NET INCOME PER COMMON SHARE

12 Months Ended

Feb. 27, 2021

NET INCOME PER COMMON SHARE 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 Common Stock to the extent that such cash dividends exceed $206.25 million per fiscal year. In applying the two-class method to interim periods, the Company allocates income to its quarterly periods independently and discretely from its year-to-date and annual periods. 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 RSUs and RSAs 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 common share were as follows (in millions, except per share data):


	Fiscal 2020		Fiscal 2019		Fiscal 2018
Basic net income per Class A common share
Net income	$	850.2	$	466.4	$	131.1
Accrued dividends on Convertible Preferred Stock	(86.0)		—		—
Earnings allocated to Convertible Preferred Stock	—		—		—
Net income allocated to Class A common stockholders - Basic	$	764.2	$	466.4	$	131.1

Weighted average Class A common shares outstanding - Basic (1)	500.3		579.4		580.5

Basic net income per Class A common share	$	1.53	$	0.80	$	0.23

Diluted net income per Class A common share
Net income allocated to Class A common stockholders - Basic	$	764.2	$	466.4	$	131.1
Accrued dividends on Convertible Preferred Stock	86.0		—		—
Earnings allocated to Convertible Preferred Stock	—		—		—
Net income allocated to Class A common stockholders - Diluted	$	850.2	$	466.4	$	131.1

Weighted average Class A common shares outstanding - Basic (1)	500.3		579.4		580.5
Dilutive effect of:
Restricted stock units and awards	4.1		0.9		0.2
Convertible preferred stock (2)	73.7		—		—
Weighted average Class A common shares outstanding - Diluted (3)	578.1		580.3		580.7

Diluted net income per Class A common share	$	1.47	$	0.80	$	0.23

(1) Fiscal 2020, fiscal 2019 and fiscal 2018 include 1.1 million, 1.3 million and 1.9 million common shares remaining to be issued, respectively.

(2) Reflects the number of shares of Convertible Preferred Stock issued, if converted into Common Stock for the period outstanding.

(3) There were no potential common shares outstanding that were antidilutive for fiscal 2020, fiscal 2019 and fiscal 2018.