EARNINGS (LOSS) PER SHARE AND SHARE REPURCHASES

We compute earnings (loss) per share ("EPS") using the two-class method, which is an earnings (loss) allocation formula that determines earnings (loss) per share for common stock, and earnings (loss) allocated to convertible preferred stock and participating securities, as appropriate. The earnings allocated to convertible preferred stock are the larger of 1) the preferred dividends accrued in the period or 2) the percentage of earnings from continuing operations allocable to the preferred stock as if they had been converted to common stock. Our participating securities are our grants of restricted stock and restricted stock units, which contain non-forfeitable rights to dividend equivalents to the extent any dividends are declared and paid on our common stock. We compute basic EPS by dividing net income (loss) allocated to common shareholders by the weighted-average number of shares outstanding during the period. Diluted EPS is calculated to give effect to all potentially dilutive common shares that were outstanding during the period.



	Three Months Ended March 31,
(Shares in millions)	2018			2017
Numerator attributable to Avon:
Net loss attributable to Avon	$	(20.3	)	$	(36.5	)
Less: Loss allocated to participating securities	(.2		)	(.5		)
Less: Earnings allocated to convertible preferred stock	5.9			5.7
Loss allocated to common shareholders	(26.0		)	(41.7		)
Denominator:
Basic EPS weighted-average shares outstanding	440.9			438.6
Diluted effect of assumed conversion of stock options	—			—
Diluted effect of assumed conversion of preferred stock	—			—
Diluted EPS adjusted weighted-average shares outstanding	440.9			438.6
Loss per Common Share attributable to Avon:
Basic	$	(.06	)	$	(.10	)
Diluted	(.06		)	(.10		)

Amounts in the table above may not necessarily sum due to rounding.

During the three months ended March 31, 2018 and 2017, we did not include stock options to purchase 15.3 million shares and 13.1 million shares of Avon common stock, respectively, in the calculation of diluted EPS as we had a net loss and the inclusion of these shares would decrease the net loss per share. Since the inclusion of such shares would be anti-dilutive, these are excluded from the calculation.

During the three months ended March 31, 2018 and 2017, respectively, it is more dilutive to assume the series C convertible preferred stock is not converted into common stock; therefore, the weighted-average shares outstanding were not adjusted by the as-if converted series C convertible preferred stock because the effect would be anti-dilutive. The inclusion of the series C convertible preferred stock would decrease the net loss per share for the three months ended March 31, 2018 and 2017. If the as-if converted series C convertible preferred stock had been dilutive, approximately 87.1 million additional shares would have been included in the diluted weighted average number of shares outstanding for the three months ended March 31, 2018 and 2017. See Note 4, Related Party Transactions.

We purchased approximately .9 million shares of Avon common stock for $2.7 during the first three months of 2018, as compared to approximately 1.4 million shares of Avon common stock for $6.2 during the first three months of 2017, through acquisition of stock from employees in connection with tax payments upon the vesting of restricted stock units and performance restricted stock units.