Diluted EPS is affected by many things, including convertible bonds. If we look at the two things that make up earnings per share, i.e., earnings and the number of shares, it starts off with figures from the basic EPS. Your basic adjusted earnings divided by your basic shares outstanding. You then look at the effect of options and RSUs, restricted stock units. The effect of options on your earnings is zero. There's no impact at all. It doesn't make your expenses go up or down. There may be net new shares from options and RSUs if they're in the money.

Next up, you look at the effect of convertible bonds. Now, convertible bonds have an option that allows the debt holder to convert the bond into equity if they so wish, i.e., if the share price has gone up, and up, and up, then they'd rather have that really valuable share price rather than their bond. This has two effects. Firstly, it has an effect on earnings. Because the bond won't exist anymore and the interest expense paid on the bond won't exist anymore, we have interest saved. And that affects earnings post-tax. So we have interest saved post-tax on bond conversion affecting earnings. Now we have new shares that have to be created when the bonds are converted into shares. Once all of these are put together, we now get down to our fully diluted WASO and our fully diluted earnings. And the two of them together give us diluted EPS.