Earnings Per Share

12 Months Ended

Dec. 31, 2020

15. Earnings per Share

The Company computes earnings per share using the two-class method, which is an earnings allocation formula that determines earnings per share for common stock and any participating securities according to dividends declared (whether paid or unpaid) and participation rights in undistributed earnings. The Series A Preferred Stock is considered participating securities because it has dividend rights determined on an as-converted basis in the event of Company’s declaration of a dividend or distribution for common shares.

On October 10, 2018, the Company completed its previously announced 1-for-12 reverse stock split. The Successor period presented has been retrospectively revised to reflect this change.

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


	Successor						Predecessor
Computation of Earnings Per Share	Year Ended December 31, 2020		Year Ended December 31, 2019		Five Months Ended December 31, 2018		Seven Months Ended July 31, 2018
Net income attributable to Successor/Predecessor	$	305	$	274	$	884	$	154
Less: Undistributed earnings attributable to participating stockholders	3		2		8		—
Net income attributable to Successor/Predecessor common stockholders	$	302	$	272	$	876	$	154

Net income per common share attributable to Successor/Predecessor common stockholders:
Basic	$	3.31	$	2.99	$	9.65	$	1.57
Diluted	$	3.20	$	2.95	$	9.54	$	1.55

Weighted average shares of common stock outstanding (in thousands):
Basic	91,312		91,035		90,813		98,046
Dilutive effect of stock awards	2,343		270		178		1,091
Dilutive effect of participating securities	839		839		839		—
Diluted	94,494		92,144		91,830		99,137