EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2016

EARNINGS PER SHARE:

Basic earnings per share are calculated by dividing net income by the weighted-average shares of common stock outstanding during the period. Diluted earnings per share are calculated by dividing net income by the weighted-average shares of common stock and dilutive common equivalent shares outstanding during the period. Dilutive common equivalent shares included in this calculation consist of dilutive shares issuable upon the assumed exercise of outstanding common stock options, the assumed vesting of outstanding restricted stock units, the assumed issuance of awards under the stock purchase plan and contingently issuable performance-based awards, as computed using the treasury stock method.

A summary of the earnings per share calculation is as follows:



	Year Ended December 31,
(in thousands, except per share amounts)	2016		2015		2014
Basic earnings per share:
Net income	$	47,890	$	39,147	$	59,544
Weighted-average common shares	28,925		29,001		29,976
Basic earnings per share	$	1.66	$	1.35	$	1.99
Diluted earnings per share (1):
Net income	$	47,890	$	39,147	$	59,544
Weighted-average common shares	28,925		29,001		29,976
Effect of dilutive securities:
Employee stock plans	694		695		853
Diluted weighted-average common shares	29,619		29,696		30,829
Diluted earnings per share	$	1.62	$	1.32	$	1.93

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(1)

The Company includes the shares underlying performance-based awards in the calculation of diluted earnings per share if the performance conditions have been satisfied as of the end of the reporting period and excludes such shares when the necessary conditions have not been met. The Company has excluded all performance-based awards in the 2014 calculation as the performance conditions for those awards were not met as of the end of the period. The Company has included in the 2016 and 2015 calculations those shares that were contingently issuable upon the satisfaction of the performance conditions as of the end of the respective periods.

In the year ended December 31, 2016 no outstanding stock awards were determined to be anti-dilutive and therefore were excluded from the computation of diluted earnings per share. In the years ended December 31, 2015 and 2014, approximately 8,000 and 37,000 outstanding stock awards were determined to be anti-dilutive, respectively, and therefore were excluded from the computation of diluted earnings per share.