Note 14 - Earnings Per Share

6 Months Ended

Jun. 30, 2022

NOTE 14: EARNINGS PER SHARE

Basic earnings per share computations are based on the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share computations include any dilutive effect of potential common shares. In periods with a net loss available to common shareholders, diluted earnings per share are calculated using weighted-average basic shares for that period, as utilizing diluted shares would be anti-dilutive to loss per share.

A reconciliation of the amounts used to calculate basic and diluted earnings per share for the three and six months ended June 30, 2022 and 2021 follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in millions)	2022			2021			2022			2021
Net income	$	20		$	16		$	17		$	22
Less: Series B preferred stock cash and deemed dividends		(1	)		(1	)		(2	)		(2	)
Less: Series C preferred stock in-kind and deemed dividends		(1	)		(2	)		(3	)		(2	)
Less: Series A preferred stock cash and deemed dividends		—			—			—			(3	)
Plus: Expiration of Series A preferred stock embedded derivative		—			—			—			11
Less: Earnings attributable to Series C preferred shareholders		(2	)		—			(2	)		—
Net income available to common shareholders - basic	$	16		$	13		$	10		$	26

Effect of dilutive securities:
Add back: Series B preferred stock cash and deemed dividends	$	1		$	1		$	—		$	2
Add back: Series C preferred stock in-kind and deemed dividends		—			2			—			2
Net income available to common shareholders - diluted	$	17		$	16		$	10		$	30

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions of shares)	2022		2021		2022		2021
Weighted average shares — basic		78.9		78.5		78.8		78.2
Effect of dilutive securities
Series B preferred stock		9.5		9.5		—		6.5
Series C preferred stock		—		10.0		—		6.4
Employee stock options		1.2		2.0		1.1		2.2
Unvested restricted stock units		0.6		0.6		0.5		0.6
Weighted average shares — diluted		90.2		100.6		80.4		93.9

The computation of diluted earnings per share for the three and six months ended June 30, 2022 excluded the impact of (1) the assumed conversion of $25 million of Convertible Notes issued in 2021, (2) the assumed conversion of 1.1 million shares of Series C Preferred Stock and (3) the assumed exercise of 3.6 million outstanding employee stock options in each period because the effects would have been anti-dilutive.

The computation of diluted earnings per share for the six months ended June 30, 2022 excluded the impact of the assumed conversion of 1.0 million shares of Series B Preferred Stock and the assumed vesting of 0.2 million unvested restricted stock units because the effects would have been anti-dilutive.

The computation of diluted earnings per share for the three and six months ended June 30, 2021 excluded the impact of (1) the assumed conversion of $25 million of Convertible Notes issued in 2021, (2) the assumed exercise of 3.2 million outstanding employee stock options in both periods and (3) the assumed vesting of 0.3 million unvested restricted stock units in both periods, because the effects would have been anti-dilutive.