Computation of Earnings per Common Share

6 Months Ended

Jun. 30, 2022

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,
(in millions, except share and per share amounts)	2022			2021			2022			2021
Net income available to common stockholders	$	163		$	144		$	310		$	281
Less: Dividends paid on and earnings allocated    to participating securities		(2	)		(3	)		(4	)		(4	)
Earnings applicable to common stock	$	161		$	141		$	306		$	277
Weighted average common shares outstanding		465,811,096			464,092,947			465,476,526			463,695,136
Basic earnings per common share	$	0.34		$	0.30		$	0.66		$	0.60
Earnings applicable to common stock	$	161		$	141		$	306		$	277
Weighted average common shares outstanding		465,811,096			464,092,947			465,476,526			463,695,136
Potential dilutive common shares		988,976			801,591			899,249			698,385
Total shares for diluted earnings per common    share computation		466,800,072			464,894,538			466,375,775			464,393,521
Diluted earnings per common share and    common share equivalents	$	0.34		$	0.30		$	0.66		$	0.60