Description of the business and summary of significant accounting policies: (Policies)

3 Months Ended

Mar. 31, 2013

Description of the business and recent developments:

Basis of presentation

Basis of presentation

The accompanying unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the unaudited condensed consolidated financial statements reflect all normal recurring adjustments that the Company considers necessary for the fair presentation of its results of operations and cash flows for the interim periods covered, and of the financial position of the Company at the date of the interim condensed consolidated balance sheet. Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The operating results for interim periods are not necessarily indicative of the operating results for the entire year. While the Company believes that the disclosures are adequate to not make the information misleading, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in its 2012 annual report on Form 10-K.

The accompanying unaudited consolidated financial statements include all wholly-owned subsidiaries. All inter-company accounts and activity have been eliminated.

Use of estimates

Use of estimates

The preparation of consolidated financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates.

Financial instruments

Financial instruments

At March 31, 2013 the carrying amount of cash and cash equivalents, accounts receivable, prepaid and other current assets, accounts payable and accrued expenses approximated fair value because of the short-term nature of these instruments. The Company measures its cash equivalents at amortized cost, which approximates fair value based upon quoted market prices (Level 1). Based upon recent trading prices (Level 2 — market approach) at March 31, 2013 the fair value of the Company’s $92.0 million convertible senior notes was $89.9 million. Based upon recent trading prices (Level 2 — market approach) at March 31, 2013 the fair value of the Company’s $175.0 million senior secured notes was $193.9 million.

The Company was party to letters of credit totaling $0.4 million as of March 31, 2013. These letters of credit are secured by investments that are restricted and included in other assets.

Basic and diluted net (loss) income per common share

Basic and diluted net (loss) income per common share

Basic earnings per share (“EPS”) excludes dilution for common stock equivalents and is computed by dividing net income or (loss) available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS is based on the weighted-average number of shares of common stock outstanding during each period, adjusted for the effect of common stock equivalents, if dilutive.

Shares of restricted stock are included in the computation of basic EPS as they vest and are included in diluted EPS, to the extent they are dilutive, determined using the treasury stock method. As of March 31, 2013 and 2012, 1.6 million and 0.7 million unvested shares of restricted common stock, respectively, are not included in the computation of basic and diluted income (loss) per share, as the shares were not vested.

Using the “if-converted” method, the shares issuable upon conversion of the Company’s 1.00% Convertible Senior Notes (the “Convertible Notes”) were anti-dilutive for the three months ended March 31, 2013 and 2012. Accordingly, the impact has been excluded from the computation of diluted loss per share. The Convertible Notes are convertible into shares of the Company’s common stock at an initial conversion price of $49.18 per share, yielding 1.9 million shares at March 31, 2013 and 2012.

The Company computes the dilutive effect of outstanding options using the treasury stock method. For the three months ended March 31, 2012, options to purchase 0.2 million shares of common stock at weighted-average exercise price of $13.52 per share are not included in the computation of diluted loss per share as the effect would be anti-dilutive. For the three months ended March 31, 2013 and 2012, the Company’s employees exercised options for 14,270 and 11,687 common shares, respectively.

The following details the determination of diluted weighted average shares for the three months ended March 31, 2013:

	Three Months Ended March 31, 2013
Weighted average common shares - basic	45,537,607
Dilutive effect of stock options	81,470
Dilutive effect of restricted stock	816,600
Weighted average common shares - diluted	46,435,677