Computation of Earnings Per Common Share

3 Months Ended

Oct. 29, 2016

Computation of Earnings Per Common Share

Computation of Earnings per Common Share

The following table sets forth the computation of basic and diluted earnings per common share (dollars in thousands, except per share amounts):



	For the Three Months Ended
	October 29, 2016		October 24, 2015
Net income available to common stockholders (numerator)	$	51,050	$	30,824

Weighted-average number of common shares (denominator)	31,429,493		32,871,240

Basic earnings per common share	$	1.62	$	0.94

Weighted-average number of common shares	31,429,493		32,871,240
Potential shares of common stock arising from stock options, and unvested restricted share units	770,794		1,015,507
Total shares-diluted (denominator)	32,200,287		33,886,747

Diluted earnings per common share	$	1.59	$	0.91

The weighted-average number of common shares outstanding used in the computation of diluted earnings per common share does not include the effect of the following instruments because their inclusion would have been anti-dilutive:



	For the Three Months Ended
	October 29, 2016	October 24, 2015
Stock-based awards	41,302	40,536
0.75% convertible senior notes due 2021	5,005,734	5,005,734
Warrants	5,005,734	5,005,734
Total anti-dilutive weighted shares excluded from the calculation of earnings per common share	10,052,770	10,052,004

Under the treasury stock method, the convertible senior notes will have a dilutive impact on earnings per common share if the Company’s average stock price for the period exceeds the conversion price for the convertible senior notes of $96.89 per share. The warrants will have a dilutive impact on earnings per common share if the Company’s average stock price for the period exceeds the warrant strike price of $130.43 per share. As the Company’s average stock price for the three months ended October 29, 2016 was below the conversion price for the convertible senior notes and the strike price for the warrants, the underlying common shares were anti-dilutive as reflected above. See Note 10, Debt, for additional information related to the Company’s convertible senior notes and warrant transactions.

In connection with the offering of the convertible senior notes, the Company entered into convertible note hedge transactions with counterparties for the purpose of reducing the potential dilution to common stockholders from the conversion of the notes and offsetting any potential cash payments in excess of the principal amount of the notes. Prior to conversion, the convertible note hedge is not included for purposes of the calculation of earnings per common share as its effect would be anti-dilutive. Upon conversion, the convertible note hedge is expected to offset the dilutive effect of the convertible senior notes when the stock price is above $96.89 per share. See Note 10, Debt, for additional information related to the Company’s convertible note hedge.