Earnings Per Share

6 Months Ended

Jun. 30, 2020

5. Earnings Per Share

For purposes of calculating basic and diluted earnings per share, we used the following weighted average common shares outstanding (in thousands):



	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Net income	$	43,789	$	10,414	$	69,962	$	2,018

Weighted average basic common shares outstanding		77,416		78,047		77,376		78,044
Dilutive effect of restricted and performance stock units		625		1,782		632		1,715
Dilutive effect of convertible debt instruments		5,815		11,268		6,499		11,343
Dilutive effect of employee share purchase plan		3		3		7		5
Weighted average dilutive common shares outstanding		83,859		91,100		84,514		91,107

Earnings per share:
Basic	$	0.57	$	0.13	$	0.90	$	0.03
Diluted	$	0.52	$	0.11	$	0.83	$	0.02

Anti-dilutive shares (excluded from per-share calculations):
Net shares received on purchased call of convertible debt hedge		3,610		6,002		3,910		6,035

Effect of Convertible Notes and Related Convertible Note Hedge and Warrants

In connection with the issuance of the Convertible Notes, the Company entered into Convertible Note Hedge and Warrant transactions as described further in Note 13, Convertible Debt. The collective impact of the Convertible Note Hedge and Warrants effectively eliminates any economic dilution that may occur from the actual conversion of the Convertible Notes between the conversion price of $24.91 per share and the strike price of the Warrants of $31.89 per share.

For reporting periods with net income, the denominator of our diluted earnings per share calculation includes the effect of additional shares issued using the treasury stock method since the average price of our common stock exceeded the conversion price of the Convertible Notes of $24.91 per share. In addition, the denominator also includes the additional shares issued related to the Warrants using the treasury stock method since the average price of our common stock exceeded the strike price of the Warrants of $31.89 per share. The dilution from the Convertible Notes had a $0.04 and $0.02, and $0.07 and $0.01 impact on diluted earnings per share for the three and six months ended June 30, 2020 and 2019, respectively. Prior to actual conversion, the Convertible Note Hedges are not considered for purposes of the calculation of diluted earnings per share, as their effect would be anti-dilutive.