Earnings Per Share

12 Months Ended

Dec. 30, 2023

EARNINGS PER SHARE

The Company computes EPS in accordance with ASC 260, Earnings per Share. Basic EPS is computed by dividing net income 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 Preferred Stock, if dilutive in the period. For fiscal years 2023, 2022 and 2021, share-based awards representing less than 1 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 2023, Series A Preferred Stock representing 9 million of underlying common shares were included in the computation because the effect is dilutive. For fiscal years 2022 and 2021, Series A Preferred Stock representing 25 million and 25 million of underlying common shares, respectively, 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:


	2023		2022		2021
Numerator:
Net income	$	506	$	265	$	164
Less: Series A Preferred Stock dividends (1)	(7)		(37)		(43)
Net income available to common shareholders	$	499	$	228	$	121
Denominator:
Weighted-average common shares outstanding	239		224		222
Effect of dilutive share-based awards	2		2		3
Effect of dilutive underlying shares of the Series A Preferred Stock (2)	9		—		—
Weighted-average dilutive shares outstanding	250		226		225
Net income per share:
Basic	$	2.09	$	1.02	$	0.55
Diluted	$	2.02	$	1.01	$	0.54

(1) As discussed in Note 14 Convertible Preferred Stock, Series A Preferred Stock dividends for the first quarter of 2021 were paid-in-kind in the form of shares of Series A Preferred Stock. Series A Preferred Stock dividends for the remaining quarters of fiscal year 2021, and all dividends paid in 2022 and 2023 were paid in cash.