Earnings Per Share

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 were current and former Company employees who purchased high performance common stock units under the Company's High Performance Unit Program. These HPU units were treated as a separate class of common stock. All of the Company's outstanding HPUs were repurchased and retired on August 13, 2015.

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



	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2016			2015			2016			2015
Income (loss) from continuing operations	$	23,711		$	(20,553	)	$	20,255		$	(92,152	)
Income from sales of real estate	34,444			26,511			88,387			66,021
Net (income) loss attributable to noncontrolling interests	967			706			(6,915		)	3,176
Preferred dividends	(12,830		)	(12,830		)	(38,490		)	(38,490		)
Income (loss) from continuing operations attributable to iStar Inc. and allocable to common shareholders, HPU holders and Participating Security Holders for basic earnings per common share⁽¹⁾	$	46,292		$	(6,166	)	$	63,237		$	(61,445	)
Add: Effect of joint venture shares	3			—			5			—
Add: Effect of 1.50% senior convertible unsecured notes	1,123			—			3,400			—
Add: Effect of 3.00% senior convertible unsecured notes	1,785			—			5,346			—
Add: Effect of Series J convertible perpetual preferred stock	2,250			—			6,750			—
Income (loss) from continuing operations attributable to iStar Inc. and allocable to common shareholders, HPU holders and Participating Security Holders for diluted earnings per common share	$	51,453		$	(6,166	)	$	78,738		$	(61,445	)

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(1)	For the nine months ended September 30, 2016, includes income from continuing operations allocable to Participating Security Holders of $27 and $21 on a basic and dilutive basis.



	For the Three Months Ended September 30,					For the Nine Months Ended September 30,
	2016		2015			2016		2015
Earnings allocable to common shares:
Numerator for basic earnings per share:
Income (loss) from continuing operations attributable to iStar Inc. and allocable to common shareholders	$	46,292	$	(6,072	)	$	63,210	$	(59,818	)
Net income (loss) attributable to iStar Inc. and allocable to common shareholders	$	46,292	$	(6,072	)	$	63,210	$	(59,818	)

Numerator for diluted earnings per share:
Income (loss) from continuing operations attributable to iStar Inc. and allocable to common shareholders	$	51,453	$	(6,072	)	$	78,717	$	(59,818	)
Net income (loss) attributable to iStar Inc. and allocable to common shareholders	$	51,453	$	(6,072	)	$	78,717	$	(59,818	)



	For the Three Months Ended September 30,					For the Nine Months Ended September 30,
	2016		2015			2016		2015
Denominator for basic and diluted earnings per share:
Weighted average common shares outstanding for basic earnings per common share	71,210		85,766			74,074		85,602
Add: Effect of assumed shares issued under treasury stock method for restricted stock units	87		—			65		—
Add: Effect of joint venture shares	298		—			298		—
Add: Effect of 1.50% senior convertible unsecured notes	11,444		—			11,526		—
Add: Effect of 3.00% senior convertible unsecured notes	16,992		—			16,992		—
Add: Effect of series J convertible perpetual preferred stock	15,635		—			15,635		—
Weighted average common shares outstanding for diluted earnings per common share	115,666		85,766			118,590		85,602


Basic earnings per common share:
Income (loss) from continuing operations attributable to iStar Inc. and allocable to common shareholders	$	0.65	$	(0.07	)	$	0.85	$	(0.70	)
Net income (loss) attributable to iStar Inc. and allocable to common shareholders	$	0.65	$	(0.07	)	$	0.85	$	(0.70	)

Diluted earnings per common share:
Income (loss) from continuing operations attributable to iStar Inc. and allocable to common shareholders	$	0.44	$	(0.07	)	$	0.66	$	(0.70	)
Net income (loss) attributable to iStar Inc. and allocable to common shareholders	$	0.44	$	(0.07	)	$	0.66	$	(0.70	)

Earnings allocable to High Performance Units ⁽¹⁾:
Numerator for basic and diluted earnings per HPU share:
Net income (loss) attributable to iStar Inc. and allocable to HPU holders	$	—	$	(94	)	$	—	$	(1,627	)
Denominator for basic and diluted earnings per HPU share:
Weighted average High Performance Units outstanding for basic and diluted earnings per share	—		7			—		12

Basic and diluted earnings per HPU share:
Net income (loss) attributable to iStar Inc. and allocable to HPU holders	$	—	$	(13.41	)	$	—	$	(132.19	)

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(1)	All of the Company's outstanding HPUs were repurchased and retired on August 13, 2015.

For the three and nine months ended September 30, 2016 and 2015, the following shares were not included in the diluted EPS calculation because they were anti-dilutive (in thousands)⁽¹⁾⁽²⁾:



	For the Three Months Ended September 30,		For the Nine Months Ended September 30,
	2016	2015	2016	2015
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	—	11,567
Joint venture shares	—	298	—	298

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(1)	For the three and nine months ended September 30, 2015, the effect of the Company's unvested Units, performance-based Units, CSEs and restricted stock awards were anti-dilutive.


(2)	For the three and nine months ended September 30, 2016, the effect of 25 and 128 unvested time and performance-based Units, respectively, were anti-dilutive.