Note 16. Earnings Per Share

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


	For the Years Ended December 31,
	2017		2016		2015
Basic:
Net income attributable to ARRIS International plc.	$	92,027	$	18,100	$	92,181

Weighted average shares outstanding		187,133		190,701		146,388

Basic earnings per share	$	0.49	$	0.09	$	0.63

Diluted:
Net income attributable to ARRIS International plc.	$	92,027	$	18,100	$	92,181

Weighted average shares outstanding		187,133		190,701		146,388
Net effect of dilutive shares		2,483		1,484		2,971

Total		189,616		192,185		149,359

Diluted earnings per share	$	0.49	$	0.09	$	0.62

Potential dilutive shares include stock options, unvested restricted and performance awards and warrants.

For the year ended December 31, 2017, 2016 and 2015, approximately 1.1 million, 0.9 thousand and 6.8 million of the equity-based awards, respectively, were excluded from the computation of diluted earnings per share because their effect would have been anti-dilutive. 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 twelve months ended December 31, 2017, the Company issued 2.6 million shares of its ordinary shares related to the vesting of restricted stock units, 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 exercise 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 customer from the Company. There was no vesting in 2017. The dilutive effect of these vested shares was immaterial.

In connection with the Pace combination in 2016, ARRIS issued approximately 47.7 million 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 Pace combination.

The Company has not paid cash dividends on its stock 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 Credit Agreement contains restrictions on the Company’s ability to pay dividends on its ordinary shares.