EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2022

NOTE M— EARNINGS PER SHARE

(Loss) income from continuing operations per common share attributable to L3Harris common shareholders (“EPS”) is computed using the two-class method, which is an earnings allocation formula that determines EPS for common stock and any participating securities according to dividends paid and participation rights in undistributed earnings. Under the two-class method, EPS is computed by dividing the sum of earnings distributed to L3Harris common shareholders and undistributed earnings allocated to L3Harris common shareholders by the weighted-average number of common shares outstanding for the period. (Loss) income from continuing operations per diluted common share attributable to L3Harris common shareholders (“diluted EPS”) is

computed using the more dilutive of the two-class method or the treasury stock method. Under the treasury stock method, diluted EPS is computed by dividing net (loss) income attributable to L3Harris common shareholders by the weighted-average number of common shares outstanding for the period. In applying the two-class method, undistributed earnings are allocated to both common shares and participating securities based on the weighted-average shares outstanding during the period.

The weighted average number of shares outstanding used to compute basic and diluted EPS are as follows:


	Quarter Ended		Three Quarters Ended
(In millions)	September 30, 2022	October 1, 2021	September 30, 2022	October 1, 2021

Basic weighted average common shares outstanding	191.3	199.5	192.2	203.3
Impact of dilutive share-based awards	—	2.1	1.8	1.9
Diluted weighted average common shares outstanding	191.3	201.6	194.0	205.2

Potential dilutive common shares primarily consist of employee stock options and restricted and performance unit awards. Diluted EPS excludes the antidilutive impact of 1.9 million and 0.3 million weighted average share-based awards outstanding for the quarter and three quarters ended September 30, 2022, respectively, and 1.1 million weighted average share-based awards outstanding for the three quarters ended October 1, 2021. The anti-dilutive impact of weighted average share-based awards outstanding for the quarter ended October 1, 2021 was immaterial.