Earnings Per Share

6 Months Ended

Jun. 30, 2023

Earnings per Share

We compute basic and diluted earnings per share using the two-class method, which is an earnings allocation calculation that determines Earnings Per Share ("EPS") for each class of common stock and participating security. Our vested and exercisable stock options contain non-forfeitable rights to dividends or dividend equivalents and are classified as participating securities in the calculation of EPS. Our unvested stock options, restricted stock units, performance shares and non-employee director awards do not contain nonforfeitable rights to dividends or dividend equivalents and are therefore not classified as participating securities.

Under the two-class method, net income is allocated between shares of common stock and participating securities based on their participating rights. Basic EPS is computed by dividing net income, adjusted for earnings allocated to participating securities, by the weighted average number of common shares outstanding. We weight shares issued or reacquired for the portion of the period that they were outstanding. Diluted EPS is calculated by dividing net income, adjusted for earnings allocated to participating securities, by the weighted average number of common shares outstanding adjusted for the dilutive effect of unvested stock options, restricted stock units and performance shares. The dilutive effect of participating securities is calculated using the more dilutive of the treasury stock method or the two-class method. Earnings allocable to participating securities include the portion of dividends declared and the portion of undistributed earnings during the period.

The following table shows the computation of our basic and diluted earnings per common share (in millions, except per share amounts):


	Three Months Ended June 30				Six Months Ended June 30
	2023		2022		2023		2022
Basic earnings per share:
Net income	$	63.3	$	2.6	$	140.7	$	78.4
Less: Net income allocated to participating securities	(1.3)		—		(2.8)		—
Net income available to common shareholders	$	62.0	$	2.6	$	137.9	$	78.4
Weighted-average shares outstanding - basic	35.6		35.5		35.6		35.5
Basic earnings per share	$	1.74	$	0.07	$	3.88	$	2.21

Diluted earnings per share:
Net income	$	63.3	$	2.6	$	140.7	$	78.4
Less: Net income allocated to participating securities	(1.3)		—		(2.8)		—
Net income available to common shareholders	$	62.0	$	2.6	$	137.9	$	78.4
Weighted-average shares outstanding - basic	35.6		35.5		35.6		35.5
Effect of dilutive securities:
Equity compensation plans	0.1		0.5		0.1		0.5
Weighted-average shares outstanding - diluted	35.7		36.0		35.7		36.0
Diluted earnings per share	$	1.74	$	0.07	$	3.87	$	2.18