Computation of Earnings (Loss) Per Share

Basic earnings (loss) per share is computed by dividing net earnings (loss) by the weighted-average number of common shares outstanding, including restricted stock units (“RSUs”) vested during the period. Diluted earnings per share (“EPS”) is computed based on the sum of the weighted average number of common shares and potentially dilutive common shares outstanding during the period. Potentially dilutive common shares consist of shares issuable from stock options, RSUs and the 3.25% Convertible Senior Notes due 2020 (“Convertible Senior Notes”). Potentially dilutive common shares from outstanding stock options and unvested RSUs are determined using the average share price for each period under the treasury stock method. As discussed in Note 6, 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”). The Convertible Senior Notes have a dilutive impact when the average market price of the Company’s common stock exceeds the applicable conversion price of the notes.

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 September 30,		Nine Months Ended September 30,
	2017	2016	2017	2016
Shares used in basic loss per share (weighted-average common shares outstanding)	33,913	32,673	33,538	32,645
Effect of potentially dilutive shares issuable from stock options, restricted stock units and Convertible Senior Notes	—	—	—	—
Shares used in diluted loss per share calculation	33,913	32,673	33,538	32,645
Potentially dilutive shares excluded from calculation due to anti-dilutive effect	—	1,856	1,121	2,892

Potentially dilutive shares excluded from the calculation above represent stock options when the combined exercise price and unrecognized stock-based compensation are greater than the average market price for the Company’s common stock because their effect is anti-dilutive.

Additionally, the number of potentially dilutive shares issuable under the stock options, RSUs and Convertible Senior Notes that would have been included in the diluted EPS calculation if the Company had earnings amounted to 1.8 million and 1.2 million for the three and nine months ended September 30, 2017, respectively. The number of stock options and RSUs that would have been included in the diluted EPS calculation if the Company had earnings amounted to 0.9 million and 0.8 million for the three and nine months ended September 30, 2016, respectively. No conversion premium existed on the Convertible Senior Notes as of