Note 5. Earnings Per Share

In June 2008, accounting guidance was issued related to share-based awards that qualify as participating securities. In accordance with this guidance, unvested share-based payment awards that include non-forfeitable rights to dividends, whether paid or unpaid, are considered participating securities. As a result, such awards are required to be included in the calculation of basic earnings per common share pursuant to the "two-class" method. For us, participating securities are generally comprised of unvested restricted stock awards.

Basic EPS is determined using the two-class method and is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted EPS reflects the dilutive effect of potential common shares from securities such as stock options.

The following table sets forth the computation of basic and diluted EPS shown on the face of the accompanying consolidated statements of income:

	Thirteen Weeks Ended
	April 30, 2011	May 1, 2010
	April 30, 2011	May 1, 2010

Numerator
Net income	$ 45,918	$ 35,402
Net income allocated to participating securities	(537)	(223)
Net income available to common shareholders	$ 45,381	$ 35,179

Denominator
Weighted average common shares outstanding – basic	174,881,470	177,335,655
Dilutive effect of stock options outstanding	1,230,938	1,497,824
Weighted average common and common equivalent shares outstanding – diluted	176,112,408	178,833,479
Net income per common share
Basic	$ 0.26	$ 0.20
Diluted	$ 0.26	$ 0.20

For the thirteen weeks ended April 30, 2011 and May 1, 2010, 3,905,031 and 3,123,581 potential shares of common stock, respectively, were excluded from the computation of diluted EPS relating to stock option awards because the effect of including these potential shares would have been anti-dilutive.