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 convertible preferred stock was considered a participating security because holders were entitled to receive dividends on an if-converted basis. The Predecessor Company’s restricted stock awards were considered participating securities because holders were entitled to receive non-forfeitable dividends during the vesting term. Diluted EPS includes securities that could potentially dilute basic EPS during a reporting period and assumes that participating securities are not executed or converted. As such, the Company includes the share-based compensation awards in its potentially dilutive securities. The calculation of diluted EPS for the Predecessor Company also considered the impact of its Convertible Junior Subordinated Debentures due December 2066 (the Debentures). 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, 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 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.

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

The computation of diluted EPS excluded aggregate share-based compensation awards of less than 0.1 million for the three months ended September 30, 2018 and 2017, the nine months ended September 30, 2018 and the period April 2 through September 30, 2017, respectively, and approximately 0.2 million for the period January 1 through April 1, 2017, 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.



	Successor						Successor						Predecessor
	Three Months Ended September 30, 2018			Three Months Ended September 30, 2017			Nine Months Ended September 30, 2018			April 2 through September 30, 2017			January 1 through April 1, 2017
	(In millions, except per share data)
EPS numerator:
Income (loss) from continuing operations, net of income taxes	$	83.9		$	233.7		$	412.2		$	335.1		$	(195.5	)
Less: Series A Convertible Preferred Stock dividends	—			23.5			102.5			138.6			—
Less: Net income attributable to noncontrolling interests	8.3			5.1			8.9			8.9			4.8
Income (loss) from continuing operations attributable to common stockholders, before allocation of earnings to participating securities	75.6			205.1			300.8			187.6			(200.3		)
Less: Earnings allocated to participating securities	—			51.6			5.7			50.6			—
Income (loss) from continuing operations attributable to common stockholders, after allocation of earnings to participating securities ⁽¹⁾	75.6			153.5			295.1			137.0			(200.3		)
Loss from discontinued operations, net of income taxes	(4.1		)	(3.7		)	(9.0		)	(6.4		)	(16.2		)
Less: Loss from discontinued operations allocated to participating securities	—			(0.9		)	(0.2		)	(1.7		)	—
Loss from discontinued operations attributable to common stockholders, after allocation of earnings to participating securities	(4.1		)	(2.8		)	(8.8		)	(4.7		)	(16.2		)
Net income (loss) attributable to common stockholders, after allocation of earnings to participating securities ⁽¹⁾	$	71.5		$	150.7		$	286.3		$	132.3		$	(216.5	)

EPS denominator:
Weighted average shares outstanding — basic	118.6			101.6			121.3			99.2			18.3
Impact of dilutive securities	1.7			1.5			1.8			1.0			—
Weighted average shares outstanding — diluted ⁽²⁾	120.3			103.1			123.1			100.2			18.3

Basic EPS attributable to common stockholders:
Income (loss) from continuing operations	$	0.64		$	1.51		$	2.43		$	1.38		$	(10.93	)
Loss from discontinued operations	(0.04		)	(0.03		)	(0.07		)	(0.05		)	(0.88		)
Net income (loss) attributable to common stockholders	$	0.60		$	1.48		$	2.36		$	1.33		$	(11.81	)

Diluted EPS attributable to common stockholders:
Income (loss) from continuing operations	$	0.63		$	1.49		$	2.40		$	1.37		$	(10.93	)
Loss from discontinued operations	(0.04		)	(0.02		)	(0.07		)	(0.05		)	(0.88		)
Net income (loss) attributable to common stockholders	$	0.59		$	1.47		$	2.33		$	1.32		$	(11.81	)

⁽¹⁾

There was no reallocation adjustment for participating securities to arrive at the numerator to calculate diluted EPS for the three months ended September 30, 2018, due to the conversion of all remaining shares of Preferred Stock as of January 31, 2018. The reallocation adjustment for participating securities to arrive at the numerator to calculate diluted EPS was $0.6 million, $0.1 million and $0.4 million for the three months ended September 30, 2017, the nine months ended September 30, 2018 and the period April 2 through September 30, 2017, respectively.

⁽²⁾

The two-class method assumes that participating securities are not exercised or converted. As such, weighted average diluted shares outstanding excluded 34.2 million shares, 2.8 million shares and 36.7 million shares related to the participating securities for the three months ended September 30, 2017, the nine months ended September 30, 2018 and the period April 2 through September 30, 2017, respectively.

In accordance with the Plan, each share of the Predecessor Company’s common stock outstanding prior to the Effective Date, 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 Predecessor 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.

As of January 31, 2018, all 30.0 million shares of Preferred Stock issued upon the Effective Date had been converted into 59.3 million shares of common stock, which is inclusive of the shares that had been issued for the payable in-kind preferred stock dividends.