Net Income Per Common Share

3 Months Ended

Jul. 02, 2016

The computation of basic net income per common share for all periods presented is derived from the information on the condensed consolidated statements of income, and there are no reconciling items in the numerator used to compute diluted net income per common share. The following table summarizes the computation of basic and diluted net income per common share:



(In thousands, except per share amounts)	July 2, 2016		June 27, 2015
Net income available to common stockholders	$	163,049	$	147,715
Weighted average common shares outstanding-basic	252,901		258,021
Dilutive effect of employee equity incentive plans	3,064		3,388
Dilutive effect of 2017 Convertible Notes and warrants	10,241		9,321
Weighted average common shares outstanding-diluted	266,206		270,730
Basic earnings per common share	$	0.64	$	0.57
Diluted earnings per common share	$	0.61	$	0.55

The total shares used in the denominator of the diluted net income per common share calculation includes potentially dilutive common equivalent shares outstanding that are not included in basic net income per common share by applying the treasury stock method to the impact of the equity incentive plans and to the incremental shares issuable assuming conversion of the Company's convertible debt and warrants (see "Note 10. Debt and Credit Facility" for more discussion of the Company's debt and warrants).

Outstanding stock options and RSUs under the Company's stock award plans to purchase approximately 297 thousand and 319 thousand shares, for the first quarter of fiscal 2017 and 2016, respectively, were excluded from diluted net income per common share by applying the treasury stock method, as their inclusion would have been antidilutive. These options and RSUs could be dilutive in the future if the Company’s average share price increases and is greater than the combined exercise prices and the unamortized fair values of these options and RSUs.

To hedge against potential dilution upon conversion of the 2017 Convertible Notes, the Company also purchased call options on its common stock from the hedge counterparties. The call options give the Company the right to purchase up to 20.8 million shares of its common stock at $28.86 per share. These call options are not considered for purposes of calculating the total shares outstanding under the basic and diluted net income per share, as their effect would be anti-dilutive. Upon exercise, the call options would serve to neutralize the dilutive effect of the 2017 Convertible Notes and potentially reduce the weighted number of diluted shares used in per share calculations.