Computation of Loss Per Share

3 Months Ended

Mar. 31, 2016

Computation of (Loss) Earnings Per Share

For the three months ended March 31, 2016 and 2015, basic (loss) earnings per share was computed by dividing net (loss) income by the weighted-average number of common shares outstanding, including restricted stock units (RSUs) vested during the period. Diluted earnings per share (“EPS”) reflects the potential dilution that could occur if the earnings were divided by the weighted-average number of common shares and potentially dilutive common shares from outstanding stock options as well as unvested RSUs. Potential dilutive common shares were calculated using the treasury stock method and represent incremental shares issuable upon exercise of the Company’s outstanding stock options and unvested RSUs.

For the three months ended March 31, 2016, there were no differences between the number of common shares used for the basic and diluted EPS computation because the Company incurred a net loss and the effect would be anti-dilutive. Stock options and RSUs that would have been included in the diluted EPS calculation if the Company had earnings amounted to 0.6 million for the three months ended March 31, 2016.

Additionally, stock options are excluded from the calculation of diluted EPS when the combined exercise price, unrecognized stock-based compensation and expected tax benefits upon exercise are greater than the average market price for the Company’s common stock because their effect is anti-dilutive. For the three months ended March 31, 2016 and 2015, stock options totaling 3.1 million and 1.0 million, respectively, were not included in the computation of diluted EPS because the exercise of such options would be anti-dilutive.

The following table reconciles the weighted-average shares used in computing basic and diluted earnings (loss) per share in the respective periods (in thousands):



	Three months ended March 31,
	2016	2015
Shares used in basic (loss) earnings per share (weighted-average common shares outstanding)	32,727	34,641
Effect of dilutive stock options and RSUs	—	1,104
Shares used in diluted (loss) earnings per share calculations	32,727	35,745

As discussed in Note 6, the Company issued Convertible Senior Notes (“Convertible Senior Notes”) in December 2014. It is the Company’s intent and policy to settle conversions through combination settlement, which essentially involves repayment of an amount of cash equal to the “principal portion” and delivery of the “share amount” in excess of the conversion value over the principal portion in cash or shares of common stock (“conversion premium”). No conversion premium existed as of