Earnings Per Share

9 Months Ended

Sep. 29, 2023

EARNINGS PER SHARE

Earnings per share is calculated by dividing the applicable income by the weighted average number of shares of common stock outstanding for the applicable period. Diluted earnings per share is computed based on the weighted average number of common shares outstanding plus the effect of dilutive potential shares outstanding during the period using the treasury stock method, except for the 2028 Convertible Notes and 2025 Convertible Notes, which are calculated using the if-converted method. Dilutive potential common shares include employee equity options, non-vested shares and similar instruments granted by the Company and the assumed conversion impact of convertible notes. The Company will settle any convertible note conversions through a combination settlement by satisfying the principal amount outstanding with cash and any convertible note conversion value in excess of the principal amount in cash or shares of the Company’s common stock or any combination thereof. As the Company will settle the principal amount of convertible notes in cash upon conversion, the convertible notes only have an impact on the Company's diluted earnings per share when the average share price of the Company’s common stock exceeds the conversion price, in any applicable period. See the computation of earnings per share below for the dilutive impact of the convertible notes for the three and nine months ended September 29, 2023 and September 30, 2022.

In connection with the offering of the 2025 Convertible Notes, the Company entered into Capped Calls, which are intended to reduce or offset the potential dilution from shares of common stock issued upon conversion. The Company completed a partial unwind of the Capped Calls in connection with the Notes Exchanges. Refer to Note 13 for further discussion of the Capped Calls.

The impact of the Capped Calls is not included when calculating potentially dilutive shares since their effect is anti-dilutive. The Capped Calls will mitigate dilution for the conversion of the remaining 2025 Convertible Notes up to the Company’s common stock price of $23.79. If the remaining 2025 Convertible Notes are converted at a price higher than $23.79 per share, the Capped Calls will no longer mitigate dilution from the conversion of the remaining 2025 Convertible Notes.

The table below presents the computation of basic and diluted earnings per share ($ and shares in millions, except per share amounts):


	Three Months Ended				Nine Months Ended
	September 29, 2023		September 30, 2022		September 29, 2023		September 30, 2022
Numerator:
Income from continuing operations, net of tax	$	21.5	$	49.6	$	117.2	$	164.5
Income from discontinued operations, net of tax	—		(2.0)		—		5.1
Net income	$	21.5	$	47.6	$	117.2	$	169.6

Denominator:
Weighted-average common shares outstanding used in basic earnings per share	168.2		163.1		165.3		162.7
Incremental common shares from:
Assumed exercise of dilutive options and vesting of dilutive restricted stock units	2.1		2.8		2.4		3.5
Assumed conversion of 2025 Convertible Notes	4.9		11.0		8.6		12.2
Weighted average common shares outstanding used in diluted earnings per share	175.2		176.9		176.3		178.4

Earnings per share:
Earnings from continuing operations - basic	$	0.13	$	0.30	$	0.71	$	1.01
Earnings from continuing operations - diluted	$	0.12	$	0.28	$	0.66	$	0.92

Earnings from discontinued operations - basic	$	—	$	(0.01)	$	—	$	0.03
Earnings from discontinued operations - diluted	$	—	$	(0.01)	$	—	$	0.03

Earnings - basic	$	0.13	$	0.29	$	0.71	$	1.04
Earnings - diluted	$	0.12	$	0.27	$	0.66	$	0.95

The following table presents the number of outstanding securities not included in the computation of diluted income per share, because their effect was anti-dilutive (in millions):


	Three Months Ended		Nine Months Ended
	September 29, 2023	September 30, 2022	September 29, 2023	September 30, 2022
Stock-based awards	1.9	1.9	2.0	1.5
2028 Convertible Notes	2.6	—	0.9	—
Total	4.5	1.9	2.9	1.5