Quarterly report pursuant to Section 13 or 15(d)

Net Income (Loss) Per Share

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Net Income (Loss) Per Share
 6 Months Ended
Jul. 02, 2011
Net Income (Loss) Per Share  
Net Income (Loss) Per Share

NOTE 4. Net Income (Loss) Per Share

Basic net income (loss) per share is computed based on the weighted average number of shares outstanding and shares issuable upon exercise of warrants issued by the Company to West Coast Hitech L.P., in connection with the initial GF transaction in 2009. The warrants became exercisable on July 24, 2009.

Diluted net income per share is computed based on the weighted average number of shares outstanding plus any potentially dilutive shares outstanding. Potentially dilutive shares include stock options, restricted stock units and shares issuable upon the conversion of convertible debt.

 

The following table sets forth the components of basic and diluted income (loss) per share:

 

     Quarter Ended     Six Months Ended  
     July 2,
2011		      June 26,
2010		     July 2,
2011		      June 26,
2010		  
     (In millions, except per share amounts)  

Numerator – Net income (loss):

        

Numerator for basic income (loss) per share

    $ 61       $ (43 )    $ 571       $ 214   

Effect of assumed conversion of 5.75% convertible senior notes:

        

Interest expense and amortization of financing cost

      —           —          15         —     
  

 

 

     

 

 

    

 

 

     

 

 

  

Numerator for diluted net income (loss) per share

    $ 61       $ (43 )    $ 586       $ 214   
  

 

 

     

 

 

    

 

 

     

 

 

  

Denominator - Weighted average shares

        

Denominator for basic net income (loss) per share

      724         709        722         708   

Effect of potentially dilutive shares:

        

Employee stock options and restricted stock units

      19         —          20         24   

5.75% convertible senior notes

      —           —          24         —     
  

 

 

     

 

 

    

 

 

     

 

 

  

Denominator for diluted net income (loss) per share

      743         709        766         732   
  

 

 

     

 

 

    

 

 

     

 

 

  

Net income (loss) per share:

        

Basic

    $ 0.08       $ (0.06 )    $ 0.79       $ 0.30   

Diluted

    $ 0.08       $ (0.06 )    $ 0.76       $ 0.29   

Potential shares (i) from outstanding stock options and restricted stock units totaling approximately 23 million and (ii) issuable under the Company's 5.75% Convertible Senior Notes due 2012 (5.75% Notes) totaling 24 million were not included in the net income per share calculation for the second quarter of 2011 because their inclusion would have been anti-dilutive.

Potential shares from outstanding stock options and restricted stock units totaling approximately 24 million were not included in the net income per share calculation for the six months ended July 2, 2011 because their inclusion would have been anti-dilutive.

Potential shares (i) from outstanding stock options and restricted stock units totaling approximately 63 million and (ii) issuable under the Company's 5.75% Notes totaling 24 million were not included in the net loss per share calculation for the second quarter of 2010 because their inclusion would have been anti-dilutive.

Potential shares (i) from outstanding stock options and restricted stock units totaling approximately 37 million and (ii) issuable under the Company's 5.75% Notes totaling 24 million were not included in the net income per share calculation for the six months ended June 26, 2010 because their inclusion would have been anti-dilutive.