Basic earnings (loss) per share is computed based upon the weighted average number of common shares outstanding. Diluted earnings (loss) per share is computed based upon the weighted average number of common shares outstanding plus the dilutive effect of common share equivalents calculated using the treasury stock method or if-converted method. For the Convertible Notes, the Company utilizes the if-converted method to calculate diluted earnings (loss) per share. Under the if-converted method, the Company adjusts net earnings to add back interest expense (including amortization of debt issuance costs) recognized on the Convertible Notes and includes the number of shares potentially issuable related to the Convertible Notes in the weighted average shares outstanding. Treasury shares are excluded from the denominator in calculating both basic and diluted earnings (loss) per share.

Common share equivalents for shares issuable for equity-based awards amounted to 4.0 million shares and 4.1 million shares for the three and six months ended June 30, 2022, respectively. For the three and six months ended June 30, 2022, 0.8 million shares and 1.0 million shares, respectively, were excluded from the computation of diluted earnings (loss) per share, primarily related to options with exercise prices above the average market price of our common shares (i.e., “underwater” options), because the effect of their inclusion would have been anti-dilutive. The difference between the remaining 3.2 million shares and 3.1 million shares assumed issued and the 1.0 million shares and 0.9 million shares assumed purchased with potential proceeds for the three and six months ended June 30, 2022, respectively, were included in the denominator of the diluted earnings (loss) per share calculation.

Common share equivalents for shares issuable for equity-based awards amounted to 4.9 million shares and 5.0 million shares for the three and six months ended June 30, 2021, respectively. For the three and six months ended June 30, 2021, 1.6 million shares and 1.9 million shares, respectively, were excluded from the computation of diluted earnings (loss) per share, primarily related to options with exercise prices above the average market price of our common shares (i.e., “underwater” options), because the effect of their inclusion would have been anti-dilutive. The difference between the remaining 3.3 million shares and 3.1 million shares assumed issued and the 1.4 million shares and 1.5 million shares assumed purchased with potential proceeds for the three and six months ended June 30, 2021, respectively, were included in the denominator of the diluted earnings (loss) per share calculation.

Common share equivalents for shares issuable upon the conversion of outstanding Convertible Notes were included in the computation of diluted earnings (loss) per share for the three and six months ended June 30, 2022 and 2021 as these shares would be dilutive.

For the three and six months ended June 30, 2022, TimkenSteel repurchased $15.2 million and $25.2 million, respectively, of outstanding principal related to the Convertible Notes. These repurchases of Convertible Notes reduced weighted average diluted shares outstanding by approximately 1.9 million shares and 1.3 million shares for the three and six months ended June 30, 2022. Refer to “Note 10 – Financing Arrangements” for additional information on the Convertible Notes.

The following table sets forth the reconciliation of the numerator and the denominator of basic and diluted earnings (loss) per share for the three and six months ended June 30, 2022 and 2021:


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Numerator:
Net income (loss), basic	$	74.5	$	54.0	$	111.6	$	63.8
Add convertible notes interest		0.5		1.2		1.2		2.5
Net income (loss), diluted	$	75.0	$	55.2	$	112.8	$	66.3

Denominator:
Weighted average shares outstanding, basic		46.6		45.9		46.5		45.6
Dilutive effect of stock-based awards		2.2		1.9		2.2		1.6
Dilutive effect of convertible notes		4.0		8.3		4.6		8.6
Weighted average shares outstanding, diluted		52.8		56.1		53.3		55.8

Basic earnings (loss) per share	$	1.60	$	1.18	$	2.40	$	1.40
Diluted earnings (loss) per share	$	1.42	$	0.98	$	2.12	$	1.19