Earnings per Share

9 Months Ended

Sep. 30, 2015

Basic earnings per share is calculated by dividing net income by the weighted average number of shares outstanding during the reported period. The calculation of diluted earnings per share is similar to basic earnings per share, except that the weighted average number of shares outstanding includes the dilution from potential shares resulting from stock options, restricted stock awards and other stock awards. The components of basic and diluted earnings per share are as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
In millions, except per share amounts	2015		2014		2015			2014
Net income (loss) attributable to common stockholders	$	78	$	94	$	(165	)	$	249
Weighted average outstanding shares of common stock	139.2		154.5		142.1			156.6
Dilutive effect of employee stock options, restricted stock and other stock awards	2.2		2.6		—			2.5
Common stock and common stock equivalents	141.4		157.1		142.1			159.1
Earnings (loss) per share:
Basic	$	0.56	$	0.61	$	(1.16	)	$	1.59
Diluted	$	0.55	$	0.60	$	(1.16	)	$	1.57

For the nine months ended September 30, 2015, due to the net loss attributable to Teradata common stockholders, largely due to the goodwill impairment charge, potential common shares that would cause dilution, such as employee stock options, restricted stock and other stock awards, have been excluded from the diluted share count because their effect would have been anti-dilutive. For the nine months ended September 30, 2015, the fully diluted shares would have been 144.5 million.

Certain options to purchase shares of common stock were not included in the computation of diluted earnings per share because their exercise prices were greater than the average market price of the common shares for the period, and therefore would have been anti-dilutive. For the three months ended September 30, 2015 and September 30, 2014 there were 3.6 million and 2.2 million shares of common stock excluded from the computation of diluted earnings per share. For the nine months ended September 30, 2015 and September 30, 2014 there were 3.3 million and 2.2 million shares of common stock excluded from the computation of diluted earnings per share.