Income (loss) per Share

12 Months Ended

Dec. 31, 2021

Basic income (loss) per share is based upon the weighted average number of common shares outstanding during the period. Dilutive income (loss) per share includes additional common shares that would have been outstanding if potential common shares with a dilutive effect had been issued using the treasury stock method.

A reconciliation of the number of shares used for the basic and diluted income per share calculations is as follows:


	Years ended December 31,
Shares in millions	2021	2020	2019
Basic weighted average common shares outstanding	140	142	141
Stock options, restricted shares and convertible debt (a)	5	—	1
Diluted weighted average common shares outstanding (b)	145	142	142

(a)For the year ended December 31, 2021 and 2019, there was a diluted impact primarily related to our Convertible Debt.

(b)In periods for which we report a net loss attributable to KBR, basic net loss per share and diluted net loss per share are identical as the effect of all potential common shares is anti-dilutive and therefore excluded.

We use the treasury stock method for calculating any potential dilutive effect of the conversion spread on our Convertible Debt on diluted income (loss) per share because upon conversion, it is our current intent and policy to settle the principal amount of our Convertible Notes in cash and any excess in shares of our common stock. For the years ended December 31, 2021 and 2019, the Convertible Notes impacted the calculation of diluted income (loss) per share as the average price of our common stock exceeded the conversion price of $25.35 and $25.51, respectively. However, for the year ended December 31, 2020, the Convertible Notes had no dilutive effect as we reported a net loss attributable to KBR. Additionally, diluted net income (loss) per share did not include any effect from the Warrant Transactions (as defined in Note 12, "Debt and Other Credit Facilities", to our consolidated financial statements) as the average price of our common stock did not exceed the exercise price of $39.76, $39.88 and $40.02 for the years ended December 31, 2021, 2020 and 2019, respectively. We expect the Warrant Transactions to have a dilutive effect on diluted net income (loss) per share in the year ending December 31, 2022.

For purposes of applying the two-class method in computing income (loss) per share, there were $0.1 million and $1.5 million net earnings allocated to participating securities, or a negligible amount per share, for the years ended December 31, 2021 and 2019, respectively. There were no net earnings allocated to participating securities for the year ended December 31, 2020. The diluted income (loss) per share calculation did not include 0.1 million, 1.1 million and 1.3 million antidilutive weighted average shares for the years ended December 31, 2021, 2020 and 2019, respectively.