Earnings Per Share

9 Months Ended

Sep. 30, 2020

Basic earnings per share ("EPS") amounts are computed by dividing earnings, after the deduction of preferred stock dividends declared, by the average number of common shares outstanding. Diluted EPS amounts assume the issuance of common stock for all potentially dilutive share equivalents outstanding.

The information used to compute basic and diluted EPS attributable to the Company's common shareholders was as follows (shares in millions):


	Third quarter ended				Nine months ended
	September 30,				September 30,
	2020		2019		2020		2019
Net income (loss) attributable to common shareholders:
Income (loss) from continuing operations attributable to common shareholders	$	36	$	58	$	105	$	8
Income (loss) attributable from discontinued operations	—		37		50		153
Net income (loss) attributable to common shareholders	36		95		155		161
Less: preferred stock dividends declared	(1)		(1)		(2)		(2)
Net income available to the Company's common shareholders - basic	35		94		153		159
Add: Interest expense related to convertible notes	—		3		—		—
Net income available to the Company's common shareholders - diluted	$	35	$	97	$	153	$	159

Average shares outstanding - basic	436		436		436		451
Effect of dilutive securities:
Stock options	—		1		—		1
Stock and performance awards	3		5		4		3
Convertible notes(1)	—		15		—		—
Average shares outstanding - diluted	439		457		440		455

(1)The convertible notes matured on October 15, 2019 (see Note O). No shares of the Company’s common stock were issued in connection with the maturity or the final conversion of the convertible notes. As of October 15, 2019, the calculation of average diluted shares outstanding ceased to include the approximately 15 shares of common stock and the corresponding interest expense previously attributable to the convertible notes.

Common stock outstanding at September 30, 2020 and 2019 was 434 and 434, respectively.

The 15 decrease in the average shares outstanding for the nine months ended September 30, 2020 compared to same period in 2019 was primarily due to the 55 of shares repurchased during 2019. As average shares outstanding are used in the calculation for both basic and diluted EPS, the full impact of 2019 share repurchases was not realized in EPS in the nine months ended September 30, 2019, as the share repurchases occurred at varying points during 2019.

The following shares were excluded from the calculation of average shares outstanding – diluted as their effect was anti-dilutive (shares in millions).


	Third quarter ended		Nine months ended
	September 30,		September 30,
	2020	2019	2020	2019
Convertible notes	—	—	—	15
Stock options(1)	3	3	3	3

(1)The weighted average exercise price per share of options excluded from diluted EPS was $26.03 and $32.64 as of September 30, 2020 and September 30, 2019, respectively.

On May 20, 2019, the Company announced that its Board of Directors (the "Board") authorized the repurchase of $500 of the Company's outstanding common stock (the "Share Repurchase Program") by means of trading plans established from time to time in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, block trades, private transactions, open market repurchases and/or accelerated share repurchase agreements or other derivative transactions. There was no stated expiration for the Share Repurchase Program under which the Company may repurchase shares from time to time and pursuant to such terms, as and if it deems appropriate. The Share Repurchase Program may be suspended, modified or terminated at any time without prior notice. During August and September 2020, 2.9 shares were repurchased on the open market at an average price of $17.36 for approximately $51 in cash, including commission. All of the shares repurchased have been retired. After giving effect to the share repurchases made through September 30, 2020, approximately $299 remains available under the prior authorizations by the Board for the Share Repurchase Program. The amount of share repurchases by the Company may be limited under the terms of the Five-Year Revolving Credit Agreement. (See Note O.)