Rosetta Stone 2009 Annual Report Download - page 90

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Table of Contents
ROSETTA STONE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
the treasury stock method), restricted stock awards, restricted stock units and conversion of preferred shares (using the as-converted method). Common
equivalent shares are excluded from the diluted computation if their effect is anti-dilutive.
The following table sets forth the computation of basic and diluted net income per common share (in thousands, except per share amounts):
Years Ended December 31,
2009 2008 2007
Numerator:
Net income $13,363 $13,892 $ 2,579
Accretion of redeemable convertible preferred stock — — (80)
Net income attributable to common stockholders $13,363 $13,892 $ 2,499
Denominator:
Weighted average number of common shares:
Basic 14,990 1,905 1,702
Diluted 19,930 16,924 16,533
Income per common share:
Basic $ 0.89 $ 7.29 $ 1.47
Diluted $ 0.67 $ 0.82 $ 0.15
The following table sets forth common stock equivalent shares included in the calculation of the Company's diluted net income per share (in thousands):
Years Ended December 31,
2009 2008 2007
Equity instruments:
Convertible preferred stock 4,134 14,508 14,508
Restricted common stock units 7 — —
Restricted common stock 93 — —
Stock options 706 511 322
Total common stock equivalent shares 4,940 15,019 14,830
Share-based awards to purchase approximately 15,000, 135,000 and 103,000 shares of common stock that had an exercise price in excess of the average
market price of the common stock during the years ended December 31, 2009, 2008 and 2007, respectively, were not included in the calculation of diluted
earnings per share because they were anti-dilutive.
Comprehensive Income (Loss)
Comprehensive income consists of net income and other comprehensive income. Other comprehensive income refers to revenues, expenses, gains, and
losses that are not included in net income, but rather are recorded directly in stockholders' equity. For the years ended December 31, 2009, 2008 and 2007, the
Company's comprehensive income consisted of net income and foreign currency translation gains (losses).
F-14