NET INCOME (LOSS) PER SHARE

6 Months Ended

Jun. 30, 2013

NET INCOME (LOSS) PER SHARE

NET INCOME (LOSS) PER SHARE

2. NET INCOME (LOSS) PER SHARE

Basic net income (loss) per share for each period presented was 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 and six months ended June 30, 2013, and the three months ended June 30, 2012, diluted net loss per share was identical to basic net loss per share since potential common shares were excluded from the calculation, as their effect was anti-dilutive.

For the six months ended June 30, 2012, diluted net income per share was computed by dividing net income plus interest on dilutive convertible subordinated notes by the weighted-average number of shares of common stock outstanding during the 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 7) and other dilutive securities.

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

Dilutive potential common shares also include the dilutive effect of the common stock underlying in-the-money stock options and ESPP shares, 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.

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

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands, except for per share amounts)	2013			2012			2013			2012
Numerator:
Net income (loss) — basic	$	(36,429	)	$	(37,120	)	$	(73,789	)	$	47,474
Add: interest and issuance costs related to convertible notes	—			—			—			3,002
Net income (loss) — diluted	(36,429		)	(37,120		)	(73,789		)	50,476
Denominator:
Weighted-average common shares outstanding	100,316			91,809			99,677			89,019
Less: unvested RSAs	(2,713		)	(2,640		)	(2,713		)	(2,640		)
Weighted-average common shares outstanding — basic	97,603			89,169			96,964			86,379
Dilutive effect of equity incentive plans and ESPP	—			—			—			1,997
Dilutive effect of convertible subordinated notes	—			—			—			6,668
Weighted-average common shares outstanding and dilutive potential common shares - diluted	97,603			89,169			96,964			95,044

Anti-Dilutive Securities

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

	Three Months Ended June 30,		Six Months Ended June 30,
(in thousands)	2013	2012	2013	2012
Shares issuable under equity incentive plans and ESPP	3,848	6,348	4,519	3,801
Shares issuable upon the conversion of convertible subordinated notes	17,015	6,668	15,643	—
Total anti-dilutive securities	20,863	13,016	20,162	3,801