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Earnings (Loss) Per Share
 6 Months Ended
Jun. 30, 2011
Earnings (Loss) Per Share  
Earnings (Loss) Per Share

10. Earnings (Loss) Per Share

 

Basic earnings (loss) per share is calculated by dividing the net income (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share is calculated by dividing the earnings (loss) by the weighted average number of common shares and potentially dilutive securities outstanding during the period. Potentially dilutive common shares consist of incremental common shares issuable upon exercise of stock options, employee stock purchases, restricted stock and restricted stock units and shares issuable upon the conversion of convertible notes. The dilutive effect of outstanding shares is reflected in diluted earnings per share by application of the treasury stock method. This method includes consideration of the amounts to be paid by the employees, the amount of excess tax benefits that would be recognized in equity if the instrument was exercised and the amount of unrecognized stock-based compensation related to future services. No potential dilutive common shares are included in the computation of any diluted per share amount when a net loss is reported. The Company reported approximately 4.8 million shares issued to Samsung as contingently redeemable common stock due to the contractual put rights associated with those shares. As such, the Company uses the two-class method for reporting earnings per share.

 

The following tables set forth the computation of basic and diluted income (loss) per share:

 

 

 

Three Months Ended June 30,

 

 

 

2011

 

2010

 

 

 

(In thousands, except per share amounts)

 

 

 

CRCS*

 

Other CS**

 

CRCS*

 

Other CS**

 

Basic and diluted net loss per share:

 

 

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

 

 

Allocation of undistributed earnings

 

$

(461

)

$

(10,124

)

$

(528

)

$

(11,962

)

Denominator:

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding

 

4,788

 

105,204

 

4,788

 

108,533

 

Basic and diluted net loss per share

 

$

(0.10

)

$

(0.10

)

$

(0.11

)

$

(0.11

)

 

 

 

Six Months Ended June 30,

 

 

 

2011

 

2010

 

 

 

(In thousands, except per share amounts)

 

 

 

CRCS*

 

Other CS**

 

CRCS*

 

Other CS**

 

Basic net income (loss) per share:

 

 

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

 

 

Allocation of undistributed earnings

 

$

(652

)

$

(14,163

)

$

5,271

 

$

133,138

 

Denominator:

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding

 

4,788

 

104,021

 

4,312

 

108,915

 

Basic net income (loss) per share

 

$

(0.14

)

$

(0.14

)

$

1.22

 

$

1.22

 

 

 

 

 

 

 

 

 

 

 

Diluted net income (loss) per share:

 

 

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

 

 

Allocation of undistributed earnings for basic computation

 

$

(652

)

$

(14,163

)

$

5,271

 

$

133,138

 

Reallocation of undistributed earnings

 

—

 

—

 

(189

)

189

 

Allocation of undistributed earnings for diluted computation

 

$

(652

)

$

(14,163

)

$

5,082

 

$

133,327

 

Denominator:

 

 

 

 

 

 

 

 

 

Number of shares used in basic computation

 

4,788

 

104,021

 

4,312

 

108,915

 

Dilutive potential shares from stock options, ESPP, Convertible notes and nonvested equity stock and stock units

 

—

 

—

 

—

 

4,207

 

Number of shares used in diluted computation

 

4,788

 

104,021

 

4,312

 

113,122

 

Diluted net income (loss) per share

 

$

(0.14

)

$

(0.14

)

$

1.18

 

$

1.18

 

 

*                 CRCS — Contingently Redeemable Common Stock

**          Other CS — Common Stock other than CRCS

 

For the three months ended June 30, 2011 and 2010, options to purchase approximately 11.5 million and 6.3 million shares, respectively, and for the six months ended June 30, 2011 and 2010, options to purchase approximately 10.0 million and 6.3 million shares, respectively, were excluded from the calculation because they were anti-dilutive after considering proceeds from exercise, taxes and related unrecognized stock-based compensation expense. For the three months ended June 30, 2011 and 2010, an additional 2.1 million and 4.1 million shares, respectively, and for the six months ended June 30, 2011, an additional 2.4 million shares, including nonvested equity stock and stock units, that would be dilutive have been excluded from the weighted average dilutive shares because there were net losses for the periods.