Earnings Per Share

3 Months Ended

Mar. 27, 2022

Earnings Per Share [Abstract]

Earnings Per Share

EARNINGS PER SHARE

We compute earnings per share based upon the lower of the two-class method or the treasury stock method. The two-class method is an earnings allocation method used when a company’s capital structure includes either two or more classes of common stock or common stock and participating securities. This method determines earnings per share based on dividends declared on common stock and participating securities (i.e., distributed earnings), as well as participation rights of participating securities in any undistributed earnings.

Earnings per share is computed using both basic shares and diluted shares. The difference between basic and diluted shares is that diluted shares include the dilutive effect of the assumed exercise of outstanding securities. Our stock options, stock-settled long-term performance awards and restricted stock units could have a significant impact on diluted shares. The difference between basic and diluted shares of approximately 0.4 million and 0.5 million in the first quarters of 2022 and 2021, respectively. In 2022, dilution resulted primarily from the dilutive effect of certain restricted stock units, performance awards and stock options. In 2021, dilution resulted primarily from the dilutive effect of certain performance awards, restricted stock units and stock options.

Securities that could potentially be dilutive are excluded from the computation of diluted earnings per share when a loss from continuing operations exists or when the exercise price exceeds the market value of our Class A Common Stock because their inclusion would result in an anti-dilutive effect on per share amounts.

There were approximately 0.2 million and 0.1 million restricted stock units excluded from the computation of diluted earnings per share in the first quarters of 2022 and 2021, respectively, because they were anti-dilutive. There were no anti-dilutive stock options or stock-settled long-term performance awards excluded from the computation of diluted earnings per share in the first quarters of 2022 and 2021.