Note 9: Net Income Per Share

Basic net income per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed using the treasury stock method, for dilutive stock options, restricted stock units (“RSUs”), and convertible notes. The following table reconciles the numerators and denominators of the basic and diluted computations for net income per share.


	Year Ended
	June 30,		June 24,		June 26,
	2013		2012		2011
	(in thousands, except per share data)
Numerator:
Net income	$	113,879	$	168,723	$	723,748

Denominator:
Basic average shares outstanding		168,932		124,176		123,529
Effect of potential dilutive securities:
Employee stock plans		2,558		910		1,490
Convertible notes		1,940		147		—

Diluted average shares outstanding		173,430		125,233		125,019

Net income per share - basic	$	0.67	$	1.36	$	5.86

Net income per share - diluted	$	0.66	$	1.35	$	5.79

For purposes of computing diluted net income per share, weighted-average common shares do not include potentially dilutive securities that are anti-dilutive under the treasury stock method. The following potentially dilutive securities were excluded:

Year Ended

June 30,

June 24,

June 26,

2013

2012

2011

(in thousands)

Number of options and RSUs excluded

534

382

241

Diluted shares outstanding include only the effect of the 2041 Notes. Diluted shares outstanding do not include any effect resulting from warrants, assumed conversion of the notes, or note hedges associated with the Company’s 2016 or 2018 Notes (as described in Note 13) as their impact would have been anti-dilutive.