Annual report pursuant to Section 13 and 15(d)

Earnings Per Unit of the Operating Partnership

v3.8.0.1
Earnings Per Unit of the Operating Partnership
12 Months Ended
Dec. 31, 2017
Tanger Properties Limited Partnership [Member]  
Earnings Per Unit of the Operating Partnership
Earnings Per Unit of the Operating Partnership

The following table sets forth a reconciliation of the numerators and denominators in computing earnings per unit for the years ended December 31, 2017, 2016 and 2015 (in thousands, except per unit amounts):
 
 
2017
 
2016
 
2015
Numerator
 
 
 
 
 
 
Net income attributable to partners of the Operating Partnership
 
$
71,611

 
$
204,031

 
$
222,531

Allocation of earnings to participating securities
 
(1,209
)
 
(1,928
)
 
(2,413
)
Net income available to common unitholders of the Operating Partnership
 
$
70,402

 
$
202,103

 
$
220,118

Denominator
 
 
 
 
 
 
Basic weighted average common units
 
99,533

 
100,155

 
99,777

Effect of notional units
 

 
175

 

Effect of outstanding options and certain restricted common units
 
16

 
68

 
61

Diluted weighted average common units
 
99,549

 
100,398

 
99,838

Basic earnings per common unit:
 
 
 
 
 
 
Net income
 
$
0.71

 
$
2.02

 
$
2.21

Diluted earnings per common unit:
 
 
 
 
 
 
Net income
 
$
0.71

 
$
2.01

 
$
2.20



We determine diluted earnings per unit based on the weighted average number of common units outstanding combined with the incremental weighted average units that would have been outstanding assuming all potentially dilutive securities were converted into common units at the earliest date possible.

The notional units are considered contingently issuable common units and are included in earnings per unit if the effect is dilutive using the treasury stock method and the common shares would be issuable if the end of the reporting period were the end of the contingency period. For the years ended December 31, 2017, 2016, 2015, 603,411, 501,446 and 859,450 units were excluded from the computation, respectively, because these units would not have been issuable if the end of the reporting period were the end of the contingency period or because they were anti-dilutive. The notional units are considered contingently issuable common units and are included in earnings per unit if the effect is dilutive using the treasury stock method.

The effect of dilutive common units is determined using the treasury stock method, whereby outstanding options are assumed exercised at the beginning of the reporting period and the exercise proceeds from such options and the average measured but unrecognized compensation cost during the period are assumed to be used to repurchase our common units at the average market price during the period. The market price of a common unit is considered to be equivalent to the market price of a Company common share. For the years ended December 31, 2017, 2016 and 2015, 169,000, 141,300 and 227,400 options were excluded from the computation, respectively.

Certain of the Company's unvested restricted common share awards contain non-forfeitable rights to distributions or distribution equivalents. The impact of the corresponding unvested restricted unit awards on earnings per unit has been calculated using the two-class method whereby earnings are allocated to the unvested restricted unit awards based on distributions declared and the unvested restricted units' participation rights in undistributed earnings. Unvested restricted common units that do not contain non-forfeitable rights to dividends or dividend equivalents are included in the diluted earnings per unit computation if the effect is dilutive, using the treasury stock method.