Net income per share

12 Months Ended

Dec. 31, 2012

Net income per share

3. Net income per share

Basic earnings per share for the Company’s common stock is computed by dividing net income available to common shareholders attributable to common stock for the year by the weighted average number of common shares outstanding during the year.

For the year ended December 31, 2010 the Company’s restricted shares granted to its outside directors were participating securities. Accordingly, net income available to common stockholders for the year ended December 31, 2010, was allocated between unvested restricted shares and common stock under the “two class method” for purposes of computing basic and diluted earnings per share.

Diluted earnings per share for the Company’s common stock assume the exercise of outstanding stock options, shares granted under 2008 Long Term Retention Plan (see Note 12), under the Company’s stock based employee compensation plan, and the corresponding adjustment attributable to changes in redeemable non-controlling interest.

The following table shows how net income is allocated using the two-class method for earnings per common share for the years ended December 31, 2012, 2011 and 2010:

	Year Ended December 31,
	2012						2011						2010
	Basic			Diluted			Basic			Diluted			Basic		Diluted
Net income	$	101,346,147		$	101,346,147		$	76,796,339		$	76,796,339		$	56,025,019	$	56,025,019
Net income available to common shareholders to unvested restricted shares		—			—			—			—			4,679		4,679
Net income attributable to noncontrolling interests		(98,849	)		(98,849	)		(16,286	)		(16,286	)		—		—
Change in redeemable amount of noncontrolling interest		359,398			359,398			(610,853	)		(610,853	)		—		—
Net income attributable to MercadoLibre, Inc. Shareholders corresponding to common stock	$	101,606,696		$	101,606,696		$	76,169,200		$	76,169,200		$	56,020,340	$	56,020,340

Net income per share of common stock is as follows for the years ended December 31, 2012, 2011 and 2010:

	Year Ended December 31,
	2012				2011				2010
	Basic		Diluted		Basic		Diluted		Basic		Diluted
Net income attributable to MercadoLibre, Inc. Shareholders per common share	$	2.30	$	2.30	$	1.73	$	1.73	$	1.27	$	1.27
Numerator:
Net income attributable to MercadoLibre, Inc. Shareholders	$	101,606,696	$	101,606,696	$	76,169,200	$	76,169,200	$	56,020,340	$	56,020,340
Denominator:
Weighted average of common stock outstanding for Basic earnings per share		44,147,861		44,147,861		44,138,397		44,138,397		44,124,018		44,124,018
Adjustment for stock options		—		1,977		—		8,089		—		13,982
Adjustment for shares granted under LTRP		—		—		—		4,951		—		8,858
Adjusted weighted average of common stock outstanding for Diluted earnings per share		44,147,861		44,149,838		44,138,397		44,151,437		44,124,018		44,146,858

For the years ended December 31, 2012, 2011 and 2010, there were no anti-dilutive shares that should have been excluded from the calculation of diluted net income per common share.