Note 15 — Earnings Per Share

Basic and diluted earnings per share are calculated by dividing net income attributable to Willis Towers Watson by the average number of ordinary shares outstanding during each period. The computation of diluted earnings per share reflects the potential dilution that could occur if dilutive securities and other contracts to issue shares were exercised or converted into shares or resulted in the issuance of shares that then shared in the net income of the Company.

At September 30, 2018 and 2017, there were 0.5 million and 0.9 million time-based share options; 0.6 million and 1.0 million performance-based options; 0.1 million and 0.4 million restricted time-based stock units; and 0.8 million and 0.6 million restricted performance-based stock units, respectively. In addition, the Company had 0.3 million performance-based phantom units outstanding at September 30, 2018; there were no phantom units outstanding at September 30, 2017.

Basic and diluted earnings per share are as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Net income/(loss) attributable to Willis Towers Watson	$	44		$	(54	)	$	317		$	323

Basic average number of shares outstanding		131			134			132			136
Dilutive effect of potentially issuable shares		1			—			—			1
Diluted average number of shares outstanding		132			134			132			137

Basic earnings/(loss) per share	$	0.34		$	(0.40	)	$	2.40		$	2.38
Dilutive effect of potentially issuable shares		(0.01	)		—			(0.01	)		(0.02	)
Diluted earnings/(loss) per share	$	0.33		$	(0.40	)	$	2.39		$	2.36

For the three and nine months ended September 30, 2018, 0.3 million and 0.2 million restricted stock units were not included in the computation of the dilutive effect of potentially issuable shares because their effect was anti-dilutive.