NOTE 14. EARNINGS PER SHARE

Basic (loss) earnings per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of shares of common stock outstanding. Diluted earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of shares of the Company’s common stock outstanding plus other potentially dilutive securities, except when the effect would be anti-dilutive. Dilutive securities include equity-based awards issued under long-term incentive plans, as discussed in Note 10 “Equity Based Compensation.”

The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating securities according to dividends or dividend equivalents and participation rights in undistributed earnings in periods when we have net income. None of our securities are considered participating securities for the periods presented.

As described in Note 1 “Organization and Basis of Presentation,” on May 30, 2018, LQH Parent stockholders of record as of May 18, 2018, received one share of CorePoint common stock for each share of LQH Parent common stock held after giving effect to the Reverse Stock Split. Basic and diluted net income (loss) per share for the three and nine months ended September 30, 2018 is calculated using the weighted average number of basic, dilutive and anti-dilutive common shares outstanding during the periods, as adjusted for the one-to-two distribution ratio.

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

	For the Three Months Ended September 30,					For the Nine Months Ended September 30,
	2018			2017		2018			2017

Numerator:
Income (loss) from Continuing Operations, net of tax	$	(13	)	$	10	$	(51	)	$	34
Loss on Discontinued Operations, net of tax		-			3		(25	)		(3	)
Net income (loss) attributable to CorePoint Lodging's stockholders	$	(13	)	$	13	$	(76	)	$	31
Denominator:
Weighted average number of shares outstanding, basic		58.5			58.0		58.3			58.0
Weighted average number of shares outstanding, diluted		58.5			58.4		58.3			58.3

Basic earnings (loss) per share from continuing operations	$	(0.22	)	$	0.16	$	(0.87	)	$	0.59
Basic earnings (loss) per share from discontinued operations		—			0.06		(0.43	)		(0.05	)
Basic earnings (loss) per share	$	(0.22	)	$	0.22	$	(1.30	)	$	0.54

Diluted earnings (loss) per share from continuing operations	$	(0.22	)	$	0.16	$	(0.87	)	$	0.58
Diluted earnings (loss) per share from discontinued operations		—			0.06		(0.43	)		(0.06	)
Diluted earnings (loss) per share	$	(0.22	)	$	0.22	$	(1.30	)	$	0.52

The earnings per share amounts are calculated using unrounded amounts and shares which result in differences in rounding of the presented per share amounts.

For the three and nine months ended September 30, 2018, approximately 1.2 million shares and 0.8 million shares, respectively, were excluded from the computation of diluted shares, as their impact would have been anti-dilutive.