EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2019

EARNINGS PER SHARE

EARNINGS PER SHARE

4. EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted net income per share of common stock for the periods indicated:

	Years Ended December 31,
	2019		2018		2017
	(in millions, except per share amounts)
Basic income per share:
Numerator:
Income from continuing operations	$	572.6	$	945.5	$	769.2
Less: Dividends declared on preferred stock		2.8		—		—
Less: Allocation of undistributed earnings		6.8		—		—
Income from continuing operations - basic		563.0		945.5		769.2
(Loss) income from discontinued operations, net of tax		(294.6)		17.6		19.5
Net income - basic	$	268.4	$	963.1	$	788.7
Denominator:
Weighted average shares, basic		50.0		54.9		55.7
Basic income (loss) attributable to common stockholders per share:
Income from continuing operations	$	11.25	$	17.24	$	13.82
(Loss) income from discontinued operations	$	(5.89)	$	0.32	$	0.35
Net income per share	$	5.36	$	17.56	$	14.17
Diluted income per share (1):
Numerator:
Income from continuing operations	$	572.6	$	945.5	$	769.2
(Loss) income from discontinued operations, net of tax		(294.6)		17.6		19.5
Net income	$	278.0	$	963.1	$	788.7
Denominator:
Weighted average shares, basic		50.0		54.9		55.7
Weighted average effect of dilutive securities:
Shares from assumed conversion of preferred stock		0.8		—		—
Net effect of dilutive stock options and unvested restricted stock (2)		0.1		0.2		0.2
Denominator for diluted calculation		50.9		55.1		55.9
Diluted income (loss) attributable to common stockholders per share:
Income from continuing operations	$	11.24	$	17.17	$	13.75
(Loss) income from discontinued operations	$	(5.78)	$	0.32	$	0.35
Net income per share	$	5.46	$	17.49	$	14.10

(1) Computed using the if-converted method, as the result was more dilutive.

(2) For the years ended December 31, 2019, 2018 and 2017, a de minimis amount of restricted stock units was excluded from each calculation of weighted average dilutive common shares as the effect would have been anti-dilutive.

On April 25, 2019, the Company entered into an exchange agreement with ValueAct Holdings, L.P. pursuant to which ValueAct exchanged an aggregate of 1,500,000 shares of the Company’s common stock for an aggregate of 150,000 shares of Series A Non-Voting Convertible Preferred Stock (“preferred stock”). In October 2019, ValueAct exchanged all 150,000 shares of preferred stock back to common stock. See Note 19, “Stockholders’ Equity,” for more information. At December 31, 2019, the Company did not have any shares of preferred stock outstanding.

For the year ended December 31, 2019, the Company’s calculation of basic and diluted EPS was computed using the two-class method for those periods in which participating securities were outstanding. The two-class method is an earnings allocation that determines EPS for each class of common stock and participating securities according to dividends declared and participation rights in undistributed earnings.