Computation of Earnings per Common Share

9 Months Ended

Sep. 30, 2023

Computation of Earnings per Common Share

Earnings per Common Share (Basic and Diluted)

Basic EPS is computed by dividing the net income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS is computed using the same method as basic EPS, however, the computation reflects the potential dilution that would occur if outstanding in-the-money stock options were exercised and converted into common stock.

Unvested stock-based compensation awards containing non-forfeitable rights to dividends paid on the Company’s common stock are considered participating securities, and therefore are included in the two-class method for calculating EPS. Under the two-class method, all earnings (distributed and undistributed) are allocated to common shares and participating securities based on their respective rights to receive dividends on the common stock. The Company grants restricted stock to certain employees under its stock-based compensation plan. Recipients receive cash dividends during the vesting periods of these awards, including on the unvested portion of such awards. Since these dividends are non-forfeitable, the unvested awards are considered participating securities and therefore have earnings allocated to them.

The following table presents the Company’s computation of basic and diluted earnings per common share:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions, except share and per share amounts)	2023		2022		2023		2022
Net income available to common stockholders	$	199	$	144	$	2,601	$	453
Less: Dividends paid on and earnings allocated to participating securities	(2)		(2)		(27)		(6)
Earnings applicable to common stock	$	197	$	142	$	2,574	$	447
Weighted average common shares outstanding	722,486,509		465,115,180		710,684,522		465,354,754
Basic earnings per common share	$	0.27	$	0.31	$	3.62	$	0.96
Earnings applicable to common stock	$	197	$	142	$	2,574	$	447
Weighted average common shares outstanding	722,486,509		465,115,180		710,684,522		465,354,754
Potential dilutive common shares	2,426,381		979,177		1,753,527		926,184
Total shares for diluted earnings per common share computation	724,912,890		466,094,357		712,438,049		466,280,938
Diluted earnings per common share and common share equivalents	$	0.27	$	0.30	$	3.61	$	0.96