Computation of Earnings per Common Share

6 Months Ended

Jun. 30, 2021

Earnings Per Share [Abstract]

Computation of Earnings per Common Share

Note 2. Computation of Earnings per Common Share

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 EPS for the periods indicated:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
(amounts in millions, except share and per share amounts)	2021			2020			2021			2020
Net income available to common shareholders	$	144		$	97		$	281		$	189
Less: Dividends paid on and earnings allocated to    participating securities		(3	)		(1	)		(4	)		(3	)
Earnings applicable to common stock	$	141		$	96		$	277		$	186
Weighted average common shares outstanding		464,092,947			461,933,533			463,695,136			463,463,751
Basic earnings per common share	$	0.30		$	0.21		$	0.60		$	0.40
Earnings applicable to common stock	$	141		$	96		$	277		$	186
Weighted average common shares outstanding		464,092,947			461,933,533			463,695,136			463,463,751
Potential dilutive common shares		801,591			555,960			698,385			487,317
Total shares for diluted earnings per common share    computation		464,894,538			462,489,493			464,393,521			463,951,068
Diluted earnings per common share and common share    equivalents	$	0.30		$	0.21		$	0.60		$	0.40