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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The IRS recently initiated an examination of the Company’s federal income tax returns for fiscal years
2009 through 2011. The Company does not expect a resolution of this audit to be reached during the next
twelve months. In addition, the Company is currently under audit by various state and international tax
authorities. The Company cannot reasonably estimate the outcome of these examinations, or provide
assurance that the outcome of these examinations will not materially harm the Company’s financial
position, results of operations or liquidity.
Note 11: Net Income per Share
The following table sets forth the computation of basic and diluted net income per share (in
thousands, except per share amounts):
Fiscal years ended
December 29, December 30, January 1,
2013 2012 2012
Numerator for basic net income per share:
Net income ..................................... $ 1,042,657 $ 417,404 $ 986,990
Denominator for basic net income per share:
Weighted average common shares outstanding ............. 234,886 242,076 239,484
Basic net income per share ....................... $ 4.44 $ 1.72 $ 4.12
Numerator for diluted net income per share:
Net income ..................................... $ 1,042,657 $ 417,404 $ 986,990
Denominator for diluted net income per share:
Weighted average common shares outstanding ............. 234,886 242,076 239,484
Incremental common shares attributable to exercise of
outstanding employee stock options, SARs and ESPP
(assuming proceeds would be used to purchase common stock),
and RSUs ..................................... 3,263 3,177 5,069
1.5% Notes due 2017 .............................. 2,087 — —
Shares used in computing diluted net income per share .... 240,236 245,253 244,553
Diluted net income per share ................... $ 4.34 $ 1.70 $ 4.04
Anti-dilutive shares excluded from net income per share calculation . . 53,485 70,309 68,079
Basic earnings per share exclude any dilutive effects of stock options, SARs, RSUs, warrants and
convertible debt. Diluted earnings per share include the dilutive effects of stock options, SARs, RSUs,
ESPP and the 1.5% Notes due 2017. Certain common stock issuable under stock options, SARs, RSUs,
warrants and the 0.5% Notes due 2020 has been omitted from the current year diluted net income per
share calculation because the inclusion is considered anti-dilutive. Certain common stock issuable under
stock options, SARs, RSUs, warrants, the 1% Notes due 2013 and the 1.5% Notes due 2017 has been
omitted from the prior year diluted net income per share calculation because the inclusion is considered
anti-dilutive.
Note 12: Commitments, Contingencies and Guarantees
Flash Ventures
Flash Ventures, the Company’s business ventures with Toshiba, consists of three separate legal
entities: Flash Partners Ltd., Flash Alliance Ltd. and Flash Forward Ltd. The Company has a 49.9%
F-43
Annual Report