Earnings Per Share

12 Months Ended

Dec. 31, 2022

EARNINGS PER SHARE

Earnings per share is calculated by dividing the applicable income by the weighted average number of shares of common stock outstanding for the applicable period. Diluted earnings per share is computed based on the weighted average number of common shares outstanding plus the effect of dilutive potential shares outstanding during the period using the treasury stock method. Dilutive potential common shares include employee equity options, non-vested shares and similar instruments granted by the Company and the assumed conversion impact of the Notes. The Company will settle any Notes conversions through a combination settlement by satisfying the principal amount outstanding with cash and any Notes conversion value in excess of the principal amount in cash or shares of the Company’s common stock or any combination thereof. As such, the Company uses the treasury stock method for the assumed conversion of the Notes to compute the weighted average shares of common stock outstanding for diluted earnings per share. As the Company will settle the principal amount of the Notes in cash upon conversion, the Notes do not have an impact on the Company's diluted earnings per share until the average share price of the Company’s common stock exceeds the conversion price of $21.01 per share in any applicable period. See the computation of earnings per share below for the dilutive impact of the Notes for the years ended December 31, 2022, 2021 and 2020.

In connection with the offering of the Notes, the Company entered into Capped Calls (see further discussion in Note 16), which are intended to reduce or offset the potential dilution from shares of common stock issued upon conversion of the Notes. However, this impact is not included when calculating potentially dilutive shares since their effect is anti-dilutive. The Capped Calls will mitigate dilution from the conversion of the Notes up to the Company’s common stock price of $23.79. If the Notes are converted at a price higher than $23.79 per share, the Capped Calls will no longer mitigate dilution from the conversion of the Notes.

The table below presents the computation of basic and diluted earnings per share ($ and shares in millions, except per share amounts):


	Year Ended December 31,
		2022		2021			2020
Numerator:
Income from continuing operations, net of tax		$	238.0	$	263.5		42.5
Income (loss) from discontinued operations, net of tax		$	5.1	$	77.0		$	(9.2)
Net income		$	243.1	$	340.5		$	33.3

Denominator:
Weighted-average common shares outstanding used in basic earnings (loss) per share		162.9		161.2			159.6
Incremental common shares from:
Assumed exercise of dilutive options and vesting of dilutive restricted stock units		3.2		4.4			2.2
Assumed conversion of the Notes		11.5		12.0			2.3
Weighted average common shares outstanding used in diluted earnings (loss) per share		177.6		177.6			164.1

Earnings per share:
Earnings from continuing operations - basic		$	1.46	$	1.63		$	0.27
Earnings from continuing operations - diluted		$	1.34	$	1.48		$	0.26

Earnings (loss) from discontinued operations - basic		$	0.03	$	0.48		$	(0.06)
Earnings (loss) from discontinued operations - diluted		$	0.03	$	0.43		$	(0.06)

Earnings - basic		$	1.49	$	2.11		$	0.21
Earnings - diluted		$	1.37	$	1.92	*	$	0.20
* Earnings per share is computed independently for earnings per share from continuing operations and earnings per share from discontinued operations. The sum of earnings per share from continuing operations and earnings per share from discontinued operations does not equal earnings per share due to rounding.

The following table presents the number of outstanding securities not included in the computation of diluted income per share, because their effect was anti-dilutive (in millions):


	Year Ended December 31,
		2022	2021	2020
Stock-based awards		1.5	1.2	4.1