EARNINGS PER SHARE OR UNIT
Basic earnings per share or unit is calculated based on the weighted average number of common shares or units outstanding during the period. Diluted earnings per share or unit is calculated based on the weighted average number of common shares or units outstanding during the period combined with the incremental weighted average common shares or units that would have been outstanding assuming the conversion of all potentially dilutive common shares or units into common shares or units as of the earliest date possible.
Potentially dilutive securities include (i) outstanding options to acquire common shares; (ii) Limited Partner Units, which may be exchanged for either cash or common shares at the Parent Company’s option and under certain circumstances; (iii) AO LTIP Units; (iv) deferred common share units, which may be credited to the personal accounts of members of the Board of Trustees in lieu of compensation paid in cash or the issuance of common shares to such trustees, and (v) common shares issuable upon the exchange of the Company’s Exchangeable Notes. The Company calculates the potential dilutive effect of the Exchangeable Notes under the if-converted method, which considers only the amounts settled in excess of the principal in diluted earnings per share as the principal must be paid in cash. Limited Partner Units have been omitted from the Parent Company’s denominator for the purpose of computing diluted earnings per share since the effect of including those amounts in the denominator would have no dilutive impact. Weighted average Limited Partner Units outstanding were 4.8 million, 3.8 million, and 3.2 million for the years ended December 31, 2025, 2024 and 2023, respectively.
The following table summarizes the calculation of basic and diluted earnings per share for the Parent Company for the years ended December 31, 2025, 2024 and 2023. We have omitted the calculation of basic and diluted earnings per unit since the dilutive securities for the Operating Partnership are the same as those for the Parent Company (dollars in thousands, except per share data):
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2025 | | 2024 | | 2023 |
| Numerator: | | | | | |
| Net income attributable to common shareholders – basic and diluted | $ | 298,663 | | | $ | 4,071 | | | $ | 47,498 | |
| | | | | |
| Denominator: | | | | | |
| Weighted average common shares outstanding – basic | 218,310,451 | | | 219,614,149 | | | 219,344,832 | |
| Effect of dilutive securities: | | | | | |
| AO LTIP Units | 38,404 | | | 43,331 | | | 325,603 | |
| Deferred common share units | 80,618 | | | 70,016 | | | 57,848 | |
| Exchangeable Notes | — | | | — | | | — | |
| Weighted average common shares outstanding – diluted | 218,429,473 | | | 219,727,496 | | | 219,728,283 | |
| | | | | |
| Net income per common share – basic | $ | 1.37 | | | $ | 0.02 | | | $ | 0.22 | |
| Net income per common share – diluted | $ | 1.37 | | | $ | 0.02 | | | $ | 0.22 | |
About Earnings Per Share Disclosures
The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.
Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.