Net Earnings Per Share

6 Months Ended

Jun. 26, 2020

NOTE 11. 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 5.7 million anti-dilutive options excluded from the diluted EPS calculation for the three month period ended June 26, 2020 and an insignificant amount of anti-dilutive options excluded from the diluted EPS calculation for the three month period ended June 28, 2019. There were 5.7 million and 1.7 million anti-dilutive options excluded for the six month periods ended June 26, 2020 and June 28, 2019, respectively.

As described in Note 5, 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 six month periods ended June 26, 2020 and June 28, 2019.

The impact of our Mandatory Convertible Preferred Stock (“MCPS”) calculated under the if-converted method was anti-dilutive for both the three and six month periods ended June 26, 2020, and 18.4 million shares were excluded from the diluted EPS calculation for each respective period. The impact of our MCPS calculated under the if-converted method was anti-dilutive for both the three and six month periods ended June 28, 2019, and 17.5 million shares were excluded from the diluted EPS calculation for each respective period.

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						Six Months Ended
	June 26, 2020		June 28, 2019		June 26, 2020		June 28, 2019
Numerator
Net earnings from continuing operations	$	130.3	$	175.3	$	172.6	$	339.3
Mandatory convertible preferred stock cumulative dividends	(17.2)		(17.2)		(34.5)		(34.5)
Net earnings attributable to common stockholders from continuing operations	$	113.1	$	158.1	$	138.1	$	304.8

Denominator
Weighted average common shares outstanding used in basic earnings per share	337.3		335.6		337.1		335.4
Incremental common shares from:
Assumed exercise of dilutive options and vesting of dilutive Stock Awards	2.4		4.1		2.8		4.4

Weighted average common shares outstanding used in diluted earnings per share	339.7		339.7		339.9		339.8

Net earnings from continuing operations per common share - Basic	$	0.34	$	0.47	$	0.41	$	0.91
Net earnings from continuing operations per common share - Diluted	$	0.33	$	0.47	$	0.41	$	0.90

We declared and paid cash dividends per common share for both periods as presented below. We declared and paid the MCPS dividends in the first and second quarter of 2019, while the MCPS dividends in the first and second quarter of 2020 were declared, accrued, and paid as follows:


	Dividend Per Common Share		Amount ($ in millions)		Dividend per MCPS		Amount ($ in millions)
2020:
First quarter	$	0.07	$	23.5	$	12.5	$	17.3
Second quarter	0.07		23.6		12.5		17.2


Total	$	0.14	$	47.1	$	25.0	$	34.5

2019:
First quarter	$	0.07	$	23.4	$	12.5	$	17.3
Second quarter	0.07		23.4		12.5		17.2


Total	$	0.14	$	46.8	$	25.0	$	34.5

The first quarter 2020 MCPS dividends were paid on April 1, 2020 and the second quarter 2020 MCPS dividends were paid on July 1, 2020.