Earnings Per Share

Basic earnings per share is calculated by dividing net income associated with common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share assumes the issuance of additional shares of common stock by the Company upon exercise of all outstanding stock options and contingently issuable securities if the effect is dilutive, in accordance with the treasury stock method or two-class method (whichever is more dilutive).

Restricted stock units without performance criteria are included as participating securities, since they have the right to share in dividends, if declared, equally with common shares. During periods of net income, participating securities are allocated a proportional share of net income determined by dividing total weighted average participating securities by the sum of total weighted average common shares and participating securities (“the two-class method”). During periods of net loss, no effect is given to participating securities since they do not share in the losses of the Company. When discontinued operations are reported, income from continuing operations represents the “control number” in determining whether potential shares of common stock are dilutive or anti-dilutive. Participating securities have the effect of diluting both basic and diluted earnings per share during periods of net income.

The following is a reconciliation of the numerators and denominators used in computing earnings per share (in thousands, except per share amounts):



	Thirteen Weeks Ended						Twenty-Six Weeks Ended
	August 26, 2017			August 27, 2016			August 26, 2017			August 27, 2016
Net income from continuing operations	$	3,347		$	23,357		$	11,344		$	33,445
Net income from continuing operations attributable to participating securities	65			444			209			609
Net income from continuing operations available to shareholders	$	3,282		$	22,913		$	11,135		$	32,836

Net loss from discontinued operations	$	(504	)	$	(1,282	)	$	(361	)	$	(1,744	)
Net loss from discontinued operations attributable to participating securities	(9		)	(24		)	(6		)	(32		)
Net loss from discontinued operations available to shareholders	$	(495	)	$	(1,258	)	$	(355	)	$	(1,712	)
Net income available to shareholders	$	2,787		$	21,655		$	10,780		$	31,124
Basic earnings per share:
Weighted-average number of common shares outstanding	40,198			40,944			40,236			41,357
Basic earnings per share:
Continued operations	$	0.08		$	0.56		$	0.28		$	0.79
Discontinued operations	(0.01		)	(0.03		)	(0.01		)	(0.04		)
Basic earnings per share	$	0.07		0.53			0.27			$	0.75
Diluted earnings per share:
Weighted-average number of common shares outstanding	40,198			40,944			40,236			41,357
Dilutive effect of potential common shares(a)	62			178			75			149
Diluted weighted-average number of common shares outstanding	40,260			41,122			40,311			41,506
Diluted earnings per share:
Continued operations	$	0.08		$	0.56		$	0.28		$	0.79
Discontinued operations	(0.01		)	(0.03		)	(0.01		)	(0.04		)
Diluted earnings per share	$	0.07		$	0.53		$	0.27		$	0.75

(a)

The computation of diluted earnings per share attributable to The Finish Line, Inc. shareholders excludes options to purchase approximately 3.4 million and 3.1 million shares of common stock in the thirteen weeks ended August 26, 2017 and August 27, 2016, respectively, and 3.4 million and 3.0 million shares of common stock in the twenty-six weeks ended August 26, 2017 and August 27, 2016, respectively, because the impact of such options would have been anti-dilutive.