Shutterfly 2009 Annual Report Download - page 80

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SHUTTERFLY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Net Income Per Share
Basic net income per share attributed to common shares is computed by dividing the net income attributable to common shares for the
period by the weighted average number of common shares outstanding during the period as reduced by the weighted average unvested common
shares subject to repurchase by the Company.
Diluted net income per share attributed to common shares is computed by dividing the net income attributable to common shares for the
period by the weighted average number of common and potential common shares outstanding during the period, if the effect of each class of
potential common shares is dilutive. Potential common shares include restricted common stock units, common stock subject to repurchase rights,
and incremental shares of common stock issuable upon the exercise of stock options.
The following weighted-
average outstanding options and convertible preferred stock were excluded from the computation of diluted net
income per common share for the periods presented because including them would have had an anti-dilutive effect:
Year Ended December 31,
2008
2007
2006
Net income per share:
In thousands, except per share amounts
Numerator
Net income
$
4,561
$
10,095
$
5,798
Denominator
Weighted
-
average common shares outstanding
25,038
24,309
8,729
Less: Weighted
-
average unvested common shares subject to repurchase
(2
)
(14
)
(107
)
Denominator for basic net income per share
25,036
24,295
8,622
Dilutive effect of stock options, restricted awards and shares subject to repurchase
751
1,978
1,709
Denominator for diluted net income per share
25,787
26,273
10,331
Net income per share
—
basic and diluted
Net income per share — basic
$
0.18
$
0.42
$
0.67
Net income per share
—
diluted
$
0.18
$
0.38
$
0.56
Year Ended December 31,
2008
2007
2006
In thousands
Options to purchase common stock
4,230
385
1,367
Convertible preferred stock (as converted basis)
—
—
10,509
78