Masco Corporation Just Filed Its Annual Report: INCOME PER COMMON SH...

INCOME PER COMMON SHARE

Reconciliations of the numerators and denominators used in the computations of basic and diluted earnings per common share were as follows, in millions:
Year Ended December 31,
 202120202019
Numerator (basic and diluted):
Income from continuing operations$410 $810 $639 
Less: Allocation to redeemable noncontrolling interest— — 
Less: Allocation to unvested restricted stock awards
Income from continuing operations attributable to common shareholders          
406 804 635 
Income from discontinued operations, net— 414 296 
Less: Allocation to unvested restricted stock awards— 
Income from discontinued operations, net attributable to common shareholders
— 411 294 
Net income attributable to common shareholders$406 $1,215 $929 
Denominator:
Basic common shares (based upon weighted average)249 264 287 
Add: Stock option dilution— 
Diluted common shares251 264 288 
We follow accounting guidance regarding determining whether instruments granted in share-based payment transactions are participating securities. This accounting guidance clarifies that share-based payment awards that entitle their holders to receive non-forfeitable dividends prior to vesting should be considered participating securities. In 2020, we began granting restricted stock units. The dividends associated with the unvested restricted stock units are forfeitable, and consequently, the restricted stock units are not considered a participating security and are not accounted for under the two-class method. We have also granted restricted stock awards that contain non-forfeitable rights to dividends on unvested shares; such unvested restricted stock awards are considered participating securities. As participating securities, the unvested shares are required to be included in the calculation of our basic income per common share, using the two-class method. The two-class method of computing income per common share is an allocation method that calculates income per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. For the years ended December 31, 2021, 2020 and 2019, we allocated dividends and undistributed earnings to the participating securities.
Additionally, 296,000, 374,000 and 854,000 common shares for 2021, 2020 and 2019, respectively, related to stock options.
Common shares outstanding included on our balance sheet and for the calculation of income per common share do not include unvested stock awards (0.6 million and 1 million common shares at December 31, 2021 and 2020, respectively); shares outstanding for legal requirements included all common shares that have voting rights (including unvested stock awards).

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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