Annual report pursuant to Section 13 and 15(d)

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

v2.4.1.9
Earnings Per Share ("EPS") and Earnings Per Unit (“EPU”)
12 Months Ended
Dec. 31, 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 Years Ended December 31,
 
 
2014
 
2013
 
2012
Numerator:
 
 
 
 
 
 
Income from continuing operations
 
$
34,509

 
$
36,836

 
$
7,967

Gain on sales of real estate, net
 
10,671

 
9,016

 
21

Preferred share dividends
 
(15,939
)
 
(19,971
)
 
(20,844
)
Issuance costs associated with redeemed preferred shares
 
(1,769
)
 
(2,904
)
 
(1,827
)
(Income) loss from continuing operations attributable to noncontrolling interests
 
(4,955
)
 
(4,486
)
 
1,309

Income from continuing operations attributable to restricted shares
 
(432
)
 
(414
)
 
(469
)
Numerator for basic and diluted EPS from continuing operations attributable to COPT common shareholders
 
$
22,085

 
$
18,077

 
$
(13,843
)
Discontinued operations
 
26

 
55,692

 
12,353

Discontinued operations attributable to noncontrolling interests
 
4

 
(3,351
)
 
(673
)
Numerator for basic and diluted EPS on net income (loss)attributable to COPT common shareholders
 
$
22,115

 
$
70,418

 
$
(2,163
)
Denominator (all weighted averages):
 
 
 
 
 
 
Denominator for basic EPS (common shares)
 
88,092

 
85,167

 
73,454

Dilutive effect of share-based compensation awards
 
171

 
57

 

Denominator for basic and diluted EPS (common shares)
 
88,263

 
85,224

 
73,454

Basic EPS:
 
 
 
 
 
 
Income (loss) from continuing operations attributable to COPT common shareholders
 
$
0.25

 
$
0.21

 
$
(0.19
)
Discontinued operations attributable to COPT common shareholders
 

 
0.62

 
0.16

Net income (loss) attributable to COPT common shareholders
 
$
0.25

 
$
0.83

 
$
(0.03
)
Diluted EPS:
 
 
 
 
 
 
Income (loss) from continuing operations attributable to COPT common shareholders
 
$
0.25

 
$
0.21

 
$
(0.19
)
Discontinued operations attributable to COPT common shareholders
 

 
0.62

 
0.16

Net income (loss) attributable to COPT common shareholders
 
$
0.25

 
$
0.83

 
$
(0.03
)

 
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,
 
 
2014
 
2013
 
2012
Conversion of common units
 
3,897

 
3,869

 
4,235

Conversion of Series I preferred units
 
176

 
176

 
176

Conversion of Series K preferred shares
 
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 of 401,000 for 2014, 385,000 for 2013 and 461,000 for 2012; and
weighted average options of 492,000 for 2014, 636,000 for 2013 and 772,000 for 2012, respectively.
 
As discussed in Note 11, 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 Years Ended December 31,
 
 
2014
 
2013
 
2012
Numerator:
 
 
 
 
 
 
Income from continuing operations
 
$
34,509

 
$
36,836

 
$
7,967

Gain on sales of real estate, net
 
10,671

 
9,016

 
21

Preferred unit distributions
 
(16,599
)
 
(20,631
)
 
(21,504
)
Issuance costs associated with redeemed preferred units
 
(1,769
)
 
(2,904
)
 
(1,827
)
(Income) loss from continuing operations attributable to noncontrolling interests
 
(3,281
)
 
(2,977
)
 
1,206

Income from continuing operations attributable to restricted units
 
(432
)
 
(414
)
 
(469
)
Numerator for basic and diluted EPU from continuing operations attributable to COPLP common unitholders
 
$
23,099

 
$
18,926

 
$
(14,606
)
Discontinued operations
 
26

 
55,692

 
12,353

Discontinued operations attributable to noncontrolling interests
 
5

 
(930
)
 
(699
)
Numerator for basic and diluted EPU on net income (loss) attributable to COPLP common unitholders
 
$
23,130

 
$
73,688

 
$
(2,952
)
Denominator (all weighted averages):
 
 
 
 
 
 
Denominator for basic EPU (common units)
 
91,989

 
89,036

 
77,689

Dilutive effect of share-based compensation awards
 
171

 
57

 

Denominator for basic and diluted EPU (common units)
 
92,160

 
89,093

 
77,689

Basic EPU:
 
 
 
 
 
 
Income (loss) from continuing operations attributable to COPLP common unitholders
 
$
0.25

 
$
0.21

 
$
(0.19
)
Discontinued operations attributable to COPLP common unitholders
 

 
0.62

 
0.15

Net income (loss) attributable to COPLP common unitholders
 
$
0.25

 
$
0.83

 
$
(0.04
)
Diluted EPU:
 
 
 
 
 
 
Income (loss) from continuing operations attributable to COPLP common unitholders
 
$
0.25

 
$
0.21

 
$
(0.19
)
Discontinued operations attributable to COPLP common unitholders
 

 
0.62

 
0.15

Net income (loss) attributable to COPLP common unitholders
 
$
0.25

 
$
0.83

 
$
(0.04
)


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 Years Ended December 31,
 
 
2014
 
2013
 
2012
Conversion of Series I preferred units
 
176

 
176

 
176

Conversion of Series K preferred units
 
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 of 401,000 for 2014, 385,000 for 2013 and 461,000 for 2012; and
weighted average options of 492,000 for 2014, 636,000 for 2013 and 772,000 for 2012.
 
As discussed in Note 11, 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.