Earnings Per Share

12 Months Ended

Jan. 02, 2021

The Company computes earnings per share (“EPS”) in accordance with ASC 260, Earnings per Share. Basic EPS is computed by dividing net income (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding.

Diluted EPS is computed using the weighted average number of shares of common stock, plus the effect of potentially dilutive securities. The Company applies the treasury method to calculate the dilution impact of share-based awards—stock options, non-vested restricted shares with forfeitable dividend rights, restricted stock units, and employee stock purchase plan deferrals. The Company applies the if-converted method to calculate the dilution impact of the Series A convertible preferred Stock. For fiscal years 2020, 2019 and 2018, share-based awards representing 9 million, 2 million and 2 million underlying common shares, respectively, were not included in the computation because the effect would have been anti-dilutive. For fiscal year 2020, convertible preferred stock representing 15 million of underlying common shares were not included in the computation because the effect would have been anti-dilutive.

The following table sets forth the computation of basic and diluted EPS:


	2020		2019		2018
Numerator:
Net (loss) income	$	(226)	$	385	$	407
Series A convertible preferred stock dividends	28		—		—
Net (loss) income available to common shareholders	$	(254)	$	385	$	407
Denominator:
Weighted-average common shares outstanding	220		218		216
Effect of dilutive securities	—		2		2
Effect of dilutive underlying shares of the Series A convertible preferred stock	—		—		—
Weighted-average dilutive shares outstanding	220		220		218
Net (loss) income per share:
Basic	$	(1.15)	$	1.77	$	1.88
Diluted	$	(1.15)	$	1.75	$	1.87