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 income (loss), all attributable to NIC in our Consolidated Statements of Operations:



	For the Years Ended October 31,
(in millions, except per share data)	2018		2017		2016
Numerator:
Amounts attributable to Navistar International Corporation common stockholders:
Income (loss) from continuing operations, net of tax	$	340	$	29	$	(97	)
Income from discontinued operations, net of tax	—		1		—
Net income (loss)	$	340	$	30	$	(97	)

Denominator:
Weighted average shares outstanding:
Basic	98.9		93.0		81.7
Effect of dilutive securities	0.7		0.5		—
Diluted	99.6		93.5		81.7

Earnings (loss) per share attributable to Navistar International Corporation:
Basic:
Continuing operations	$	3.44	$	0.31	$	(1.19	)
Discontinued operations	—		0.01		—
Net income (loss)	$	3.44	$	0.32	$	(1.19	)
Diluted:
Continuing operations	$	3.41	$	0.31	$	(1.19	)
Discontinued operations	—		0.01		—
Net income (loss)	$	3.41	$	0.32	$	(1.19	)

The conversion rate on our 4.5% Senior Subordinated Convertible Notes due 2018 (the "2018 Convertible Notes") was 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 had an anti-dilutive effect when calculating diluted earnings per share as our average stock price was less than $58.40 for all periods presented. The 2018 Convertible Notes were fully repaid upon maturity in October 2018, and none were converted into our common stock.

The conversion rate on our 4.75% Senior Subordinated Convertible Notes due 2019 (the "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 2018 Convertible Notes and 2019 Convertible Notes, see Note 9, Debt.

In February 2017, we consummated our previously announced strategic alliance with TRATON Group, which included an equity investment in the Company by TRATON Group pursuant to a Stock Purchase Agreement (the "Stock Purchase Agreement"), a License and Supply Framework Agreement and a Procurement JV Framework Agreement.

Pursuant to the Stock Purchase Agreement, on February 28, 2017 we issued and TRATON Group purchased 16.2 million shares of our common stock for an aggregate purchase price of $256 million at $15.76 per share (a 19.9% stake at the time of purchase (16.6% on a fully-diluted basis)) in the Company, excluding stock issuance costs.

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 year ended October 31, 2016, 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, 2018, 2017, and 2016, the aggregate shares not included were 9.8 million, 13.9 million, and 15.0 million, respectively.

For the year ended October 31, 2018, the aggregate shares not included in the computation of earnings per share were primarily comprised of 7.6 million shares related to the 2019 Convertible Notes. For the years ended October 31, 2017 and 2016, 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.