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.

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,
	2017			2016			2017			2016
Income (loss) from continuing operations	$	(23,029	)	$	19,990		$	24,839		$	9,321
Income from sales of real estate	19,313			34,444			28,267			88,387
Net (income) loss attributable to noncontrolling interests	160			967			(4,450		)	(6,915		)
Preferred dividends	(12,830		)	(12,830		)	(38,490		)	(38,490		)
Preferred dividends declared and payable	(1,830		)	—			(1,830		)	—
Premium above book value on redemption of preferred stock	(16,314		)	—			(16,314		)	—
Income (loss) from continuing operations attributable to iStar Inc. and allocable to common shareholders and Participating Security Holders for basic earnings per common share⁽¹⁾	$	(34,530	)	$	42,571		$	(7,978	)	$	52,303
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 and Participating Security Holders for diluted earnings per common share⁽¹⁾	$	(34,530	)	$	47,732		$	(7,978	)	$	67,804

_______________________________________________________________________________


(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,
	2017			2016		2017			2016
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	$	(34,530	)	$	42,571	$	(7,978	)	$	52,280
Income from discontinued operations	—			3,721		4,939			10,929
Gain from discontinued operations	—			—		123,418			—
Income tax expense from discontinued operations	—			—		(4,545		)	—
Net income (loss) attributable to iStar Inc. and allocable to common shareholders	$	(34,530	)	$	46,292	$	115,834		$	63,209

Numerator for diluted earnings per share:
Income (loss) from continuing operations attributable to iStar Inc. and allocable to common shareholders	$	(34,530	)	$	47,732	$	(7,978	)	$	67,786
Income from discontinued operations	—			3,721		4,939			10,931
Gain from discontinued operations	—			—		123,418			—
Income tax expense from discontinued operations	—			—		(4,545		)	—
Net income (loss) attributable to iStar Inc. and allocable to common shareholders	$	(34,530	)	$	51,453	$	115,834		$	78,717

Denominator for basic and diluted earnings per share:
Weighted average common shares outstanding for basic earnings per common share	71,713			71,210		71,972			74,074
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	71,713			115,666		71,972			118,590

Basic earnings per common share:
Income (loss) from continuing operations attributable to iStar Inc. and allocable to common shareholders	$	(0.48	)	$	0.60	$	(0.11	)	$	0.70
Income from discontinued operations	—			0.05		0.07			0.15
Gain from discontinued operations	—			—		1.71			—
Income tax expense from discontinued operations	—			—		(0.06		)	—
Net income (loss) attributable to iStar Inc. and allocable to common shareholders	$	(0.48	)	$	0.65	$	1.61		$	0.85



	For the Three Months Ended September 30,					For the Nine Months Ended September 30,
	2017			2016		2017			2016
Diluted earnings per common share:
Income (loss) from continuing operations attributable to iStar Inc. and allocable to common shareholders	$	(0.48	)	$	0.41	$	(0.11	)	$	0.57
Income from discontinued operations	—			0.03		0.07			0.09
Gain from discontinued operations	—			—		1.71			—
Income tax expense from discontinued operations	—			—		(0.06		)	—
Net income (loss) attributable to iStar Inc. and allocable to common shareholders	$	(0.48	)	$	0.44	$	1.61		$	0.66

The following shares were not included in the diluted EPS calculation because they were anti-dilutive (in thousands)⁽¹⁾:



	For the Three Months Ended September 30,		For the Nine Months Ended September 30,
	2017	2016	2017	2016
Series J convertible perpetual preferred stock	15,635	—	15,635	—
Joint venture shares	298	—	298	—

_______________________________________________________________________________

(1)

For the three and nine months ended September 30, 2017, the effect of 3 and 22 unvested time and performance-based Units were anti-dilutive, respectively. For the three and nine months ended September 30, 2016, the effect of 25 and 128 unvested time and performance-based Units were anti-dilutive, respectively. The Company will settle conversions of the 3.125% Convertible Notes by paying the conversion value in cash up to the original principal amount of the notes being converted and shares of common stock to the extent of any conversion premium. The amount of cash and shares of common stock, if any, due upon conversion will be based on a daily conversion value calculated for each trading day in a 40 consecutive day observation period. Based upon the conversion price of the 3.125% Convertible Notes, no shares of common stock would have been issuable upon conversion of the 3.125% Convertible Notes for the three and nine months ended September 30, 2017 and therefore the 3.125% Convertible Notes had no effect on diluted EPS for such periods.