14.

EARNINGS PER SHARE

Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the year. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. For CCA, diluted earnings per share is computed by dividing net income by the weighted average number of common shares after considering the additional dilution related to restricted share grants and stock options.

A reconciliation of the numerator and denominator of the basic earnings per share computation to the numerator and denominator of the diluted earnings per share computation is as follows (in thousands, except per share data):


	For the Years Ended December 31,
	2014		2013			2012
NUMERATOR
Basic:
Income from continuing operations	$	195,022	$	304,592		$	156,966
Loss from discontinued operations, net of taxes		—		(3,757	)		(205	)

Net income	$	195,022	$	300,835		$	156,761

Diluted:
Income from continuing operations	$	195,022	$	304,592		$	156,966
Loss from discontinued operations, net of taxes		—		(3,757	)		(205	)

Diluted net income	$	195,022	$	300,835		$	156,761

DENOMINATOR
Basic:
Weighted average common shares outstanding		116,109		109,617			99,545

Diluted:
Weighted average common shares outstanding		116,109		109,617			99,545
Effect of dilutive securities:
Stock options		895		1,279			864
Restricted stock-based compensation		308		354			214

Weighted average shares and assumed conversions		117,312		111,250			100,623

BASIC EARNINGS PER SHARE:
Income from continuing operations	$	1.68	$	2.77		$	1.58
Loss from discontinued operations, net of taxes		—		(0.03	)		—

Net income	$	1.68	$	2.74		$	1.58

DILUTED EARNINGS PER SHARE:
Income from continuing operations	$	1.66	$	2.73		$	1.56
Loss from discontinued operations, net of taxes		—		(0.03	)		—

Net income	$	1.66	$	2.70		$	1.56

As discussed in Note 13, on May 20, 2013, CCA paid a special dividend in connection with its conversion to a REIT. The shareholders were allowed to elect to receive their payment of the special dividend either in all cash, all shares of CCA common stock, or a combination of cash and CCA common stock, except that CCA placed a limit on the aggregate amount of cash payable to the shareholders. Under ASC 505, “Equity” and ASU 2010-01, “Accounting for Distributions to Shareholders with Components of Stock and Cash, a consensus of the FASB Emerging Issues Task Force”, a distribution that allows shareholders to elect to receive cash or stock with a potential limitation on the total amount of cash that all shareholders can elect to receive in the aggregate is considered a share issuance that is reflected in earnings per share prospectively. As such, the stock portion of the special dividend, totaling 13.9 million shares, is presented prospectively in basic and diluted earnings per share as presented above and was not presented retroactively for all periods presented.

Approximately 12,000, 15,000, and 0.7 million stock options were excluded from the computations of diluted earnings per share for the years ended December 31, 2014, 2013, and 2012, respectively, because they were anti-dilutive.