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 June 30,						For the Six Months Ended June 30,
	2014			2013			2014			2013
Income (loss) from continuing operations	$	(20,774	)	$	(56,939	)	$	(51,445	)	$	(119,176	)
Net (income) loss attributable to noncontrolling interests	(325		)	311			(779		)	500
Income from sales of residential property	17,180			34,319			33,674			58,016
Preferred dividends	(12,830		)	(12,780		)	(25,660		)	(23,360		)
Income (loss) from continuing operations attributable to iStar Financial Inc. and allocable to common shareholders, HPU holders and Participating Security Holders	$	(16,749	)	$	(35,089	)	$	(44,210	)	$	(84,020	)



	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2014			2013			2014			2013
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	$	(16,207	)	$	(33,958	)	$	(42,779	)	$	(81,304	)
Income (loss) from discontinued operations	—			(55		)	—			1,148
Gain from discontinued operations	—			8,012			—			12,892
Net income (loss) attributable to iStar Financial Inc. and allocable to common shareholders	$	(16,207	)	$	(26,001	)	$	(42,779	)	$	(67,264	)
Denominator for basic and diluted earnings per share:
Weighted average common shares outstanding for basic and diluted earnings per common share	84,916			85,125			84,868			84,975
Basic and diluted earnings per common share:
Income (loss) from continuing operations attributable to iStar Financial Inc. and allocable to common shareholders	$	(0.19	)	$	(0.40	)	$	(0.50	)	$	(0.95	)
Income (loss) from discontinued operations	—			—			—			0.01
Gain from discontinued operations	—			0.09			—			0.15
Net income (loss) attributable to iStar Financial Inc. and allocable to common shareholders	$	(0.19	)	$	(0.31	)	$	(0.50	)	$	(0.79	)



	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2014			2013			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	$	(542	)	$	(1,131	)	$	(1,431	)	$	(2,716	)
Income (loss) from discontinued operations	—			(2		)	—			38
Gain from discontinued operations	—			267			—			431
Net income (loss) attributable to iStar Financial Inc. and allocable to HPU holders	$	(542	)	$	(866	)	$	(1,431	)	$	(2,247	)
Denominator for basic and diluted earnings per HPU share:
Weighted average High Performance Units outstanding for basic and diluted earnings per share	15			15			15			15
Basic and diluted earnings per HPU share:
Income (loss) from continuing operations attributable to iStar Financial Inc. and allocable to HPU holders	$	(36.13	)	$	(75.41	)	$	(95.40	)	$	(181.07	)
Income (loss) from discontinued operations	—			(0.13		)	—			2.53
Gain from discontinued operations	—			17.80			—			28.73
Net income (loss) attributable to iStar Financial Inc. and allocable to HPU holders	$	(36.13	)	$	(57.74	)	$	(95.40	)	$	(149.81	)

For the three and six months ended June 30, 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 June 30,				For the Six Months Ended June 30,
	2014		2013		2014		2013
Joint venture shares	$	298	$	298	$	298	$	298
3.00% convertible senior unsecured notes	16,992		16,992		16,992		16,992
Series J convertible perpetual preferred stock	15,635		15,635		15,635		15,635
1.50% convertible senior unsecured notes	11,567		—		11,567		—