Earnings (Loss) Per Share

12 Months Ended

Dec. 31, 2020

Earnings (loss) per share is computed using the two-class method. For periods in which the Company reports net income, diluted earnings per share is determined by using the weighted average number of common and dilutive common equivalent shares outstanding during the period, unless the effect is antidilutive. SARs and options to purchase 15 million and 17 million shares of common stock were outstanding, but were excluded from the calculation of diluted earnings per share for the years ended December 31, 2020 and 2019, respectively, because their exercise prices were greater than the average market price of the common shares and, therefore, the effect would be antidilutive. For the same reason, options to purchase 13 million shares of common stock were outstanding, but were excluded from the calculation of diluted earnings per share, for the year ended December 31, 2018. In addition, due to the loss from continuing operations attributable to CVS Health in the year ended December 31, 2018, 3 million potentially dilutive common equivalent shares were excluded from the calculation of diluted earnings per share, as the impact of these shares was antidilutive for that period.

The following is a reconciliation of basic and diluted earnings (loss) per share from continuing operations for the years ended December 31, 2020, 2019 and 2018:


In millions, except per share amounts	2020		2019		2018
Numerator for earnings (loss) per share calculation:
Income (loss) from continuing operations	$	7,201	$	6,631	$	(596)
Income allocated to participating securities	—		(5)		(3)
Net (income) loss attributable to noncontrolling interests	(13)		3		2
Income (loss) from continuing operations attributable to CVS Health	$	7,188	$	6,629	$	(597)

Denominator for earnings (loss) per share calculation:
Weighted average shares, basic	1,309		1,301		1,044
Effect of dilutive securities	5		4		—
Weighted average shares, diluted	1,314		1,305		1,044

Earnings (loss) per share from continuing operations:
Basic	$	5.49	$	5.10	$	(0.57)
Diluted	$	5.47	$	5.08	$	(0.57)