SanDisk 2007 Annual Report Download - page 127

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Note 11: Net Income per Share
The following table sets forth the computation of basic and diluted net income per share (in thousands, except
per share amounts):
December 30,
2007
December 31,
2006
January 1,
2006
Fiscal Years Ended
Numerator:
Numerator for basic net income per share:
Net income .................................. $218,357 $198,896 $386,384
Denominator for basic net income per share:
Weighted average common shares outstanding . . ...... 227,744 198,929 183,008
Basic net income per share ........................ $ 0.96 $ 1.00 $ 2.11
Numerator for diluted net income per share:
Net income .................................. $218,357 $198,896 $386,384
Interest on the 1% Convertible Notes due 2035, net of
tax ...................................... 469 58 —
Net income for diluted income per share ............ $218,826 $198,954 $386,384
Denominator for diluted net income per share:
Weighted average common shares ................. 227,744 198,929 183,008
Incremental common shares attributable to exercise of
outstanding employee stock options, restricted stock,
restricted stock units and warrants (assuming proceeds
would be used to purchase common stock) . . . ...... 6,101 8,284 10,008
Effect of dilutive 1% Convertible Notes due 2035 ..... 2,012 238 —
Shares used in computing diluted net income per share . . . 235,857 207,451 193,016
Diluted net income per share ....................... $ 0.93 $ 0.96 $ 2.00
Anti-dilutive shares excluded from net income per share
calculation .................................. 40,133 33,381 98
Basic earnings per share exclude any dilutive effects of stock options, SARs, RSUs, warrants and convertible
securities. Diluted earnings per share include the dilutive effects of stock options, SARs, RSUs, warrants and the
1% Convertible Notes due 2035. Certain common stock issuable under stock options, SARs, warrants and the
1% Senior Convertible Notes due 2013 have been omitted from the diluted net income per share calculation because
their inclusion is considered anti-dilutive.
Note 12: Commitments, Contingencies and Guarantees
FlashVision. The Company has a 49.9% ownership interest in FlashVision Ltd. (“FlashVision”), a business
venture with Toshiba Corporation (“Toshiba”) which owns 50.1%, formed in fiscal year 2000. In the venture, the
Company and Toshiba have collaborated in the development and manufacture of NAND flash memory products.
These NAND flash memory products are manufactured by Toshiba at its 200-millimeter wafer fabrication facilities
located in Yokkaichi, Japan, using the semiconductor manufacturing equipment owned or leased by FlashVision.
FlashVision purchases wafers from Toshiba at cost and then resells those wafers to the Company and Toshiba at cost
plus a markup. The Company accounts for its 49.9% ownership position in FlashVision under the equity method of
accounting. The terms of the FlashVision venture contractually obligate the Company to purchase its provided
three-month forecast of FlashVision’s NAND wafer supply, which generally equals 50 percent of the venture’s
output. The Company is not able to estimate its total wafer purchase commitment obligation beyond its rolling three
F-31
Notes to Consolidated Financial Statements — (Continued)