Earnings (Loss) Per Share

12 Months Ended

Dec. 31, 2019

16.	Earnings (Loss) Per Share

Beginning in March 2019, we use the two-class method to calculate earnings per share as the unvested restricted stock awards outstanding under our equity incentive plan are participating shares with nonforfeitable rights to dividends. Under the two-class method, we compute earnings per share of common stock by dividing the sum of distributed earnings to common stockholders (currently not applicable as we do not pay dividends) and undistributed earnings allocated to common stockholders by the weighted average number of outstanding shares of common stock for the period. In applying the two-class method, we allocate undistributed earnings to both shares of common stock and participating securities based on the number of weighted average shares outstanding during the period. Any undistributed losses are not allocated to unvested restricted stock as the restricted stockholders are not obligated to share in the losses. The following is a reconciliation of the numerator and denominator of basic and diluted earnings (loss) per share for the years ended December 31, 2019, 2018, and 2017:

(In thousands except per share data)	Year Ended December 31,
Numerator:	2019			2018		2017
Income (loss) from continuing operations attributable to Tivity Health, Inc. - numerator for earnings (loss) per share	$	(286,821	)	$	97,902	$	61,230
Net income from discontinued operations attributable to Tivity Health, Inc. - numerator for earnings (loss) per share		—			901		2,485
Net income (loss) attributable to Tivity Health, Inc. - numerator for earnings (loss) per share	$	(286,821	)	$	98,803	$	63,715

Denominator:
Shares used for basic income (loss) per share		46,509			40,078		39,357
Effect of dilutive stock options and restricted stock units outstanding:
Non-qualified stock options		—			264		436
Restricted stock units		—			299		549
Warrants related to Cash Convertible Notes		—			2,013		1,709
Market stock units		—			419		496
Shares used for diluted income (loss) per share ⁽¹⁾		46,509			43,073		42,547

Earnings (loss) per share attributable to Tivity Health, Inc. - basic:
Continuing operations	$	(6.17	)	$	2.44	$	1.56
Discontinued operations	$	—		$	0.02	$	0.06
Net income (loss) ⁽²⁾	$	(6.17	)	$	2.47	$	1.62

Earnings (loss) per share attributable to Tivity Health, Inc. - diluted: ⁽¹⁾
Continuing operations	$	(6.17	)	$	2.27	$	1.44
Discontinued operations	$	—		$	0.02	$	0.06
Net income (loss)	$	(6.17	)	$	2.29	$	1.50

Dilutive securities outstanding not included in the computation of earnings (loss) per share because their effect is anti-dilutive:
Non-qualified stock options		159			56		4
Restricted stock units		681			36		12
Restricted stock awards		102			—		—
Performance-based stock units		15			—		—

⁽¹⁾

^{The impact of potentially dilutive securities for the year ended December 31, 2019 was not considered because the impact would be anti-dilutive.}

⁽²⁾

^{Figures may not add due to rounding.}

Market stock units and performance-based stock units outstanding are considered contingently issuable shares, and certain of these market stock units were excluded from the calculations of diluted earnings per share for all periods presented because the performance criteria had not been met as of the end of the reporting periods.