Earnings Per Share

EPS is calculated using the two-class method, which allocates earnings among common stock and participating securities to calculate EPS when an entity's capital structure includes either two or more classes of common stock or common stock and participating securities. HPU holders are current and former Company employees who purchased high performance common stock units under the Company's High Performance Unit (HPU) Program. These HPU units are treated as a separate class of common stock.

The following table presents a reconciliation of income (loss) from continuing operations used in the basic and diluted earnings per share calculations ($ in thousands, except for per share data):



	For the Three Months Ended March 31,
	2014			2013
Income (loss) from continuing operations	$	(30,671	)	$	(62,240	)
Net (income) loss attributable to noncontrolling interests	(454		)	189
Income from sales of residential property	16,494			23,697
Preferred dividends	(12,830		)	(10,580		)
Income (loss) from continuing operations attributable to iStar Financial Inc. and allocable to common shareholders, HPU holders and Participating Security Holders	$	(27,461	)	$	(48,934	)



Earnings allocable to common shares:
Numerator for basic and diluted earnings per share:
Income (loss) from continuing operations attributable to iStar Financial Inc. and allocable to common shareholders	$	(26,572	)	$	(47,350	)
Income (loss) from discontinued operations	—			1,206
Gain from discontinued operations	—			4,881
Net income (loss) attributable to iStar Financial Inc. and allocable to common shareholders	$	(26,572	)	$	(41,263	)
Denominator for basic and diluted earnings per share:
Weighted average common shares outstanding for basic and diluted earnings per common share	84,819			84,824
Basic and diluted earnings per common share:
Income (loss) from continuing operations attributable to iStar Financial Inc. and allocable to common shareholders	$	(0.31	)	$	(0.56	)
Income (loss) from discontinued operations	—			0.01
Gain from discontinued operations	—			0.06
Net income (loss) attributable to iStar Financial Inc. and allocable to common shareholders	$	(0.31	)	$	(0.49	)



	For the Three Months Ended March 31,
	2014			2013
Earnings allocable to High Performance Units:
Numerator for basic and diluted earnings per HPU share:
Income (loss) from continuing operations attributable to iStar Financial Inc. and allocable to HPU holders	$	(889	)	$	(1,584	)
Income (loss) from discontinued operations	—			40
Gain from discontinued operations	—			163
Net income (loss) attributable to iStar Financial Inc. and allocable to HPU holders	$	(889	)	$	(1,381	)
Denominator for basic and diluted earnings per HPU share:
Weighted average High Performance Units outstanding for basic and diluted earnings per share	15			15
Basic and diluted earnings per HPU share:
Income (loss) from continuing operations attributable to iStar Financial Inc. and allocable to HPU holders	$	(59.27	)	$	(105.61	)
Income (loss) from discontinued operations	—			2.67
Gain from discontinued operations	—			10.87
Net income (loss) attributable to iStar Financial Inc. and allocable to HPU holders	$	(59.27	)	$	(92.07	)

For the three months ended March 31, 2014 and 2013, the following shares were not included in the diluted EPS calculation because they were anti-dilutive ($ in thousands):



	For the Three Months Ended March 31,
	2014		2013
Joint venture shares	$	298	$	298
3.00% convertible senior unsecured notes	$	16,992	$	16,992
Series J convertible perpetual preferred stock	$	15,635	$	15,635
1.50% convertible senior unsecured notes	$	11,567	$	—