NOTE 16: EARNINGS PER SHARE

Basic earnings per share computations are based on the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share include any dilutive effect of potential common shares. In periods with a net loss from continuing operations, diluted earnings per share are calculated using weighted-average basic shares for that period, as utilizing diluted shares would be anti-dilutive to loss per share.

A reconciliation of the amounts used to calculate basic and diluted earnings per share for the three and six months ended June 30, 2017 follows: (in millions):

	Three Months Ended			Six Months Ended
	June 30, 2017			June 30, 2017
Earnings from continuing operations attributable to Eastman Kodak Company	$	7		$	14
Less: Series A convertible preferred stock cash dividend		(3	)		(6	)
Less: Series A convertible preferred stock deemed dividend		(2	)		(4	)
Earnings from continuing operations available to common shareholders - basic and diluted	$	2		$	4

Earnings from net earnings attributable to Eastman Kodak Company	$	4		$	11
Less: Series A convertible preferred stock cash dividend		(3	)		(6	)
Less: Series A convertible preferred stock deemed dividend		(2	)		(4	)
(Loss) earnings from net earnings available to common shareholders - basic and diluted	$	(1	)	$	1

Weighted-average common shares outstanding - basic	42.5	42.5
Effect of dilutive securities:
Unvested restricted stock units	0.2	0.2
Weighted-average common shares outstanding - diluted	42.7	42.7

The computation of diluted earnings per share for the three and six months ended June 30, 2017 excluded the impact of (1) the assumed conversion of 2.0 million shares of Series A convertible preferred shares, (2) the assumed conversion of net share settled warrants to purchase 1.8 million shares of common stock at an exercise price of $14.93, (3) the assumed conversion of net share settled warrants to purchase 1.8 million shares of common stock at an exercise price of $16.12 and (4) the assumed conversion of 2.6 million outstanding employee stock options because they would have been anti-dilutive.

Weighted-average basic shares outstanding were 42.2 million for the three and six month periods ended June 30, 2016.

Weighted average diluted shares were 42.6 million for the three-month period ended June 30, 2016 and included the dilutive effect of 0.4 million unvested restricted stock units.

As a result of the net loss from continuing operations for the six months ended June 30, 2016, Kodak calculated earnings per share using weighted-average basic shares outstanding for the period. If Kodak had reported earnings from continuing operations for the six months ended June 30, 2016, Kodak would have included the dilutive effect of 0.2 million unvested restricted stock units.

The computation of diluted earnings per share for the three and six months ended June 30, 2016 excluded the impact of the assumed conversion of net share settled warrants to purchase (a) 1.8 million shares of common shares at an exercise price of $14.93 and (b) 1.8 million shares of common shares at an exercise price of $16.12 because they would have been anti-dilutive. Outstanding stock options of 1.7 million for the three and six months ended June 30, 2016 were not included in the computation of diluted earnings per share as they would also have been anti-dilutive.