Earnings per Share (EPS)

12 Months Ended

Dec. 31, 2020

Basic EPS is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted EPS is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding. As such, the Company includes the share-based compensation awards in its potentially dilutive securities. Dilutive securities are not included in the computation of loss per share when a company reports a net loss from continuing operations as the impact would be anti-dilutive.

During the period which included the Company’s Series A Convertible Preferred Stock, basic and diluted EPS were computed using the two-class method, which is an earnings allocation that determines EPS for each class of common stock and participating securities according to dividends declared and participation rights in undistributed earnings. The Company’s Series A Convertible Preferred Stock was considered a participating security because holders were entitled to receive dividends on an if-converted basis. Diluted EPS assumes that participating securities are not executed or converted.

For all but the performance units, the potentially dilutive impact of the Company’s share-based compensation awards is determined using the treasury stock method. Under the treasury stock method, awards are treated as if they had been exercised with any proceeds used to repurchase common stock at the average market price during the period. Any incremental difference between the assumed number of shares issued and purchased is included in the diluted share computation. For the performance units, their contingent features result in an assessment for any potentially dilutive common stock by using the end of the reporting period as if it were the end of the contingency period for all units granted. For further discussion of the Company’s share-based compensation awards, see Note 18. “Share-Based Compensation.”

The computation of diluted EPS excluded aggregate share-based compensation awards of approximately 2.2 million, 1.9 million and less than 0.1 million for the years ended December 31, 2020, 2019 and 2018 respectively, because to do so would have been anti-dilutive for those periods. Because the potential dilutive impact of such share-based compensation awards is calculated under the treasury stock method, anti-dilution generally occurs when the exercise prices or unrecognized compensation cost per share of such awards are higher than the Company’s average stock price during the applicable period. Anti-dilution also occurs when a company reports a net loss from continuing operations, and the dilutive impact of all share-based compensation awards are excluded accordingly.

The following illustrates the earnings allocation method utilized in the calculation of basic and diluted EPS:


	Year Ended December 31,
	2020		2019		2018
	(In millions, except per share data)
EPS numerator:
(Loss) income from continuing operations, net of income taxes	$	(1,859.8)	$	(188.3)	$	645.7
Less: Series A Convertible Preferred Stock dividends	—		—		102.5
Less: Net (loss) income attributable to noncontrolling interests	(3.5)		26.2		16.9
(Loss) income from continuing operations attributable to common stockholders, before allocation of earnings to participating securities	(1,856.3)		(214.5)		526.3
Less: Earnings allocated to participating securities	—		—		7.9
(Loss) income from continuing operations attributable to common stockholders, after allocation of earnings to participating securities (1)	(1,856.3)		(214.5)		518.4
(Loss) income from discontinued operations, net of income taxes	(14.0)		3.2		18.1
Less: Income from discontinued operations allocated to participating securities	—		—		0.3
(Loss) income from discontinued operations attributable to common stockholders, after allocation of earnings to participating securities	(14.0)		3.2		17.8
Net (loss) income attributable to common stockholders, after allocation of earnings to participating securities (1)	$	(1,870.3)	$	(211.3)	$	536.2

EPS denominator:
Weighted average shares outstanding — basic	97.7		103.7		119.3
Impact of dilutive securities	—		—		1.7
Weighted average shares outstanding — diluted (2)	97.7		103.7		121.0

Basic EPS attributable to common stockholders:
(Loss) income from continuing operations	$	(18.99)	$	(2.07)	$	4.35
(Loss) income from discontinued operations	(0.15)		0.03		0.15
Net (loss) income attributable to common stockholders	$	(19.14)	$	(2.04)	$	4.50

Diluted EPS attributable to common stockholders:
(Loss) income from continuing operations	$	(18.99)	$	(2.07)	$	4.28
(Loss) income from discontinued operations	(0.15)		0.03		0.15
Net (loss) income attributable to common stockholders	$	(19.14)	$	(2.04)	$	4.43

(1) The reallocation adjustment for participating securities to arrive at the numerator to calculate diluted EPS was $0.1 million for the year ended December 31, 2018.

(2) The two-class method assumes that participating securities are not exercised or converted. As such, weighted average diluted shares outstanding excluded 2.1 million shares related to the participating securities for the year ended December 31, 2018.

As of January 31, 2018, all 30.0 million shares of Series A Convertible Preferred Stock issued upon the Effective Date had been converted into 59.3 million shares of Common Stock, which is inclusive of the shares that had been issued for the payable in-kind preferred stock dividends.