Note 12 - Earnings Per Share

3 Months Ended

Mar. 31, 2022

NOTE 12: EARNINGS PER SHARE

Basic earnings per share computations are based on the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share computations include any dilutive effect of potential common shares. In periods with a net loss available to common shareholders, diluted earnings per share are calculated using weighted-average basic shares for that period, as utilizing diluted shares would be anti-dilutive to loss per share.

A reconciliation of the amounts used to calculate basic and diluted (loss) earnings per share for the three months ended March 31, 2022 and 2021 follows:

	Three Months Ended
	March 31,
(in millions)	2022			2021
Net (loss) income	$	(3	)	$	6
Less: Preferred stock cash dividends		(1	)		(1	)
Less: Preferred stock in-kind dividends		(1	)		(1	)
Less: Preferred stock deemed dividends		(1	)		(2	)
Plus: Expiration of Series A preferred stock embedded derivative		—			11
Net (loss) income available to common shareholders - basic and diluted	$	(6	)	$	13

	Three Months Ended
	March 31,
(in millions of shares)	2022		2021
Weighted average shares — basic		78.7		77.8
Effect of dilutive securities
Employee stock options		—		2.3
Unvested restricted stock units		—		0.5
Weighted average shares — diluted		78.7		80.6

As a result of the net loss available to common shareholders for the three months ended March 31, 2022, Kodak calculated diluted earnings per share using weighted-average basic shares outstanding. If Kodak had reported income available to common shareholders for the three months ended March 31, 2022, the calculation of diluted earnings per share would have included the assumed vesting of 0.5 million unvested restricted stock units and the assumed exercise of 0.9 million stock options.

The computation of diluted earnings per share for the three months ended March 31, 2022 and 2021 excluded the impact of (1) the assumed conversion of $25 million of Convertible Notes issued in 2021, (2) the assumed conversion of 1.0 million shares of Series B Preferred Stock, (3) the assumed conversion of 1.0 million shares of Series C Preferred stock, (4) the assumed exercise of 3.8 million and 3.2 million outstanding employee stock options, respectively and (5) the assumed vesting of 0.4 million and 0.3 million unvested restricted stock units, respectively, because the effects would have been anti-dilutive.