Salesforce.com 2013 Annual Report Download - page 102

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The Company believes that it has provided adequate reserves for its income tax uncertainties in all open tax
years. In the next 12 months, it is reasonably possible that the unrecognized tax benefits may decrease by
approximately $4.0 million due to lapsing of the statute of limitations.
9. Earnings/Loss Per Share
Basic earnings/loss per share is computed by dividing net income (loss) by the weighted-average number of
common shares outstanding for the fiscal period. Diluted earnings/loss per share is computed giving effect to all
potential weighted average dilutive common stock, including options, restricted stock units, warrants and the
convertible senior notes. The dilutive effect of outstanding awards and convertible securities is reflected in
diluted earnings per share by application of the treasury stock method. Diluted loss per share for fiscal 2013 and
2012 are the same as basic loss per share as there is a net loss in these periods and inclusion of potentially
issuable shares would be anti-dilutive.
A reconciliation of the denominator used in the calculation of basic and diluted earnings/loss per share is as
follows (in thousands):
Fiscal Year Ended January 31,
2013 2012 2011
Numerator:
Net income (loss) attributable to salesforce.com .... $(270,445) $ (11,572) $ 64,474
Denominator:
Weighted-average shares outstanding for basic
income (loss) per share ...................... 141,224 135,302 130,222
Effect of dilutive securities:
Convertible senior notes ................... 0 0 1,561
Employee stock awards .................... 0 0 4,815
Warrants ............................... 0 0 0
Adjusted weighted-average shares outstanding and
assumed conversions for diluted income (loss) per
share .................................... 141,224 135,302 136,598
The weighted-average number of shares outstanding used in the computation of basic and diluted earnings/
loss per share does not include the effect of the following potential outstanding common stock. The effects of
these potentially outstanding shares were not included in the calculation of diluted earnings/loss per share
because the effect would have been anti-dilutive (in thousands):
Fiscal Year Ended January 31,
2013 2012 2011
Stock awards ................................ 7,517 7,560 1,061
Warrants ................................... 6,736 6,736 6,376
Convertible senior notes ....................... 6,735 6,735 0
10. Commitments
Letters of Credit
As of January 31, 2013, the Company had a total of $60.8 million in letters of credit outstanding
substantially in favor of certain landlords for office space. These letters of credit renew annually and mature at
various dates through December 2030.
98