EARNINGS PER SHARE
Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period, increased to include the number of shares of common stock that would have been outstanding had potentially dilutive shares of common stock been issued. The dilutive effect of restricted stock units is reflected in diluted earnings per share by applying the treasury stock method.

There are no adjustments required to be made to net income for purposes of computing basic and diluted earnings per share.
Basic and diluted earnings per share are calculated as follows:
In millions, except per share amounts202520242023
Net income $132 $302 $253 
Weighted average common shares outstanding40.141.142.0
Effect of dilutive securities0.60.90.7
Weighted average common shares outstanding - assuming dilution40.742.042.7
Earnings per share - basic $3.29 $7.35 $6.02 
Earnings per share - diluted$3.24 $7.18 $5.93 
Anti-dilutive shares (a)
0.30.20.3
(a) Common stock related to service-based restricted stock units and performance-based restricted stock units were outstanding but excluded from the computation of diluted earnings per share because their effect would be anti-dilutive under the treasury stock method or because the shares were subject to performance conditions that had not been met.

Historical Timeline

Fiscal YearFiled
2025Feb 20, 2026Showing above
2024Feb 20, 2025
2023Feb 21, 2024
2022Feb 22, 2023
2021Mar 2, 2022

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.