Notes to Financial Statements Dollars in thousands, except share and per share amounts and where indicated as in millions or billions As a result of the consolidation of the Management Company, the deferred tax assets and liabilities and income tax  expense of the Management Company are included in the accompanying consolidated financial statements as of and for  the year ended December 31, 2003. A net deferred tax asset of $22.0 million related to our TRS subsidiaries is included in  deferred costs, other assets, and minority interest, net in the accompanying balance sheet. The net deferred tax asset consists  primarily of operating loss and other carryforwards for Federal income tax purposes as well as the timing of the deductibility  of losses from insurance subsidiaries. We determine basic earnings per share based on the weighted average number of shares of common stock outstanding  during the period. We determine diluted earnings per share based on the weighted average number of shares of common  stock outstanding combined with the incremental weighted average shares that would have been outstanding assuming  all dilutive potential common shares were converted into shares at the earliest date possible. The following table sets forth  the computation of our basic and diluted earnings per share. The effect of dilutive securities amounts presented in the  reconciliation below represents the common shareholders’ pro rata share of the respective line items in the statements of  operations and is after considering the effect of preferred dividends.  Per Share Data For the year ending December 31, 2003, potentially dilutive securities include stock options, certain preferred units  of limited partnership interest of the Operating Partnership, Series B 6.5% Convertible Preferred Stock, and the units of  limited partnership interest (“Units”) in the Operating Partnership which are exchangeable for common stock. simon property group, inc. 56 For the Year Ended December 31,  2003 2002  2001 Common Shareholders’ share of: Income from continuing operations  $  291,083 $  346,231 $  149,022 Discontinued operations  22,494 12,156 – Cumulative effect of accounting change  – – (1,233 ) Net Income available to Common Shareholders – Basic $  313,577 $  358,387 $  147,789 Effect of Dilutive Securities: Impact to General Partner’s interest in Operating Partnership from all dilutive securities and options  $  333 $  1,919 – Net Income available to Common Shareholders – Diluted $  313,910 $  360,306 $  147,789 Weighted Average Shares Outstanding – Basic  189,475,124  179,910,355  172,669,133 Effect of stock options  823,532 671,972 358,414 Effect of convertible preferred stock  – 918,615 – Weighted Average Shares Outstanding – Diluted 190,298,656  181,500,942  173,027,547 Basic per share amounts: Income from continuing operations  $  1.53 $  1.92 $  0.87 Discontinued operations  0.12 .07 – Cumulative effect of accounting change  – – (0.01 ) Net income available to Common Shareholders – Basic $  1.65 $  1.99 $  .086 Diluted per share amounts: Income from continuing operations  $  1.53 $  1.92 $  0.86 Discontinued operations  0.12 .07 – Cumulative effect of accounting change  – – (0.01 ) Net income available to Common Shareholders – Dilutive $  1.65 $  1.99 $  0.85