Earnings Per Common Share

12 Months Ended

Dec. 31, 2019

Basic income (loss) per common share ("EPS") is computed based on the weighted average number of common shares outstanding. Diluted income (loss) per common share is computed based on the weighted average number of common shares outstanding plus the impact of forward equity sales agreements using the treasury stock method and common shares issuable from the assumed conversion of DownREIT units, stock options, certain performance restricted stock units, and unvested restricted stock units. Only those instruments having a dilutive impact on the Company's basic income (loss) per share are included in diluted income (loss) per share during the periods presented.

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

During the year ended December 31, 2019, the Company utilized the forward sale provisions under the 2019 ATM Program to sell up to an aggregate of 20.3 million shares of common stock with a one year term. During the year ended December 31, 2019, the Company settled 5.5 million shares under forward contracts under the 2019 ATM Program, leaving 14.8 million shares outstanding thereunder.

Additionally, in November 2019, the Company entered into the 2019 forward equity sales agreement to sell an aggregate of 15.6 million shares of its common stock by November 4, 2020. At December 31, 2019, all 15.6 million shares remained outstanding thereunder.

Additionally, in December 2018, the Company entered into forward equity sales agreement to sell an aggregate of 15.3 million shares of its common stock by December 13, 2019. During the year ended December 31, 2019, the Company settled all 15.3 million shares under the December 2018 forward sales agreement.

The Company expects to settle the remaining forward sales with shares of common stock prior to their respective expiration dates. See Note 12 for further details.

The Company considered the potential dilution resulting from the forward agreements to the calculation of earnings per share. At inception, the agreements do not have an effect on the computation of basic EPS as no shares are delivered until settlement. However, the Company uses the treasury stock method to determine the dilution, if any, resulting from the forward sales agreements during the period of time prior to settlement. The aggregate effect on the Company’s diluted weighted-average common shares for the year ended December 31, 2019, was 2.8 million weighted-average incremental shares from the forward equity sales agreements.

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



	Year Ended December 31,
	2019			2018			2017
Numerator
Net income (loss)	$	60,061		$	1,073,474		$	422,634
Noncontrolling interests' share in earnings	(14,531		)	(12,381		)	(8,465		)
Net income (loss) attributable to Healthpeak Properties, Inc.	45,530			1,061,093			414,169
Less: Participating securities' share in earnings	(1,543		)	(2,669		)	(1,156		)
Net income (loss) applicable to common shares	$	43,987		$	1,058,424		$	413,013

Numerator - Dilutive
Net income (loss) applicable to common shares	$	43,987		$	1,058,424		$	413,013
Add: distributions on dilutive convertible units and other	—			6,919			—
Dilutive net income (loss) available to common shares	$	43,987		$	1,065,343		$	413,013
Denominator
Basic weighted average shares outstanding	486,255			470,551			468,759
Dilutive potential common shares - equity awards	309			168			176
Dilutive potential common shares - forward equity agreements⁽¹⁾	2,771			—			—
Dilutive potential common shares - DownREIT conversions	—			4,668			—
Diluted weighted average common shares	489,335			475,387			468,935
Earnings per common share
Basic	$	0.09		$	2.25		$	0.88
Diluted	$	0.09		$	2.24		$	0.88


(1)	Represents the current dilutive impact of 30 million shares of common stock under forward sales agreements that have not been settled as of December 31, 2019. Based on the forward price of each agreement as of December 31, 2019, issuance of all 30 million shares would result in approximately $1.00 billion of net proceeds.

For the years ended December 31, 2019, 2018, and 2017, 7 million, 2 million, and 7 million shares, respectively, issuable upon conversion of DownREIT units were not included because they are anti-dilutive. Additionally, for the years ended December 31, 2019 and 2018, 28 million and 15 million shares of common stock, respectively, issuable pursuant to the settlement of forward equity sales agreements were not included because they are anti-dilutive (see discussion above). For all periods presented in the above table, approximately 1 million shares of common stock subject to outstanding equity awards (restricted stock units and stock options) were not included because they are anti-dilutive.