Net Income (Loss) Per Share

12 Months Ended

Jan. 31, 2012

Net Income (Loss) Per Share

13. Net Income (Loss) Per Share

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

Year ended January 31,	2012		2011		2010
Net income (loss) attributable to Mentor Graphics shareholders	$	83,872	$	28,584	$	(21,889	)
Weighted average common shares used to calculate basic net income (loss) per share		110,138		107,743		96,474
Employee stock options, restricted stock units, and employee stock purchase plans		2,777		2,118		—
Weighted average common and potential common shares used to calculate diluted net income (loss) per share		112,915		109,861		96,474
Net income (loss) per share attributable to Mentor Graphics shareholders:
Basic	$	0.76	$	0.27	$	(0.23	)
Diluted	$	0.74	$	0.26	$	(0.23	)

We excluded from the computation of diluted net income (loss) per share stock options, restricted stock units, and ESPP purchase rights to purchase 4,056 shares of common stock for the year ended January 31, 2012, 6,921 for fiscal 2011, and 19,382 for fiscal 2010. The stock options, restricted stock units, and ESPP purchase rights were anti-dilutive either because we incurred a net loss for the period or the stock options or ESPP purchase rights were determined to be anti-dilutive as a result of applying the treasury stock method.

The effect of the conversion of the Floating Rate Convertible Subordinated Debentures due 2023 (retired during fiscal 2011), the 6.25% Debentures (retired during fiscal 2012), and the 4.00% Debentures was anti-dilutive and therefore excluded from the computation of diluted net income (loss) per share. We assume that the 6.25% Debentures and the 4.00% Debentures will be settled in common stock for purposes of calculating the dilutive effect of the 6.25% Debentures and the 4.00% Debentures. If the Floating Rate Debentures, the 6.25% Debentures, and the 4.00% Debentures had been dilutive we would have included additional income and additional incremental common shares as shown in the following table:

Year ended January 31,	2012		2011		2010
Floating Rate Debentures
Additional income	$	—	$	—	$	633
Additional incremental common shares		—		—		1,415
Year ended January 31,	2012		2011		2010
6.25% Debentures
Additional income	$	—	$	3,062	$	2,643
Additional incremental common shares (1)		—		—		—
Year ended January 31,	2012		2011		2010
4.00% Debentures
Additional income	$	2,075	$	—	$	—
Additional incremental common shares (1)		—		—		—

⁽¹⁾  Dilutive net income (loss) per share would have included no incremental shares for the years ended January 31, 2012, 2011, or 2010 as the stock price was below the conversion rate.

The conversion features of the 6.25% Debentures and 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 8. “Notes Payable.”

We excluded from the calculation of earnings per share for the year ended January 31, 2012, an adjustment to the numerator for the excess redemption value of the noncontrolling interest, as the amount was not significant. See further discussion under the heading “Noncontrolling Interest with Redemption Feature” in Note 2. “Summary of Significant Accounting Policies.”