Earnings Per Common Share

12 Months Ended

Dec. 31, 2011

Earnings Per Common Share

Earnings Per Common Share

(19) Earnings Per Common Share

        The following table illustrates the computation of basic and diluted earnings per share (dollars in thousands, except per share and share amounts):

	Year Ended December 31,
	2011			2010			2009
Numerator
Income from continuing operations	$	549,955		$	320,462		$	102,659
Noncontrolling interests' share in continuing operations		(15,603	)		(13,686	)		(14,461	)
Income from continuing operations applicable to HCP, Inc.		534,352			306,776			88,198
Preferred stock dividends		(21,130	)		(21,130	)		(21,130	)
Participating securities' share in continuing operations		(2,459	)		(2,081	)		(1,491	)
Income from continuing operations applicable to common shares		510,763			283,565			65,577
Discontinued operations		4,539			23,933			43,492
Net income applicable to common shares	$	515,302		$	307,498		$	109,069
Denominator
Basic weighted average common shares		398,446			305,574			274,216
Dilutive stock options and restricted stock		1,772			1,326			415
Diluted weighted average common shares		400,218			306,900			274,631
Basic earnings per common share
Income from continuing operations	$	1.28		$	0.93		$	0.24
Discontinued operations		0.01			0.08			0.16
Net income applicable to common stockholders	$	1.29		$	1.01		$	0.40
Diluted earnings per common share
Income from continuing operations	$	1.28		$	0.92		$	0.24
Discontinued operations		0.01			0.08			0.16
Net income applicable to common shares	$	1.29		$	1.00		$	0.40

        Restricted stock and certain of the Company's performance restricted stock units are considered participating securities, because dividend payments are not forfeited even if the underlying award does not vest, which require the use of the two-class method when computing basic and diluted earnings per share.

        Options to purchase approximately 1.1 million, 1.9 million and 4.6 million shares of common stock that had an exercise price in excess of the average market price of the common stock during the years ended December 31, 2011, 2010 and 2009, respectively, were not included because they are anti-dilutive. Additionally, 5.9 million shares issuable upon conversion of 4.2 million DownREIT units during the year ended December 31, 2011; 6.0 million shares issuable upon conversion of 4.2 million DownREIT units during the year ended December 31, 2010; and 5.9 million shares issuable upon conversion of 4.3 million DownREIT units during the year ended December 31, 2009 were not included since they are anti-dilutive.