Net Income Per Share

The following table sets forth the computation of basic and diluted net income per share of Class A and Class B common stock and Class C capital stock (in millions, except share amounts which are reflected in thousands and per share amounts):



	Three Months Ended September 30,
	2014									2015
	(unaudited)
	Class A			Class B			Class C			Class A			Class B			Class C
Basic net income (loss) per share:
Numerator
Allocation of undistributed earnings - continuing operations	$	1,226		$	236		$	1,462		$	1,683		$	298		$	1,998
Allocation of undistributed earnings - discontinued operations	(78		)	(15		)	(92		)	0			0			0
Total	$	1,148		$	221		$	1,370		$	1,683		$	298		$	1,998
Denominator
Number of shares used in per share computation	283,850			54,623			338,624			290,368			51,369			344,698
Basic net income (loss) per share:
Continuing operations	$	4.32		$	4.32		$	4.32		$	5.80		$	5.80		$	5.80
Discontinued operations	(0.27		)	(0.27		)	(0.27		)	0.00			0.00			0.00
Basic net income per share	$	4.05		$	4.05		$	4.05		$	5.80		$	5.80		$	5.80
Diluted net income (loss) per share:
Numerator
Allocation of undistributed earnings for basic computation - continuing operations	$	1,226		$	236		$	1,462		$	1,683		$	298		$	1,998
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	236			0			0			298			0			0
Reallocation of undistributed earnings	(2		)	(4		)	2			(10		)	(4		)	10
Allocation of undistributed earnings - continuing operations	$	1,460		$	232		$	1,464		$	1,971		$	294		$	2,008
Allocation of undistributed earnings for basic computation - discontinued operations	(78		)	(15		)	(92		)	0			0			0
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	(15		)	0			0			0			0			0
Reallocation of undistributed earnings	1			0			(1		)	0			0			0
Allocation of undistributed earnings - discontinued operations	$	(92	)	$	(15	)	$	(93	)	$	0		$	0		$	0
Denominator
Number of shares used in basic computation	283,850			54,623			338,624			290,368			51,369			344,698
Weighted-average effect of dilutive securities
Add:
Conversion of Class B to Class A common shares outstanding	54,623			0			0			51,369			0			0
Employee stock options	1,985			0			1,962			1,342			0			1,300
Restricted stock units and other contingently issuable shares	3,062			0			4,109			835			0			4,407
Number of shares used in per share computation	343,520			54,623			344,695			343,914			51,369			350,405
Diluted net income (loss) per share:
Continuing operations	$	4.25		$	4.25		$	4.25		$	5.73		$	5.73		$	5.73
Discontinued operations	(0.27		)	(0.27		)	(0.27		)	0.00			0.00			0.00
Diluted net income per share	$	3.98		$	3.98		$	3.98		$	5.73		$	5.73		$	5.73



	Nine Months Ended September 30,
	2014									2015
	(unaudited)
	Class A			Class B			Class C			Class A			Class B			Class C
Basic net income (loss) per share:
Numerator
Adjustment Payment to Class C capital stockholders - continuing operations	$	0		$	0		$	0		$	0		$	0		$	522
Allocation of undistributed earnings - continuing operations	4,142			813			4,957			4,604			831			5,468
Allocation of undistributed earnings - discontinued operations	(188		)	(37		)	(226		)	0			0			0
Total	$	3,954		$	776		$	4,731		$	4,604		$	831		$	5,990
Denominator
Number of shares used in per share computation	282,014			55,357			337,562			288,686			52,108			342,862
Basic net income (loss) per share:
Continuing operations	$	14.69		$	14.69		$	14.69		$	15.95		$	15.95		$	17.47
Discontinued operations	(0.67		)	(0.67		)	(0.67		)	0.00			0.00			0.00
Basic net income per share	$	14.02		$	14.02		$	14.02		$	15.95		$	15.95		$	17.47
Diluted net income (loss) per share:
Numerator
Adjustment Payment to Class C capital stockholders - continuing operations	$	0		$	0		$	0		$	0		$	0		$	522
Allocation of undistributed earnings for basic computation - continuing operations	$	4,142		$	813		$	4,957		$	4,604		$	831		$	5,468
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	813			0			0			831			0			0
Reallocation of undistributed earnings	(5		)	(14		)	5			(24		)	(9		)	24
Allocation of undistributed earnings - continuing operations	$	4,950		$	799		$	4,962		$	5,411		$	822		$	5,492
Allocation of undistributed earnings for basic computation - discontinued operations	(188		)	(37		)	(226		)	0			0			0
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	(37		)	0			0			0			0			0
Reallocation of undistributed earnings	0			1			0			0			0			0
Allocation of undistributed earnings - discontinued operations	$	(225	)	$	(36	)	$	(226	)	$	0		$	0		$	0
Denominator
Number of shares used in basic computation	282,014			55,357			337,562			288,686			52,108			342,862
Weighted-average effect of dilutive securities
Add:
Conversion of Class B to Class A common shares outstanding	55,357			0			0			52,108			0			0
Employee stock options	2,139			0			2,127			1,527			0			1,484
Restricted stock units and other contingently issuable shares	3,362			0			4,036			893			0			4,005
Number of shares used in per share computation	342,872			55,357			343,725			343,214			52,108			348,351
Diluted net income (loss) per share:
Continuing operations	$	14.44		$	14.44		$	14.44		$	15.77		$	15.77		$	17.27
Discontinued operations	(0.66		)	(0.66		)	(0.66		)	0.00			0.00			0.00
Diluted net income per share	$	13.78		$	13.78		$	13.78		$	15.77		$	15.77		$	17.27

Stock Split Effected In Form of Stock Dividend

In January 2014, our board of directors approved the distribution of shares of Class C capital stock as a dividend to our holders of Class A and Class B common stock (the Stock Split). The Stock Split had a record date of March 27, 2014 and a payment date of April 2, 2014.

In the second quarter of 2015, in accordance with a settlement of litigation involving the authorization to distribute Class C capital stock, at the close of trading on April 2, 2015, the last trading day of the 365 day period following the first date the Class C shares traded on NASDAQ (Lookback Period), we determined that a payment (the Adjustment Payment) in the amount of $522 million was due to Class C capital stockholders. The amount of the Adjustment Payment was based on the percentage difference that developed between the volume-weighted average price of Class A and Class C shares during the Lookback Period, as supplied by NASDAQ Data-on-Demand, and was payable to holders of Class C capital stock as of the end of the Lookback Period in cash, Class A common stock, Class C capital stock, or a combination thereof, at the discretion of our board of directors. On April 22, 2015, our board of directors approved the Adjustment Payment in shares of Class C capital stock, and cash in lieu of any fractional shares of Class C capital stock. In May 2015, the Adjustment Payment was made, resulting in the issuance of approximately 853 thousand shares of Class C capital stock and $47 million of cash in lieu of fractional shares of Class C capital stock.

In the nine months ended September 30, 2015, the Adjustment Payment was allocated to the numerator for calculating net income per share of Class C capital stock from net income available to all stockholders and the remaining undistributed earnings were allocated on a pro rata basis to Class A and Class B common stock and Class C capital stock based on the number of shares used in the per share computation for each class of stock. The weighted-average share impact of the Adjustment Payment is included in the denominator of both basic and diluted net income per share computations for the nine months ended September 30, 2015.

In the three and nine months ended September 30, 2014 and three months ended September 30, 2015, the net income per share amounts are the same for Class A and Class B common stock and Class C capital stock because the holders of each class are entitled to equal per share dividends or distributions in liquidation in accordance with our Fourth Amended and Restated Certificate of Incorporation.