Net Income Per Share

3 Months Ended

Jul. 01, 2022

Earnings Per Share [Abstract]

Net Income Per Share

Net Income Per Share

Basic income per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted net income per share also includes the incremental effect of dilutive potentially issuable common shares outstanding. Dilutive potentially issuable common shares include the dilutive effect of the shares underlying convertible debt and employee equity awards.

The components of basic and diluted net income (loss) per share are as follows:

	Three Months Ended
(In millions, except per share amounts)	July 1, 2022		July 2, 2021
Net income (loss)	$	200	$	181
Net income (loss) per share - basic	$	0.35	$	0.31
Net income (loss) per share - diluted	$	0.33	$	0.31
Weighted-average shares outstanding - basic	578		580
Dilutive potentially issuable shares:
Convertible debt	22		7
Employee equity awards	4		4
Weighted-average shares outstanding - diluted	604		591

Upon adoption of ASU 2020-06 under the modified retrospective method, we are required to apply the if-converted method to our calculation of diluted earnings per share. For the three months ended July 1, 2022, we adjust for the dilutive effect of the maximum number of potential shares to be issued upon settlement of our outstanding convertible debt instruments. Prior period earnings per share amounts are not restated under the modified retrospective method. For the three months ended July 2, 2021, the dilutive effect of our debt instruments is calculated using the treasury stock method, under which our convertible debt instruments generally had a dilutive impact on net income per share when our average stock price for the period exceeds the conversion prices for the convertible debt instruments. The adoption of ASU 2020-06 had a $0.01 impact on dilutive earnings per share for the three months ended July 1, 2022, with the dilutive shares underlying the convertible debt increasing by 18 million shares.

The conversion price of each convertible debt instrument applicable in the periods presented is as follows:

	Three Months Ended
	July 1, 2022		July 2, 2021
New 2.00% Convertible Senior Notes due August 15, 2022	$	20.41	$	20.41