Earnings Per Share

Basic earnings per share is computed based only on the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed using the weighted average number of common shares outstanding during the period, plus the dilutive effect of potential future issuances of common stock relating to stock option programs and other potentially dilutive securities using the treasury stock method. In calculating diluted earnings per share, the dilutive effect of stock options and restricted stock units is computed using the average market price for the respective period. In addition, the assumed proceeds under the treasury stock method include the average unrecognized compensation expense of stock options that are in-the-money and restricted stock units. This results in the “assumed” buyback of additional shares, thereby reducing the dilutive impact of in-the-money stock options. Potential shares related to certain of the Company’s outstanding stock options and restricted stock units were excluded because they were anti-dilutive. Those potential shares, determined based on the weighted average exercise prices during the respective periods, could be dilutive in the future.

In connection with the Acquisition, the Company granted restricted stock awards to replace outstanding restricted stock awards of Linear employees. These restricted stock awards entitle recipients to voting and nonforfeitable dividend rights from the date of grant. These unvested stock-based compensation awards are considered participating securities and the two-class method is used for purposes of calculating earnings per share. Under the two-class method, a portion of net income is allocated to these participating securities and therefore is excluded from the calculation of earnings per share allocated to common stock, as shown in the table below. The difference between the income allocated to participating securities under the basic and diluted two-class methods is not material.

The following table sets forth the computation of basic and diluted earnings per share:



	Three Months Ended				Nine Months Ended
	August 4, 2018		July 29, 2017		August 4, 2018		July 29, 2017
Net Income	$	414,464	$	68,916	$	1,062,467	$	379,609
Less: income allocated to participating securities	1,526		981		4,439		981
Net income allocated to common stockholders	$	412,938	$	67,935	$	1,058,028	$	378,628

Basic shares:
Weighted-average shares outstanding	371,315		367,315		370,211		339,139
Earnings per common share basic:	$	1.11	$	0.18	$	2.86	$	1.12
Diluted shares:
Weighted-average shares outstanding	371,315		367,315		370,211		339,139
Assumed exercise of common stock equivalents	4,500		3,844		4,669		4,147
Weighted-average common and common equivalent shares	375,815		371,159		374,880		343,286
Earnings per common share diluted:	$	1.10	$	0.18	$	2.82	$	1.10
Anti-dilutive shares related to:
Outstanding share-based awards	810		1,758		1,424		1,135