Earnings Per Share

6 Months Ended

Jun. 30, 2019

Basic earnings per share (EPS) amounts are computed by dividing earnings, after the deduction of preferred stock dividends declared, by the average number of common shares outstanding. Diluted EPS amounts assume the issuance of common stock for all potentially dilutive share equivalents outstanding.

The information used to compute basic and diluted EPS attributable to Arconic common shareholders was as follows (shares in millions):



	Second quarter ended					Six months ended
	June 30,					June 30,
	2019			2018		2019			2018
Net (loss) income	$	(121	)	$	120	$	66		$	263
Less: preferred stock dividends declared	—			—		(1		)	(1		)
Net (loss) income available to Arconic common shareholders - basic	(121		)	120		65			262
Add: Interest expense related to convertible notes	—			3		—			6
Net (loss) income available to Arconic common shareholders - diluted	$	(121	)	$	123	$	65		$	268

Average shares outstanding - basic	445			483		458			483
Effect of dilutive securities:
Stock options	—			—		—			—
Stock and performance awards	—			5		4			5
Convertible notes	—			14		—			14
Average shares outstanding - diluted	445			502		462			502

Common stock outstanding at June 30, 2019 and 2018 was 440 and 483, respectively. The decrease in common stock outstanding at June 30, 2019 was primarily due to the impact of share repurchases of approximately 45 in the six months ended June 30, 2019 (see Note H). As average shares outstanding are used in the calculation for both basic and diluted EPS, the full

impact of share repurchases was not realized in EPS in the second quarter and six months ended June 30, 2019 as the share repurchases occurred at varying points during 2019.

The following shares were excluded from the calculation of average shares outstanding – diluted as their effect was anti-dilutive (shares in millions).



	Second quarter ended		Six months ended
	June 30,		June 30,
	2019	2018	2019	2018
Convertible notes	14	—	14	—
Stock options⁽¹⁾	9	9	3	9
Stock and performance awards	4	—	—	—

⁽¹⁾

The average exercise price per share of options was $25.03 and $32.66 for the second quarter and six months ended June 30, 2019 and $26.80 for the second quarter and six months ended June 30, 2018.