Computation of Loss Per Share

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Computation of Loss Per Share

Computation of Loss Per Share

For the three and six months ended June 30, 2016 and 2015, basic loss per share was computed by dividing net loss 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.

As the effect would be anti-dilutive, 0.7 million of outstanding stock options and RSUs were excluded from the computation of loss per share for both the three and six months ended June 30, 2016, and 1.0 million and 1.1 million of outstanding stock options and RSUs were excluded from the computation of loss per share for the three and six months ended June 30, 2015, respectively.

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. Stock options totaling 3.2 million for both the three and six months ended June 30, 2016, and 1.9 million and 1.2 million for the three and six months ended June 30, 2015 were not included in the computation of diluted EPS because the exercise of such options would be anti-dilutive.

As discussed in Note 6, the Company issued its 3.25% Convertible Senior Notes due 2020 (“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