NOTE 15. 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 for the years ended December 31 (in thousands, except per share and unit amounts) was as follows:

Prologis, Inc.	2017		2016		2015
Net earnings attributable to common stockholders – Basic	$	1,641,931	$	1,203,218	$	862,788
Net earnings attributable to exchangeable limited partnership units (1)		46,280		37,079		13,120
Gains, net of expenses, associated with exchangeable debt assumed exchanged (2)		-		-		(1,614	)
Adjusted net earnings attributable to common stockholders – Diluted	$	1,688,211	$	1,240,297	$	874,294

Weighted average common shares outstanding – Basic		530,400		526,103		521,241
Incremental weighted average effect on exchange of limited partnership units (1)		15,945		16,833		8,569
Incremental weighted average effect of equity awards		5,955		3,730		1,961
Incremental weighted average effect on exchangeable debt assumed exchanged (2)		-		-		2,173
Weighted average common shares outstanding – Diluted (3)		552,300		546,666		533,944

Net earnings per share attributable to common stockholders:
Basic	$	3.10	$	2.29	$	1.66
Diluted	$	3.06	$	2.27	$	1.64

Prologis, L.P.	2017			2016			2015
Net earnings attributable to common unitholders	$	1,686,945		$	1,237,519		$	873,914
Net earnings attributable to Class A convertible common unitholders		(26,642	)		(20,069	)		(3,393	)
Net earnings attributable to common unitholders – Basic		1,660,303			1,217,450			870,521
Net earnings attributable to Class A convertible common unitholders		26,642			20,069			3,393
Net earnings attributable to exchangeable limited partnership units		1,266			2,778			1,994
Gain, net of expenses, associated with exchangeable debt assumed exchanged (2)		-			-			(1,614	)
Adjusted net earnings attributable to common unitholders – Diluted	$	1,688,211		$	1,240,297		$	874,294

Weighted average common partnership units outstanding – Basic		536,335			532,326			525,912
Incremental weighted average effect on exchange of Class A units		8,607			8,775			2,050
Incremental weighted average effect on exchange of limited partnership units		1,403			1,835			1,848
Incremental weighted average effect of equity awards of Prologis, Inc.		5,955			3,730			1,961
Incremental weighted average effect on exchangeable debt assumed exchanged (2)		-			-			2,173
Weighted average common units outstanding – Diluted (3)		552,300			546,666			533,944

Net earnings per unit attributable to common unitholders:
Basic	$	3.10		$	2.29		$	1.66
Diluted	$	3.06		$	2.27		$	1.64

(1)	Earnings allocated to the exchangeable OP units not held by the Parent have been included in the numerator and exchangeable common 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, the exchangeable debt was settled primarily through the issuance of common stock. The adjustment in 2015 assumes the exchange occurred on January 1, 2015.

(3)	Our total potentially dilutive shares and units outstanding for the years ended December 31 consisted of the following:

	2017		2016		2015
Total weighted average potentially dilutive limited partnership units		10,010		10,610		3,898
Total potentially dilutive stock awards		9,183		8,444		7,299
Total weighted average potentially dilutive shares and units from exchangeable debt		-		-		2,173
Prologis, L.P.		19,193		19,054		13,370
Limited partners in Prologis, L.P.		5,935		6,223		4,671
Prologis, Inc.		25,128		25,277		18,041