Earnings Per Share

3 Months Ended

Mar. 31, 2021

EARNINGS PER SHARE

A reconciliation of the numerators and denominators of the basic and diluted per share computations of Common Stock based on the consolidated earnings of Prudential Financial for the periods indicated is as follows:


	Three Months Ended March 31,
	2021					2020
	Income		Weighted Average Shares	Per Share Amount		Income		Weighted Average Shares	Per Share Amount
	(in millions, except per share amounts)
Basic earnings per share
Net income (loss)	$	2,804				$	(270)
Less: Income (loss) attributable to noncontrolling interests	(24)					1
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards	44					5
Net income (loss) attributable to Prudential Financial available to holders of Common Stock	$	2,784	396.3	$	7.02	$	(276)	397.0	$	(0.70)
Effect of dilutive securities and compensation programs
Add: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Basic	$	44				$	5
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Diluted	44					5
Stock options			0.6					0.0
Deferred and long-term compensation programs			1.9					0.0
Diluted earnings per share(1)
Net income (loss) attributable to Prudential Financial available to holders of Common Stock	$	2,784	398.8	$	6.98	$	(276)	397.0	$	(0.70)

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(1)For the three months ended March 31, 2020, weighted average shares for basic earnings per share is also used for calculating diluted earnings per share because dilutive shares and dilutive earnings per share are not applicable when a net loss is reported. As a result of the net loss attributable to Prudential Financial available to holders of Common Stock for the three months ended March 31, 2020, all potential stock options and compensation programs were considered antidilutive.

Unvested share-based payment awards that contain nonforfeitable rights to dividends are participating securities and included in the computation of earnings per share pursuant to the two-class method. Under this method, earnings attributable to Prudential Financial are allocated between Common Stock and the participating awards, as if the awards were a second class of stock. During periods of net income available to holders of Common Stock, the calculation of earnings per share excludes the income attributable to participating securities in the numerator and the dilutive impact of these securities from the denominator. In the event of a net loss available to holders of Common Stock, undistributed earnings are not allocated to participating securities and the denominator excludes the dilutive impact of these securities as they do not share in the losses of the Company. Undistributed earnings allocated to participating unvested share-based payment awards for the three months ended March 31, 2021 and 2020, as applicable, were based on 6.0 million and 5.1 million of such awards, respectively, weighted for the period they were outstanding.

Stock options and shares related to deferred and long-term compensation programs that are considered antidilutive are excluded from the computation of diluted earnings per share. Stock options are considered antidilutive based on application of the treasury stock method or in the event of a net loss available to holders of Common Stock. Shares related to deferred and long-term compensation programs are considered antidilutive in the event of a net loss available to holders of Common Stock. For the periods indicated, the number of stock options and shares related to deferred and long-term compensation programs that were considered antidilutive and were excluded from the computation of diluted earnings per share, weighted for the portion of the period they were outstanding, are as follows:


	Three Months Ended March 31,
	2021			2020
	Shares	Exercise Price Per Share		Shares	Exercise Price Per Share
	(in millions, except per share amounts, based on weighted average)
Antidilutive stock options based on application of the treasury stock method	2.1	$	97.46	2.3	$	87.62
Antidilutive stock options due to net loss available to holders of Common Stock	0.0			0.9
Antidilutive shares based on application of the treasury stock method	0.0			0.2
Antidilutive shares due to net loss available to holders of Common Stock	0.0			1.7
Total antidilutive stock options and shares	2.1			5.1