Computation of Earnings per Common Share

3 Months Ended

Mar. 31, 2024

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. Diluted earnings per share is the amount of earnings available to each common share outstanding during the reporting periods adjusted to include the effects of potentially dilutive common shares. Potentially dilutive common shares include warrants, convertible preferred stock, stock options and other stock-based awards. Potentially dilutive common shares are excluded from the computation of diluted earnings per share in the periods where the effect would be antidilutive.

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 March 31,
(in millions, except share and per share amounts)	2024		2023
Net income available to common stockholders	$	(335)	$	1,998
Less: Dividends paid on and earnings allocated to participating securities	—		(21)
Earnings applicable to common stock	$	(335)	$	1,977
Weighted average common shares outstanding	740,047,777		686,911,555
Basic earnings per common share	$	(0.45)	$	2.88
Earnings applicable to common stock	$	(335)	$	1,977
Weighted average common shares outstanding	740,047,777		686,911,555
Potential dilutive common shares	—		1,360,056
Total shares for diluted earnings per common share computation	740,047,777		688,271,611
Diluted earnings per common share and common share equivalents	$	(0.45)	$	2.87