Earnings (Loss) Per Share Attributable to Navistar International Corporation

The following table presents the information used in the calculation of our basic and diluted loss per share for continuing operations, discontinued operations, and net loss, all attributable to Navistar International Corporation:



(in millions, except per share data)	2013			2012			2011
Numerator:
Amounts attributable to Navistar International Corporation common stockholders:
Income (loss) from continuing operations, net of tax	$	(857	)	$	(2,939	)	$	1,797
Loss from discontinued operations, net of tax	(41		)	(71		)	(74		)
Net income (loss)	$	(898	)	$	(3,010	)	$	1,723

Denominator:
Weighted average shares outstanding:
Basic	80.4			69.1			72.8
Effect of dilutive securities	—			—			3.3
Diluted	80.4			69.1			76.1

Earnings (loss) per share attributable to Navistar International Corporation:
Basic:
Continuing operations	$	(10.66	)	$	(42.53	)	$	24.68
Discontinued operations	(0.51		)	(1.03		)	(1.02		)
Net income (loss)	$	(11.17	)	$	(43.56	)	$	23.66
Diluted:
Continuing operations	$	(10.66	)	$	(42.53	)	$	23.61
Discontinued operations	(0.51		)	(1.03		)	(0.97		)
Net income (loss)	$	(11.17	)	$	(43.56	)	$	22.64

The conversion rate on our 2014 Convertible Notes is 19.891 shares of common stock per $1,000 principal amount of 2014 Convertible Notes, equivalent to an initial conversion price of $50.27 per share of common stock. In connection with the sale of the 2014 Convertible Notes, we sold warrants to various counterparties to purchase shares of our common stock from us at an exercise price of $60.14 per share. The 2014 Convertible Notes and warrants are anti-dilutive when calculating diluted earnings per share when our average stock price is less than $50.27 and $60.14, respectively.

We also purchased call options in connection with the sale of the 2014 Convertible Notes, covering 11.3 million shares at an exercise price of $50.27 per share, which are intended to minimize share dilution associated with the 2014 Convertible Notes; however under accounting guidance, these call options cannot be utilized to offset the dilution of the 2014 Convertible Notes for determining diluted earnings per share as they are anti-dilutive.

The conversion rate on our 2018 Convertible Notes is 17.1233 shares of common stock per $1,000 principal amount of 2018 Convertible Notes, equivalent to an initial conversion price of approximately $58.40 per share of common stock. The 2018 Convertible Notes are anti-dilutive when calculating diluted earnings per share when our average stock price is less than $58.40.

The computation of diluted earnings per share also excludes outstanding options and other common stock equivalents in periods where inclusion of such potential common stock instruments would be anti-dilutive.

For the years ended October 31, 2013 and 2012, no dilutive securities were included in the computation of diluted loss per share since they would have been anti-dilutive due to the net loss attributable to Navistar International Corporation. Additionally, certain securities would have been excluded from the computation of earnings per share, as our average stock price was less than their respective exercise prices. For the years ended October 31, 2013 and 2012, the aggregate shares not included were 29.9 million and 28.5 million, respectively, of which 11.3 million shares were related to the warrants and 11.3 million shares were related to the 2014 Convertible Notes, as well as for the year ended October 31, 2013, 0.9 million shares were related to the 2018 Convertible Notes.

For the year ended October 31, 2011, the aggregate shares not included in the computation of earnings per share, as they would have been anti-dilutive, were 0.9 million. Additionally, the computation of earnings per share for the year ended October 31, 2011 did not include any impact of the forward contract related to the ASR program as it would have been anti-dilutive.