Netgear 2012 Annual Report Download - page 79

Table of Contents NETGEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The effects of the Company’
s derivatives not designated as hedging instruments in other income (expense), net in the consolidated statements
of operations for the years ended December 31, 2012 and 2011 , are as follows (in thousands):
Note 6. Net Income Per Share
Basic net income per share is computed by dividing the net income for the period by the weighted average number of common shares
outstanding during the period. Diluted net income per share is computed by dividing the net income for the period by the weighted average number
of shares of common stock and potentially dilutive common stock outstanding during the period. Potentially dilutive common shares include
outstanding stock options and unvested restricted stock awards, which are reflected in diluted net income per share by application of the treasury
stock method. Under the treasury stock method, the amount that the employee must pay for exercising stock options, the amount of stock-
based
compensation cost for future services that the Company has not yet recognized, and the estimated tax benefit that would be recorded in additional
paid-in capital upon exercise are assumed to be used to repurchase shares.
Net income per share for the years ended December 31, 2012 , 2011 and 2010 are as follows (in thousands, except per share data):
Common stock equivalents excluded from net income per diluted share because their effect would have been anti-dilutive totaled 2.6 million
,
2.0 million and 3.3 million shares for the years ended December 31, 2012 , 2011 and 2010 , respectively.
Note 7. Other Income (Expense), Net
Other income (expense), net consisted of the following (in thousands):
75
Derivatives Not Designated as Hedging Instruments
Location of Gains or (Losses)
Recognized in Income on Derivative
Amount of Gains or (Losses)
Recognized in Income on Derivative
Year Ended
December 31,
2012
Year Ended
December 31,
2011
Foreign currency forward contracts Other income (expense), net
(502
)
$
(957
)
Year Ended
December 31,
2012
December 31,
2011
December 31,
2010
Net income
$
86,539
$
91,368
$
50,909
Weighted average shares outstanding:
Basic
38,057
37,121
35,385
Dilutive potential common shares
690
811
739
Total diluted
38,747
37,932
36,124
Basic net income per share
$
2.27
$
2.46
$
1.44
Diluted net income per share
$
2.23
$
2.41
$
1.41
Year Ended December 31,
2012
2011 2010
Foreign currency transaction gain (loss), net
$
204
$
131
$
(130
)
Foreign currency contract loss, net
(660
)
(1,267
)
(434
)
Gain on sale of cost method investment
3,126
—
—
Total
$
2,670
$
(1,136
)
$
(564
)