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 the three months ended March 31, 2018 and 2017, we had 0.3 million and 0.2 million weighted average unvested shares outstanding, respectively, 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 for the three months ended March 31, 2018, and no anti-dilutive stock options for the three months ended March 31, 2017. 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.



	Three Months Ended
	March 31,
	2018			2017
	(In thousands, except per share data)
NUMERATOR
Income from continuing operations	$	59,615		$	57,892
Less: Preferred share dividends	(2,010		)	(135		)
Less: Income from continuing operations attributable to noncontrolling interests	(1,684		)	(1,772		)
Less: Earnings allocated to unvested shares	(253		)	(235		)
Income from continuing operations available for common shareholders	55,668			55,750
Gain on sale of real estate, net	3,316			70
Net income available for common shareholders, basic and diluted	$	58,984		$	55,820
DENOMINATOR
Weighted average common shares outstanding—basic	72,905			71,862
Stock options	63			143
Weighted average common shares outstanding—diluted	72,968			72,005

EARNINGS PER COMMON SHARE, BASIC:
Net income available for common shareholders	$	0.81		$	0.78
EARNINGS PER COMMON SHARE, DILUTED:
Net income available for common shareholders	$	0.81		$	0.78
Income from continuing operations attributable to the Trust	$	57,931		$	56,120