Earnings (Loss) Per Share Attributable to Navistar International Corporation

12 Months Ended

Oct. 31, 2019

Loss Per Share Attributable to Navistar International Corporation

Earnings Per Share Attributable to Navistar International Corporation

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



	For the Years Ended October 31,
(in millions, except per share data)	2019		2018		2017
Numerator:
Amounts attributable to Navistar International Corporation common stockholders:
Income from continuing operations, net of tax	$	221	$	340	$	29
Income from discontinued operations, net of tax	—		—		1
Net income	$	221	$	340	$	30

Denominator:
Weighted average shares outstanding:
Basic	99.3		98.9		93.0
Effect of dilutive securities	0.2		0.7		0.5
Diluted	99.5		99.6		93.5

Earnings per share attributable to Navistar International Corporation:
Basic:
Continuing operations	$	2.23	$	3.44	$	0.31
Discontinued operations	—		—		0.01
Net income	$	2.23	$	3.44	$	0.32
Diluted:
Continuing operations	$	2.22	$	3.41	$	0.31
Discontinued operations	—		—		0.01
Net income	$	2.22	$	3.41	$	0.32

The conversion rate on our former 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 when 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 former 2019 Convertible Notes was 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 had an anti-dilutive effect when calculating diluted earnings per share when our average stock price was less than $54.07 for all periods presented. The 2019 Convertible Notes were fully repaid upon maturity in April 2019 and none were converted into our common stock.

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 years ended October 31, 2018 and 2017, certain securities have been excluded from the computation of earnings per share, as our average stock price was less than their respective exercise prices. The aggregate shares not included were 9.8 million and 13.9 million, respectively, which were primarily comprised of 7.6 million shares related to the 2019 Convertible Notes for the years ended October 31, 2018 and October 31, 2017, as well as 3.4 million shares related to the 2018 Convertible Notes for the year ended October 31, 2017.