EARNINGS PER SHARE

6 Months Ended

Jun. 20, 2014

Earnings Per Share [Abstract]

EARNINGS PER SHARE

6. EARNINGS PER SHARE

Basic earnings per common share is calculated by dividing net income attributable to common shareholders by the weighted average number of shares of common stock outstanding during the reporting period. Treasury stock is excluded from the weighted average number of shares of common stock outstanding. Diluted earnings per common share is calculated to give effect to all potentially dilutive common shares that were outstanding during the reporting period. The dilutive effect of outstanding equity-based compensation awards is reflected in diluted earnings per common share by application of the treasury stock method using average market prices during the period.

The table below illustrates the reconciliation of the earnings and number of shares used in our calculation of basic and diluted earnings per share.

	Twelve Weeks Ended				Twenty-Four Weeks Ended
(in millions, except per share amounts)	June 20, 2014 (1)		June 14, 2013 (2)		June 20, 2014 (1)		June 14, 2013 (2)
Computation of Basic Earnings Per Share
Net income	$	36	$	30	$	55	$	49
Weighted average shares outstanding		34.3		35.4		34.6		35.3
Basic earnings per share	$	1.03	$	0.87	$	1.58	$	1.40
Computation of Diluted Earnings Per Share
Net income	$	36	$	30	$	55	$	49
Weighted average shares outstanding		34.3		35.4		34.6		35.3
Effect of dilutive securities
Employee stock options and SARs		0.5		0.7		0.6		0.7
Restricted stock units		0.4		0.5		0.4		0.6
Shares for diluted earnings per share		35.2		36.6		35.6		36.6
Diluted earnings per share	$	1.00	$	0.85	$	1.54	$	1.35

⁽¹⁾  The computations of diluted earnings per share exclude approximately 228,000 shares of common stock, the maximum number of shares issuable as of June 20, 2014 upon the vesting of certain performance-based awards, because the performance conditions required for the shares subject to such awards to vest were not achieved by the end of the reporting period.

⁽²⁾  The computations of diluted earnings per share exclude approximately 229,000 shares of common stock, the maximum number of shares issuable as of June 14, 2013 upon the vesting of certain performance-based awards, because the performance conditions required for the shares subject to such awards to vest were not achieved by the end of the reporting period.

For the twelve and twenty-four week periods ended June 20, 2014 and June 14, 2013, we have not excluded any shares underlying stock options or stock appreciation rights (“SARs”) that may be settled in shares of common stock from our calculation of diluted earnings per share as no exercise prices were greater than the average market prices for the applicable period.