EARNINGS PER SHARE

Basic and diluted earnings per share are based on the weighted average number of shares of common stock and potential common stock outstanding during the period. Potential common stock, for purposes of determining diluted earnings per share, includes the effects of dilutive RSUs, stock options and convertible securities. The effect of such potential common stock is computed using the treasury stock method or the if-converted method, as applicable.

The following table is a reconciliation of the numerator and denominator of the basic and diluted earnings per share computation for income (loss) from continuing operations for the three and six months ended June 30, 2017 and 2016, where income or loss represents the numerator and weighted average shares represent the denominator.



Three Months Ended June 30,	2017					2016
(in millions, except per share data)	Income		Shares	$ per Share		Loss			Shares	$ per Share

BASIC EARNINGS PER SHARE
Income (loss) from continuing operations attributable to The AES Corporation common stockholders	$	53	660	$	0.08	$	(103	)	659	$	(0.16	)
EFFECT OF DILUTIVE SECURITIES
Restricted stock units	—		2	—		—			—	—
DILUTED EARNINGS PER SHARE	$	53	662	$	0.08	$	(103	)	659	$	(0.16	)

Six Months Ended June 30,	2017					2016
(in millions, except per share data)	Income		Shares	$ per Share		Income			Shares	$ per Share

BASIC EARNINGS PER SHARE
Income from continuing operations attributable to The AES Corporation common stockholders, net of tax	$	29	660	$	0.04	$	32		660	$	0.05
EFFECT OF DILUTIVE SECURITIES
Restricted stock units	—		2	—		—			2	—
DILUTED EARNINGS PER SHARE	$	29	662	$	0.04	$	32		662	$	0.05

For the three and six months ended June 30, 2017 and 2016, respectively, the calculation of diluted earnings per share excluded 7 million and 8 million outstanding stock awards that could potentially dilute basic earnings per share in the future. All 15 million shares of potential common stock associated with convertible debentures (“TECONs”) were omitted from the earnings per share calculation for the three and six months ended June 30, 2016, as the impact would have been anti-dilutive. The company redeemed all of its existing TECONs in June 2017.

For the three months ended June 30, 2016, the calculation of diluted earnings per share also excluded 5 million outstanding restricted stock units, that could potentially dilute earnings per share in the future. These restricted units were not included in the computation of diluted earnings per share for the three months ended June 30, 2016, because their impact would be anti-dilutive given the loss from continuing operations. Had the Company generated income from continuing operations in the three months ended June 30, 2016, 3 million potential shares of common stock related to the restricted stock units would have been included in diluted average shares outstanding.