Earnings Per Common Share

9 Months Ended

Sep. 30, 2022

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 11 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 each of the three and nine months ended September 30, 2022 and 2021 was zero 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):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Numerator
Income (loss) from continuing operations	$	359,284	$	61,305	$	503,611	$	108,785
Noncontrolling interests' share in continuing operations	(4,016)		(7,195)		(11,701)		(14,036)
Income (loss) from continuing operations attributable to Healthpeak Properties, Inc.	355,268		54,110		491,910		94,749
Less: Participating securities' share in continuing operations	(604)		(269)		(2,523)		(3,001)
Income (loss) from continuing operations applicable to common shares	354,664		53,841		489,387		91,748
Income (loss) from discontinued operations	(1,298)		601		2,011		384,569
Noncontrolling interests' share in discontinued operations	—		—		—		(2,539)
Net income (loss) applicable to common shares	$	353,366	$	54,442	$	491,398	$	473,778
Numerator - Dilutive
Net income (loss) applicable to common shares	$	353,366	$	54,442	$	491,398	$	473,778
Add: distributions on dilutive convertible units and other	2,355		—		4,943		—
Dilutive net income (loss) available to common shares	$	355,721	$	54,442	$	496,341	$	473,778
Denominator
Basic weighted average shares outstanding	538,417		539,021		539,105		538,879
Dilutive potential common shares - equity awards(1)	281		367		255		280

Dilutive potential common shares - DownREIT conversions	7,317		—		5,492		—
Diluted weighted average common shares	546,015		539,388		544,852		539,159
Basic earnings (loss) per common share
Continuing operations	$	0.66	$	0.10	$	0.91	$	0.17
Discontinued operations	0.00		0.00		0.00		0.71
Net income (loss) applicable to common shares	$	0.66	$	0.10	$	0.91	$	0.88
Diluted earnings (loss) per common share
Continuing operations	$	0.65	$	0.10	$	0.91	$	0.17
Discontinued operations	0.00		0.00		0.00		0.71
Net income (loss) applicable to common shares	$	0.65	$	0.10	$	0.91	$	0.88

_______________________________________

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

For all periods presented in the table above, the 9.1 million shares under forward sales agreements that have not been settled as of September 30, 2022 and 2021 were anti-dilutive.

For the three and nine months ended September 30, 2022, 7 million and 5 million shares issuable upon conversion of DownREIT units, respectively, were dilutive and are presented as diluted potential common shares in the table above. For the three and nine months ended September 30, 2021, all 7 million shares issuable upon conversion of DownREIT units were not included because they were anti-dilutive.