Earnings Per Share

6 Months Ended

Jun. 30, 2021

Note 11: Earnings Per Share

Earnings per share is calculated using the

two-class

method in which earnings are allocated to common stock and participating securities based on their rights to receive nonforfeitable dividends or dividend equivalents. The Company grants restricted stock to certain employees and

non-employee

directors in accordance with the Company’s long-term incentive programs, which entitle the participants to receive nonforfeitable dividends or dividend equivalents during the vesting period on the same basis as those dividends are paid to common shareholders. These unvested stock awards represent participating securities. During periods of net income, the calculation of earnings per share exclude the income attributable to participating securities in the numerator and the dilutive impact of these securities from the denominator. During periods of net loss, no effect is given to participating securities in the numerator and the denominator excludes the dilutive impact of these securities since they do not share in the losses of the Company.

Basic earnings per share excludes dilution and is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflects the dilutive effect of all unvested restricted stock outstanding during the period that could potentially result in the issuance of common stock. The dilution from unvested restricted stock is calculated by applying the

two-class

method and using the treasury stock method. The treasury stock method assumes the proceeds from the unrecognized compensation expense from unvested restricted stock will be used to purchase shares of the Company’s common stock at the average market price during the period. If the potentially dilutive securities disclosed in the table below become vested, the transaction would be net share settled resulting in a significantly lower impact to the outstanding share balance in comparison to the total amount of the potentially dilutive securities. During periods of net loss, unvested restricted stock is excluded from the calculation because it would have an antidilutive effect. Therefore, in periods of net loss, the calculation of basic and diluted earnings per share would result in the same value.

The following table presents the computation of basic and diluted earnings per share for the three and six months ended June 30, 2021 and 2020:


	Three Months Ended June 30,						Six Months Ended June 30,
In millions except per share amounts	2021			2020			2021			2020
Basic earnings per share:
Net income (loss)	$	(61	)	$	(106	)	$	(167	)	$	(439	)
Less: undistributed earnings allocated to participating securities		-			-			-			-

Net income (loss) available to common shareholders	$	(61	)	$	(106	)	$	(167	)	$	(439	)
Basic weighted average shares (1)		49.5			62.6			49.4			67.3

Net income (loss) per basic common share	$	(1.23	)	$	(1.69	)	$	(3.38	)	$	(6.51	)
Diluted earnings per share:
Net income (loss)	$	(61	)	$	(106	)	$	(167	)	$	(439	)
Less: undistributed earnings allocated to participating securities		-			-			-			-

Net income (loss) available to common shareholders	$	(61	)	$	(106	)	$	(167	)	$	(439	)
Diluted weighted average shares		49.5			62.6			49.4			67.3

Net income (loss) per diluted common share	$	(1.23	)	$	(1.69	)	$	(3.38	)	$	(6.51	)
Potentially dilutive securities excluded from the calculation of diluted EPS because of antidilutive affect		4.9			4.9			4.9			4.9

(1) -

Includes 0.9 million of participating securities that met the service condition and were eligible to receive nonforfeitable dividends or dividend equivalents for each of the three months and six months ended June 30, 2021 and 2020