EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2022

We use the two-class method to calculate basic and diluted earnings per share because we have participating securities in the form of Class A preferred shares. The two-class method requires a proportional share of net income to be allocated between common shares and participating securities. The proportional share to be allocated to participating securities is determined by dividing total weighted average participating securities by the sum of total weighted average common shares and participating securities.

Basic earnings per share is computed under the two-class method by dividing the net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding during the period. Net income attributable to common shareholders represents our net income reduced by an allocation of current period earnings to participating securities as described above. No such adjustment is made during periods with a net loss, as the adjustment would be anti-dilutive.

Diluted earnings per share is computed under the two-class method by dividing diluted net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding, plus, for periods with net income attributable to common stockholders, the potential dilutive effects of share-based awards. In addition, we calculate the potential dilutive effect of any outstanding dilutive security under both the two-class method and the “if-converted” method, and we report the more dilutive of the methods as our diluted earnings per share. We also apply the treasury stock method with respect to certain share-based awards in the calculation of diluted earnings per share, if dilutive.

The calculation of earnings per share attributable to Civeo common shareholders is presented below for the periods indicated (in thousands, except per share amounts):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Numerator:
Net income (loss) attributable to Civeo common shareholders	$	5,225	$	62	$	15,226	$	(10,367)
Less: income allocated to participating securities	(794)		(9)		(2,297)		—
Basic net income (loss) attributable to Civeo Corporation common shareholders	$	4,431	$	53	$	12,929	$	(10,367)
Add: undistributed income attributable to participating securities	794		9		2,297		—
Less: undistributed income reallocated to participating securities	(788)		(9)		(2,275)		—
Diluted net income (loss) attributable to Civeo Corporation common shareholders	$	4,437	$	53	$	12,951	$	(10,367)

Denominator:
Weighted average shares outstanding - basic	13,932		14,277		14,058		14,255
Dilutive shares - share-based awards	132		84		162		—
Weighted average shares outstanding - diluted	14,064		14,361		14,220		14,255

Basic net income (loss) per share attributable to Civeo Corporation common shareholders (1)	$	0.32	$	—	$	0.92	$	(0.73)

Diluted net income (loss) per share attributable to Civeo Corporation common shareholders (1)	$	0.32	$	—	$	0.91	$	(0.73)

(1)Computations may reflect rounding adjustments.

The following common share equivalents have been excluded from the calculation of weighted-average common shares outstanding because the effect is anti-dilutive for the periods presented (in millions of shares):


	Three Months Ended September 30,		Nine Months Ended September 30,
	2022	2021	2022	2021
Share-based awards (1)	—	0.1	—	0.2
Preferred shares	2.5	2.4	2.5	2.4

(1)Share-based awards for the three and nine months ended September 30, 2022 totaled less than 0.1 million shares.