Earnings Per Share

9 Months Ended

Oct. 01, 2016

Note 5. Earnings Per Share

We calculate basic and diluted earnings per share (EPS) based on net income, which approximates income available to common shareholders for each period. Basic EPS is calculated using the two-class method, which includes the weighted-average number of common shares outstanding during the period and restricted stock units to be paid in stock that are deemed participating securities as they provide nonforfeitable rights to dividends. Diluted EPS considers the dilutive effect of all potential future common stock, including stock options.

The weighted-average shares outstanding for basic and diluted EPS are as follows:

	Three Months Ended			Nine Months Ended
(In thousands)		October 1, 2016	October 3, 2015		October 1, 2016	October 3, 2015
Basic weighted-average shares outstanding		270,560	276,334		270,703	277,317
Dilutive effect of stock options		1,539	1,705		1,348	2,083

Diluted weighted-average shares outstanding		272,099	278,039		272,051	279,400

Stock options to purchase 4 million shares of common stock are excluded from the calculation of diluted weighted average shares outstanding for both the three and nine months ended October 1, 2016, as their effect would have been anti-dilutive. Stock options to purchase 4 million and 2 million shares of common stock are excluded from the calculation of diluted weighted average shares outstanding for the three and nine months ended October 3, 2015, respectively, as their effect would have been anti-dilutive.