Earnings Per Share

3 Months Ended

Mar. 31, 2017

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. Additionally, For the three month period ended March 31, 2016, the earnings per share amount was calculated using the if-converted method to account for the dilutive impact of the Convertible Notes. The Convertible Notes matured in the quarter ended June 30, 2016.

The Company’s potentially dilutive shares consist of: (i) vested and unvested stock options that are in-the-money, (ii) unvested RSUs, and (iii) for the three month period ended March 31, 2016, shares potentially issuable upon conversion of the Notes.

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 March 31,
	2017		2016
Net income	$	41,027	$	41,886
Convertible debt income adjustments, net of tax	—		604
Net income adjusted for convertible debt as used for diluted earnings per share	$	41,027	$	42,490
Net income per share:
Basic	$	0.33	$	0.35
Diluted (1)	$	0.33	$	0.34
Shares used in computing net income per share:
Weighted average basic shares outstanding	124,421		119,516
Dilutive securities:
Stock option and unvested RSUs	245		1,172
Shares issuable upon conversion of the notes	—		4,933
Total dilutive securities	245		6,105
Weighted average diluted shares outstanding	124,666		125,621

Shares subject to stock options omitted from the calculation of income per share as their effect would have been anti-dilutive	4,093		2,430

(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 for the periods prior to the complete conversion of the convertible debt on June 1, 2016, included the dilutive effect of convertible debt and was offset by the exclusion of interest expense and deferred financing fees related to the convertible debt of $0.6 million, after-tax for the three month period ended March 31, 2016.