
4.	Earnings Per Share

Basic earnings per share is calculated by dividing net income associated with common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share assumes the issuance of additional shares of common stock by the Company upon exercise of all outstanding stock options and contingently issuable securities if the effect is dilutive, in accordance with the treasury stock method discussed in ASC 260-10, Earnings Per Share.

The determination and reporting of earnings per share requires the inclusion of time and performance-based restricted stock as participating securities, since they have the right to share in dividends, if declared, equally with common shareholders. During periods of net income, participating securities are allocated a proportional share of net income determined by dividing total weighted average participating securities by the sum of total weighted average common shares and participating securities (“the two-class method”). During periods of net income, participating securities have the effect of diluting both basic and diluted earnings per share. During periods of net loss, no effect is given to participating securities, since they do not share in the losses of the Company.


4.	Earnings Per Share (Continued)

The following table presents a reconciliation of basic and diluted earnings per share for the quarters and nine months ended October 27, 2012 and October 29, 2011:



	Quarter Ended
	October 27, 2012					October 29, 2011
	(in thousands, except per share amounts)
Basic Earnings per Share:	Net Income		Shares	Per Share Amount		Net Income		Shares	Per Share Amount
Net income	$	40,748				$	32,280
Less net income associated with participating securities	562					544
Basic earnings per share	$	40,186	47,422	$	0.85	$	31,736	51,389	$	0.62
Diluted Earnings per Share:
Net income	$	40,748				$	32,280
Less net income associated with participating securities	555					537
Effect of dilutive securities			551					683
Diluted earnings per share	$	40,193	47,973	$	0.84	$	31,743	52,072	$	0.61

	Nine Months Ended
	October 27, 2012					October 29, 2011
	(in thousands, except per share amounts)
Basic Earnings per Share:	Net Income		Shares	Per Share Amount		Net Income		Shares	Per Share Amount
Net income	$	100,215				$	84,386
Less net income associated with participating securities	1,454					1,425
Basic earnings per share	$	98,761	47,638	$	2.07	82,961		51,583	$	1.61
Diluted Earnings per Share:
Net income	$	100,215				$	84,386
Less net income associated with participating securities	1,436					1,402
Effect of dilutive securities			618					858
Diluted earnings per share	$	98,779	48,256	$	2.05	$	82,984	52,441	$	1.58


4.	Earnings Per Share (Continued)

For the quarter and nine months ended October 27, 2012, non-participating securities (stock options) representing 616,175 and 1,637,275 shares of common stock, respectively, were excluded from the above computations of weighted average shares for diluted earnings per share due to their antidilutive effect, since their exercise prices exceeded the average market price of the common shares during those periods. In addition, non-participating securities (performance-based restricted units) representing 23,003 shares and 15,890 shares of common stock were excluded from the above computation of weighted average shares for diluted earnings per share for the quarter and nine months ended October 27, 2012, respectively, due to the fact that they are contingently issuable securities whose contingency was not met at certain dates during the periods then ended.

For the quarter and nine months ended October 29, 2011, non-participating securities (stock options) representing 2,570,642 and 1,984,653 shares of common stock, respectively, were excluded from the above computations of weighted average shares for diluted earnings per share due to their antidilutive effect, since their exercise prices exceeded the average market price of the common shares during those periods. In addition, non-participating securities (performance-based restricted units) representing 28,250 shares and 18,833 shares of common stock were excluded from the above computation of weighted average shares for diluted earnings per share for the quarter and nine months ended October 29, 2011, respectively, due to the fact that they are contingently issuable securities whose contingency was not met at certain dates during the periods then ended.