Note 13: Earnings per Share

Certain share-based compensation awards that entitle their holders to receive non-forfeitable dividends prior to vesting are considered participating securities. Prior to fiscal 2019, we granted restricted stock awards that contained non-forfeitable rights to dividends on unvested shares, and we are required to include these participating securities in calculating our basic earnings per common share, using the two-class method. The restricted stock awards we granted in fiscal 2019 do not have non-forfeitable rights to dividends and so are not participating securities.

The following is a reconciliation of the numerators and denominators we used in our computations of basic and diluted earnings per share:

	Quarter Ended
(Unaudited, amounts in thousands)	7/28/18			7/29/17
Numerator (basic and diluted):
Net income attributable to La-Z-Boy Incorporated	$	18,303		$	11,651
Income allocated to participating securities	(76		)	(57		)

Net income available to common shareholders	$	18,227		$	11,594


Denominator:
Basic weighted average common shares outstanding	46,716			48,357
Add:
Contingent common shares	66			175
Stock option dilution	379			314

Diluted weighted average common shares outstanding	47,161			48,846

The values for contingent common shares set forth above reflect the dilutive effect of common shares that we would have issued to employees under the terms of performance-based share awards if the relevant performance period for the award had been the reporting period.

We had outstanding options to purchase 0.4 million shares for the quarter ended July 28, 2018, with a weighted average exercise price of $33.15. We excluded the effect of these options from our diluted share calculation since the weighted average exercise price of the options was higher than the average market price and including the options’ effect would have been anti-dilutive. We did not exclude any outstanding options from the diluted share calculation for the quarter ended July 29, 2017.