NET INCOME PER CLASS A COMMON SHARE

4 Months Ended

Jun. 20, 2020

The Company calculates basic and diluted net income per Class A common share using the two-class method. The two-class method is an allocation formula that determines net income per Class A common share for each share of Class A common stock and Convertible Preferred Stock, a participating security, according to dividends declared and participation rights in undistributed earnings. Under this method, all earnings (distributed and undistributed) are allocated to Class A common shares and Convertible Preferred Stock based on their respective rights to receive dividends. The holders of Convertible Preferred Stock participate in cash dividends that the Company pays on its Class A common stock to the extent that such cash dividends exceed $206.25 million per fiscal year. Basic net income per Class A common share is computed by dividing net income allocated to Class A common stockholders by the weighted average number of Class A common shares outstanding for the period, including Class A common shares to be issued with no prior remaining contingencies prior to issuance. Diluted net income per Class A common share is computed based on the weighted average number of shares of Class A common stock outstanding during each period, plus potential Class A common shares considered outstanding during the period, as long as the inclusion of such awards is not antidilutive. Potential Class A common shares consist of unvested restricted stock units and awards and Convertible Preferred Stock, using the more dilutive of either the two-class method or as-converted stock method. Performance-based RSUs are considered dilutive when the related performance criterion has been met.

The components of basic and diluted net income per Class A common share were as follows (in millions, except per share data):



	16 weeks ended
	June 20, 2020			June 15, 2019
Basic net income per Class A common share
Net income	$	586.2		$	49.0
Accrued dividends on Convertible Preferred Stock	(3.9		)	—
Earnings allocated to Convertible Preferred Stock	—			—
Net income allocated to Class A common stockholders - Basic	$	582.3		$	49.0

Weighted average Class A common shares outstanding - Basic (1)	568.0			579.2

Basic net income per Class A common share	$	1.03		$	0.08

Diluted net income per Class A common share
Net income allocated to Class A common stockholders - Basic	$	582.3		$	49.0
Accrued dividends on Convertible Preferred Stock	3.9			—
Earnings allocated to Convertible Preferred Stock	—			—
Net income allocated to Class A common stockholders - Diluted	$	586.2		$	49.0

Weighted average Class A common shares outstanding - Basic (1)	568.0			579.2
Dilutive effect of:
Restricted stock units and awards	4.8			0.2
Convertible preferred stock (2)	10.9			—
Weighted average Class A common shares outstanding - Diluted (3)	583.7			579.4

Diluted net income per Class A common share	$	1.00		$	0.08

(1) There were no common shares remaining to be issued for the 16 weeks ended June 20, 2020, compared to 3.4 million common shares remaining to be issued for the 16 weeks ended June 15, 2019.

(2) Reflects the number of shares of Convertible Preferred Stock issued on the Preferred Closing Date, if converted into common stock for the period outstanding.

(3) There were no potential common shares outstanding that were antidilutive for the 16 weeks ended June 20, 2020 and June 15, 2019.