Net Loss Per Share

3 Months Ended

Apr. 30, 2016

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.

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



	Three months ended April 30,
	2016			2015
Net loss attributable to Mentor Graphics shareholders	$	(13,436	)	$	(9,885	)
Adjustment to redemption value of noncontrolling interest with redemption feature	—			269
Adjusted net loss attributable to Mentor Graphics shareholders	$	(13,436	)	$	(9,616	)

Weighted average common shares used to calculate basic net loss per share	109,085			116,003
Potential common shares	—			—
Weighted average common and potential common shares used to calculate diluted net loss per share	109,085			116,003

Net loss per share attributable to Mentor Graphics shareholders:
Basic net loss per share	$	(0.12	)	$	(0.08	)
Diluted net loss per share	$	(0.12	)	$	(0.08	)

We have adjusted the numerator of our basic and diluted loss per share calculation for the three months ended April 30, 2015 for the adjustment of the noncontrolling interest with redemption feature to its calculated redemption value, recorded directly to retained earnings.

The effect of the conversion of the 4.00% Debentures was anti-dilutive for the three months ended April 30, 2016 and 2015 and therefore excluded from the computation of diluted net loss per share. The conversion feature of the 4.00% Debentures, which allows for settlement in cash or a combination of cash and common stock, is further described in Note 6. “Notes Payable.”

The following details the adjustments to net loss excluded from the computation of diluted net loss per share for the three months ended April 30, 2016 and April 30, 2015:



	Three months ended April 30,
	2016		2015
Adjustment for convertible debt interest, net of tax to be forfeited upon conversion of 4.00% Debentures	$	—	$	519

There was no adjustment for the 4.00% Debentures interest for three months ended April 30, 2016 because our average stock price was below the conversion price for the period. The adjustment for three months ended April 30, 2015 was excluded because we incurred a net loss for the period.

The following details shares excluded from the computation of diluted net loss per share:



	Three months ended April 30,
	2016	2015
Shares of common stock for restricted stock units	2,298	1,254
Shares of common stock for stock options	1,208	1,284
Shares of common stock for ESPP purchase rights	51	100
Shares of common stock for convertible debt	—	2,116
Total anti-dilutive shares excluded	3,557	4,754

The stock options, restricted stock units, ESPP purchase rights, and the 4.00% Debentures were determined to be anti-dilutive because we incurred a net loss for both periods. There was no adjustment for the 4.00% Debentures for three months ended April 30, 2016 because our average stock price was below the conversion price for the period.