Earnings Per Share

6 Months Ended

Jun. 30, 2021

11. 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 March 26, 2021, the Company repurchased 3,700 thousand shares of its common stock from affiliates of Kohlberg Kravis Roberts & Co. L.P., a related party of the Company, for a total cost of $119 or $32.25 per share.

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


	Three Months Ended June 30,				Six Months Ended June 30,
Computation of Earnings Per Share	2021		2020		2021		2020
Net income (loss) from continuing operations	$	427	$	77	$	986	$	(82)
Less: Net loss attributable to non-controlling interests	—		—		—		(3)
Less: Undistributed earnings from continuing operations attributable to participating stockholders	4		1		9		—
Net income (loss) from continuing operations attributable to Mr. Cooper common stockholders	$	423	$	76	$	977	$	(79)

Net income (loss) from discontinued operations	$	12	$	(4)	$	14	$	(16)
Less: Undistributed earnings from discontinued operations attributable to participating stockholders	—		—		—		—
Net income (loss) from discontinued operations attributable to Mr. Cooper common stockholders	$	12	$	(4)	$	14	$	(16)

Net income (loss)	$	439	$	73	$	1,000	$	(98)
Less: Net loss attributable to non-controlling interests	—		—		—		(3)
Net income (loss) attributable to Mr. Cooper	439		73		1,000		(95)
Less: Undistributed earnings attributable to participating stockholders	4		1		9		—
Net income (loss) attributable to common stockholders	$	435	$	72	$	991	$	(95)

Earnings from continuing operations per common share attributable to Mr. Cooper:
Basic	$	4.91	$	0.82	$	11.13	$	(0.86)
Diluted	$	4.72	$	0.81	$	10.65	$	(0.86)

Earnings from discontinued operations per common share attributable to Mr. Cooper:
Basic	$	0.14	$	(0.04)	$	0.16	$	(0.18)
Diluted	$	0.13	$	(0.04)	$	0.15	$	(0.18)

Earnings per common share attributable to Mr. Cooper:
Basic	$	5.05	$	0.78	$	11.29	$	(1.04)
Diluted	$	4.85	$	0.77	$	10.80	$	(1.04)

Weighted average shares of common stock outstanding (in thousands):
Basic	86,142		91,997		87,791		91,691
Dilutive effect of stock awards(1)	2,664		176		3,123		—
Dilutive effect of participating securities(1)	839		839		839		—
Diluted	89,645		93,012		91,753		91,691

(1)For periods with net loss, the Company excluded potential common shares from the computation of diluted EPS because inclusion would be antidilutive.