COPT Defense Properties Annual report [Section 13 and 15(d), not S-K Item 405]

Annual report [Section 13 and 15(d), not S-K Item 405]

Earnings Per Share ("EPS")

Earnings Per Share ("EPS")

12 Months Ended

Dec. 31, 2025

Earnings Per Share (“EPS”)

We present both basic and diluted EPS. We compute basic EPS by dividing net income (loss) available to common shareholders allocable to unrestricted common shares by the weighted average number of unrestricted common shares outstanding during the period after allocating undistributed earnings between common shareholders and participating securities under the two-class method. Our participating securities include restricted shares and PIUs and deferred share awards not previously settled by common share issuances. 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.

We compute diluted EPS using the treasury stock method for unvested restricted shares, TB-PIUs and deferred share awards and the if-converted method for exchangeable debt (including our 5.25% Notes), common units, redeemable noncontrolling interests, PB-PIUs, PSUs and vested PIUs and deferred share awards not previously settled by common share issuances.

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 Years Ended December 31,
	2025		2024		2023
Numerator




Net income (loss) attributable to common shareholders	$	152,315	$	138,929	$	(73,469)
Income attributable to share-based compensation awards for basic EPS	(622)		(510)		(1,199)
Numerator for basic EPS on net income (loss) attributable to common shareholders	151,693		138,419		(74,668)

Adjustment to income attributable to share-based compensation awards for diluted EPS	187		89		—




Numerator for diluted EPS on net income (loss) attributable to common shareholders	$	151,880	$	138,508	$	(74,668)

Denominator (all weighted averages)
Denominator for basic EPS (common shares)	112,516		112,296		112,178

Dilutive effect of share-based compensation awards	788		603		—


Denominator for diluted EPS (common shares)	113,304		112,899		112,178




Basic EPS attributable to common shareholders	$	1.35	$	1.23	$	(0.67)



Diluted EPS attributable to common shareholders	$	1.34	$	1.23	$	(0.67)

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 Years Ended December 31,
	2025	2024	2023
Conversion of common units	2,083	1,672	1,509
Conversion of redeemable noncontrolling interests	847	842	969

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 of 432,000 for 2025, 434,000 for 2024 and 416,000 for 2023;

•weighted average TB-PIUs of 236,000 for 2025, 223,000 for 2024 and 175,000 for 2023;

•weighted average PB-PIUs of 629,000 for 2023; and

•weighted average vested PIUs of 215,000 for 2024 and 154,000 for 2023.

As discussed in Note 8, our 5.25% Notes have an exchange settlement feature under which the principal amount of notes exchanged is payable in cash, with the remainder of the exchange obligation, if any, determined based on the exchange price per common share at the time of settlement, payable in cash, common shares or a combination thereof at our election. These notes did not affect our diluted EPS reported above since the weighted average closing price of our common shares for the years ended December 31, 2025, 2024 and 2023 was less than the exchange price applicable to those periods.