The following table summarizes the computation of basic and diluted earnings per common share for the three- and six-month periods ended March 26, 2011 and March 27, 2010 (in thousands, except net income in millions and per share amounts):
Three Months Ended
Six Months Ended
Numerator: Net income Denominator: Weighted-average shares outstanding Effect of dilutive securities
Weighted-average diluted shares
Basic earnings per common share Diluted earnings per common share
Potentially dilutive securities representing approximately 220,000 shares and 1.3 million shares of common stock for the three months ended March 26, 2011 and March 27, 2010, respectively, and 297,000 shares and 772,000 shares of common stock for the six months ended March 26, 2011 and March 27, 2010, respectively, were excluded from the computation of diluted earnings per common share for these periods because their effect would have been antidilutive.
Fair Value Measurements
Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:
Level 1 – Quoted prices in active markets for identical assets or liabilities.
Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.