Earnings per Share

12 Months Ended

Dec. 31, 2017

12. Earnings per Share

The denominator for basic earnings per common share (EPS) is the weighted-average number of common shares outstanding during the period. The dilutive effect of outstanding stock options and time-vested restricted stock units is reflected in the denominator for diluted EPS using the treasury stock method. The numerator for both basic and diluted EPS is net income.

On February 1, 2017, Biogen distributed approximately 108 million shares of Bioverativ common stock to its shareholders. The computation of basic and dilutive EPS for periods prior to the separation was calculated using the shares distributed.

Basic and diluted earnings per share are calculated as follows:


	For the Years Ended
	December 31,
(In millions)	2017		2016		2015
Numerator:
Net income	$	355.6	$	439.6	$	108.6
Denominator:
Weighted average number of common shares outstanding		108.1		108.0		108.0
Effect of dilutive securities:
Stock options		—		—		—
Time-vested restricted stock units		0.4		—		—
Dilutive potential common shares		0.4		—		—
Shares used in calculating diluted earnings per share		108.5		108.0		108.0

The computation of diluted earnings per share excludes 2.2 million of outstanding common share equivalents for stock options for the year ended December 31, 2017, as compared to 2.5 million of outstanding common share equivalents for stock options and time-vested restricted stock units for the years ended December 31, 2016 and 2015 as the effect is anti-dilutive.

Bioverativ Inc. 10-K