NOTE 6 – LOSS PER SHARE

Loss per common share is based upon the weighted average number of common shares outstanding during the respective periods. Because the Company is reporting a loss from continuing operations attributable to the Company for the three years ended December 31, 2015, the dilutive calculation of earnings per common share excludes the dilutive impact of stock options, performance-based restricted shares and tangible equity units. The Company follows the provisions of the authoritative guidance for determining whether instruments granted in share-based payment transactions are participating securities, which requires that unvested restricted stock that entitles the holder to receive nonforfeitable dividends before vesting be included as a participating security in the basic and diluted earnings per common share calculation pursuant to the two-class method. However, because the Company reported a loss from continuing operations attributable to the Company, there was no allocation to participating unvested restricted stockholders for all periods presented.

NOTE 6 – LOSS PER SHARE (Continued)

A computation of the loss per common share follows (in thousands, except per share amounts):

	Year ended December 31,
	2015						2014						2013
	Basic			Diluted			Basic			Diluted			Basic			Diluted
Loss:
Amounts attributable to Kindred stockholders:
Loss from continuing operations:
As reported in Statement of Operations	$	(94,427	)	$	(94,427	)	$	(13,976	)	$	(13,976	)	$	(44,523	)	$	(44,523	)
Allocation to participating unvested restricted stockholders		–			–			–			–			–			–
Available to common stockholders	$	(94,427	)	$	(94,427	)	$	(13,976	)	$	(13,976	)	$	(44,523	)	$	(44,523	)
Discontinued operations, net of income taxes:
Loss from operations:
As reported in Statement of Operations	$	(201	)	$	(201	)	$	(53,163	)	$	(53,163	)	$	(40,082	)	$	(40,082	)
Allocation to participating unvested restricted stockholders		–			–			–			–			–			–
Available to common stockholders	$	(201	)	$	(201	)	$	(53,163	)	$	(53,163	)	$	(40,082	)	$	(40,082	)
Gain (loss) on divestiture of operations:
As reported in Statement of Operations	$	1,244		$	1,244		$	(12,698	)	$	(12,698	)	$	(83,887	)	$	(83,887	)
Allocation to participating unvested restricted stockholders		–			–			–			–			–			–
Available to common stockholders	$	1,244		$	1,244		$	(12,698	)	$	(12,698	)	$	(83,887	)	$	(83,887	)
Income (loss) from discontinued operations:
As reported in Statement of Operations	$	1,043		$	1,043		$	(65,861	)	$	(65,861	)	$	(123,969	)	$	(123,969	)
Allocation to participating unvested restricted stockholders		–			–			–			–			–			–
Available to common stockholders	$	1,043		$	1,043		$	(65,861	)	$	(65,861	)	$	(123,969	)	$	(123,969	)
Net loss:
As reported in Statement of Operations	$	(93,384	)	$	(93,384	)	$	(79,837	)	$	(79,837	)	$	(168,492	)	$	(168,492	)
Allocation to participating unvested restricted stockholders		–			–			–			–			–			–
Available to common stockholders	$	(93,384	)	$	(93,384	)	$	(79,837	)	$	(79,837	)	$	(168,492	)	$	(168,492	)
Shares used in the computation:
Weighted average shares outstanding – basic computation		84,558			84,558			58,634			58,634			52,249			52,249
Dilutive effect of employee stock options					–						–						–
Dilutive effect of performance-based restricted shares					–						–						–
Dilutive effect of tangible equity units					–						–						–
Adjusted weighted average shares outstanding – diluted computation					84,558						58,634						52,249
Loss per common share:
Loss from continuing operations	$	(1.12	)	$	(1.12	)	$	(0.24	)	$	(0.24	)	$	(0.85	)	$	(0.85	)
Discontinued operations:
Loss from operations		–			–			(0.91	)		(0.91	)		(0.77	)		(0.77	)
Gain (loss) on divestiture of operations		0.01			0.01			(0.21	)		(0.21	)		(1.61	)		(1.61	)
Income (loss) from discontinued operations		0.01			0.01			(1.12	)		(1.12	)		(2.38	)		(2.38	)
Net loss	$	(1.11	)	$	(1.11	)	$	(1.36	)	$	(1.36	)	$	(3.23	)	$	(3.23	)
Number of antidilutive stock options, performance-based restricted shares and tangible equity units excluded from shares used in the diluted loss per common share computation					2,600						1,276						1,038