Net Income Per Share

12 Months Ended

Jan. 31, 2014

Earnings Per Share [Abstract]

Earnings Per Share

Net Income Per Share

The following provides the computation of basic and diluted net income per share:

Year ended January 31,	2014			2013			2012
Net income attributable to Mentor Graphics shareholders	$	155,258		$	138,736		$	83,872
Noncontrolling interest adjustment to redemption value	(4,486		)	(5,272		)	—
Adjusted net income attributable to Mentor Graphics shareholders	$	150,772		$	133,464		$	83,872
Weighted average common shares used to calculate basic net income per share	113,671			110,998			110,138
Employee stock options, restricted stock units and employee stock purchase plan	3,031			3,019			2,777
Weighted average common and potential common shares used to calculate diluted net income per share	116,702			114,017			112,915
Net income per share attributable to Mentor Graphics shareholders:
Basic	$	1.33		$	1.20		$	0.76
Diluted	$	1.29		$	1.17		$	0.74

We excluded from the computation of diluted net income per share stock options, restricted stock units, and ESPP purchase rights to purchase 1,195 shares of common stock for the year ended January 31, 2014, 1,975 for fiscal 2013, and 4,056 for fiscal 2012. The stock options, restricted stock units, and ESPP purchase rights were determined to be anti-dilutive as a result of applying the treasury stock method.

We have decreased the numerator of our basic and diluted earnings per share calculation for the adjustment of the noncontrolling interest with redemption feature to its calculated redemption value at January 31, 2014 and January 31, 2013, recorded directly to retained earnings. For the year ended January 31, 2012, we excluded a similar adjustment of $1,682 from the calculation of basic and diluted earnings per share, as the amount was not significant.

The effect of the conversion of the 4.00% Debentures was anti-dilutive and therefore excluded from the computation of diluted net income per share. We assume that the 4.00% Debentures will be settled in common stock for purposes of calculating the dilutive effect on net income per share. If the 4.00% Debentures had been dilutive we would have included additional income of $2,075 for the years ended January 31, 2014, 2013 and 2012. Dilutive net income per share would have included no incremental shares for the years ended January 31, 2014, 2013, or 2012 as the average stock price for the period was below the conversion rate.

The conversion features of the 4.00% Debentures, which allow for settlement in cash, common stock, or a combination of cash and common stock, are further described in Note 6. “Notes Payable.”