Net Income (Loss) per Share

3 Months Ended

Mar. 31, 2012

Net Income (Loss) per Share

Net Income (Loss) per Share

2. Net Income (Loss) per Share

Basic net income (loss) per share amounts for each period presented were computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding, less RSAs subject to forfeiture.

For the three months ended March 31, 2012, diluted net income per share was computed by dividing net income plus interest on dilutive convertible notes by the weighted-average number of shares of common stock outstanding during each period, less RSAs subject to forfeiture, plus all additional common shares that would have been outstanding assuming dilutive potential common shares had been issued for dilutive convertible notes (see Note 6) and other dilutive securities.

Dilutive potential common shares for dilutive convertible notes were calculated based on the “if-converted” method. Under the “if-converted” method, when computing the dilutive effect of convertible notes, net income was adjusted to add back the amount of interest and debt issuance costs recognized in the period and the denominator was adjusted to add back the number of shares that would be issued if the entire obligation was settled in shares.

Dilutive potential common shares also include the dilutive effect of the common stock underlying in-the-money stock options and were calculated based on the average share price for each period using the treasury stock method. Under the treasury stock method, the exercise price of an option and the average amount of compensation cost, if any, for future service that the Company has not yet recognized when the option is exercised, are assumed to be used to repurchase shares in the current period. Dilutive potential common shares also reflect the dilutive effect of unvested restricted stock units.

For the three months ended March 31, 2011, diluted net loss per share was identical to basic EPS since potential common shares were excluded from the calculation, as their effect was anti-dilutive.

The computations for basic and diluted net income (loss) per share were as follows:

	Three Months Ended March 31,
(in thousands, except for per share amounts)	2012			2011
Numerator:
Net income (loss) — basic	$	84,594		$	(22,667	)
Add: interest and issuance costs related to convertible notes	1,500			—
Net income (loss) — diluted	86,094			(22,667		)
Denominator:
Weighted-average common shares outstanding	86,292			83,325
Less: unvested RSAs	(2,702		)	(2,471		)
Weighted-average common shares outstanding — basic	83,590			80,854
Dilutive effect of equity incentive plans and ESPP	1,822			—
Dilutive effect of convertible subordinated notes	6,668			—
Weighted-average common shares outstanding and dilutive potential common shares — diluted	92,080			80,854

Anti-dilutive securities

The following awards were not included in the computation of diluted net income (loss) per share because their effect was anti-dilutive:

	Three Months Ended March 31,
(in thousands)	2012	2011
Shares issuable under Equity Incentive Plans and ESPP	4,641	6,673
Shares issuable upon the conversion of convertible debt	—	6,668
Total anti-dilutive securities	4,641	13,341