EARNINGS PER SHARE

Basic net income per common share is based upon the weighted average number of common shares outstanding during the period. Diluted net income per common share is based upon the weighted average number of common shares outstanding, including the dilutive effect, if any, of potentially dilutive securities using the treasury stock method.

Previously, diluted net income per share assumed the principal amount of the Convertible Notes would be cash settled and any conversion spread would be settled using common shares, as the Company has the choice of settling either in cash or shares. The Company had demonstrated a past practice and intent of cash settlement for the principal and stock settlement of the conversion spread. As a result, earnings per share calculations for periods ended prior to and including September 30, 2014 only included the assumption of conversion to common shares for the convertible spread. During the quarter ended December 31, 2014, the Company changed its practice of cash settlement and settled redemptions using common shares for both the principal and conversion spread and accordingly, earnings per share amounts were calculated using the if-converted method. For the three and six month periods ended June 30, 2016 and 2015, the earnings per share amounts were calculated using the if-converted method.

The Company’s potentially dilutive shares consist of: (i) vested and unvested stock options that have a strike price less than the market price as of June 30, 2016, (ii) unvested RSUs, and (iii) shares potentially issuable upon conversion of the Notes that matured on June 1, 2016.

A reconciliation of the earnings per share data from a basic to a fully diluted basis is detailed below (amounts in thousands, except per share data):



	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
Net income	$	61,993	$	32,508	$	103,879	$	70,046
Convertible debt income adjustments, net of tax	443		927		1,047		2,034
Net income adjusted for convertible debt as used for diluted earnings per share	$	62,436	$	33,435	$	104,926	$	72,080
Net income per share:
Basic	$	0.51	$	0.28	$	0.86	$	0.61
Diluted (1)	$	0.50	$	0.27	$	0.83	$	0.57
Shares used in computing net income per share:
Weighted average basic shares outstanding	121,374		115,808		120,401		114,587
Dilutive securities:
Stock option and unvested RSUs	1,365		1,655		1,474		1,869
Shares issuable upon conversion of the notes	3,185		8,456		4,059		9,194
Total dilutive securities	4,550		10,111		5,533		11,063
Weighted average diluted shares outstanding	125,924		125,919		125,934		125,650

Shares subject to stock options omitted from the calculation of income per share as their effect would have been anti-dilutive	2,430		874		2,740		724

(1)

As a result of the Company's expectation that it would likely settle all future note conversions in shares of the Company's common stock, the diluted income from continuing operations per share calculation includes the dilutive effect of convertible debt and is offset by the exclusion of interest expense and deferred financing fees related to the convertible debt of $0.4 million and $0.9 million, after-tax for the three month periods ended June 30, 2016 and 2015, respectively and the exclusion of $1.0 million and $2.0 million, after-tax for the six month periods ended June 30, 2016 and 2015, respectively.