Earnings (Loss) Per Share

9 Months Ended

Sep. 30, 2021

Basic net income per share is computed by dividing net income, less any dividends, accretion or decretion, redemption or induced conversion on the preferred stock, by the weighted average number of common shares outstanding during the period. As the preferred stock participates in dividends alongside the Company’s common stock (per their participating dividends), the preferred stock would constitute participating securities under ASC 260-10 and are applied to earnings per share using the two-class method. Under this method, all earnings (distributed and undistributed) are allocated to common shares and participating securities based on their respective rights to receive dividends.

Diluted net income per share is calculated using the more dilutive of the if-converted or the two-class method. For the nine months ended September 30, 2021 and the three and nine months ended September 30, 2020, the two-class method was more dilutive and was computed by adjusting the denominator used in the basic net income per share computation by potentially dilutive securities outstanding during the period plus, when their effect is dilutive, incremental shares consisting of shares subject to stock options and shares issuable upon vesting of RSUs and PBRSUs.

Basic and diluted net income (loss) per common share are calculated as follows (in millions, except share and per share data):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Basic EPS:
Net income	$	17.0	$	5.2	$	61.2	$	38.5
Less dividends on preferred shares (1)	—		(5.6)		(592.3)		(16.6)
Less income allocated to preferred shareholders	—		—		—		(10.9)
Net income (loss) available/(allocated) to common shareholders - basic	$	17.0	$	(0.4)	$	(531.1)	$	11.0
Diluted EPS:
Net income	$	17.0	$	5.2	$	61.2	$	38.5
Less dividends on preferred shares (1)	—		(5.6)		(592.3)		(16.6)
Less income allocated to preferred shareholders	—		—		—		(8.7)
Net income (loss) available/(allocated) to common shareholders - diluted	$	17.0	$	(0.4)	$	(531.1)	$	13.2
Basic weighted-average common shares	278,655,269		115,976,377		262,209,929		115,164,631
Add: Effect of dilutive equity awards	7,281,436		—		—		12,293,285
Add: Effect of dilutive warrants	34,680,381		—		—		43,720,170
Diluted weighted average common shares	320,617,086		115,976,377		262,209,929		171,178,086
Net income (loss) per common share (basic)	$	0.06	$	—	$	(2.03)	$	0.10
Net income (loss) per common share (diluted)	$	0.05	$	—	$	(2.03)	$	0.08

(1) The 2021 dividend on preferred shares includes amounts related to the conversion of the preferred shares. See Note 15, 8.00% Series A Convertible Preferred Stock, for more information.

Because of their anti-dilutive effect, 890,717 and 15,155,288 common share equivalents comprised of stock options, PBRSUs, and RSUs have been excluded from the diluted earnings per share calculation for the three and nine months ended September 30, 2021, respectively. Additionally, for the nine months ended September 30, 2021, the Investor's and IHC Health Services, Inc.’s (“Intermountain”) exercisable warrants to acquire up to 40.5 million and 1.5 million shares, respectively, of the Company's common stock have been excluded from the diluted earnings per share calculation because they are anti-dilutive.

For the three and nine months ended September 30, 2020, 21,350,755 and 95,210 common share equivalents have been excluded from the diluted earnings per share calculation because of their anti-dilutive effect. Additionally, for the three months ended September 30, 2020, the Investor's and Intermountain’s exercisable warrants to acquire up to 60.0 million and 1.5 million shares, respectively, of the Company's common stock have been excluded from the diluted earnings per share calculation because they are anti-dilutive.