Earnings Per Share

9 Months Ended

Sep. 30, 2021

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 Howmet common shareholders was as follows (shares in millions):


	Third quarter ended				Nine months ended
	September 30,				September 30,
	2021		2020		2021		2020
Net income from continuing operations attributable to common shareholders	$	27	$	36	$	181	$	105
Income from discontinued operations	—		—		—		50
Net income attributable to common shareholders	27		36		181		155
Less: preferred stock dividends declared	1		1		2		2
Net income available to Howmet Aerospace common shareholders - basic and diluted	$	26	$	35	$	179	$	153



Average shares outstanding - basic	429		436		431		436
Effect of dilutive securities:
Stock options	1		—		1		—
Stock and performance awards	4		3		5		4

Average shares outstanding - diluted	434		439		437		440

Common stock outstanding at September 30, 2021 and 2020 was approximately 428 million and 434 million, respectively.

On August 18, 2021, the Company announced that its Board of Directors authorized a share repurchase program of up to $1,500 of the Company's outstanding common stock. The Board had previously authorized, in May 2019, a share repurchase program of up to $500, of which approximately $77 Board authorization remained available as of July 31, 2021. In the quarter ended September 30, 2021, the Company repurchased approximately 770 thousand shares of its common stock at an average price of $32.50 per share (excluding commissions cost) for approximately $25 in cash. All of the shares repurchased have been retired. After giving effect to the share repurchases made through September 30, 2021, approximately $1,552 Board authorization remains available. Under the Company’s share repurchase programs (the “Share Repurchase Programs”), the Company may repurchase shares 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 is no stated expiration for the Share Repurchase Programs. Under its Share Repurchase Programs, the Company may repurchase shares from time to time, in amounts, at prices, and at such times as the Company deems appropriate, subject to market conditions, legal requirements and other considerations, including limits under the Company’s Five-Year Revolving Credit Agreement (see Note O). The Company is not obligated to repurchase any specific number of shares or to do so at any particular time, and the Share Repurchase Programs may be suspended, modified or terminated at any time without prior notice.

The 5 million decrease in average shares outstanding (basic) for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020 was primarily due to the 7 million shares repurchased during 2021. As average shares outstanding are used in the calculation for both basic and diluted EPS, the full impact of share repurchases was not realized in EPS in the third quarter and nine months ended September 30, 2021 as share repurchases occurred at varying points during the second and third quarter of 2021.

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,
	2021	2020	2021	2020

Stock options(1)	—	3	—	3

(1)The weighted average exercise price per share of options excluded from diluted EPS was $33.61 and $26.03 as of September 30, 2021 and 2020, respectively.