Earnings Per Share

9 Months Ended

Sep. 30, 2015

Basic earnings per share of the Company is computed by dividing net income/(loss) by the weighted average number of shares of common stock outstanding for the period. Except when the effect would be anti-dilutive, the diluted earnings per share calculation calculated using the treasury stock method includes the impact of stock units, shares of non-vested restricted stock and shares that could be issued under outstanding stock options.

Weighted average number of common shares used for basic earnings per share excludes weighted average shares of non-vested restricted stock of 226,900, 232,884, 234,370 and 236,616 for the three and nine months ended September 30, 2015 and 2014, respectively. Non-vested restricted stock is included in common shares issued and outstanding in the condensed consolidated balance sheets.

Potentially dilutive shares exclude warrants and stock options issued after repurchase under the FairPoint Communications, Inc. Amended and Restated 2010 Long Term Incentive Plan, primarily due to exercise prices exceeding the average market value. Since the Company incurred a loss for the three and nine months ended September 30, 2014, all potentially dilutive securities are anti-dilutive and, therefore, are excluded from the determination of diluted earnings per share.

The following table provides a reconciliation of the common shares used for basic earnings per share and diluted earnings per share:



	Three Months ended September 30,		Nine Months ended September 30,
	2015	2014	2015	2014
Weighted average number of common shares used for basic earnings per share	26,676,385	26,472,162	26,640,103	26,439,870
Effect of potential dilutive shares	327,448	—	312,193	—
Weighted average number of common shares and potential dilutive shares used for diluted earnings per share	27,003,833	26,472,162	26,952,296	26,439,870
Weighted average number of anti-dilutive shares outstanding at period-end that are excluded from the above reconciliation	4,146,782	4,548,565	4,148,613	4,443,933