Net Earnings Per Share

9 Months Ended

Sep. 27, 2019

NOTE 13. NET EARNINGS PER SHARE

Basic net earnings per share (“EPS”) is calculated by dividing net earnings attributable to common stockholders by the weighted average number of shares of common stock outstanding for the applicable period. Diluted EPS is similarly calculated, except that the calculation includes the dilutive effect of the assumed issuance of shares under stock-based compensation plans under the treasury stock method, except where the inclusion of such shares would have an anti-dilutive impact. There were 3.3 million anti-dilutive options excluded from the diluted EPS calculation for the three months ended September 27, 2019 and no anti-dilutive options excluded from the diluted EPS calculation for the three months ended September 28, 2018. There were 1.7 million anti-dilutive options excluded for the nine months ended September 27, 2019. There were an insignificant amount of anti-dilutive options excluded for the nine months ended September 28, 2018.

As described in Note 6, upon conversion of the Convertible Notes, holders will receive cash, shares of our common stock, or a combination thereof, at our election. Our intention is to settle such conversions through cash up to the principal amount of the Convertible Notes and, if applicable, through shares of our common stock for conversion value, if any, in excess of the principal amount of the Convertible Notes. We believe we have the ability to settle these obligations as intended, and therefore we have accounted for the conversion features under the treasury stock method in our calculation of EPS. Because the fair value of our common stock is below the conversion price, the Convertible Notes had no impact on our earnings per share for the three and nine months ended September 27, 2019.

The impact of our Mandatory Convertible Preferred Stock (“MCPS”) calculated under the if-converted method was anti-dilutive, and as such 18.4 million shares were excluded from the diluted EPS calculation for the three and nine months ended September 27, 2019.

Information related to the calculation of net earnings per share of common stock is summarized as follows ($ and shares in millions, except per share amounts):



	Three Months Ended						Nine Months Ended
	September 27, 2019			September 28, 2018			September 27, 2019			September 28, 2018
Numerator
Net earnings from continuing operations	$	207.3		$	214.0		$	546.6		$	678.2
Mandatory convertible preferred stock cumulative dividends	(17.3		)	(17.4		)	(51.8		)	(17.6		)
Net earnings attributable to common stockholders from continuing operations	$	190.0		$	196.6		$	494.8		$	660.6

Denominator
Weighted average common shares outstanding used in basic earnings per share	336.1			349.9			335.6			349.2
Incremental common shares from:
Assumed exercise of dilutive options and vesting of dilutive Stock Awards	3.8			5.4			4.1			5.6
Weighted average common shares outstanding used in diluted earnings per share	339.9			355.3			339.7			354.8

Net earnings from continuing operations per common share - Basic	$	0.57		$	0.56		$	1.47		$	1.89
Net earnings from continuing operations per common share - Diluted	$	0.56		$	0.55		$	1.46		$	1.86

As of September 27, 2019, we accrued $17.3 million of dividends on our MCPS relating to the third quarter dividend payment that was made on September 30, 2019. We declared and paid cash dividends per common share and per MCPS during the periods presented as follows:



	Dividend Per Common Share		Amount ($ in millions)		Dividend per MCPS		Amount ($ in millions)
2019:
First quarter	$	0.07	$	23.4	$	12.50	$	17.3
Second quarter	0.07		23.4		12.50		17.2
Third quarter	0.07		23.5		12.50		17.3
Total	$	0.21	$	70.3	$	37.50	$	51.8

2018:
First quarter	$	0.07	$	24.3	$	—	$	—
Second quarter	0.07		24.4		—		—
Third quarter	0.07		24.5		12.78		17.6
Total	$	0.21	$	73.2	$	12.78	$	17.6