Note K - Loss Per Share

We present loss per share in accordance with ASC 260, Earnings Per Share. Basic earnings (loss) per share is computed by dividing earnings available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) 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 or resulted in the issuance of common stock that then shared in the earnings of AV Homes. In accordance with ASC 260, the computation of diluted earnings (loss) per share for the nine and three months ended September 30, 2012 and 2011 did not assume the effect of restricted stock units, employee stock options or the 7.50% Notes or 4.50% Notes because the effects were antidilutive.

The weighted average number of shares outstanding in calculating basic loss per share includes cancellation of 26,412 shares and 21,340 shares of common stock for the nine and three months ended September 30, 2012, respectively and issuance of 71,160 and 64,000 shares of common stock for the nine and three months ended September 30, 2012, respectively. We reflect the issuance of 66,538 and 0 shares of our common stock in this calculation for the nine and three months ended September 30, 2011, respectively. In accordance with ASC 260, nonvested shares are not included in basic earnings per share until the vesting requirements are met.

The following table represents the net loss and weighted average shares outstanding for the calculation of basic and diluted loss per share for the nine and three months ended September 30, 2012 and 2011:

	Nine Months						Three Months
	2012			2011			2012			2011
Numerator:
Basic and diluted loss – net loss attributable to AV Homes	$	(31,379	)	$	(148,184	)	$	(11,583	)	$	(121,561	)

Denominator:
Basic and diluted weighted average shares outstanding		12,542,605			12,444,422			12,574,002			12,450,961