Earnings Per Share

9 Months Ended

Sep. 30, 2020

The following table sets forth the computation of basic and diluted earnings per share on net income (in millions, except per share information):



	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Earnings:
Net income	$	213	$	263	$	283	$	635
Shares:
Weighted average outstanding shares	68		63		65		63
Equivalent shares from outstanding stock options	—		1		—		1
Denominator for diluted calculation	68		64		65		64
Earnings per share:
Basic	$	3.13	$	4.19	$	4.39	$	10.13
Diluted	$	3.12	$	4.12	$	4.36	$	9.93

The calculation of common equivalent shares does not include the impact of options having a strike or conversion price that exceeds the average stock price for the earnings period, as the result would be anti-dilutive. The calculation of common equivalent shares also excludes the impact of outstanding performance contingent shares, as the conditions necessary for their issuance have not been satisfied as of the end of the reporting period. The following table presents approximate amounts of stock options and performance contingent shares excluded from the calculation of common equivalent shares (in thousands):



	Three months ended September 30,		Nine months ended September 30,
	2020	2019	2020	2019
Excluded from common equivalent shares:
Stock options	1,692	139	993	416
Performance contingent shares	82	258	27	182