TripAdvisor 2012 Annual Report Download - page 91

included them in our diluted earnings per share calculation for the year ended December 31, 2011, based on the
number of days they were outstanding.
For the year ended December 31, 2010, we computed diluted earnings per share using (i) the number of
shares of common stock and Class B common stock outstanding immediately following the Spin-Off, as no
TripAdvisor equity awards were outstanding prior to the Spin-Off.
Under the treasury stock method, the assumed proceeds calculation includes the actual proceeds to be
received from the employee upon exercise, the average unrecognized compensation cost during the period and
any tax benefits credited upon exercise to additional paid-in-capital. The treasury stock method assumes that a
company uses the proceeds from the exercise of an award to repurchase common stock at the average market
price for the period. Windfall tax benefits created upon the exercise of an award would be added to assumed
proceeds, while shortfalls charged to additional paid-in-capital would be deducted from assumed proceeds. Any
shortfalls not covered by the windfall tax pool would be charged to the income statement and would be excluded
from the calculation of assumed proceeds, if any.
Below is a reconciliation of the weighted average number of shares of common stock outstanding in
calculating diluted earnings per share (in thousands, except for per share information):
During the Year Ended December 31,
2012 2011 2010
Numerator:
Net income attributable to TripAdvisor, Inc. .... $194,069 $177,677 $138,776
Denominator:
Weighted average shares used to compute Basic
EPS .................................. 139,462 133,461 133,461
Effect of dilutive securities:
Stock options ........................ 1,207 1,164 —
RSUs ............................... 161 240 —
Stock warrants ....................... 511 — —
Weighted average shares used to compute
Diluted EPS ........................... 141,341 134,865 133,461
Basic EPS ................................... $ 1.39 $ 1.33 $ 1.04
Diluted EPS ................................. $ 1.37 $ 1.32 $ 1.04
The following potential common shares related to stock options, stock warrants and RSUs were excluded
from the calculation of diluted net income per share because their effect would have been anti-dilutive for the
periods presented (in thousands):
During the Year Ended December 31,
2012(1)(2) 2011(2) 2010
Stock options .................................... 3,944 2,261 —
RSUs .......................................... 21 80 —
Warrants ....................................... — 8,047 —
Total .......................................... 3,965 10,388 —
(1) These totals do not include performance based options representing the right to acquire 110,000 shares of
common stock, respectively, for which all targets required to trigger vesting have not been achieved;
therefore, such awards were excluded from the calculation of weighted average shares used to compute
diluted earnings per share for those reporting periods.
(2) These totals do not include performance based RSUs representing the right to acquire 200,000 and 400,000
shares of common stock at December 31, 2012 and 2011, respectively, for which all targets required to
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