Netgear 2011 Annual Report Download - page 86

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Table of Contents
(a) Refer to Note 10, Stockholder’s Equity , which summarizes the activity in other comprehensive income related to derivatives.
The Company did not recognize any net gain or loss related to the ineffective portion of cash flow hedges during the year ended
December 31, 2011, 2010 or 2009.
Note 6—Net Income Per Share
Basic net income per share is computed by dividing the net income for the period by the weighted average number of common shares
outstanding during the period. Diluted net income per share is computed by dividing the net income for the period by the weighted average
number of shares of common stock and potentially dilutive common stock outstanding during the period.
Potentially dilutive common shares include outstanding stock options and unvested restricted stock awards, which are reflected in diluted
net income per share by application of the treasury stock method. Under the treasury stock method, the amount that the employee must pay for
exercising stock options, the amount of stock-based compensation cost for future services that the Company has not yet recognized, and the
amount of tax benefit that would be recorded in additional paid-in capital upon exercise are assumed to be used to repurchase shares.
82
Derivatives Designated as
Hedging Instruments
Year ended December 31, 2010
Gain or (Loss)
Recognized in
OCI-
Effective
Portion (a)
Location of Gain
or (Loss)
Reclassified from
OCI into
Income-Effective
Portion
Gain or (Loss)
Reclassified
from OCI into
Income-
Effective
Portion (a)
Location of Gain or (Loss)
Recognized in Income and
Excluded from
Effectiveness Testing
Amount of Gain or
(Loss) Recognized in
Income and
Excluded from
Effectiveness Testing
(In thousands)
Cash flow hedges:
Foreign currency forward contracts
$
2,257
Net revenue
$
2,755
Other income (expense), net
$
(261
)
Foreign currency forward contracts
—
Cost of revenue
(27
)
Other income (expense), net
—
Foreign currency forward contracts
—
Operating expenses
(724
)
Other income (expense), net
—
Total
$
2,257
$
2,004
$
(261
)
Derivatives Designated as
Hedging Instruments
Year ended December 31, 2009
Gain or (Loss)
Recognized in
OCI-
Effective
Portion (a)
Location of Gain
or (Loss)
Reclassified from
OCI into
Income-Effective
Portion
Gain or (Loss)
Reclassified
from OCI into
Income-
Effective
Portion (a)
Location of Gain or (Loss)
Recognized in Income and
Excluded from
Effectiveness Testing
Amount of Gain or
(Loss) Recognized in
Income and
Excluded from
Effectiveness Testing
(In thousands)
Cash flow hedges:
Foreign currency forward contracts
$
(499
)
Net revenue
$
(707
)
Other income (expense), net
$
(85
)
Foreign currency forward contracts
—
Cost of revenue
15
Other income (expense), net
—
Foreign currency forward contracts
—
Operating expenses
173
Other income (expense), net
—
Total
$
(499
)
$
(519
)
$
(85
)