NOTE 11—LOSS PER SHARE

The Company computes loss per share using the two-class method, as unvested restricted common stock and unvested restricted stock units contain non-forfeitable rights to dividends and meet the criteria of participating securities. Under the two-class method, earnings are allocated between common stock and participating securities. The presentation of basic and diluted earnings per share is required only for each class of common stock and not for participating securities. As such, the Company presents basic and diluted earnings per share for its one class of common stock.

The two-class method includes an earnings allocation formula that determines earnings per share for each class of common stock according to dividends declared and undistributed earnings for the period. The Company’s reported net earnings (loss) are reduced by the amount allocated to participating securities to arrive at the earnings allocated to common stockholders for purposes of calculating earnings per share.

Basic loss per share is computed by dividing net loss attributable to Real Industry, Inc., less dividends on and accretion of the fair value adjustment to Redeemable Preferred Stock, by the weighted average number of common shares outstanding for the reporting period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. For the calculation of diluted earnings per share, the basic weighted average number of common shares outstanding is increased by the dilutive effect of unvested restricted common stock, common stock options, unvested restricted stock units, and the Warrants (as defined below in Note 12—Derivative and Other Financial Instruments and Fair Value Measurements), determined using the treasury stock method.

The following table sets forth the computation of basic and diluted loss per share for the three and nine months ended September 30, 2017 and 2016:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions, except share and per share amounts)	2017		2016		2017		2016
Loss from continuing operations	$	(40.5)	$	(10.8)	$	(58.0)	$	(22.1)
Earnings from discontinued operations, net of income taxes		—		—		—		0.1
Net loss		(40.5)		(10.8)		(58.0)		(22.0)
Earnings from continuing operations attributable to noncontrolling interest		0.3		0.1		0.7		0.5
Net loss attributable to Real Industry, Inc.		(40.8)		(10.9)		(58.7)		(22.5)
Dividends on Redeemable Preferred Stock, in-kind		—		(0.5)		—		(1.4)
Dividends on Redeemable Preferred Stock, in cash or accrued		(0.6)		—		(1.7)		—
Accretion of fair value adjustment to Redeemable Preferred Stock		(0.2)		(0.2)		(0.7)		(0.8)
Numerator for basic and diluted loss per share—Net loss available to common stockholders	$	(41.6)	$	(11.6)	$	(61.1)	$	(24.7)
Denominator for basic and diluted loss per share—Weighted average shares outstanding		29,044,480		29,268,515		28,945,331		29,196,598
Weighted average shares outstanding
Basic and diluted loss per share:
Continuing operations	$	(1.43)	$	(0.40)	$	(2.11)	$	(0.85)
Discontinued operations		—		—		—		—
Basic and diluted loss per share	$	(1.43)	$	(0.40)	$	(2.11)	$	(0.85)

Unvested restricted common stock, common stock options, unvested restricted stock units, and the Warrants are antidilutive and excluded from the computation of diluted loss per share if the assumed proceeds upon exercise or vesting are greater than the cost to reacquire the same number of shares at the average market price during the period. For the three and nine months ended September 30, 2017 and 2016, the impact of all outstanding unvested shares of restricted common stock, common stock options, unvested restricted stock units, and the Warrants are excluded from diluted loss per share as their impact would be antidilutive.

The following tables provide details on the average market price of Real Industry common stock; the outstanding shares of unvested restricted common stock, common stock options, unvested restricted stock units, and Warrants that were potentially dilutive; and summary information about the potentially dilutive common stock equivalents for each of the periods presented:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Average market price of Real Industry common stock	$	2.13	$	7.27	$	3.26	$	7.43

Potentially dilutive common stock equivalents:
Unvested restricted common stock		700,191		571,676		700,191		571,676
Outstanding common stock options		445,100		748,150		445,100		748,150
Unvested restricted stock units		519,835		354,058		519,835		354,058
Warrants		1,448,333		1,448,333		1,448,333		1,448,333
Total potentially dilutive common stock equivalents		3,113,459		3,122,217		3,113,459		3,122,217


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions, except exercise prices)	2017		2016		2017		2016
Average unamortized share-based compensation expense:
Restricted common stock awards	$	3.0	$	2.5	$	3.3	$	2.6
Restricted stock unit awards		0.9		1.3		0.9		1.8
Range of exercise prices on common stock options		$3.00 - $10.00		$3.00 - $10.00		$3.00 - $10.00		$3.00 - $10.00
Weighted average exercise price of the Warrants	$	5.64	$	5.64	$	5.64	$	5.64