Net Income (Loss) Per Common Share
 12 Months Ended
Dec. 31, 2016
Earnings Per Share [Abstract]  
Net Income (Loss) Per Common Share
19. Net Income (Loss) Per Common Share

Basic net income (loss) per common share is computed using the two-class method, which is an earnings allocation formula that determines net income (loss) per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. Under the two-class method, basic net income (loss) per common share is determined by dividing net income (loss) after deducting amounts allocated to participating securities, by the weighted average number of common shares outstanding for the period. Participating securities include our unvested restricted stock and certain stock settled restricted stock units that have nonforfeitable rights to receive dividends or dividend equivalents, whether paid or unpaid. During periods of net loss from continuing operations, no effect is given to participating securities because they do not have a contractual obligation to participate in our losses.

Diluted net income (loss) per common share is computed using the weighted average number of common shares outstanding adjusted for the incremental common stock equivalents attributed to outstanding options to purchase common stock and non-participating restricted stock units, unless their effect would be anti-dilutive.

To effect the Spin-off, on November 3, 2015, Archrock distributed 34,286,267 shares of our common stock to its stockholders. For the periods prior to November 3, 2015, the average number of common shares outstanding used to calculate basic and diluted net income per common share was based on the shares of our common stock that were distributed on November 3, 2015. The same number of shares was used to calculate basic and diluted net income per common share for these periods since we had no equity awards outstanding prior to November 3, 2015 and we were a wholly owned subsidiary of Archrock prior to the Spin-off date.

The following table presents a reconciliation of basic and diluted net income (loss) per common share for the years ended December 31, 2016, 2015 and 2014 (in thousands, except per share data):
 
Years Ended December 31,
 
2016
 
2015
 
2014
Numerator for basic and diluted net income (loss) per common share:
 
 
 
 
 
Income (loss) from continuing operations
$
(194,366
)
 
$
(28,126
)
 
$
48,109

Income (loss) from discontinued operations, net of tax
(33,571
)
 
54,774

 
67,183

Less: Net income attributable to participating securities
—

 
—

 
—

Net income (loss) — used in basic and diluted net income (loss) per common share
$
(227,937
)
 
$
26,648

 
$
115,292

 
 
 
 
 
 
Weighted average common shares outstanding including participating securities
35,489

 
34,437

 
34,286

Less: Weighted average participating securities outstanding
(921
)
 
(149
)
 
—

Weighted average common shares outstanding — used in basic net income (loss) per common share
34,568

 
34,288

 
34,286

Net dilutive potential common shares issuable:


 
 
 
 
On exercise of options and vesting of restricted stock units
*

 
*

 
—

Weighted average common shares outstanding — used in diluted net income (loss) per common share
34,568

 
34,288

 
34,286

 
 
 
 
 
 
Net income (loss) per common share:
 
 
 
 
 
Basic
$
(6.59
)
 
$
0.78

 
$
3.36

Diluted
$
(6.59
)
 
$
0.78

 
$
3.36


 
*
Excluded from diluted net income (loss) per common share as their inclusion would have been anti-dilutive.

The following table shows the potential shares of common stock issuable that were excluded from computing diluted net income (loss) per common share as their inclusion would have been anti-dilutive (in thousands):
 
Years Ended December 31,
 
2016
 
2015
 
2014
Net dilutive potential common shares issuable:
 
 
 
 
 
On exercise of options where exercise price is greater than average market value for the period
225

 
62

 
*

On exercise of options and vesting of restricted stock units
50

 
16

 
*

Net dilutive potential common shares issuable
275

 
78

 
—

 
*
Not applicable for the period.