Earnings Per Share

12 Months Ended

Sep. 27, 2019

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, 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 unvested) and vesting of outstanding RSUs. 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 stock 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 Year Ended
	September 27, 2019		September 28, 2018 (as adjusted)		September 29, 2017 (as adjusted)
Numerator:
Net income attributable to Dolby Laboratories, Inc.	$	255,151	$	41,746	$	206,481

Denominator:
Weighted-average shares outstanding—basic	101,629		103,377		101,784
Potential common shares from options to purchase common stock	1,922		2,370		1,098
Potential common shares from restricted stock units	1,021		1,231		404
Weighted-average shares outstanding—diluted	104,572		106,978		103,286

Net income per share attributable to Dolby Laboratories, Inc.:
Basic	$	2.51	$	0.40	$	2.03
Diluted	$	2.44	$	0.39	$	2.00

Antidilutive awards excluded from calculation:
Stock options	2,340		1,043		160
Restricted stock units	1		6		—