Earnings per Share (EPS)

Basic and diluted EPS are computed using the two-class method, which is an earnings allocation that determines EPS for each class of common stock and participating securities according to dividends declared and participation rights in undistributed earnings. The Company’s restricted stock awards are considered participating securities because holders are entitled to receive non-forfeitable dividends during the vesting term. Diluted EPS includes securities that could potentially dilute basic EPS during a reporting period, for which the Company includes the Debentures and share-based compensation awards. Dilutive securities are not included in the computation of loss per share when a company reports a net loss from continuing operations as the impact would be anti-dilutive.

For all but the performance units, which are further described in Note 20. "Share-Based Compensation" in the Company's Annual Report on Form 10-K for the year ended December 31, 2016, the potentially dilutive impact of the Company’s share-based compensation awards is determined using the treasury stock method. Under the treasury stock method, awards are treated as if they had been exercised with any proceeds used to repurchase common stock at the average market price during the period. Any incremental difference between the assumed number of shares issued and purchased is included in the diluted share computation. For the Company’s performance units, their contingent features result in an assessment for any potentially dilutive common stock by using the end of the reporting period as if it were the end of the contingency period for all units granted.

A conversion of the Debentures could have resulted, up to the time of the cancellation, in payment for any conversion value in excess of the principal amount of the Debentures in the Company’s common stock. For diluted EPS purposes, potential common stock is calculated based on whether the market price of the Company’s common stock at the end of each reporting period is in excess of the conversion price of the Debentures. The effect of the Debentures was excluded from the calculation of diluted EPS for all periods presented herein because to do so would have been anti-dilutive for those periods.

The computation of diluted EPS also excluded aggregate share-based compensation awards of approximately 0.2 million and 0.5 million for the three months ended March 31, 2017 and 2016, respectively, because to do so would have been anti-dilutive for those periods. Because the potential dilutive impact of such share-based compensation awards is calculated under the treasury stock method, anti-dilution generally occurs when the exercise prices or unrecognized compensation cost per share of such awards are higher than the Company's average stock price during the applicable period.

The following illustrates the earnings allocation method utilized in the calculation of basic and diluted EPS.



	Three Months Ended
	March 31,
	2017			2016
	(In millions, except per share data)
EPS numerator:
Income (loss) from continuing operations, net of income taxes	$	124.3		$	(167.7	)
Less: Net income attributable to noncontrolling interests	4.8			—
Income (loss) from continuing operations attributable to common stockholders, before allocation of earnings to participating securities	119.5			(167.7		)
Less: Earnings allocated to participating securities	1.1			—
Income (loss) from continuing operations attributable to common stockholders, after allocation of earnings to participating securities ⁽¹⁾	118.4			(167.7		)
Loss from discontinued operations, net of income taxes	(4.1		)	(3.4		)
Less: Loss from discontinued operations allocated to participating securities	(0.1		)	—
Loss from discontinued operations attributable to common stockholders, after allocation of earnings to participating securities ⁽¹⁾	(4.0		)	(3.4		)
Net income (loss) attributable to common stockholders, after allocation of earnings to participating securities ⁽¹⁾	$	114.4		$	(171.1	)

EPS denominator:
Weighted average shares outstanding — basic	18.3			18.3
Impact of dilutive securities	0.1			—
Weighted average shares outstanding — diluted	18.4			18.3

Basic EPS attributable to common stockholders:
Income (loss) from continuing operations	$	6.46		$	(9.17	)
Loss from discontinued operations	(0.22		)	(0.18		)
Net income (loss) attributable to common stockholders	$	6.24		$	(9.35	)

Diluted EPS attributable to common stockholders:
Income (loss) from continuing operations	$	6.44		$	(9.17	)
Loss from discontinued operations	(0.23		)	(0.18		)
Net income (loss) attributable to common stockholders	$	6.21		$	(9.35	)


⁽¹⁾	The reallocation adjustment for participating securities to arrive at the numerator used to calculate diluted EPS was less than $0.1 million for the periods presented.

In accordance with the Plan, each share of the Company’s common stock outstanding prior to the Effective Date (reflected in the table above), including all options and warrants to purchase such stock, were extinguished, canceled and discharged, and each such share, option or warrant has no further force or effect after the Effective Date. Furthermore, all of the Company’s equity award agreements under prior incentive plans, and the equity awards granted pursuant thereto, were extinguished, canceled and discharged and have no further force or effect after the Effective Date.

The successor Company would have approximately 137.3 million shares of Common Stock issued, assuming full conversion of the Preferred Stock (including make-whole shares issuable upon conversion of the Preferred Stock) and full exercise of all Warrants issued in connection with the Company’s emergence from the Chapter 11 Cases.