Earnings Per Share

6 Months Ended

Jun. 30, 2022

The following is a reconciliation of the shares used in calculating basic and diluted net earnings per share:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Net income (in millions)	$	112	$	113	$	194	$	200
Shares (in thousands):
Weighted average common shares outstanding	180,123		180,072		180,164		180,162
Add: Participating securities (a)	33		34		29		24
Weighted average common shares outstanding — Basic	180,156		180,106		180,193		180,186
Plus incremental shares from assumed conversions: (b)
Dilutive effect of stock options	438		897		513		845
Dilutive effect of restricted stock units and performance share units	56		346		129		380

Weighted average common shares outstanding — Diluted	180,650		181,349		180,835		181,411
Basic earnings per share	$	0.62	$	0.63	$	1.07	$	1.11
Diluted earnings per share	$	0.62	$	0.62	$	1.07	$	1.10

(a)Restricted stock unit awards containing rights to non-forfeitable dividends that participate in undistributed earnings with common stockholders are considered participating securities for purposes of computing earnings per share.

(b)Incremental shares from stock options, restricted stock units and performance share units are computed by the treasury stock method. The weighted average shares listed below were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive for the periods presented or were otherwise excluded under the treasury stock method. The treasury stock method calculates dilution assuming the exercise of all in-the-money options and vesting of restricted stock units and performance share units, reduced by the repurchase of shares with the proceeds from the assumed exercises and unrecognized compensation expense for outstanding awards. Performance share units will be included in the treasury stock calculation of diluted earnings per share upon achievement of underlying performance or market conditions at the end of the reporting period. See Note 13, "Share-Based Compensation Plans", to the condensed consolidated financial statements for further detail on the performance share units.


	Three Months Ended		Six Months Ended
	June 30,		June 30,
(in thousands)	2022	2021	2022	2021
Stock options	1,647	1,227	1,491	1,238
Restricted stock units	362	318	346	302
Performance share units	270	345	252	349