EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2021

Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period, increased to include the number of shares of common stock that would have been outstanding had potentially dilutive shares of common stock been issued. The dilutive effect of restricted stock units is reflected in diluted earnings per share by applying the treasury stock method.

There are no adjustments required to be made to net income for purposes of computing basic and diluted earnings per share.

These financial statements are prepared on the basis that, at the date of distribution of Sylvamo common stock by International Paper to its shareholders on October 1, 2021, Sylvamo had 43,949,277 total shares of common stock outstanding. The calculation of pro forma earnings per share for each period presented utilizes the number of shares of common stock outstanding at the date of distribution as the basis for the calculation of the weighted average number of shares of common stock outstanding for periods prior to the spinoff because, at that time, Sylvamo did not operate as a separate, stand-alone entity, and no shares or equity-based awards were outstanding prior to the date of distribution. This share count reflects a change from the prior period to reflect an immaterial adjustment to the number of outstanding shares of common stock held by International Paper on the spin-off record date.

Basic and diluted earnings per share are calculated as follows:


In millions, except per share amounts	2021		2020		2019
Net income (loss)	$	331	$	170	$	377
Weighted average common shares outstanding	44		44		44
Effect of dilutive securities	—		—		—
Weighted average common shares outstanding - assuming dilution	44		44		44
Earnings per share - basic and diluted	$	7.53	$	3.85	$	8.55