(7) EARNINGS PER SHARE

Basic earnings per common share is computed by dividing net income attributable to common stock by the weighted average number of common shares outstanding during the reportable period. The diluted earnings per share calculation adds to the weighted average number of common shares outstanding: the incremental shares that would have been outstanding assuming the exercise of dilutive stock options, the vesting of unvested restricted shares of common stock, performance units and the assumed conversion of mandatory convertible preferred stock. An antidilutive impact is an increase in earnings per share or a reduction in net loss per share resulting from the conversion, exercise or contingent issuance of certain securities.

In January 2015, the Company issued 34,500,000 depositary shares that entitled the holder to a proportional fractional interest in the rights and preferences of the mandatory convertible preferred stock, including conversion, dividend, liquidation and voting rights. The mandatory convertible preferred stock had the non-forfeitable right to participate on an as-converted basis at the conversion rate then in effect in any common stock dividends declared and, therefore, was considered a participating security. Accordingly, it has been included in the computation of basic and diluted earnings per share, pursuant to the two-class method. In the calculation of basic earnings per share attributable to common shareholders, earnings are allocated to participating securities based on actual dividend distributions received plus a proportionate share of undistributed net income attributable to common shareholders, if any, after recognizing distributed earnings. The Company’s participating securities do not participate in undistributed net losses because they are not contractually obligated to do so. On January 12, 2018, all outstanding shares of mandatory convertible preferred stock converted to 74,998,614 shares of the Company’s common stock.

On December 18, 2017, the Company declared the quarterly dividend, which was paid to holders of the mandatory convertible preferred stock in cash on January 16, 2018. Dividends declared in the first, second and third quarters of 2017 were settled partially in common stock for a total of 10,040,306 shares.

In September 2018, the Company repurchased 4,829,011 of its outstanding common stock for approximately $25 million at an average price of $5.18 per share.

The following table presents the computation of earnings per share for the three and nine months ended September 30, 2018 and 2017:


	For the three months ended September 30,				For the nine months ended September 30,
(in millions, except share/per share amounts)	2018		2017		2018		2017
Net income (loss)	$	(29)	$	77	$	230	$	712
Mandatory convertible preferred stock dividend		–		27		–		81
Participating securities - mandatory convertible preferred stock		−		7		1		83
Net income (loss) attributable to common stock	$	(29)	$	43	$	229	$	548

Number of common shares:
Weighted average outstanding		581,171,753		499,812,926		577,912,421		496,458,435
Issued upon assumed exercise of outstanding stock options		–		–		–		–
Effect of issuance of non-vested restricted common stock		–		1,202,585		640,365		883,512
Effect of issuance of non-vested performance units		–		1,275,268		1,276,072		1,185,724
Weighted average and potential dilutive outstanding		581,171,753		502,290,779		579,828,858		498,527,671

Earnings (loss) per common share:
Basic	$	(0.05)	$	0.09	$	0.40	$	1.11
Diluted	$	(0.05)	$	0.09	$	0.39	$	1.10

The following table presents the common stock shares equivalent excluded from the calculation of diluted earnings per share for the three and nine months ended September 30, 2018 and 2017, as they would have had an antidilutive effect:


	For the three months ended		For the nine months ended
	September 30,		September 30,
	2018	2017	2018	2017
Unexercised stock options	717	180,932	–	60,973
Unvested share-based payment	3,463,802	5,703,086	4,246,492	5,356,166
Performance units	2,000,553	1,036,422	856,703	1,036,422
Mandatory convertible preferred stock	–	74,999,895	3,296,642	74,999,895
Total	5,465,072	81,920,335	8,399,837	81,453,456