Note 4. Earnings Per Share

The following table sets forth the computation of basic and diluted net (loss) income per share (in millions, except per share data):



	Three Months Ended						Six Months Ended
	December 26, 2015			December 27, 2014			December 26, 2015			December 27, 2014
Numerator:
Net income (loss)	$	2.8		$	(4.1	)	$	2.6		$	0.2
Less: Cumulative dividends on Series A Preferred Stock	(0.2		)	—			(0.3		)	—
Less: Accretion of Series A Preferred Stock	(2.0		)	—			(11.7		)	—
Net income (loss) available to common stockholders	$	0.6		$	(4.1	)	$	(9.4	)	$	0.2
Denominator:
Weighted-average number of common shares outstanding
Basic	59.0			58.8			58.9			58.8
Effect of dilutive securities from stock-based benefit plans	0.2			—			—			—
Diluted	59.2			58.8			58.9			58.8
Net income (loss) per share attributable to common stockholders:
Basic	$	0.01		$	(0.07	)	$	(0.16	)	$	—
Diluted	$	0.01		$	(0.07	)	$	(0.16	)	$	—

On August 1, 2015, JDS Uniphase Corporation (“JDSU”) distributed 47.1 million shares, or 80.1% of the outstanding shares of common stock of Lumentum Holdings Inc. (“we”, “our” or “Lumentum”) to existing holders of JDSU common stock. JDSU was renamed Viavi Solutions Inc. (“Viavi”) and at the time of the distribution, retained 11.7 million shares, or 19.9% of Lumentum's outstanding shares. The weighted average number of common shares outstanding is calculated as the number of shares of common stock outstanding immediately following the Separation, and the weighted average number of shares outstanding following the Separation through December 26, 2015. Diluted earnings per share is calculated by dividing net income for the period by the weighted average number of shares of common stock and potentially dilutive common stock outstanding for the period beginning after the Separation. Basic and diluted net income (loss) per share for the three and six months ended December 27, 2014 is calculated using the shares of Lumentum common stock outstanding on August 1, 2015, as if such shares were outstanding for the entire period.

The dilutive effect of share-based awards is reflected in diluted earnings per share by application of the treasury stock method, which includes consideration of unamortized share-based compensation expense, the tax benefits or shortfalls recorded to additional paid-in capital and the dilutive effect of in-the-money options and non-vested restricted stock units. Under the treasury stock method, the amount the employee must pay for exercising stock options and unamortized share-based compensation expense and tax benefits or shortfalls collectively are assumed proceeds to be used to repurchase hypothetical shares. An increase in the fair market value of the company's common stock can result in a greater dilutive effect from potentially dilutive awards.

The dilutive effect of the redeemable convertible preferred stock is reflected in diluted earnings per share by the application of the if-converted method. The number of shares is increased for the assumed conversion of the instrument. Additionally, cumulative dividends and accretion from measuring the instrument at its redemption value are added back to net income.

We excluded from the calculation of diluted earnings per share all anti-dilutive instruments.

The following table sets forth the weighted-average potentially dilutive securities excluded from the computation of the diluted net income (loss) per share because the effect would have been anti-dilutive (in millions):



	Three Months Ended	Six Months Ended
	December 26, 2015	December 26, 2015
Restricted stock units	—	0.1
Redeemable convertible preferred stock	1.5	1.2
Stock options and employee stock purchase plan	—	0.1
Total potentially dilutive securities	1.5	1.4