NOTE 10—EARNINGS (LOSS) PER SHARE

The numerators and denominators of the basic and diluted earnings (loss) per share (“EPS”) computations for our common stock are calculated as follows:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In millions, except per share amounts)	2018		2017		2018		2017
Numerator:
Net income	$	103.6	$	44.3	$	182.3	$	24.2
Convertible preferred stock accretion		—		(54.8)		—		(106.1)
Net reversal of convertible preferred stock accretion due to recapitalization of convertible preferred stock to common stock (1)		—		—		423.2		—
Net income (loss) attributable to common stockholders used for basic EPS computation		103.6		(10.5)		605.5		(81.9)
Add back the effect of dilutive securities:
Convertible preferred stock accretion (2)		—		—		—		—
Net income (loss) attributable to common stockholders used for diluted EPS computation	$	103.6	$	(10.5)	$	605.5	$	(81.9)

Denominator:
Weighted average shares used for basic EPS computation		109.3		51.8		98.9		51.8
Effect of dilutive securities:
Convertible preferred stock (2)		—		—		—		—
Restricted stock units (3) (4)		—		—		—		—
Dilutive potential common shares		—		—		—		—
Number of shares used for diluted EPS computation		109.3		51.8		98.9		51.8

Basic and diluted EPS	$	0.95	$	(0.20)	$	6.12	$	(1.58)

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(1)

The accreted value of our Preferred Stock was $1,132.7 million at December 31, 2017. In connection with the IPO, the Preferred Stock was recapitalized into 39.4 million shares of common stock. These shares of common stock had a value of $709.5 million at the IPO share price of $18.00, which resulted in a net reversal of $423.2 million of convertible preferred stock accretion previously recognized.

(2)

Dilutive securities in our diluted EPS calculation for 2017 do not include the effects of converting the convertible preferred stock because the effect would be antidilutive. The number of common stock equivalents attributable to convertible preferred stock was 13.0 million shares as of June 30, 2017.

(3)

Dilutive securities in our diluted EPS calculation do not include RSUs granted under our 2014 LTIP. Vesting of these RSUs was dependent upon the satisfaction of both a service condition and a corporate liquidity event such as an initial public offering of our common stock. As of June 30, 2017, a corporate liquidity event had not occurred and the holders of these RSUs had no rights to our undistributed earnings. Therefore, they were excluded from the effect of dilutive securities. The number of common stock equivalents attributable to these RSUs was approximately 128,000 shares as of June 30, 2017.

(4)

Dilutive securities in our diluted EPS calculation for 2018 do not include RSUs granted under our 2018 Plan because the effect would be antidilutive. The number of common stock equivalents attributable to these RSUs was 2.8 million as of June 30, 2018.