Earnings Per Share

12 Months Ended

Dec. 31, 2022

EARNINGS PER SHARE

The Company computes EPS in accordance with ASC 260, Earnings per Share. Basic EPS is computed by dividing net income (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding.

Diluted EPS is computed using the weighted average number of shares of common stock, plus the effect of potentially dilutive securities. The Company applies the treasury method to calculate the dilution impact of share-based awards—stock options, non-vested restricted shares with forfeitable dividend rights, restricted stock units, and employee stock purchase plan deferrals. The Company applies the if-converted method to calculate the dilution impact of the Series A Preferred Stock, if dilutive in the period. For fiscal years 2022, 2021 and 2020, share-based awards representing 2 million, 2 million and 9 million underlying common shares, respectively, were not included in the computation because the effect would have been anti-dilutive. For fiscal years 2022, 2021, and 2020, Series A Preferred Stock representing 25 million, 25 million and 15 million of underlying common shares, respectively, were not included in the computation because the effect would have been anti-dilutive.

The following table sets forth the computation of basic and diluted EPS:


	2022		2021		2020
Numerator:
Net income (loss)	$	265	$	164	$	(226)
Less: Series A Preferred Stock dividends (1)	(37)		(43)		(28)
Net income (loss) available to common shareholders	$	228	$	121	$	(254)
Denominator:
Weighted-average common shares outstanding	224		222		220
Effect of dilutive share-based awards	2		3		—
Effect of dilutive underlying shares of the Series A Preferred Stock (2)	—		—		—
Weighted-average dilutive shares outstanding	226		225		220
Net income (loss) per share:
Basic	$	1.02	$	0.55	$	(1.15)
Diluted	$	1.01	$	0.54	$	(1.15)

(1) As discussed in Note 14 Convertible Preferred Stock, Series A Preferred Stock dividends for fiscal year 2020 and the first quarter of 2021 were paid-in-kind in the form of shares of Series A Preferred Stock. Series A Preferred Stock dividends for the remaining quarters of fiscal year 2021 and 2022 were paid in cash.

(2) The Company applies the if-converted method to calculate the dilution impact of the Series A Preferred Stock, if dilutive in the period. Under the if-converted method, the Series A Preferred Stock are converted to common shares for inclusion in the calculation of the weighted-average common shares outstanding—diluted. Once converted, there would be no Series A Preferred Stock outstanding and therefore no Series A convertible preferred stock dividend.