15.

EARNINGS PER SHARE

The following table calculates the Company’s earnings per share (“EPS”) and provides a reconciliation of net loss from continuing operations and the number of common shares used in the computations of “basic” EPS, which utilizes the weighted-average number of common shares outstanding without regard to dilutive potential common shares, and “diluted” EPS, which includes all such shares (in thousands, except per share amounts):


	Three-Month Periods Ended June 30,						Six-Month Periods Ended June 30,
	2013			2012			2013			2012
Basic Earnings:
Continuing Operations:
Loss from continuing operations	$	(19,288	)	$	(8,511	)	$	(9,342	)	$	(7,022	)
Plus: (Loss) gain on disposition of real estate		(1,525	)		5,234			(1,582	)		5,899
Plus: Loss attributable to non-controlling interests		(195	)		(120	)		(386	)		(296	)

Loss from continuing operations attributable to DDR		(21,008	)		(3,397	)		(11,310	)		(1,419	)
Write-off of preferred share original issuance costs		(5,246	)		—			(5,246	)		—
Preferred dividends		(7,475	)		(6,967	)		(14,505	)		(13,934	)

Basic—Loss from continuing operations attributable to DDR common shareholders		(33,729	)		(10,364	)		(31,061	)		(15,353	)
Less: Earnings attributable to unvested shares and operating partnership units		(359	)		(308	)		(722	)		(600	)

Basic—Loss from continuing operations	$	(34,088	)	$	(10,672	)	$	(31,783	)	$	(15,953	)

Discontinued Operations:
Basic—Loss from discontinued operations		(2,305	)		(34,103	)		(5,700	)		(51,138	)

Basic—Net loss attributable to DDR common shareholders after allocation to participating securities	$	(36,393	)	$	(44,775	)	$	(37,483	)	$	(67,091	)


Diluted Earnings:
Continuing Operations:
Basic—Loss from continuing operations	$	(33,729	)	$	(10,364	)	$	(31,061	)	$	(15,353	)
Less: Earnings attributable to unvested shares and operating partnership units		(359	)		(308	)		(722	)		(600	)

Diluted—Loss from continuing operations		(34,088	)		(10,672	)		(31,783	)		(15,953	)

Discontinued Operations:
Basic—Loss from discontinued operations		(2,305	)		(34,103	)		(5,700	)		(51,138	)

Diluted—Net loss attributable to DDR common shareholders after allocation to participating securities	$	(36,393	)	$	(44,775	)	$	(37,483	)	$	(67,091	)


Number of Shares:
Basic and diluted—Average shares outstanding		316,967			280,390			315,110			277,802


Basic Earnings Per Share:
Loss from continuing operations attributable to DDR common shareholders	$	(0.11	)	$	(0.04	)	$	(0.10	)	$	(0.06	)
Loss from discontinued operations attributable to DDR common shareholders		—			(0.12	)		(0.02	)		(0.18	)

Net loss attributable to DDR common shareholders	$	(0.11	)	$	(0.16	)	$	(0.12	)	$	(0.24	)


Dilutive Earnings Per Share:
Loss from continuing operations attributable to DDR common shareholders	$	(0.11	)	$	(0.04	)	$	(0.10	)	$	(0.06	)
Loss from discontinued operations attributable to DDR common shareholders		—			(0.12	)		(0.02	)		(0.18	)

Net loss attributable to DDR common shareholders	$	(0.11	)	$	(0.16	)	$	(0.12	)	$	(0.24	)

The following potentially dilutive securities are considered in the calculation of EPS as described below:

Potentially dilutive Securities:

•

Options to purchase 2.7 million and 2.8 million common shares were outstanding at June 30, 2013 and 2012, respectively. These outstanding options were not considered in the computation of diluted EPS for all periods presented, as the options were anti-dilutive due to the Company’s loss from continuing operations.

•

The exchange into common shares associated with operating partnership units was not included in the computation of diluted shares outstanding for all periods presented because the effect of assuming conversion was anti-dilutive.

•

The Company’s senior convertible notes due 2040, which are convertible into common shares of the Company with a conversion price of $15.55 at June 30, 2013, were not included in the computation of diluted EPS for all periods presented, because the Company’s common share price did not exceed 125% of the conversion price in these periods and would therefore be anti-dilutive. The Company’s senior convertible notes due 2012, which were convertible into common shares of the Company, were not included in the computation of diluted EPS for the six-month period ended June 30, 2012, because the Company’s common share price did not exceed the conversion price in this period and would therefore be anti-dilutive. The senior convertible notes due 2012 were repaid at maturity in March 2012. In addition, the purchase option related to this debt issuance was not included in the computation of diluted EPS for the six-month period ended June 30, 2012, as the purchase option was anti-dilutive.

•

Shares subject to issuance under the Company’s 2013 VSEP were not considered in the computation of diluted EPS for the three- and six-month periods ended June 30, 2013, as they were anti-dilutive due to the Company’s loss from continuing operations (Note 10). Shares subject to issuance under the Company’s 2009 VSEP were not considered in the computation of diluted EPS for the three- and six-month periods ended June 30, 2012, as they were anti-dilutive due to the Company’s loss from continuing operations. The final measurement date for the 2009 VSEP was December 31, 2012.

•

The 39.1 million common shares that were subject to the forward equity agreements entered into in May 2013 were not included in the computation of diluted EPS using the treasury stock method for the three- and six-month periods ended June 30, 2013, as they were anti-dilutive due to the Company’s loss from continuing operations. The Company expects to physically settle the forward sale agreements no later than October 31, 2013.

•

The 19.0 million common shares that were subject to the forward equity agreements entered into in January 2012 were not included in the computation of diluted EPS using the treasury stock method for the three- and six-month periods ended June 30, 2012, as they were anti-dilutive due to the Company’s loss from continuing operations. The Company settled the forward equity agreements in June 2012.