Quarterly report pursuant to Section 13 or 15(d)

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

v3.2.0.727
Earnings Per Share ("EPS") and Earnings Per Unit ("EPU")
6 Months Ended
Jun. 30, 2015
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 June 30,
 
For the Six Months Ended June 30,
 
2015
 
2014
 
2015
 
2014
Numerator:
 

 
 

 
 
 
 
Income from continuing operations
$
16,839

 
$
9,248

 
$
27,826

 
$
14,908

Gain on sales of real estate, net
(1
)
 

 
3,985

 

Preferred share dividends
(3,553
)
 
(4,344
)
 
(7,105
)
 
(8,834
)
Issuance costs associated with redeemed preferred shares

 
(1,769
)
 

 
(1,769
)
Income from continuing operations attributable to noncontrolling interests
(1,436
)
 
(1,171
)
 
(2,828
)
 
(2,103
)
Income from continuing operations attributable to share-based compensation awards
(113
)
 
(108
)
 
(235
)
 
(229
)
Numerator for basic and diluted EPS from continuing operations attributable to COPT common shareholders
$
11,736

 
$
1,856

 
$
21,643

 
$
1,973

Discontinued operations
394

 
(198
)
 
156

 
(187
)
Discontinued operations attributable to noncontrolling interests
(15
)
 
11

 
(3
)
 
13

Numerator for basic and diluted EPS on net income attributable to COPT common shareholders
$
12,115

 
$
1,669

 
$
21,796

 
$
1,799

Denominator (all weighted averages):
 

 
 

 
 
 
 
Denominator for basic EPS (common shares)
94,128

 
87,214

 
93,666

 
87,148

Dilutive effect of share-based compensation awards
35

 
201

 
114

 
156

Denominator for diluted EPS (common shares)
94,163

 
87,415

 
93,780

 
87,304

Basic EPS:
 

 
 

 
 
 
 
Income from continuing operations attributable to COPT common shareholders
$
0.13

 
$
0.02

 
$
0.23

 
$
0.02

Discontinued operations attributable to COPT common shareholders
0.00

 
0.00

 
0.00

 
0.00

Net income attributable to COPT common shareholders
$
0.13

 
$
0.02

 
$
0.23

 
$
0.02

Diluted EPS:
 

 
 

 
 
 
 
Income from continuing operations attributable to COPT common shareholders
$
0.13

 
$
0.02

 
$
0.23

 
$
0.02

Discontinued operations attributable to COPT common shareholders
0.00

 
0.00

 
0.00

 
0.00

Net income attributable to COPT common shareholders
$
0.13

 
$
0.02

 
$
0.23

 
$
0.02


 
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 June 30,
 
For the Six Months Ended June 30,
 
2015
 
2014
 
2015
 
2014
Conversion of common units
3,680

 
3,912

 
3,706

 
3,934

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 effects were antidilutive:
 
weighted average restricted shares and deferred share awards for the three months ended June 30, 2015 and 2014 of 426,000 and 420,000, respectively, and for the six months ended June 30, 2015 and 2014 of 413,000 and 405,000, respectively; and
weighted average options for the three months ended June 30, 2015 and 2014 of 473,000 and 496,000, respectively, and for the six months ended June 30, 2015 and 2014 of 472,000 and 512,000, respectively.

As discussed in Note 9, we had outstanding senior notes, which we redeemed in April 2015, with 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 June 30,
 
For the Six Months Ended June 30,
 
2015
 
2014
 
2015
 
2014
Numerator:
 

 
 

 
 
 
 
Income from continuing operations
$
16,839

 
$
9,248

 
$
27,826

 
$
14,908

Gain on sales of real estate, net
(1
)
 

 
3,985

 

Preferred unit distributions
(3,718
)
 
(4,509
)
 
(7,435
)
 
(9,164
)
Issuance costs associated with redeemed preferred units

 
(1,769
)
 

 
(1,769
)
Income from continuing operations attributable to noncontrolling interests
(812
)
 
(840
)
 
(1,633
)
 
(1,579
)
Income from continuing operations attributable to share-based compensation awards
(113
)
 
(108
)
 
(235
)
 
(229
)
Numerator for basic and diluted EPU from continuing operations attributable to COPLP common unitholders
$
12,195

 
$
2,022

 
$
22,508

 
$
2,167

Discontinued operations
394

 
(198
)
 
156

 
(187
)
Discontinued operations attributable to noncontrolling interests

 
3

 
3

 
5

Numerator for basic and diluted EPU on net income attributable to COPLP common unitholders
$
12,589

 
$
1,827

 
$
22,667

 
$
1,985

Denominator (all weighted averages):
 

 
 

 
 
 
 
Denominator for basic EPU (common units)
97,808

 
91,126

 
97,372

 
91,082

Dilutive effect of share-based compensation awards
35

 
201

 
114

 
156

Denominator for basic and diluted EPU (common units)
97,843

 
91,327

 
97,486

 
91,238

Basic EPU:
 

 
 

 
 
 
 
Income from continuing operations attributable to COPLP common unitholders
$
0.13

 
$
0.02

 
$
0.23

 
$
0.02

Discontinued operations attributable to COPLP common unitholders
0.00

 
0.00

 
0.00

 
0.00

Net income attributable to COPLP common unitholders
$
0.13

 
$
0.02

 
$
0.23

 
$
0.02

Diluted EPU:
 

 
 

 
 
 
 
Income from continuing operations attributable to COPLP common unitholders
$
0.13

 
$
0.02

 
$
0.23

 
$
0.02

Discontinued operations attributable to COPLP common unitholders
0.00

 
0.00

 
0.00

 
0.00

Net income attributable to COPLP common unitholders
$
0.13

 
$
0.02

 
$
0.23

 
$
0.02


 
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 June 30,
 
For the Six Months Ended June 30,
 
2015
 
2014
 
2015
 
2014
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 effects were antidilutive:
 
weighted average restricted units and deferred share awards for the three months ended June 30, 2015 and 2014 of 426,000 and 420,000, respectively, and for the six months ended June 30, 2015 and 2014 of 413,000 and 405,000, respectively; and
weighted average options for the three months ended June 30, 2015 and 2014 of 473,000 and 496,000, respectively, and for the six months ended June 30, 2015 and 2014 of 472,000 and 512,000, respectively.
 
As discussed in Note 9, we had outstanding senior notes, which we redeemed in April 2015, with 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.