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 available to common shareholders, 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 three and six months ended June 30, 2018 and 2017 follows (in millions):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in millions)	2018			2017			2018			2017
Earnings (loss) from continuing operations	$	4		$	7		$	(21	)	$	14
Less: Series A convertible preferred stock cash dividend		(3	)		(3	)		(6	)		(6	)
Less: Series A convertible preferred stock deemed dividend		(2	)		(2	)		(4	)		(4	)
(Loss) earnings from continuing operations available to common shareholders - basic and diluted	$	(1	)	$	2		$	(31	)	$	4

Net earnings (loss)	$	4		$	4		$	(21	)	$	11
Less: Series A convertible preferred stock cash dividend		(3	)		(3	)		(6	)		(6	)
Less: Series A convertible preferred stock deemed dividend		(2	)		(2	)		(4	)		(4	)
Net (loss) earnings available to common shareholders - basic and diluted	$	(1	)	$	(1	)	$	(31	)	$	1

(in millions of shares)
Weighted average shares - basic	42.7	42.5		42.6	42.5
Effect of dilutive securities
Unvested restricted stock units	0.3	0.2	0.3		0.2
Weighted average shares - diluted	43.0	42.7		42.9		42.7

As a result of the net loss from continuing operations available to common shareholders for the three and six months ended June 30, 2018, Kodak calculated diluted earnings per share using weighted-average basic shares outstanding for those periods. If Kodak reported earnings from continuing operations available to common shareholders for both the three and six months ended June 30, 2018, the calculation of diluted earnings per share would have included the assumed conversion of 0.3 million of unvested restricted stock units.

The computation of diluted earnings per share for the three and six months ended June 30, 2018 and 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 outstanding employee stock options of 4.9 million and 4.8 million for the three and six months ended June 30, 2018, respectively, and 2.6 million for both the three and six months ended June 30, 2017, because the effects would have been anti-dilutive.