Note 2 – Earnings Per Share

Basic earnings or loss per share is computed by dividing net income or loss available to MasTec’s common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing net income available to MasTec’s common shareholders by the number of fully diluted shares, which includes the effect of dilutive potential issuances of common shares as determined using income from continuing operations, including the potential issuance of common shares upon the exercise, conversion or vesting of outstanding stock options and unvested restricted shares, as calculated under the treasury stock method, as well as shares associated with the Company’s convertible debt securities, which matured and were converted in 2014. If the Company reports a loss, rather than income, from continuing operations, the computation of diluted loss per share excludes dilutive common stock equivalents as their effect would be anti-dilutive. For the nine month period ended September 30, 2015, the Company reported a net loss from continuing operations, and 648,379 dilutive common shares were excluded from the calculation of diluted net loss per share for the related period. Therefore, diluted and basic earnings per share were the same in this period.

There were no anti-dilutive common stock equivalents for the three and nine month periods ended September 30, 2015, except for those excluded from the calculation of diluted net loss per share as discussed above. For the three and nine month periods ended September 30, 2014, there were 304,486 and 223,422 weighted average anti-dilutive common stock equivalents excluded from the calculation of diluted earnings per share because their effect would have been anti-dilutive.

The following table provides details underlying the Company’s earnings per share calculations for the periods indicated (in thousands):



	For the Three Months Ended September 30,					For the Nine Months Ended September 30,
	2015		2014			2015			2014
			As Restated						As Restated
Net income (loss) attributable to MasTec:
Net income (loss), continuing operations - basic ^(a)	$	7,618	$	49,306		$	(2,346	)	$	95,399
Interest expense, net of tax, convertible notes	—		20			—			166
Net income (loss), continuing operations - diluted	$	7,618	$	49,326		$	(2,346	)	$	95,565
Net loss from discontinued operations - basic and diluted ^(a)	—		(320		)	—			(592		)
Net income (loss) attributable to MasTec - diluted	$	7,618	$	49,006		$	(2,346	)	$	94,973
Weighted average shares outstanding:
Weighted average shares outstanding - basic	79,845		81,811			80,681			79,158
Dilutive common stock equivalents	603		814			—			798
Dilutive shares, convertible notes	—		3,199			—			6,460
Weighted average shares outstanding - diluted	80,448		85,824			80,681			86,416


(a)	Calculated as total net income (loss) less amounts attributable to non-controlling interests.

Convertible Notes - Diluted Share Impact

In June 2014, $115 million aggregate principal amount of 4.0% senior convertible notes (the “4.0% Convertible Notes”) matured, at which time the holders elected to convert the notes. Upon conversion, the Company paid $105 million in cash and issued 4.2 million shares of common stock in respect thereof. The 4.0% Convertible Notes were composed of $105 million of 4.0% Convertible Notes issued in 2011 (the “2011 4.0% Notes”) and approximately $10 million of 4.0% Convertible Notes issued in 2009 (the “2009 4.0% Notes”). Additionally, in December 2014, $100 million aggregate principal amount of 4.25% senior convertible notes (the “4.25% Convertible Notes”) matured and were converted, and, upon conversion, the Company paid $97 million in cash and issued 2.4 million shares of common stock in respect of such notes. The 4.25% Convertible Notes were composed of $97 million of 4.25% Convertible Notes issued in 2011 (the “2011 4.25% Notes”) and $3 million of 4.25% Convertible Notes issued in 2009 (the “2009 4.25% Notes”). The 2009 4.0% Notes and the 2009 4.25% Notes are collectively referred to as the “2009 Convertible Notes,” and the 2011 4.0% Notes and the 2011 4.25% Notes are collectively referred to as the “2011 Convertible Notes.”

Until their maturity in 2014, dilutive shares associated with the 2009 Convertible Notes were attributable to the underlying principal amounts and were reflected in the calculation of weighted average diluted earnings per share for the corresponding periods by application of the “if-converted” method, whereas dilutive shares associated with the 2011 Convertible Notes were derived from the premium value of the notes in excess of their principal amounts, as calculated using the treasury stock method. These shares were referred to as the “premium shares.” The 4.25% Convertible Notes were convertible at $15.48 per share and the 4.0% Convertible Notes were convertible at $15.76 per share. The calculations underlying the number of premium shares included in the Company’s diluted share count for the periods indicated were as follows (in thousands, except per share amounts):



	2011 4.25% Notes
Premium Share Information:	For the Three Months Ended September 30, 2014		For the Nine Months Ended September 30, 2014
Number of conversion shares, principal amount	6,268		6,268
Per share price, actual average	$	29.73	$	35.06
Premium value	$	89,341	$	122,748
Premium shares	3,005		3,501

In addition to the premium shares described above, there were 2.4 million equivalent premium shares included in the Company's dilutive share calculation for the nine month period ended September 30, 2014 related to the 2011 4.0% Notes, as calculated based on the average price per share of the Company's common stock from the beginning of the period through June 15, 2014, the date of maturity.