Earnings Per Share

12 Months Ended

Dec. 28, 2024

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 2024, 2023 and 2022, share-based awards representing less than 1 million, less than 1 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 year 2022, Series A Preferred Stock representing 25 million of underlying common shares, respectively, were not included in the computation because the effect would have been anti-dilutive. The Company did not have any outstanding Series A Preferred Stock during fiscal year 2024.

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


	2024		2023		2022
Numerator:
Net income	$	494	$	506	$	265
Less: Series A Preferred Stock dividends (1)	—		(7)		(37)
Net income available to common shareholders	$	494	$	499	$	228
Denominator:
Weighted-average common shares outstanding	241		239		224
Effect of dilutive share-based awards	3		2		2
Effect of dilutive underlying shares of the Series A Preferred Stock (2)	—		9		—
Weighted-average dilutive shares outstanding	244		250		226
Net income per share:
Basic	$	2.05	$	2.09	$	1.02
Diluted	$	2.02	$	2.02	$	1.01

(1) As discussed in Note 13 Convertible Preferred Stock, Series A Preferred Stock dividends for 2022 and 2023 were paid in cash.

(2) Under the if-converted method, outstanding shares of the Series A Preferred Stock are converted to common shares for inclusion in the calculation of weighted-average common shares outstanding-diluted. Once converted, there would be no preferred stock outstanding and therefore, no Series A Preferred Stock dividend As of December 30, 2023, the 9 million shares represent the weighted average impact on these shares during the fiscal year 2023. See Note 13 Convertible Preferred Stock, for details on Series A Preferred Stock.