Net Earnings (Loss) per Share

In accordance with ASC 260-10-45, Share-Based Payment Arrangements and Participating Securities and the Two-Class Method, the Company’s unvested restricted shares, unvested restricted stock units and shares issuable under the Company’s deferred compensation plan are considered participating securities. During periods of net income, the calculation of earnings per share for common stock are reclassified to exclude the income attributable to the unvested restricted shares, unvested restricted stock units and shares issuable under the Company’s deferred compensation plan from the numerator and exclude the dilutive impact of those shares from the denominator. Diluted earnings per share for the 13 and 39 weeks ended January 31, 2015 and for the 13 weeks ended January 25, 2014 were calculated using the two-class method for stock options, restricted stock and restricted stock units, and the if-converted method for the preferred stock.

During periods of net loss, no effect is given to the participating securities because they do not share in the losses of the Company. Due to the net loss during the 39 weeks ended January 25, 2014, participating securities in the amount of 2,748,293 were excluded from the calculation of loss per share using the two-class method because the effect would be antidilutive. The Company’s outstanding dilutive stock options of 40,491 and accretion/payments of dividends on preferred shares were also excluded from the calculation of loss per share using the two-class method because the effect would be antidilutive.

The following is a reconciliation of the Company’s basic and diluted income (loss) per share calculation:


	13 weeks ended						39 weeks ended
	January 31, 2015			January 25, 2014			January 31, 2015			January 25, 2014
Numerator for basic income (loss) per share:
Net income (loss) attributable to Barnes & Noble, Inc.	$	72,168			63,230		$	56,017			(10,564	)
Preferred stock dividends		(3,942	)		(3,942	)		(11,825	)		(11,825	)
Accretion of dividends on preferred stock		(5,507	)		(316	)		(7,024	)		(947	)
Less allocation of earnings and dividends to participating securities		(3,380	)		(2,604	)		(2,171	)		—

Net income (loss) available to common shareholders	$	59,339			56,368		$	34,997			(23,336	)


Numerator for diluted income (loss) per share:
Net income (loss) available to common shareholders	$	59,339			56,368		$	34,997			(23,336	)
Preferred stock dividends ^(a)		3,942			3,942			—			—
Accretion of dividends on preferred stock ^(a)(b)		5,507			316			—			—
Allocation of earnings and dividends to participating securities		3,380			2,604			2,171			—
Less diluted allocation of earnings and dividends to participating securities		(3,278	)		(2,338	)		(2,168	)		—

Net income (loss) available to common shareholders	$	68,890			60,892		$	35,000			(23,336	)

Denominator for basic income (loss) per share:
Basic weighted average common shares		61,589			59,033			60,056			58,919

Denominator for diluted income (loss) per share:
Basic weighted average common shares		61,589			59,033			60,056			58,919
Preferred shares ^(a)		12,000			12,000			—			—
Average dilutive options		122			—			72			—

Diluted weighted average common shares		73,711			71,033			60,128			58,919

Income (loss) per common share:
Basic	$	0.96			0.95		$	0.58			(0.40	)
Diluted	$	0.93			0.86		$	0.58			(0.40	)

(a)	Although the Company was in a net income position during the 39 weeks ended January 31, 2015, the dilutive effect of the Company’s convertible preferred shares were excluded from the calculation of income per share using the two-class method because the effect would be antidilutive.

(b)	Includes accretion of dividends on the preferred membership interests, of which $4,897 was accelerated during the 13 weeks ended January 31, 2015 in connection with the re-acquired preferred membership interests.