Note 16. Earnings Per Share

The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share (“EPS”) computations for the periods indicated (in thousands, except per share data):


	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017			2016
Basic:
Net income (loss) attributable to ARRIS International plc	$	30,336	$	84,228	$	(8,762	)	$	(118,345	)
Weighted average shares outstanding		186,803		190,409		188,291			191,076
Basic earnings (loss) per share	$	0.16	$	0.44	$	(0.05	)	$	(0.62	)
Diluted:
Net income (loss) attributable to ARRIS International plc	$	30,336	$	84,228	$	(8,762	)	$	(118,345	)
Weighted average shares outstanding		186,803		190,409		188,291			191,076
Net effect of dilutive equity awards		2,199		841		—			—

Total		189,002		191,250		188,291			191,076
Diluted earnings (loss) per share	$	0.16	$	0.44	$	(0.05	)	$	(0.62	)

Potential dilutive shares include unvested restricted and performance awards and warrants.

For the three months ended June 30, 2017 and 2016, approximately 3.4 million and 2.5 million of the equity-based awards were excluded from the computation of diluted earnings per share. During the six months ended June 30, 2017 and 2016, all of the equity-based awards were excluded from the computation of diluted earnings per share. These exclusions are made if the exercise price of these equity-based awards is in excess of the average market price of the shares for the period, or if the Company has net losses, both of which have an anti-dilutive effect.

During the six months ended June 30, 2017, the Company issued 1.3 million ordinary shares related to the vesting of restricted shares, as compared to 2.3 million shares for the twelve months ended December 31, 2016.

The warrants have a dilutive effect in those periods in which the average market price of the shares exceeds the current effective conversion price (under the treasury stock method), and are not subject to performance conditions. During the fourth quarter of 2016, approximately 2.2 million warrants vested based on the amount of purchases of products and services by the respective customers from the Company. There is no vesting in the first half of 2017. The dilutive effect of these vested shares was immaterial.

In connection with the Combination, ARRIS issued approximately 47.7 million ARRIS International plc ordinary shares as part of the purchase consideration. The fair value of the 47.7 million shares issued, $1,434.7 million, was determined based on the conversion of each of Pace’s shares and equity awards outstanding at a conversion rate of 0.1455 with a value of $30.08 at January 4, 2016, which represents the opening price of the Company’s shares at the date of Combination.

The Company has not paid cash dividends on its shares since its inception. Any future determination to pay dividends will be at the discretion of the Board of Directors and will be dependent on then-existing conditions, including the Company’s financial condition, results of operations, capital requirements, contractual and legal restrictions, business prospects and other factors that the Board considers relevant. The Amended Credit Agreement contains restrictions on the Company’s ability to pay dividends on its ordinary shares.