Earnings Per Share

Basic earnings per share, which excludes dilution, is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding for the period.

Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.



	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
	(in thousands, except for per share data)
Numerator:
Net Income	$	35,575	$	40,604	$	57,827	$	34,775
Denominator:
Weighted average common stock shares outstanding - Basic	53,878		52,303		53,359		51,994
Assumed exercise of stock options and awards	848		1,209		1,061		1,166
Assumed conversion of convertible note premium	4,965		—		4,498		—
Assumed conversion of warrants	3,359		—		2,767		—
Weighted average common stock shares outstanding - Diluted	63,050		53,512		61,685		53,160
Net Income per common share
Basic	$	0.66	$	0.78	$	1.08	$	0.67
Diluted	$	0.56	$	0.76	$	0.94	$	0.65

The table below summarizes those common stock equivalents that could potentially dilute basic earnings per share in the future but were excluded from the computation of diluted earnings per share because the instruments were antidilutive.



	Three Months Ended September 30,		Nine months ended September 30,
	2014	2013	2014	2013
	(in thousands)
Stock options	—	—	—	522
Deferred stock	—	—	—	58
Restricted stock	7	1,031	2	1,494
Convertible note premium	—	10,943	—	10,943
Warrants	—	10,943	—	10,943

In March 2011, the Company entered into a convertible note transaction which included the sale of convertible notes, purchase of call options and sale of warrants. The Company’s 5% Convertible Notes due in 2016 (the "Convertible Notes") with a current principal amount of $86.25 million can be redeemed with either cash or the Company’s common stock, or a combination thereof, at the Company’s option. The 10.9 million shares into which the Convertible Notes could be converted will not impact the dilutive earnings per share calculation in the current and future periods under the if-converted method, as the Company has the intent and ability to redeem the principal amount of the Convertible Notes with cash. During the three and nine months ended September 30, 2014 the average share price of the Company’s common stock exceeded the conversion price of $7.88 per share, therefore shares related to the conversion premium of the Convertible Notes (for which share settlement is assumed for EPS purposes) are included in the Company's computation of diluted earnings per share.

In connection with the issuance of the Convertible Notes, the Company entered into separate call option transactions and separate warrant transactions with certain financial investors to reduce the potential dilution of the Company’s common stock and to offset potential payments by the Company to holders of the Convertible Notes in excess of the principal of the Convertible Notes upon conversion.

The call options to repurchase the Company’s common stock will always be antidilutive and, therefore, will have no effect on diluted earnings per share and are excluded from the table above.

During the three and nine months ended September 30, 2014 the average share price of the Company's common stock exceeded the warrant strike price of $10.00 per share, therefore the assumed conversion of the warrants are included in the Company's computation of diluted earnings per share.