Earnings Per Share

6 Months Ended

Mar. 31, 2017

9. Earnings Per Share

Basic EPS is computed by dividing net income attributable to Dolby Laboratories, Inc. by the number of weighted-average shares of Class A and Class B common stock outstanding during the period. Through application of the treasury stock method, diluted EPS is computed in the same manner, except that the number of weighted-average shares outstanding is increased by the number of potentially dilutive shares from employee incentive plans during the period.

Basic and diluted EPS are computed independently for each fiscal quarter and year-to-date period presented,

which involves the use of different weighted-average share count figures relating to quarterly and annual periods. As a

result, and after factoring the effect of rounding to the nearest cent per share, the sum of all four quarter-to-date EPS

figures may not equal year-to-date EPS.

Potentially dilutive shares represent the hypothetical number of incremental shares issuable under the assumed exercise of outstanding stock options (both vested and non-vested), vesting of outstanding RSUs, and shares issued under our employee stock purchase plan. The calculation of dilutive shares outstanding excludes out-of-the-money stock options (e.g., such options' exercise prices were greater than the average market price of our common shares for the period) because their inclusion would have been antidilutive.

The following table sets forth the computation of basic and diluted EPS attributable to Dolby Laboratories, Inc. (in thousands, except per share amounts):



	Fiscal Quarter Ended				Fiscal Year-To-Date Ended
	March 31, 2017		April 1, 2016		March 31, 2017		April 1, 2016
Numerator:
Net income attributable to Dolby Laboratories, Inc.	$	50,590	$	67,398	$	103,964	$	98,299

Denominator:
Weighted-average shares outstanding—basic	101,787		100,456		101,635		100,600
Potential common shares from options to purchase common stock	1,513		748		1,448		674
Potential common shares from restricted stock units	583		351		784		442
Weighted-average shares outstanding—diluted	103,883		101,555		103,867		101,716

Net income per share attributable to Dolby Laboratories, Inc.:
Basic	$	0.50	$	0.67	$	1.02	$	0.98
Diluted	$	0.49	$	0.66	$	1.00	$	0.97

Antidilutive awards excluded from calculation:
Stock options	1,819		7,124		1,222		6,349
Restricted stock units	2		733		8		184