Earnings Per Share

3 Months Ended

Jan. 01, 2016

Basic EPS is computed by dividing net income attributable to Dolby Laboratories, Inc. by the number of weighted-average shares of Class A and Class B common stock outstanding during the period. Through application of the treasury stock method, diluted EPS is computed in the same manner, except that the number of weighted-average shares outstanding is increased by the number of potentially dilutive shares from employee incentive plans during the period.

Potentially dilutive shares represent the hypothetical number of incremental shares issuable under the assumed exercise of outstanding stock options (both vested and non-vested), vesting of outstanding restricted stock units, and shares issued under our employee stock purchase plan. The calculation of dilutive shares outstanding excludes out-of-the-money stock options (i.e., such options' exercise prices were greater than the average market price of our common shares for the period) because their inclusion would have been antidilutive.

The following table sets forth the computation of basic and diluted EPS attributable to Dolby Laboratories, Inc. (in thousands, except per share amounts):



	Fiscal Quarter Ended
	January 1, 2016		December 26, 2014
Numerator:
Net income attributable to Dolby Laboratories, Inc.	$	30,901	$	41,357

Denominator:
Weighted-average shares outstanding—basic	100,734		102,303
Potential common shares from options to purchase common stock	599		992
Potential common shares from restricted stock units	598		980
Weighted-average shares outstanding—diluted	101,931		104,275

Net income per share attributable to Dolby Laboratories, Inc.:
Basic	$	0.31	$	0.40
Diluted	$	0.30	$	0.40

Antidilutive awards excluded from calculation:
Stock options	5,698		2,683
Restricted stock units	215		159