Earnings Per Share

6 Months Ended

Jun. 30, 2022

Basic earnings (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted-average number of common shares outstanding during the period. Basic and diluted earnings per share ("EPS") for the Predecessor was calculated in accordance with the two-class method. Predecessor net loss attributable to Legacy Valaris used in our computations of basic and diluted EPS was adjusted to exclude net income allocated to non-vested shares granted to our employees and non-employee directors. Weighted-average shares outstanding used in our computation of diluted EPS is calculated using the treasury stock method and for the Successor includes the effect of all potentially dilutive stock equivalents, including warrants, restricted stock unit awards and performance stock unit awards and for the Predecessor would include the effect of all potentially dilutive stock options and excludes non-vested shares.

For the Successor, during the three and six months ended June 30, 2022, income from continuing operations attributable to our shares was $111.6 million and $73.0 million, respectively.

For the Successor, during the two months ended June 30, 2021, loss from continuing operations attributable to our shares was $6.2 million.

For the Predecessor, during the one month and four months ended April 30, 2021, loss from continuing operations attributable to Legacy Valaris and Legacy Valaris shares was $3.6 billion and $4.5 billion, respectively. No amounts were allocated to non-vested share awards in these periods given that losses are not allocated to non-vested share awards.

The following table is a reconciliation of the weighted-average shares used in our basic and diluted EPS computations for the three and six months ended June 30, 2022 (Successor), two months ended June 30, 2021 (Successor), and one and four months ended April 30, 2021 (Predecessor) (in millions):


	Successor		Predecessor
	Three Months Ended June 30, 2022	Two Months Ended June 30, 2021	One Month Ended April 30, 2021
Weighted average shares outstanding:
Basic	75.0	75.0	199.7

Effect of stock equivalents	0.6	—	—


Diluted	75.6	75.0	199.7


	Successor		Predecessor
	Six Months Ended June 30, 2022	Two Months Ended June 30, 2021	Four Month Ended April 30, 2021
Weighted average shares outstanding:
Basic	75.0	75.0	199.6

Effect of stock equivalents	0.5	—	—


Diluted	75.5	75.0	199.6

Anti-dilutive share awards totaling 13,000 and 6,000 were excluded from the computation of diluted EPS for the three and six months ended June 30, 2022, respectively.

Due to the net loss position of the Successor during the two months ended June 30, 2021, our potentially dilutive instruments were not included in the computation of diluted EPS as the effect of including these shares in the calculation would have been anti-dilutive. For the Successor, during the two months ended June 30, 2021, there were 29,000 anti-dilutive shares.

Due to the net loss position of the Predecessor, during the one month and four months ended April 30, 2021, our potentially dilutive instruments were not included in the computation of diluted EPS as the effect of including these shares in the calculation would have been anti-dilutive. For the Predecessor, during the one month and four months ended April 30, 2021, anti-dilutive share awards totaling 300,000 were excluded from the computation of diluted EPS.

We have 5,470,971 warrants outstanding (the "Warrants") as of June 30, 2022 to purchase common shares of Valaris Limited which are exercisable for one Common Share per Warrant at an initial exercise price of $131.88 per Warrant, in each case as may be adjusted from time to time pursuant to the applicable warrant agreement. The Warrants are exercisable for a period of seven years and will expire on April 29, 2028. The exercise of these Warrants into Common Shares would have a dilutive effect to the holdings of Valaris Limited's existing shareholders. These warrants are anti-dilutive for all periods presented for the Successor.