Basic earnings per share computations are based on the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share include any dilutive effect of potential common shares. In periods with a net loss available to common shareholders, diluted earnings per share are calculated using weighted-average basic shares for that period, as utilizing diluted shares would be anti-dilutive to loss per share.

A reconciliation of the amounts used to calculate basic and diluted earnings per share for the three months ended March 31, 2021 and 2020 follows:

	Three Months Ended
	March 31,
(in millions)	2021			2020
Net income (loss)	$	6		$	(111	)
Less: Preferred stock cash dividends		(1	)		(3	)
Less: Preferred stock deemed dividends		(2	)		(2	)
Less: Preferred stock in-kind dividend		(1	)		—
Plus: Expiration of Series A preferred stock embedded derivative		11			—
Net income (loss) available to common shareholders - basic and diluted	$	13		$	(116	)

(in millions of shares)
Weighted average shares — basic	77.8	43.6
Effect of dilutive securities
Employee stock options	2.3	—
Unvested restricted stock units	0.5	—
Weighted average shares — diluted	80.6	43.6

The computation of diluted earnings per share for the three months ended March 31, 2021 excluded the impact of (1) the assumed conversion of 1.0 million shares of Series B Preferred Stock, (2) the assumed conversion of 1.0 million shares of Series C Preferred Stock, (3) the assumed exercise of 3.2 million of outstanding employee stock options, (4) the assumed conversion of $25 million of Convertible Notes issued in 2021 and (5) the assumed vesting of 0.3 million unvested restricted stock units because the effects would have been anti-dilutive.

As a result of the net loss available to common shareholders for the three months ended March 31, 2020, Kodak calculated diluted earnings per share using weighted-average basic shares outstanding. If Kodak reported income available to common shareholders for the three months ended March 31, 2020, the calculation of diluted earnings per share would have included the assumed vesting of 0.3 million unvested restricted stock units.

The computation of diluted earnings per share for the three months ended March 31, 2020 also excluded the impact of (1) the assumed conversion of 2.0 million shares of Series A Preferred Stock, (2) the assumed exercise of 6.8 million outstanding employee stock options and (3) the assumed conversion of $100 million of Convertible Notes issued in 2019 because the effects would have been anti-dilutive.