Earnings Per Common Share

3 Months Ended

Mar. 31, 2021

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.

Refer to Note 12 for a discussion of the sale of shares under and settlement of forward sales agreements during the periods presented. 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 calculate 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 three months ended March 31, 2021 and 2020 was zero and 0.8 million weighted-average incremental shares, respectively, 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):


	Three Months Ended March 31,
	2021		2020
Numerator
Income (loss) from continuing operations	$	(120,585)	$	147,132
Noncontrolling interests' share in continuing operations	(3,306)		(3,463)
Income (loss) from continuing operations attributable to Healthpeak Properties, Inc.	(123,891)		143,669
Less: Participating securities' share in continuing operations	(2,451)		(1,616)
Income (loss) from continuing operations applicable to common shares	(126,342)		142,053
Income (loss) from discontinued operations	270,008		135,408
Noncontrolling interests' share in discontinued operations	(329)		3
Net income (loss) applicable to common shares	$	143,337	$	277,464
Numerator - Dilutive
Net income (loss) applicable to common shares	$	143,337	$	277,464
Add: distributions on dilutive convertible units and other	—		2,515
Dilutive net income (loss) available to common shares	$	143,337	$	279,979
Denominator
Basic weighted average shares outstanding	538,679		506,476
Dilutive potential common shares - equity awards(1)	—		318
Dilutive potential common shares - forward equity agreements(2)	—		808
Dilutive potential common shares - DownREIT conversions	—		7,443
Diluted weighted average common shares	538,679		515,045
Basic earnings (loss) per common share
Continuing operations	$	(0.23)	$	0.28
Discontinued operations	0.50		0.27
Net income (loss) applicable to common shares	$	0.27	$	0.55
Diluted earnings (loss) per common share
Continuing operations	$	(0.23)	$	0.28
Discontinued operations	0.50		0.26
Net income (loss) applicable to common shares	$	0.27	$	0.54

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(1)For all periods presented, represents the dilutive impact of 1 million outstanding equity awards (restricted stock units and stock options).

(2)For the three months ended March 31, 2021, forward sales agreements had no dilutive impact as all agreements were settled prior to the start of the period. For the three months ended March 31, 2020, represents the dilutive impact of 32 million shares that were settled during the three months then ended. For the three months ended March 31, 2021, diluted loss per common share is calculated using the weighted average common shares outstanding as a result of the Company generating a loss from continuing operations for the period.

For the three months ended March 31, 2021, all 7 million shares issuable upon conversion of DownREIT units were not included because they are anti-dilutive. For the three months ended March 31, 2020, all 7 million DownREIT shares were dilutive.