Earnings Per Share

9 Months Ended

Sep. 30, 2021

Basic and diluted earnings per share are calculated based on the weighted-average number of shares outstanding in each period and dilutive stock options, unvested shares and warrants, to the extent such securities exist and have a dilutive effect on earnings per share. The Company computes basic and diluted earnings per share using the two-class method. The two-class method of computing earnings per share is an earnings allocation method that determines earnings per share for common shares and participating securities according to their participation rights in dividends and undistributed earnings.

A reconciliation of the numerator and denominator of basic and diluted earnings per share follows (dollars in millions, except per share amounts; shares in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Numerator:
Net loss attributable to Surgery Partners, Inc.	$	(22.9)	$	(61.6)	$	(70.8)	$	(121.6)
Less: amounts allocated to participating securities (1)	—		(10.0)		(10.3)		(29.2)
Net loss attributable to common stockholders	$	(22.9)	$	(71.6)	$	(81.1)	$	(150.8)

Denominator:
Weighted average shares outstanding- basic and diluted (2)	80,726		48,883		68,350		48,736

Loss per share:
Basic and diluted (2)	$	(0.28)	$	(1.46)	$	(1.19)	$	(3.09)

Dilutive securities outstanding not included in the computation of loss per share as their effect is antidilutive:
Stock options	1,974		810		1,927		285
Restricted shares	1,461		986		1,444		848

(1)Includes dividends accrued for the Series A Preferred Stock. The Series A Preferred Stock does not participate in undistributed losses.

(2)The impact of potentially dilutive securities for all periods presented was not considered because the effect would be anti-dilutive in each period.

On January 27, 2021, the Company entered into an underwriting agreement relating to a public offering of 7,500,000 shares (the “Firm Shares”) of the Company’s common stock, $0.01 par value per share, at a price to the public of $30.25 per share. In addition, the Company granted the underwriters an option to purchase up to an additional 1,125,000 shares of common stock at the same price per share as the Firm Shares. On February 1, 2021, the Company completed the public offering pursuant to which the Company sold 8,625,000 shares of common stock (including the Firm Shares and the option shares), resulting in gross proceeds of $260.9 million. In connection with the offering, the Company incurred underwriting discounts, commissions and other related costs of $12.7 million, which were recognized as a direct reduction of proceeds received.

On May 17, 2021, the Company converted all outstanding shares of Series A Preferred Stock into approximately 22.609 million shares of common stock. See Note 5. "Redeemable Preferred Stock" for further discussion.