NOTE 10. EARNINGS PER COMMON SHARE OR UNIT

We determine basic earnings per share or unit based on the weighted average number of shares of common stock or units outstanding during the period. We compute diluted earnings per share or unit based on the weighted average number of shares or units outstanding combined with the incremental weighted average effect from all outstanding potentially dilutive instruments.

The computation of our basic and diluted earnings per share and unit (in thousands, except per share and unit amounts) is as follows:

	Three Months Ended
	March 31,
Prologis, Inc.	2016		2015
Net earnings attributable to common stockholders – Basic	$	208,041	$	345,206
Net earnings attributable to exchangeable limited partnership units (1)		6,609		1,650
Gains, net of expenses, associated with exchangeable debt assumed exchanged (2)		-		(1,614	)
Adjusted net earnings attributable to common stockholders – Diluted	$	214,650	$	345,242

Weighted average common shares outstanding – Basic (3)		524,205		514,022
Incremental weighted average effect on exchange of limited partnership units (1)		17,543		3,794
Incremental weighted average effect of equity awards		1,814		2,394
Incremental weighted average effect on exchangeable debt assumed exchanged (2)		-		8,812
Weighted average common shares outstanding – Diluted (4)		543,562		529,022

Net earnings per share attributable to common stockholders:
Basic	$	0.40	$	0.67
Diluted	$	0.39	$	0.65

	Three Months Ended
	March 31,
Prologis, L.P.	2016			2015
Net earnings attributable to common unitholders	$	214,275		$	346,488
Net earnings attributable to Class A convertible common unitholders		(3,510	)		-
Net earnings attributable to common unitholders – Basic	$	210,765		$	346,488
Net earnings attributable to Class A convertible common unitholders		3,510			-
Net earnings attributable to exchangeable limited partnership units		375			368
Gains, net of expenses, associated with exchangeable debt assumed exchanged (2)		-			(1,614	)
Adjusted net earnings attributable to common unitholders – Diluted	$	214,650		$	345,242

Weighted average common partnership units outstanding – Basic (3)		531,070			515,931
Incremental weighted average effect on exchange of Class A convertible units		8,844			-
Incremental weighted average effect on exchange of limited partnership units		1,834			1,885
Incremental weighted average effect of equity awards of Prologis, Inc.		1,814			2,394
Incremental weighted average effect on exchangeable debt assumed exchanged (2)		-			8,812
Weighted average common partnership units outstanding – Diluted (4)		543,562			529,022

Net earnings per unit attributable to common unitholders:
Basic	$	0.40		$	0.67
Diluted	$	0.39		$	0.65

(1)

Earnings allocated to the exchangeable Operating Partnership units not held by the Parent has been included in the numerator and exchangeable Operating Partnership units have been included in the denominator for the purpose of computing diluted earnings per share for all periods as the per share and unit amount is the same.

(2)	In March 2015, we had exchangeable debt that was settled primarily through the issuance of common stock. The adjustment in 2015 assumes the exchange occurred on January 1, 2015.

(3)	The increase in shares and units between the periods is primarily due the at-the-market program activity in early 2015 and the conversion of exchangeable debt to shares and units in March 2015.

(4)	Our total potentially dilutive shares and units outstanding consisted of the following:

	Three Months Ended
	March 31,
	2016		2015
Total weighted average potentially dilutive limited partnership units		10,678		1,885
Total potentially dilutive stock awards		6,565		7,391
Total weighted average potentially dilutive shares and units from exchangeable debt		-		8,812
Total Prologis, L.P.		17,243		18,088
Limited partners in Prologis, L.P.		6,865		1,909
Total Prologis, Inc.		24,108		19,997