EARNINGS PER SHARE
Basic and diluted earnings per share (EPS) were calculated using the treasury stock method. Our restricted and performance stock unit awards, as described in Note 10 Stock-Based Compensation, are not considered participating securities since the dividend rights on unvested shares are forfeitable.

For basic EPS, the weighted-average number of common shares outstanding excludes underlying shares related to equity-settled awards and warrants. For diluted EPS, the basic shares outstanding are adjusted by adding potential common shares, if dilutive. Under the treasury stock method, we assume that proceeds from the exercise of options, warrants and similar instruments are used to purchase common stock at average market price of our stock each period. For PSUs, we measure the performance of our common stock against certain market conditions to determine the percentage earned for each period and the number of potential common shares included in diluted EPS. An insignificant number of potential common shares were not earned, and therefore were not treated as issued in our diluted EPS calculation for the year ended December 31, 2025.

The following table presents the calculation of basic and diluted EPS.
Year ended December 31,
202520242023
(in millions, except per share amounts)
Numerator for Basic and Diluted EPS
Net income $363 $376 $564 
Denominator for Basic EPS
Weighted-average shares87.0 79.3 69.6 
Potential common shares, if dilutive:
Warrants
— 1.0 1.0 
Restricted stock units
0.3 0.5 1.0 
Performance stock units
0.1 0.5 0.9 
Deferred Consideration Obligation (related to the Aera Merger)
— 0.1 — 
Denominator for Diluted EPS
Weighted-average shares
87.4 81.4 72.5 
EPS
Basic$4.17 $4.74 $8.10 
Diluted$4.15 $4.62 $7.78 

Historical Timeline

Fiscal YearFiled
2025Mar 2, 2026Showing above
2024Mar 3, 2025
2023Feb 28, 2024
2022Feb 24, 2023
2021Feb 25, 2022
2020Mar 11, 2021
2019Feb 26, 2020
2018Feb 27, 2019
2017Feb 27, 2018
2016Feb 24, 2017
2015Feb 29, 2016

About Earnings Per Share Disclosures

The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.

Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.