Earnings Per Common Share

12 Months Ended

Dec. 31, 2014

Earnings Per Common Share

Earnings Per Common Share

NOTE 19.    Earnings Per Common Share

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

	Year Ended December 31,
	2014		2013		2012
Numerator
Income from continuing operations	$	906,845	$	910,633	$	801,190
Noncontrolling interests’ share in continuing operations		(13,181)		(14,110)		(12,411)
Income from continuing operations applicable to HCP, Inc.		893,664		896,523		788,779
Preferred stock dividends		—		—		(17,006)
Participating securities’ share in continuing operations		(2,437)		(1,734)		(3,245)
Income from continuing operations applicable to common shares		891,227		894,789		768,528
Discontinued operations		29,746		74,373		45,652
Noncontrolling interests’ share in discontinued operations		(1,177)		(59)		(1,891)
Net income applicable to common shares	$	919,796	$	969,103	$	812,289
Denominator
Basic weighted average common shares		458,425		455,002		427,047
Dilutive potential common shares		371		700		1,269
Diluted weighted average common shares		458,796		455,702		428,316
Basic earnings per common share
Income from continuing operations	$	1.94	$	1.97	$	1.80
Discontinued operations		0.07		0.16		0.10
Net income applicable to common stockholders	$	2.01	$	2.13	$	1.90
Diluted earnings per common share
Income from continuing operations	$	1.94	$	1.97	$	1.80
Discontinued operations		0.06		0.16		0.10
Net income applicable to common shares	$	2.00	$	2.13	$	1.90

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 million, 800,000 and 500,000 shares of common stock that had exercises prices in excess of the average market price of the common stock during the years ended December 31, 2014, 2013 and 2012, respectively, were not included because they are anti-dilutive. Additionally, 6 million shares issuable upon conversion of 4 million DownREIT units during the years ended December 31, 2014, 2013 and 2012 were not included because they are anti-dilutive.