Earnings Per Share

3 Months Ended

Mar. 31, 2021

The following table sets forth the computation of basic and diluted earnings per share on net income (in millions, except per share information):


	Three months ended March 31,
		2021		2020
Earnings:
Net income (loss)		$	139	$	(88)
Shares:
Weighted average outstanding shares		68		62
Equivalent shares from outstanding stock awards		—		1
Denominator for diluted calculation		68		63
Earnings per share:
Basic		$	2.04	$	(1.41)
Diluted		$	2.03	$	(1.41)

As a result of the net loss for the three months ended March 31, 2020, the Company is required to use basic weighted average common shares outstanding of 62 million in the calculation of diluted loss per share, since the inclusion of shares for outstanding stock awards of 1 million would have been anti-dilutive to the loss per share calculations. In the absence of the losses, weighted average common shares outstanding and dilutive potential common shares would have totaled 63 million.

The calculation of common equivalent shares does not include the impact of stock appreciation rights having a strike or conversion price that exceeds the average stock price for the earnings period, as the result would be anti-dilutive. The calculation of common equivalent shares also excludes the impact of outstanding performance contingent awards, as the conditions necessary for their issuance have not been satisfied as of the end of the reporting period. The following table presents approximate amounts of stock appreciation rights and performance contingent awards excluded from the calculation of common equivalent shares (in thousands):


	Three months ended March 31,
	2021	2020
Excluded from common equivalent shares:
Stock appreciation rights	1,248	1,060
Performance contingent awards	291	150