Earnings (Loss) Per Share Attributable to Navistar International Corporation

The following table presents the information used in the calculation of our basic and diluted earnings (loss) per share for continuing operations, discontinued operations, and net loss, all attributable to NIC in our Consolidated Statements of Operations:



	For the Years Ended October 31,
(in millions, except per share data)	2016			2015			2014
Numerator:
Amounts attributable to Navistar International Corporation common stockholders:
Loss from continuing operations, net of tax	$	(97	)	$	(187	)	$	(622	)
Income from discontinued operations, net of tax	—			3			3
Net loss	$	(97	)	$	(184	)	$	(619	)

Denominator:
Weighted average shares outstanding:
Basic	81.7			81.6			81.4
Effect of dilutive securities	—			—			—
Diluted	81.7			81.6			81.4

Earnings (loss) per share attributable to Navistar International Corporation:
Basic:
Continuing operations	$	(1.19	)	$	(2.29	)	$	(7.64	)
Discontinued operations	—			0.04			0.04
Net loss	$	(1.19	)	$	(2.25	)	$	(7.60	)
Diluted:
Continuing operations	$	(1.19	)	$	(2.29	)	$	(7.64	)
Discontinued operations	—			0.04			0.04
Net loss	$	(1.19	)	$	(2.25	)	$	(7.60	)

The conversion rate on our 2014 Convertible Notes was 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 were anti-dilutive when calculating diluted earnings per share when our average stock price is less than $50.27 and $60.14, respectively. During the second quarter of 2014, we unwound warrants representing 6.5 million shares associated with the repurchased 2014 Convertible Notes. On October 15, 2014, upon maturity the 2014 Convertible Notes were repaid in full. During the first quarter of 2015, we unwound warrants representing 1.9 million shares associated with the 2014 Convertible Notes, and the remaining 2.9 million warrants expired worthless on April 10, 2015.

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 have an anti-dilutive effect when calculating diluted earnings per share when our average stock price is less than $58.40.

The conversion rate on our 2019 Convertible Notes is 18.4946 shares of common stock per $1,000 principal amount of 2019 Convertible Notes, equivalent to an initial conversion price of approximately $54.07 per share of common stock. The 2019 Convertible Notes have an anti-dilutive effect when calculating diluted earnings per share when our average stock price is less than $54.07.

For more information on our 2014 Convertible Notes, 2018 Convertible Notes, and 2019 Convertible Notes, see Note 9, Debt.

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, 2016, 2015, and 2014, no dilutive securities were included in the computation of diluted earnings per share because they would have been anti-dilutive due to the net loss attributable to NIC. Additionally, certain securities 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, 2016, 2015, and 2014, the aggregate shares not included were 15.0 million, 15.7 million, and 24.8 million, respectively.

Pursuant to the announced VW T&B Stock Purchase Agreement, we will issue and VW T&B will purchase 16.2 million of our newly issued shares for an aggregate purchase price of $256 million at $15.76 per share (an estimated 19.9% stake (16.6% on a pro forma basis) in the Company). The closing of the Stock Purchase Agreement is subject to certain regulatory approvals and the finalization of the definitive agreements and contracts, among other customary closing conditions.

For both of the years ended October 31, 2016 and 2015, the aggregate shares not included in the computation of earnings per share were primarily comprised of 3.4 million shares related to the 2018 Convertible Notes and 7.6 million shares related to the 2019 Convertible Notes.

For the year ended October 31, 2014, the aggregate shares not included in the computation of earnings per share were primarily comprised of 6.4 million shares related to the warrants associated with the 2014 Convertible Notes, 4.5 million shares related to the 2014 Convertible Notes, 3.4 million shares related to the 2018 Convertible Notes, and 5.7 million shares related to the 2019 Convertible Notes.