Quarterly report pursuant to Section 13 or 15(d)

Earnings Per Share ("EPS") and Earnings Per Unit ("EPU")

v2.4.0.8
Earnings Per Share ("EPS") and Earnings Per Unit ("EPU")
9 Months Ended
Sep. 30, 2014
Earnings Per Share [Abstract]  
Earnings Per Share (“EPS”) and Earnings Per Unit (“EPU”)
Earnings Per Share (“EPS”) and Earnings Per Unit (“EPU”)
 
COPT and Subsidiaries EPS

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 COPT common shares were converted; and (2) the effect of dilutive potential common shares outstanding during the period attributable to share-based compensation using the treasury stock or if-converted 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 added 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 September 30,
 
For the Nine Months Ended September 30,
 
2014
 
2013
 
2014
 
2013
Numerator:
 

 
 

 
 
 
 
Income from continuing operations
$
13,727

 
$
10,974

 
$
28,635

 
$
22,404

Gain on sales of real estate, net
10,630

 

 
10,630

 
2,683

Preferred share dividends
(3,553
)
 
(4,490
)
 
(12,387
)
 
(15,481
)
Issuance costs associated with redeemed preferred shares

 

 
(1,769
)
 
(2,904
)
Income from continuing operations attributable to noncontrolling interests
(1,820
)
 
(1,456
)
 
(3,923
)
 
(2,710
)
Income from continuing operations attributable to restricted shares
(103
)
 
(97
)
 
(332
)
 
(317
)
Numerator for basic and diluted EPS from continuing operations attributable to COPT common shareholders
$
18,881

 
$
4,931

 
$
20,854

 
$
3,675

Discontinued operations
191

 
(12,974
)
 
4

 
(16,215
)
Discontinued operations attributable to noncontrolling interests
(8
)
 
492

 
5

 
529

Numerator for basic and diluted EPS on net income (loss) attributable to COPT common shareholders
$
19,064

 
$
(7,551
)
 
$
20,863

 
$
(12,011
)
Denominator (all weighted averages):
 

 
 

 
 
 
 
Denominator for basic EPS (common shares)
87,290

 
86,760

 
87,196

 
84,547

Dilutive effect of share-based compensation awards
195

 

 
169

 

Denominator for diluted EPS (common shares)
87,485

 
86,760

 
87,365

 
84,547

Basic EPS:
 

 
 

 
 
 
 
Income from continuing operations attributable to COPT common shareholders
$
0.22

 
$
0.06

 
$
0.24

 
$
0.04

Discontinued operations attributable to COPT common shareholders
0.00

 
(0.15
)
 
0.00

 
(0.18
)
Net income (loss) attributable to COPT common shareholders
$
0.22

 
$
(0.09
)
 
$
0.24

 
$
(0.14
)
Diluted EPS:
 

 
 

 
 
 
 
Income from continuing operations attributable to COPT common shareholders
$
0.22

 
$
0.06

 
$
0.24

 
$
0.04

Discontinued operations attributable to COPT common shareholders
0.00

 
(0.15
)
 
0.00

 
(0.18
)
Net income (loss) attributable to COPT common shareholders
$
0.22

 
$
(0.09
)
 
$
0.24

 
$
(0.14
)

 
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 September 30,
 
For the Nine Months Ended September 30,
 
2014
 
2013
 
2014
 
2013
Conversion of common units
3,876

 
3,804

 
3,915

 
3,832

Conversion of Series I Preferred Units
176

 
176

 
176

 
176

Conversion of Series K Preferred Shares
434

 
434

 
434

 
434


 
The following share-based compensation securities were excluded from the computation of diluted EPS because their effect was antidilutive:
 
weighted average restricted shares for the three months ended September 30, 2014 and 2013 of 401,000 and 377,000, respectively, and for the nine months ended September 30, 2014 and 2013 of 404,000 and 388,000, respectively; and
weighted average options for the three months ended September 30, 2014 and 2013 of 490,000 and 613,000, respectively, and for the nine months ended September 30, 2014 and 2013 of 495,000 and 571,000, respectively.

As discussed in Note 8, we have outstanding senior notes that have an exchange settlement feature, but such notes did not affect our diluted EPS reported above since the weighted average closing price of COPT’s common shares during each of the periods was less than the exchange prices per common share applicable for such periods.

COPLP and Subsidiaries EPU

We present both basic and diluted EPU.  We compute basic EPU by dividing net income available to common unitholders allocable to unrestricted common units under the two-class method by the weighted average number of unrestricted common units outstanding during the period.  Our computation of diluted EPU is similar except that:
 
the denominator is increased to include: (1) the weighted average number of potential additional common units that would have been outstanding if securities that are convertible into our common units were converted; and (2) the effect of dilutive potential common units outstanding during the period attributable to share-based compensation using the treasury stock or if-converted methods; and
the numerator is adjusted to add back any changes in income or loss that would result from the assumed conversion into common units that we added to the denominator.

Summaries of the numerator and denominator for purposes of basic and diluted EPU calculations are set forth below (in thousands, except per unit data):
 
For the Three Months Ended September 30,
 
For the Nine Months Ended September 30,
 
2014
 
2013
 
2014
 
2013
Numerator:
 

 
 

 
 
 
 
Income from continuing operations
$
13,727

 
$
10,974

 
$
28,635

 
$
22,404

Gain on sales of real estate, net
10,630

 

 
10,630

 
2,683

Preferred unit distributions
(3,718
)
 
(4,655
)
 
(12,882
)
 
(15,976
)
Issuance costs associated with redeemed preferred units

 

 
(1,769
)
 
(2,904
)
Income from continuing operations attributable to noncontrolling interests
(897
)
 
(986
)
 
(2,476
)
 
(2,025
)
Income from continuing operations attributable to restricted units
(103
)
 
(97
)
 
(332
)
 
(317
)
Numerator for basic and diluted EPU from continuing operations attributable to COPLP common unitholders
$
19,639

 
$
5,236

 
$
21,806

 
$
3,865

Discontinued operations
191

 
(12,974
)
 
4

 
(16,215
)
Discontinued operations attributable to noncontrolling interests

 
(49
)
 
5

 
(147
)
Numerator for basic and diluted EPU on net income attributable to COPLP common unitholders
$
19,830

 
$
(7,787
)
 
$
21,815

 
$
(12,497
)
Denominator (all weighted averages):
 

 
 

 
 
 
 
Denominator for basic EPU (common units)
91,166

 
90,564

 
91,111

 
88,379

Dilutive effect of share-based compensation awards
195

 

 
169

 

Denominator for basic and diluted EPU (common units)
91,361

 
90,564

 
91,280

 
88,379

Basic EPU:
 

 
 

 
 
 
 
Income from continuing operations attributable to COPLP common unitholders
$
0.22

 
$
0.06

 
$
0.24

 
$
0.04

Discontinued operations attributable to COPLP common unitholders
0.00

 
(0.15
)
 
0.00

 
(0.18
)
Net income (loss) attributable to COPLP common unitholders
$
0.22

 
$
(0.09
)
 
$
0.24

 
$
(0.14
)
Diluted EPU:
 

 
 

 
 
 
 
Income from continuing operations attributable to COPLP common unitholders
$
0.22

 
$
0.06

 
$
0.24

 
$
0.04

Discontinued operations attributable to COPLP common unitholders
0.00

 
(0.15
)
 
0.00

 
(0.18
)
Net income (loss) attributable to COPLP common unitholders
$
0.22

 
$
(0.09
)
 
$
0.24

 
$
(0.14
)

 
Our diluted EPU computations do not include the effects of the following securities since the conversions of such securities would increase diluted EPU for the respective periods (in thousands):
 
Weighted Average Units Excluded from Denominator
 
For the Three Months Ended September 30,
 
For the Nine Months Ended September 30,
 
2014
 
2013
 
2014
 
2013
Conversion of Series I preferred units
176

 
176

 
176

 
176

Conversion of Series K preferred units
434

 
434

 
434

 
434


 
The following share-based compensation securities were excluded from the computation of diluted EPU because their effect was antidilutive:
 
weighted average restricted units for the three months ended September 30, 2014 and 2013 of 401,000 and 377,000, respectively, and for the nine months ended September 30, 2014 and 2013 of 404,000 and 388,000, respectively; and
weighted average options for the three months ended September 30, 2014 and 2013 of 490,000 and 613,000, respectively, and for the nine months ended September 30, 2014 and 2013 of 495,000 and 571,000, respectively.
 
As discussed in Note 8, we have outstanding senior notes that have an exchange settlement feature, but such notes did not affect our diluted EPU reported above since the weighted average closing price of COPT’s common shares during each of the periods was less than the exchange prices per common share applicable for such periods.