EARNINGS PER SHARE

We have calculated earnings per share (“EPS”) under the two-class method. The two-class method is an earnings allocation methodology whereby EPS for each class of common stock and participating securities is calculated according to dividends declared and participation rights in undistributed earnings. For 2017, 2016, and 2015 we had 0.2 million weighted average unvested shares outstanding, which are considered participating securities. Therefore, we have allocated our earnings for basic and diluted EPS between common shares and unvested shares; the portion of earnings allocated to the unvested shares is reflected as “earnings allocated to unvested shares” in the reconciliation below.

In the dilutive EPS calculation, dilutive stock options were calculated using the treasury stock method consistent with prior periods. There were 682 anti-dilutive stock options in 2017, and no anti-dilutive stock options in 2016 or 2015. The conversions of downREIT operating partnership units and 5.417% Series 1 Cumulative Convertible Preferred Shares are anti-dilutive for all periods presented and accordingly, have been excluded from the weighted average common shares used to compute diluted EPS.



	Year Ended December 31,
	2017			2016			2015
	(In thousands, except per share data)
NUMERATOR
Income from continuing operations	$	219,948		$	226,425		$	190,094
Less: Preferred share dividends	(2,458		)	(541		)	(541		)
Less: Income from continuing operations attributable to noncontrolling interests	(7,666		)	(7,648		)	(8,205		)
Less: Earnings allocated to unvested shares	(942		)	(702		)	(797		)
Income from continuing operations available for common shareholders	208,882			217,534			180,551
Gain on sale of real estate and change in control of interests, net	77,632			31,133			28,330
Net income available for common shareholders, basic and diluted	$	286,514		$	248,667		$	208,881
DENOMINATOR
Weighted average common shares outstanding—basic	72,117			70,877			68,797
Effect of dilutive securities:
Stock options	116			172			184
Weighted average common shares outstanding—diluted	72,233			71,049			68,981

EARNINGS PER COMMON SHARE, BASIC
Net income available for common shareholders	$	3.97		$	3.51		$	3.04
EARNINGS PER COMMON SHARE, DILUTED
Net income available for common shareholders	$	3.97		$	3.50		$	3.03
Income from continuing operations attributable to the Trust	$	212,282		$	218,777		$	181,889