Earnings Per Common Share

3 Months Ended

Mar. 31, 2015

Earnings Per Common Share

Earnings Per Common Share

NOTE 15.  Earnings Per Common Share

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

	Three Months Ended March 31,
	2015		2014
Numerator
(Loss) income from continuing operations	$	(237,503)	$	233,877
Noncontrolling interests’ share in continuing operations		(3,111)		(3,335)
(Loss) income from continuing operations applicable to HCP, Inc.		(240,614)		230,542
Participating securities’ share in continuing operations		(335)		(1,064)
(Loss) income from continuing operations applicable to common shares		(240,949)		229,478
Discontinued operations		—		29,746
Noncontrolling interests’ share in discontinued operations		—		(1,177)
Net (loss) income applicable to common shares	$	(240,949)	$	258,047
Denominator
Basic weighted average common shares		460,880		457,294
Dilutive potential common shares		—		380
Diluted weighted average common shares		460,880		457,674
Basic earnings per common share
(Loss) income from continuing operations	$	(0.52)	$	0.50
Discontinued operations		—		0.06
Net (loss) income applicable to common shares	$	(0.52)	$	0.56
Diluted earnings per common share
(Loss) income from continuing operations	$	(0.52)	$	0.50
Discontinued operations		—		0.06
Net (loss) income applicable to common shares	$	(0.52)	$	0.56

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 requires the use of the two-class method when computing basic and diluted earnings per share. Options to purchase approximately 0.5 million and 1.6 million shares of common stock that had an exercise price (including deferred compensation expense) in excess of the average closing market price of the Company’s common stock during the three months ended March 31, 2015 and 2014, respectively, were not included in the Company’s earnings per share calculations because they are anti-dilutive. Restricted stock and performance restricted stock units representing 0.4 million and 0.9 million shares of common stock during the three months ended March 31, 2015 and 2014, respectively, were not included because they are anti-dilutive. Additionally, 6 million shares issuable upon conversion of 4 million DownREIT units during the three months ended March 31, 2015 and 2014 were not included because they are anti-dilutive.