ON Semiconductor (ONNN)

Note 7: Common Stock and Treasury Stock

Income per share calculations for the quarters ended March 28, 2008 and March 30, 2007, are as follows (in millions, except per share data):

Basic income per share is computed by dividing net income by the weighted average number of common shares outstanding during the period.

The number of incremental shares from the assumed exercise of stock options is calculated by applying the treasury stock method. Common shares relating to the employee stock options where the exercise price exceeded the average market price of the Company’s common shares or the assumed exercise would have been anti-dilutive during these periods were also excluded from the diluted earnings per share calculation. The excluded option shares were 18.5 million and 7.0 million, for the quarters ended March 28, 2008 and March 30, 2007, respectively.

Additionally, warrants held by non-employees to purchase 5.3 million shares of the Company’s common stock, which were obtained from the AMIS acquisition, were outstanding as of March 28, 2008, but were not included in the computation of diluted net income per share as the effect would have been anti-dilutive under the treasury stock method.

For the quarters ended March 28, 2008 and March 30, 2007, the assumed conversion of the zero coupon convertible senior subordinated notes due 2024 was also excluded in determining diluted earnings per share as the impact would have been anti-dilutive. The zero coupon convertible senior subordinated notes are convertible into cash up to the par value of $260.0 million, based on a conversion price of $9.82 per share. The excess of fair value over par value is convertible into stock. As of March 28, 2008 and March 30, 2007, respectively, the Company’s common stock traded below $9.82 per share; thus, the effects of an assumed conversion would have been anti-dilutive and therefore were excluded.

For the quarter ended March 28, 2008, the assumed conversion of the 1.875% convertible senior subordinated notes due 2025 was also excluded in determining diluted earnings per share as the impact would have been anti-dilutive. These notes are convertible into cash up to the par value of $95.0 million, based on a

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ON SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(unaudited)

conversion price of $7.00 per share. The excess of fair value over par value is convertible into stock. As of March 28, 2008, the Company’s common stock traded below $7.00 per share; thus, the effects of an assumed conversion would have been anti-dilutive and therefore were excluded.

For the quarters ended March 28, 2008 and March 30, 2007, the assumed conversion of the 2.625% convertible senior subordinated notes was also excluded in determining diluted earnings per share. The 2.625% convertible senior subordinated notes are convertible into cash up to the par value of $484.0 million, based on an initial conversion price of approximately $10.50 per share. The excess of fair value over par value is convertible into stock. As of March 28, 2008 and March 30, 2007, respectively, the Company’s common stock traded below $10.50 per share; thus, the effects of an assumed conversion would have been anti-dilutive and therefore were excluded.

Treasury Stock is recorded at cost and is presented as a reduction of stockholders’ equity in the accompanying consolidated financial statements. None of these shares had been reissued or retired as of March 28, 2008, but may be reissued by the Company at a later date.

Note 7: Common Stock and Treasury Stock

Income per share calculations for the quarters ended March 30, 2007 and March 31, 2006, are as follows (in millions, except per share data):

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ON SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(unaudited)

Basic income per share is computed by dividing net income, by the weighted average number of common shares outstanding during the period.

Diluted income per share incorporates the incremental impact of shares issuable upon the assumed exercise of stock options for the quarters ended March 30, 2007 and March 31, 2006 and upon the assumed conversion of the zero coupon convertible senior subordinated notes for the quarter ended March 31, 2006.

The number of incremental shares from the assumed exercise of stock options is calculated by applying the treasury stock method. Common shares relating to the employee stock options where the exercise price exceeded the average market price of the Company’s common shares or the assumed exercise would have been anti-dilutive during these periods were also excluded from the diluted earnings per share calculation. The excluded option shares were 7.0 million and 8.7 million for the quarter ended March 30, 2007 and March 31, 2006, respectively.

For the quarter ended March 30, 2007, the assumed conversion of the zero coupon convertible senior subordinated notes due 2024 was also excluded in determining diluted earnings per share as the impact would have been anti-dilutive. The zero coupon convertible senior subordinated notes are convertible into cash up to the par value of $260.0 million, based on a conversion price of $9.82 per share. The excess of fair value over par value is convertible into stock. As of March 30, 2007, the Company’s common stock traded below $9.82 per share; thus, the effects of an assumed conversion would have been anti-dilutive and therefore were excluded.

For the quarter ended March 30, 2007, the assumed conversion of the 2.625% convertible senior subordinated notes was also excluded in determining diluted earnings per share. The 2.625% convertible senior subordinated notes are convertible into cash up to the par value of $484.0 million, based on an initial conversion price of approximately $10.50 per share. The excess of fair value over par value is convertible into stock. As of March 30, 2007, the Company’s common stock traded below $10.50; thus, the effects of an assumed conversion would have been anti-dilutive and therefore were excluded.

Treasury Stock is recorded at cost and is presented as a reduction of stockholders’ equity in the accompanying consolidated financial statements. None of these shares had been reissued or retired as of March 30, 2007.

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Table of Contents

ON SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(unaudited)