Earnings Per Share

12 Months Ended

Dec. 31, 2022

Basic earnings per share is computed based on the weighted-average number of shares outstanding.

Diluted earnings per share is computed based on the weighted-average number of shares outstanding plus potentially dilutive shares outstanding during the period. Potentially dilutive shares are determined by applying the treasury stock method to the Company’s stock options, RSUs (including PRSUs), common stock to be issued under the ESPP and warrants. Potentially dilutive shares issuable upon conversion of the 2.125% Convertible Senior Notes due 2026 (2.125% Notes) are calculated using the if-converted method.

The following table sets forth the components of basic and diluted earnings per share:


	Year Ended
	December 31, 2022		December 25, 2021		December 26, 2020
	(In millions, except per share amounts)
Numerator
Net income for basic earnings per share	$	1,320	$	3,162	$	2,490
Effect of potentially dilutive shares:
Interest expense related to the 2.125% Notes	—		—		1
Net income for diluted earnings per share	$	1,320	$	3,162	$	2,491
Denominator
Basic weighted-average shares	1,561		1,213		1,184
Effect of potentially dilutive shares:
Employee equity plans and warrants	10		16		20
2.125% Notes	—		—		3
Diluted weighted-average shares	1,571		1,229		1,207
Earnings per share:
Basic	$	0.85	$	2.61	$	2.10
Diluted	$	0.84	$	2.57	$	2.06

Potential shares from employee equity plans and the impact from the conversion of the 2.125% Notes up to the conversion date, totaling 16 million and 2 million shares for 2022 and 2021, respectively, were not included in the earnings per share calculation because their inclusion would have been anti-dilutive.