Earthlink 2010 Annual Report Download - page 102

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Table of Contents
EARTHLINK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table sets forth the computation for basic and diluted net income per share for the years ended December 31, 2008, 2009 and
2010:
During the years ended December 31, 2008, 2009 and 2010, approximately 8.4 million, 4.9 million and 2.6 million, respectively, stock
options and restricted stock units were excluded from the calculation of diluted earnings per share because their effect would have been anti-
dilutive. The shares that underlie the Company's convertible senior notes were also excluded from the calculation of diluted earnings per share
during the years ended December 31, 2008 and 2009 because their effect would have been anti-dilutive. Anti-
dilutive securities could be dilutive
in future periods.
Comprehensive Income
Comprehensive income as presented in the Consolidated Statements of Stockholders' Equity and Comprehensive Income includes
unrealized gains and losses which are excluded from the Consolidated Statements of Operations. For the years ended December 31, 2008, 2009
and 2010, these amounts included changes in unrealized gains and losses, net of tax, on certain investments classified as available-for-sale.
Certain Risks and Concentrations
Credit Risk. By their nature, all financial instruments involve risk, including credit risk for non-
performance by counterparties. Financial
instruments that potentially subject the Company to credit risk consist principally of cash equivalents, marketable securities and trade
receivables. In addition, credit risk for the Company's cash equivalents and marketable securities may be exacerbated by unfavorable economic
conditions. If financial markets experience prolonged periods of decline, the value or liquidity of the Company's cash equivalents and marketable
securities could decline and result in an other-than-
temporary decline in fair value, which could adversely affect the Company's financial
position, results of operations and cash flows.
95
Year Ended December 31,
2008 2009 2010
(in thousands, except per share data)
Numerator
Income from continuing operations
$
187,090
$
287,118
$
81,480
Loss from discontinued operations
(8,506
)
—
—
Net income
$
178,584
$
287,118
$
81,480
Denominator
Basic weighted average common shares
outstanding
109,531
106,909
108,057
Dilutive effect of Common Stock
Equivalents
1,520
1,175
1,411
Diluted weighted average common shares
outstanding
111,051
108,084
109,468
Basic net income per share
Continuing operations
$
1.71
$
2.69
$
0.75
Discontinued operations
(0.08
)
—
—
Basic net income per share
$
1.63
$
2.69
$
0.75
Diluted net income per share
Continuing operations
$
1.68
$
2.66
$
0.74
Discontinued operations
(0.08
)
—
—
Diluted net income per share
$
1.61
$
2.66
$
0.74