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Earnings Per Share
 3 Months Ended
Mar. 31, 2015
Earnings Per Share
14. Earnings Per Share

Unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and are included in the computation of earnings per share pursuant to the two-class method. Certain of Mattel’s restricted stock units (“RSUs”) are considered participating securities because they contain nonforfeitable rights to dividend equivalents.

Under the two-class method, net income is reduced by the amount of dividends declared in the period for each class of common stock and participating securities. The remaining undistributed earnings are then allocated to common stock and participating securities as if all of the net income for the period had been distributed. Basic earnings per common share excludes dilution and is calculated by dividing net income allocable to common shares by the weighted average number of common shares outstanding for the period. Diluted earnings per common share is calculated by dividing net income allocable to common shares by the weighted average number of common shares for the period, as adjusted for the potential dilutive effect of non-participating share-based awards. The following table reconciles earnings (loss) per common share for the three months ended March 31, 2015 and 2014:

 

     For the Three Months Ended  
     March 31,
2015		      March 31,
2014		  
     (In thousands, except per share amounts)  

Basic:

      

Net loss

    $ (58,177 )     $ (11,218 ) 

Less: net income allocable to participating RSUs (a)

      —           —     
  

 

 

     

 

 

  

Net loss available for basic common shares

 $ (58,177 )  $ (11,218 ) 
  

 

 

     

 

 

  

Weighted average common shares outstanding

   338,579      340,226   
  

 

 

     

 

 

  

Basic net loss per common share

 $ (0.17 )  $ (0.03 ) 
  

 

 

     

 

 

  

Diluted:

Net loss

 $ (58,177 )  $ (11,218 ) 

Less: net income allocable to participating RSUs (a)

   —        —     
  

 

 

     

 

 

  

Net loss available for diluted common shares

 $ (58,177 )  $ (11,218 ) 
  

 

 

     

 

 

  

Weighted average common shares outstanding

   338,579      340,226   

Weighted average common equivalent shares arising from:

Dilutive stock options and non-participating RSUs

   —        —     
  

 

 

     

 

 

  

Weighted average number of common and potential common shares

   338,579      340,226   
  

 

 

     

 

 

  

Diluted net loss per common share

 $ (0.17 )  $ (0.03 ) 
  

 

 

     

 

 

  

 

(a) During the three months ended March 31, 2015 and March 31, 2014, Mattel did not allocate its net loss to its participating RSUs as its participating RSUs are not obligated to share in the losses of the Company.

Mattel was in a net loss position during the three months ended March 31, 2015 and 2014, and accordingly, all outstanding nonqualified stock options and non-participating RSUs were excluded from the calculation of diluted earnings per common share because their effect would be antidilutive.