Note 15 – Earnings Per Share

For the three and six months ended June 30, 2022, basic earnings per share has been calculated by dividing net income attributable to Class A common stockholders by the weighted average number of shares of Class A common stock outstanding for the period. Diluted earnings per share has been calculated in a manner consistent with that of basic earnings per share while considering all potentially dilutive shares of Class A common stock outstanding during the period.

Because a portion of XPO Holdings is owned by parties other than the Company, those parties participate in earnings at the XPO Holdings level. Additionally, given the organizational structure of XPO Inc, a parallel capital structure exists at XPO Holdings such that the shares of XPO Holdings are redeemable on a one-to-one basis with the XPO Inc. shares. In order to maintain the one-to-one ratio, the preferred stock issued at the XPO Inc. level also exist at the XPO Holdings level. The Company applies the two class method to allocate undistributed earnings of XPO Holdings, and in doing so, determines the portion of XPO Holdings’ income that is attributable to the Company and accordingly reflected in income available to common stockholders in the Company’s calculation of basic earnings per share. Due to the attribution of only a portion of the preferred stock dividends issued by XPO Holdings to the Company in first determining basic earnings per share at the subsidiary level, the amounts presented as net income attributable to noncontrolling interests and net income attributable to XPO Inc. presented below will not agree to the amounts presented on the condensed consolidated statement of operations.
 

Diluted earnings per share attributable to common stockholders adjusts the basic earnings per share attributable to common stockholders and the weighted average number of shares of common stock outstanding for the potential dilutive impact of potential common stock. The potential dilutive impact of redeemable convertible preferred stock and Class B common stock was calculated using the as-if-converted method. The potentially dilutive impact of restricted stock units was calculated using the treasury stock method.