EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2022

The Company calculates basic and diluted earnings per common share using the two-class method. Under the two-class method, net earnings are allocated to each class of common stock and participating security as if all of the net earnings for the period had been distributed. The Company’s participating securities consist of share-based payment awards that contain a non-forfeitable right to receive dividends and therefore are considered to participate in undistributed earnings with common shareholders.

Basic earnings per common share excludes dilution and is calculated by dividing net earnings allocable to common shares by the weighted-average number of common shares outstanding for the period. Diluted earnings per common share is calculated by dividing net earnings allocated to common shares by the weighted-average number of common shares outstanding for the period, as adjusted for the potential dilutive effect of non-participating share-based awards.

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


(In millions, except per share amounts)	2022		2021		2020
Numerator:
Net income attributable to Franklin Electric Co., Inc.	$	187.3	$	153.9	$	100.5
Less: Earnings allocated to participating securities	0.7		0.9		0.7
Net income available to common shareholders	$	186.6	$	153.0	$	99.8
Denominator:
Basic weighted average common shares outstanding	46.3		46.4		46.2
Effect of dilutive securities:
Non-participating employee stock options, performance awards, and deferred shares to non-employee directors	0.7		0.6		0.5
Diluted weighted average common shares outstanding	47.0		47.0		46.7
Basic earnings per share	$	4.02	$	3.29	$	2.16
Diluted earnings per share	$	3.97	$	3.25	$	2.14

There were 0.1 million, 0.1 million, and 0.2 million stock options outstanding as of 2022, 2021, and 2020, respectively, that were excluded from the computation of diluted earnings per share, as their inclusion would be anti-dilutive.