EARNINGS PER SHARE

6 Months Ended

Jul. 02, 2022

The following table reconciles net earnings attributable to common shareowners and the weighted-average shares outstanding used to calculate basic and diluted earnings per share for the three and six months ended July 2, 2022 and July 3, 2021:


	Second Quarter				Year-to-Date
	2022		2021		2022		2021
Numerator (in millions):
Net Earnings from Continuing Operations Attributable to Common Shareowners	$	78.6	$	428.7	$	234.1	$	879.5
Add: Contract adjustment payments accretion	0.4		0.3		0.7		0.5
Net Earnings from Continuing Operations Attributable to Common Shareowners - Diluted	$	79.0	$	429.0	$	234.8	$	880.0
Net earnings from discontinued operations	9.0		26.0		28.8		53.2
Net Earnings Attributable to Common Shareowners - Diluted	$	88.0	$	455.0	$	263.6	$	933.2


	Second Quarter		Year-to-Date
	2022	2021	2022	2021
Denominator (in thousands):
Basic weighted-average shares outstanding	145,353	158,644	150,385	158,081
Dilutive effect of stock contracts and awards	9,461	6,543	9,742	6,653
Diluted weighted-average shares outstanding	154,814	165,187	160,127	164,734


	Second Quarter				Year-to-Date
	2022		2021		2022		2021
Earnings per share of common stock:
Basic earnings per share of common stock:
Continuing operations	$	0.54	$	2.70	$	1.56	$	5.56
Discontinued operations	$	0.06	$	0.16	$	0.19	$	0.34
Total basic earnings per share of common stock	$	0.60	$	2.87	$	1.75	$	5.90

Diluted earnings per share of common stock:
Continuing operations	$	0.51	$	2.60	$	1.47	$	5.34
Discontinued operations	$	0.06	$	0.16	$	0.18	$	0.32
Total dilutive earnings per share of common stock	$	0.57	$	2.75	$	1.65	$	5.67

The following weighted-average stock options were not included in the computation of weighted-average diluted shares outstanding because the effect would be anti-dilutive (in thousands):


	Second Quarter		Year-to-Date
	2022	2021	2022	2021
Number of stock options	4,166	706	3,356	901

In November 2019, the Company issued 7,500,000 Equity Units with a total notional value of $750.0 million ("2019 Equity Units"). Each unit has a stated amount of $100 and initially consists of a three-year forward stock purchase contract (“2022 Purchase Contracts”) for the purchase of a variable number of shares of common stock, on November 15, 2022, for a price of $100, and a 10% beneficial ownership interest in one share of 0% Series D Cumulative Perpetual Convertible Preferred Stock, without par, with a liquidation preference of $1,000 per share (“Series D Preferred Stock”). The shares associated with the

forward stock purchase contracts component of the 2019 Equity Units have been reflected in diluted earnings per share using the if-converted method.

On and after November 15, 2022, the Series D Preferred Stock may be converted into common stock at the option of the holder. At the election of the Company, upon conversion, the Company may deliver cash, common stock, or a combination thereof. The conversion rate was initially 5.2263 shares of common stock per one share of Series D Preferred Stock, which was equivalent to an initial conversion price of approximately $191.34 per share of common stock. As of July 2, 2022, due to customary anti-dilution provisions, the conversion rate was 5.2409, equivalent to a conversion price of approximately $190.81 per share of common stock. Upon the adoption of ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40), beginning in the first quarter of 2022, the common shares that would be required to settle the applicable conversion value of the Series D Preferred Stock were included in the denominator of diluted earnings per share using the if-converted method. In accordance with the standard, the Company increased weighted-average shares outstanding used to calculate diluted earnings per share for both the three and six months ended July 2, 2022 by 4.1 million shares.

In May 2017, the Company issued 7,500,000 Equity Units with a total notional value of $750.0 million (“2017 Equity Units”). Each unit had a stated amount of $100 and initially consisted of a three-year forward stock purchase contract (“2020 Purchase Contracts”) for the purchase of a variable number of shares of common stock, on May 15, 2020, for a price of $100, and a 10% beneficial ownership interest in one share of 0% Series C Cumulative Perpetual Convertible Preferred Stock, without par, with a liquidation preference of $1,000 per share (“Series C Preferred Stock”).

In May 2020, the Company successfully remarketed the Series C Preferred Stock (the “Remarketed Series C Preferred Stock”) resulting in cash proceeds of $750.0 million. Upon completion of the remarketing, the holders of the 2017 Equity Units received 5,463,750 common shares and the Company issued 750,000 shares of Remarketed Series C Preferred Stock, without par, with a liquidation preference of $1,000 per share. Holders of the Remarketed Series C Preferred Stock were entitled to receive cumulative dividends, if declared by the Board of Directors, at an initial fixed rate equal to 5.0% per annum of the $1,000 per share liquidation preference (equivalent to $50.00 per annum per share). Beginning on May 15, 2020, the holders had the option to convert the Remarketed Series C Preferred Stock into common stock. At the election of the Company, upon conversion, the Company may deliver cash, common stock, or a combination thereof. In connection with the remarketing described above, the conversion rate was reset to 6.7352 shares of the Company's common stock per one share of Remarketed Series C Preferred Stock, which was equivalent to a conversion price of approximately $148.47 per share of common stock.

In April 2021, the Company informed holders that it would redeem all outstanding shares of the Remarketed Series C Preferred Stock on June 3, 2021 (the “Redemption Date”) at $1,002.50 per share in cash (the “Redemption Price”) which was equal to 100% of the liquidation preference of a share of Remarketed Series C Preferred Stock, plus accumulated and unpaid dividends to, but excluding, the Redemption Date. If a holder elected to convert its shares of Remarketed Series C Preferred Stock prior to the Redemption Date, the Company elected a combination settlement with a specified cash amount of $1,000 per share. In June 2021, the Company redeemed the Remarketed Series C Preferred Stock and settled all conversions, paying $750 million in cash and issuing 1,469,055 common shares. The conversion rate used was 6.7548 (equivalent to a conversion price set at $148.04 per common share). Prior to the Redemption Date, the Remarketed Series C Preferred Stock was excluded from the denominator of the diluted earnings per share calculation on the basis that the Remarketed Series C Preferred Stock would be settled in cash except to the extent that the conversion value exceeded its liquidation preference. Therefore, before any redemption or conversion, the common shares that would be required to settle the applicable conversion value in excess of the liquidation preference were included in the denominator of diluted earnings per share in periods in which they were dilutive.

Refer to Note J, Equity Arrangements, for further discussion of the above transactions.