EARNINGS PER SHARE
Basic earnings per share is based on the weighted average number of shares of common stock outstanding. Diluted earnings per share is based upon the weighted average number of shares of common stock outstanding plus all potentially dilutive securities that were assumed to be converted into common shares at the beginning of the period under the treasury stock method. This method requires that the effect of potentially dilutive common stock equivalents (stock options, SSARs, restricted stock or units, and performance stock units) be excluded from the calculation of diluted earnings per share for the periods in which losses from continuing operations are reported because the effect is anti-dilutive.
The following table sets forth the computation of basic and diluted earnings per share (dollar and share amounts in millions):
 
Year Ended December 31,
2025
2024
2023
Net income$146 $420 $178 
Weighted average common shares outstanding - basic70 71 72 
Dilutive effect of employee stock plans— — — 
Shares used for diluted earnings per share70 7172
Net income per share of common stock:
Basic
$2.09 $5.91 $2.47 
Diluted
$2.08 $5.89 $2.46 

Historical Timeline

Fiscal YearFiled
2025Feb 17, 2026Showing above
2024Feb 19, 2025
2023Feb 14, 2024
2022Feb 21, 2023
2021Feb 22, 2022
2020Feb 18, 2021
2019Feb 13, 2020
2018Feb 14, 2019
2017Feb 13, 2018
2016Feb 15, 2017
2015Feb 24, 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.