Earnings (Loss) Per Share

9 Months Ended

Sep. 30, 2020

Earnings (Loss) Per Share Basic earnings (loss) per common share (“EPS”) is computed by dividing net income (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. In addition, the shares of common stock issuable pursuant to restricted stock awards, restricted stock units, performance stock units, and stock options outstanding under our 2019 Omnibus Incentive Compensation Plan, shares issuable under our Employee Stock Purchase Plan, and Series A Preferred Stock are included in the diluted EPS calculation to the extent they are dilutive.

On September 9, 2020, we converted a portion of our 7.50% Series A Convertible Preferred Stock to 14.4 million common shares. Following the conversion, the additional shares were included in weighted-average common shares outstanding.

The following is a reconciliation of the numerator and denominator of the basic and diluted EPS computation for net income (loss) per share:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions, except per share amounts)	2020		2019		2020		2019
Numerator:
Net income (loss) attributable to Covetrus	$	(35)	$	(959)	$	(15)	$	(982)

Adjustment for:
Dividends declared on Series A preferred stock	(4)		—		(6)		—


Income (loss) available to common shareholders	$	(39)	$	(959)	$	(21)	$	(982)

Denominator:
Basic
Weighted-average common shares outstanding	116		112		113		106
Diluted
Effect of dilutive shares	—		—		—		—
Weighted-average common shares outstanding	116		112		113		106

Earnings (loss) per share attributable to Covetrus:
Basic	$	(0.33)	$	(8.56)	$	(0.18)	$	(9.26)
Diluted	$	(0.33)	$	(8.56)	$	(0.18)	$	(9.26)

Potentially dilutive securities (a)	26		6		27		4

(a) Potentially dilutive securities attributable to outstanding convertible Series A Preferred Stock (approximately 73% of the total potentially dilutive securities for the three months ended September 30, 2020 and approximately 74% of the total potentially dilutive securities for the nine months ended September 30, 2020), stock options, restricted stock units, restricted stock awards, and performance stock units were excluded from the computation of diluted earnings per share because the securities would have had an antidilutive effect.