
Income (loss) from continuing operations attributable to COPT common shareholders		$	0.27	$	(0.07)
Discontinued operations attributable to COPT common shareholders		0.25		0.01
Net income (loss) attributable to COPT common shareholders		$	0.52	$	(0.06)

Our diluted EPS computations do not include the effects of the following securities since the conversions of such securities would increase diluted EPS for the respective periods (in thousands):


		Weighted Average Shares Excluded from Denominator
	For the Three Months Ended March 31,
			2022	2021
Conversion of common units			1,384	1,246
Conversion of redeemable noncontrolling interests			806	940

The following securities were also excluded from the computation of diluted EPS because their effect was antidilutive:

•weighted average restricted shares and deferred share awards for the three months ended March 31, 2022 and 2021 of 399,000 and 419,000, respectively;

•weighted average TB-PIUs for the three months ended March 31, 2022 and 2021 of 172,000 and 131,000, respectively; and

•weighted average PB-PIUs for the three months ended March 31, 2021 of 228,000.