NOTE 16: EARNINGS PER SHARE

Basic earnings per share computations are based on the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share include any dilutive effect of potential common shares. In periods with a net loss from continuing operations available to common shareholders, diluted earnings per share are calculated using weighted-average basic shares for that period, as utilizing diluted shares would be anti-dilutive to loss per share.

A reconciliation of the amounts used to calculate basic and diluted earnings per share for the three months ended March 31, 2018 and 2017 follows: (in millions):

	Three Months Ended
	March 31,
(in millions)	2018			2017
Net (loss) earnings attributable to Eastman Kodak Company	$	(25	)	$	7
Less: Series A convertible preferred stock cash dividend		(3	)		(3	)
Less: Series A convertible preferred stock deemed dividend		(2	)		(2	)
Net (loss) earnings available to common shareholders - basic and diluted	$	(30	)	$	2

(in millions of shares)
Weighted average shares - basic	42.6	42.4
Effect of dilutive securities
Unvested restricted stock units	—	0.2
Employee stock options	—	0.1
Weighted average shares - diluted	42.6	42.7

As a result of the net loss from continuing operations available to common shareholders for the three months ending March 31, 2018, Kodak calculated diluted earnings per share using weighted-average basic shares outstanding for those periods. If Kodak reported earnings from continuing operations available to common shareholders for the three months ending March 31, 2018, the calculation of diluted earnings per share would have included the assumed conversion of 0.3 million of unvested restricted stock units.

The computation of diluted earnings per share for the three months ended March 31, 2018 and March 31, 2017 also excluded the impact of (1) the assumed conversion of 2.0 million shares of Series A convertible preferred shares, (2) the assumed conversion of net share settled warrants to purchase 1.8 million shares of common stock at an exercise price of $14.93, (3) the assumed conversion of net share settled warrants to purchase 1.8 million shares of common stock at an exercise price of $16.12 and (4) the assumed conversion of 5.0 million and 1.8 million, respectively, outstanding employee stock options because the effects would have been anti-dilutive.