Earnings Per Share

6 Months Ended

Jun. 30, 2011

Earnings Per Share

Earnings Per Share

6. Earnings Per Share

Basic income per share is calculated by dividing net income by the weighted average number of common shares outstanding during the period.  Diluted income per share is calculated by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding during the period.  Our common share equivalents consist of stock options and restricted stock awards and units.

The following table reconciles the basic to diluted weighted average shares outstanding using the treasury stock method (shares in thousands):

	Three months ended		Six months ended
	June 30,		June 30,
	2011	2010	2011	2010
Weighted average shares outstanding — basic	83,925	81,320	84,186	81,040
Dilutive effect of stock options	2,671	3,655	2,781	3,670
Dilutive effect of restricted stock awards and units	124	113	145	102
Weighted average shares outstanding - diluted	86,720	85,088	87,112	84,812

For the three months ended June 30, 2011 and 2010, 231,225 and 36,495 stock options, respectively, were not included in the diluted earnings per share calculation because the effect would have been anti-dilutive. For the three months ended June 30, 2011 and 2010, restricted stock units representing 50,211 and 1,325 shares of common stock, respectively, were not included in the diluted earnings per share calculation because the effect would have been anti-dilutive.

For the six months ended June 30, 2011 and 2010, 554,526 and 577,074 stock options, respectively, were not included in the diluted earnings per share calculation because the effect would have been anti-dilutive. For the six ended June 30, 2011 and 2010, restricted stock units representing 37,170 and 666 shares of common stock, respectively, were not included in the diluted earnings per share calculation because the effect would have been anti-dilutive.

We issue restricted stock units under the terms of our 2006 Stock Plan, as amended, or the 2006 Stock Plan. For the majority of restricted stock units granted, the number of shares issued on the date the restricted stock units vest is net of the statutory withholding requirements that we pay on behalf of our employees. During 2011, net restricted stock awards and restricted stock units of 76,752 were vested after the withholding of 37,158 shares to satisfy $0.9 million of employees’ tax obligations. Although shares withheld are not issued, they are treated as common stock repurchases for accounting and disclosure purposes, as they reduce the number of shares that would have been issued upon vesting.