Common Stock and Earnings Per Share

12 Months Ended

Dec. 31, 2022

COMMON STOCK AND EARNINGS PER SHARE

Earnings per Share

The calculation of basic and diluted earnings per common share is as follows (in thousands, except per share amounts):


	December 31
	2022		2021		2020
Numerator:
Earnings from continuing operations - basic	$	196,438	$	228,980	$	25,079
Gain from stock warrants revaluation, net of tax	$	(170)	$	(15,564)	$	—
Convertible debt interest charge, net of tax	$	3,051	$	—	$	—
Earnings from continuing operations - diluted	$	199,319	$	213,416	$	25,079

Denominator:
Weighted-average shares outstanding for basic earnings per share	73,611		68,853		59,128
Common equivalent shares:
Effect of stock-based compensation awards and warrants	6,602		7,363		803
Effect of convertible debt	8,111		—		—
Weighted-average shares outstanding assuming dilution	88,324		76,216		59,931
Basic earnings per share from continuing operations	$	2.67	$	3.33	$	0.42
Diluted earnings per share from continuing operations	$	2.26	$	2.80	$	0.42

Basic weighted average shares outstanding for purposes of basic earnings per share are less than the shares outstanding due to 226,449 shares, 283,139 shares and 365,100 shares of restricted stock for 2022, 2021 and 2020, respectively, which are accounted for as part of diluted weighted average shares outstanding in diluted earnings per share.

The determination of diluted earnings per share requires the exclusion of the fair value re-measurement of the stock warrants recorded as a liability (see Note C), if such warrants have an anti-dilutive effect on earnings per share. The dilutive effect of the weighted-average diluted shares outstanding is calculated using the treasury method for periods in which equivalent shares have a dilutive effect on earnings per share. Under this method, the number of diluted shares is determined by dividing the assumed proceeds of the warrants recorded as a liability by the average stock price during the period and comparing that amount with the number of corresponding warrants outstanding.

In conjunction with the offering of the Convertible Notes (see note F), the Company also sold warrants for ATSG common stock, subject to customary anti-dilution adjustments. The amount received for these warrants and recorded in Stockholders' Equity in the Company’s consolidated balance sheets was $38.5 million. These warrants may result in 8.1 million additional shares of common stock, if ATSG's traded market price exceeds the strike price which is $41.35 per share and is subject to certain adjustments under the terms of the warrant transactions.