Earnings Per Share

12 Months Ended

Dec. 31, 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):


	Year Ended December 31,
	2021		2020		2019

Numerator:
Net loss attributable to Surgery Partners, Inc.	$	(70.9)	$	(116.1)	$	(74.8)
Less: Amounts allocated to participating securities (1)	(10.3)		(39.5)		(35.7)
Net loss attributable to common stockholders	$	(81.2)	$	(155.6)	$	(110.5)

Denominator:
Weighted average shares outstanding- basic and diluted (2)	72,427		48,776		48,280

Basic and diluted loss per share (2)	$	(1.12)	$	(3.19)	$	(2.29)

Dilutive securities outstanding not included in the computation of diluted loss per share as their effect is antidilutive:
Stock options	1,920		712		—
Restricted shares	1,452		981		67

(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 were not considered because the effect would be anti-dilutive in each of those periods.

Public Offerings

On January 27, 2021, the Company entered into an underwriting agreement relating to a public offering of 7,500,000 shares (the “January 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 January 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 January 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 November 8, 2021, the Company entered into an underwriting agreement relating to a public offering of 6,000,000 shares (the “November Firm Shares”) of the Company’s common stock, $0.01 par value per share, at a price to the public of $46.50 per share. In addition, the Company granted the underwriters an option to purchase up to an additional 900,000 shares of common stock at the same price per share as the November Firm Shares. On November 12, 2021, the Company completed the public offering pursuant to which the Company sold 6,900,000 shares of common stock (including the November Firm Shares and the option shares), resulting in gross proceeds of $320.9 million. In connection with the offering, the Company incurred underwriting discounts, commissions and other related costs of $14.9 million, which were recognized as a direct reduction of proceeds received.

Preferred Conversion

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 7. "Redeemable Preferred Stock" for further discussion.

Share Repurchase Authorization

On December 15, 2017, the Company's Board of Directors authorized a share repurchase program of up to $50.0 million of the Company's issued and outstanding common stock from time to time. The timing and size of repurchases will be determined based on market conditions and other factors. The authorization does not obligate the repurchase of any shares and the Company may repurchase shares of common stock at any time without prior notice. The share repurchases will be made in accordance with applicable securities laws in open market or privately negotiated transactions. The authorization does not have a specified expiration date, and the share repurchase program may be suspended, recommenced or discontinued at any time or from time to time without prior notice. At December 31, 2021, the Company had $46.0 million of repurchase authorization available under the December 2017 authorization.