Earnings Per Share

12 Months Ended

Dec. 26, 2020

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:


	2020		2019		2018
	(In millions, except per share amounts)
Numerator
Net income for basic earnings per share	$	2,490	$	341	$	337
Effect of potentially dilutive shares:
Interest expense related to the 2.125% Notes	1		—		—
Net income for diluted earnings per share	$	2,491	$	341	$	337
Denominator
Basic weighted average shares	1,184		1,091		982
Effect of potentially dilutive shares:
Employee equity plans and warrants	20		29		82
2.125% Notes	3		—		—
Diluted weighted average shares	1,207		1,120		1,064
Earnings per share:
Basic	$	2.10	$	0.31	$	0.34
Diluted	$	2.06	$	0.30	$	0.32

Potential shares from employee equity plans and the impact from the conversion of the 2.125% Notes up to the conversion date, totaling 22 million for 2020, were not included in the earnings per share calculation because their inclusion would have been anti-dilutive.

Potential shares from employee equity plans, the impact from the conversion of the 2.125% Notes up to the conversion date and the assumed conversion of the remaining outstanding 2.125% Notes, totaling 93 million and 105 million shares for 2019 and 2018, respectively, were not included in the earnings per share calculation because their inclusion would have been anti-dilutive.