Earnings Per Share

9 Months Ended

Apr. 30, 2011

Earnings Per Share

Earnings Per Share

(6)           Earnings Per Share

Our basic earnings per share ("EPS") is computed based on the weighted average number of shares outstanding. Our diluted EPS reflects the dilution from potential common stock issuable pursuant to the exercise of equity-classified stock-based awards and convertible senior notes, if dilutive, outstanding during each period. When calculating our diluted earnings per share, we consider (i) the amount an employee must pay upon assumed exercise of stock-based awards; (ii) the amount of stock-based compensation cost attributed to future services and not yet recognized; and (iii) the amount of excess tax benefits, if any, that would be credited to additional paid-in capital assuming exercise of in-the-money stock-based awards. This excess tax benefit is the amount resulting from a tax deduction for compensation in excess of compensation expense, based on the Black Scholes option pricing model, recognized for financial reporting purposes.

Equity-classified stock-based awards to purchase 2,342,000 and 2,019,000 shares, for the three months ended April 30, 2011 and 2010, respectively, were not included in our diluted EPS calculation because their effect would have been anti-dilutive. Equity-classified stock-based awards to purchase 2,424,000 and 2,042,000 shares, for the nine months ended April 30, 2011 and 2010, respectively, were not included in our diluted EPS calculation because their effect would have been anti-dilutive. Liability-classified stock-based awards do not impact and are not included in the denominator for EPS calculations.

The following table reconciles the numerators and denominators used in our basic and diluted EPS calculations:

	Three months ended April 30,		Nine months ended April 30,
	2011	2010	2011	2010
Numerator:
Net income for basic calculation	$  14,255,000	21,796,000	56,007,000	47,161,000
Effect of dilutive securities:
Interest expense (net of tax) on 3.0% convertible senior notes	1,117,000	1,117,000	3,351,000	3,351,000
Numerator for diluted calculation	$  15,372,000	22,913,000	59,358,000	50,512,000
Denominator:
Denominator for basic calculation	26,577,000	28,291,000	27,310,000	28,254,000
Effect of dilutive securities:
Stock options	210,000	307,000	219,000	332,000
Conversion of 3.0% convertible senior notes	5,591,000	5,488,000	5,540,000	5,488,000
Denominator for diluted calculation	32,378,000	34,086,000	33,069,000	34,074,000