Earnings Per Share

9 Months Ended

Oct. 01, 2021

Note L — Earnings Per Share

Income from continuing operations per common share attributable to L3Harris common shareholders (“EPS”) is computed using the two-class method, which is an earnings allocation formula that determines EPS for common stock and any participating securities according to dividends paid and participation rights in undistributed earnings. Under the two-class method, EPS is computed by dividing the sum of earnings distributed to L3Harris common shareholders and undistributed earnings allocated to L3Harris common shareholders by the weighted-average number of common shares outstanding for the period. Income from continuing operations per diluted common share attributable to L3Harris common shareholders (“diluted EPS”) is computed using the more dilutive of the two-class method or the treasury stock method. Under the treasury stock method, diluted EPS is computed by dividing net income attributable to L3Harris common shareholders by the weighted-average number of common shares outstanding for the period. In applying the two-class method, undistributed earnings are allocated to both common shares and participating securities based on the weighted-average shares outstanding during the period.

The weighted average number of shares outstanding used to compute EPS and diluted EPS are as follows:


	Quarter Ended		Three Quarters Ended
(In millions)	October 1, 2021	October 2, 2020	October 1, 2021	October 2, 2020

Basic weighted average common shares outstanding	199.5	213.4	203.3	215.5
Impact of dilutive share-based awards	2.1	1.7	1.9	1.8
Diluted weighted average common shares outstanding	201.6	215.1	205.2	217.3

Potential dilutive common shares primarily consist of employee stock options, restricted stock units and performance stock units. The anti-dilutive impact of weighted average share-based awards outstanding for the quarter ended October 1, 2021 was immaterial. Diluted EPS excludes the anti-dilutive impact of 1.1 million weighted average share-based awards outstanding for the three quarters ended October 1, 2021 and 1.5 million and 1.3 million weighted average share-based awards outstanding for the quarter and three quarters ended October 2, 2020, respectively.