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Net Income (Loss) Per Share
 3 Months Ended
Apr. 30, 2014
Earnings Per Share [Abstract]  
Net Income (Loss) Per Share
Net Income (Loss) Per Share

We compute basic net income (loss) per share using the weighted average number of common shares outstanding during the period. We compute diluted net income per share using the weighted average number of common shares and potentially dilutive common shares outstanding during the period. Potentially dilutive common shares consist of common shares issuable upon vesting of restricted stock units, exercise of stock options and ESPP purchase rights, and conversion of the 4.00% Debentures using the treasury stock method, if dilutive.

The following provides the computation of basic and diluted net income (loss) per share:
 
 
Three months ended April 30,
 
2014
 
2013
Net income (loss) attributable to Mentor Graphics shareholders
$
(2,551
)
 
$
205

Noncontrolling interest adjustment to redemption value
667

 
468

Adjusted net income (loss) attributable to Mentor Graphics shareholders
$
(1,884
)
 
$
673

Weighted average common shares used to calculate basic net income (loss) per share
114,935

 
112,711

Employee stock options, restricted stock units and employee stock purchase plan
—

 
3,040

Weighted average common and potential common shares used to calculate diluted net income (loss) per share
114,935

 
115,751

Net income (loss) per share attributable to Mentor Graphics shareholders:
 
 
 
Basic net income (loss) per share
$
(0.02
)
 
$
0.01

Diluted net income (loss) per share
$
(0.02
)
 
$
0.01



We excluded from the computation of diluted net income (loss) per share for the three months ended April 30, 2014, 3,372 shares of common stock for stock options, restricted stock units, and ESPP purchase rights compared to 1,188 shares of common stock for stock options and ESPP purchase rights for the three months ended April 30, 2013. These stock options, restricted stock units, and ESPP purchase rights were determined to be anti-dilutive either because we incurred a net loss for the period or as a result of applying the treasury stock method.

We have increased the numerator of our basic and diluted earnings per share calculation by $667 for the three months ended April 30, 2014 and $468 for the three months ended April 30, 2013 for the decrease of the noncontrolling interest with redemption feature to its calculated redemption value, recorded directly to retained earnings.

We assume that the 4.00% Debentures will be settled in common stock for purposes of calculating their dilutive effect. The assumed conversion of the 4.00% Debentures was anti-dilutive and therefore excluded from the computation of diluted net income per share.

The conversion feature of the 4.00% Debentures, which allow for settlement in cash or a combination of cash and common stock, are further described in Note 7. “Notes Payable.”