NOTE 8. 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				Nine Months Ended
	September 30,				September 30,
Prologis, Inc.	2017		2016		2017		2016
Net earnings attributable to common stockholders – Basic	$	876,218	$	279,255	$	1,346,416	$	762,679
Net earnings attributable to redeemable limited partnership unitholders (1)		24,362		7,713		38,127		24,479
Adjusted net earnings attributable to common stockholders – Diluted	$	900,580	$	286,968	$	1,384,543	$	787,158

Weighted average common shares outstanding – Basic		531,288		527,288		530,036		525,462
Incremental weighted average effect on redemption of limited partnership units (1)		15,641		14,568		16,150		17,156
Incremental weighted average effect of equity awards		7,234		5,344		5,432		2,610
Weighted average common shares outstanding – Diluted (2)		554,163		547,200		551,618		545,228

Net earnings per share attributable to common stockholders:
Basic	$	1.65	$	0.53	$	2.54	$	1.45
Diluted	$	1.63	$	0.52	$	2.51	$	1.44

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
Prologis, L.P.	2017			2016			2017			2016
Net earnings attributable to common unitholders	$	900,331		$	286,943		$	1,383,529		$	784,917
Net earnings attributable to Class A common unitholders		(14,233	)		(4,641	)		(21,911	)		(12,769	)
Net earnings attributable to common unitholders – Basic		886,098			282,302			1,361,618			772,148
Net earnings attributable to Class A common unitholders		14,233			4,641			21,911			12,769
Net earnings attributable to limited partnership unitholders		249			25			1,014			2,241
Adjusted net earnings attributable to common unitholders – Diluted	$	900,580		$	286,968		$	1,384,543		$	787,158

Weighted average common partnership units outstanding – Basic		537,257			532,934			536,021			531,985
Incremental weighted average effect on conversion of Class A Units		8,588			8,753			8,625			8,798
Incremental weighted average effect on redemption of limited partnership units into common stock of Prologis, Inc.		1,084			169			1,540			1,835
Incremental weighted average effect of equity awards of Prologis, Inc.		7,234			5,344			5,432			2,610
Weighted average common partnership units outstanding – Diluted (2)		554,163			547,200			551,618			545,228

Net earnings per unit attributable to common unitholders:
Basic	$	1.65		$	0.53		$	2.54		$	1.45
Diluted	$	1.63		$	0.52		$	2.51		$	1.44

(1)

Earnings allocated to the redeemable Operating Partnership units not held by the Parent has been included in the numerator and redeemable 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)	Our total potentially dilutive shares and units outstanding consisted of the following:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Total weighted average potentially dilutive limited partnership units		9,672		10,587		10,166		10,633
Total potentially dilutive stock awards		9,934		9,220		9,038		7,783
Total Prologis, L.P.		19,606		19,807		19,204		18,416
Limited partners in Prologis, L.P.		5,969		5,646		5,984		6,523
Total Prologis, Inc.		25,575		25,453		25,188		24,939