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 September 30,						Nine-Month Periods Ended September 30,
	2013			2012			2013			2012
Basic Earnings:
Continuing Operations:
(Loss) income from continuing operations	$	(11,577	)	$	30,421		$	(14,553	)	$	22,116
Plus: Gain on disposition of real estate		1,929			261			347			6,161
Plus: Loss attributable to non-controlling interests		(170	)		(128	)		(556	)		(424	)
Write-off of preferred share original issuance costs		—			(5,804	)		(5,246	)		(5,804	)
Preferred dividends		(6,608	)		(7,681	)		(21,113	)		(21,616	)
Less: Earnings attributable to unvested shares and operating partnership units		(330	)		(323	)		(1,052	)		(919	)

Basic—(Loss) income from continuing operations	$	(16,756	)	$	16,746		$	(42,173	)	$	(486	)
Discontinued Operations:
Basic—Income (loss) from discontinued operations		9,443			(3,816	)		(2,623	)		(53,671	)

Basic—Net (loss) income attributable to DDR common shareholders after allocation to participating securities	$	(7,313	)	$	12,930		$	(44,796	)	$	(54,157	)

Diluted Earnings:
Continuing Operations:
Basic—(Loss) income from continuing operations	$	(16,426	)	$	17,069		$	(41,121	)	$	433
Less: Earnings attributable to unvested shares and operating partnership units		(330	)		(323	)		(1,052	)		(919	)

Diluted—(Loss) income from continuing operations		(16,756	)		16,746			(42,173	)		(486	)
Discontinued Operations:
Basic—Income (loss) from discontinued operations		9,443			(3,816	)		(2,623	)		(53,671	)

Diluted—Net (loss) income attributable to DDR common shareholders after allocation to participating securities	$	(7,313	)	$	12,930		$	(44,796	)	$	(54,157	)

Number of Shares:
Basic—Average shares outstanding		318,184			302,232			316,146			286,016
Effect of dilutive securities:
Stock options		—			490			—			479
Value sharing equity program		—			202			—			169
Forward equity agreement		—			—			—			1,033

Diluted—Average shares outstanding		318,184			302,924			316,146			287,697

Basic Earnings Per Share:
(Loss) income from continuing operations attributable to DDR common shareholders	$	(0.05	)	$	0.05		$	(0.13	)	$	0.00
Income (loss) from discontinued operations attributable to DDR common shareholders		0.03			(0.01	)		(0.01	)		(0.19	)

Net (loss) income attributable to DDR common shareholders	$	(0.02	)	$	0.04		$	(0.14	)	$	(0.19	)

Dilutive Earnings Per Share:
(Loss) income from continuing operations attributable to DDR common shareholders	$	(0.05	)	$	0.05		$	(0.13	)	$	0.00
Income (loss) from discontinued operations attributable to DDR common shareholders		0.03			(0.01	)		(0.01	)		(0.19	)

Net (loss) income attributable to DDR common shareholders	$	(0.02	)	$	0.04		$	(0.14	)	$	(0.19	)

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

Potentially Dilutive Securities:

•

The Company’s senior convertible notes due 2040, which are convertible into common shares of the Company with a conversion price of $15.44 at September 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.

•

Shares subject to issuance under the Company’s 2013 VSEP were not considered in the computation of diluted EPS for the three- and nine-month periods ended September 30, 2013, because they were anti-dilutive due to the Company’s loss from continuing operations (Note 10).

•

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 nine-month periods ended September 30, 2013, because they were anti-dilutive due to the Company’s loss from continuing operations. The Company settled the forward equity agreements on September 27, 2013 and October 1, 2013.