Earnings Per Share

12 Months Ended

Dec. 31, 2019

Basic earnings per share is calculated by dividing income available to stockholders by the weighted-average number of

common shares outstanding during each period. Diluted earnings per share is computed using the weighted-average number of common and dilutive common share equivalents outstanding during the period. Dilutive common share equivalents consist of

shares issuable upon the exercise or settlement of stock awards and shares issuable under the employee stock purchase plan

(calculated using the treasury stock method) during the period they were outstanding and potential dilutive common shares

from the conversion spread on the Company’s Convertible Notes and the Company's warrants.

The following table sets forth the computation of basic and diluted net income per share (in thousands, except per share information):


	Year Ended December 31,
	2019		2018		2017
Numerator:
Income from continuing operations	$	681,813	$	575,667	$	21,985
Loss from discontinued operations, net of income taxes	—		—		(42,704)
Net income (loss)	$	681,813	$	575,667	$	(20,719)
Denominator:
Denominator for basic earnings per share - weighted-average shares outstanding	130,853		136,030		150,779
Effect of dilutive employee stock awards	2,196		2,653		2,493
Effect of dilutive Convertible Notes	1,422		5,769		2,231
Effect of dilutive warrants	1,024		1,482		—
Denominator for diluted earnings per share - weighted-average shares outstanding	135,495		145,934		155,503

Basic earnings (loss) per share:
Income from continuing operations	$	5.21	$	4.23	$	0.15
Loss from discontinued operations, net of income taxes	—		—		(0.28)
Basic net earnings (loss) per share	$	5.21	$	4.23	$	(0.13)

Diluted earnings (loss) per share:
Income from continuing operations	$	5.03	$	3.94	$	0.14
Loss from discontinued operations, net of income taxes	—		—		(0.27)
Diluted net earnings (loss) per share:	$	5.03	$	3.94	$	(0.13)

For the years ended December 31, 2019 and 2018, the weighted-average number of shares outstanding used in the computation of diluted earnings per share includes the dilutive effect of the Company's warrants, as the average stock price during the year was above the weighted-average warrant strike price of $94.42 and $94.94 per share, respectively. For the year ended 2017, the weighted-average number of shares outstanding used in the computation of diluted earnings per share does not include common stock issuable upon the exercise of the Company's warrants. The effects of these potentially issuable shares were not included in the calculation of diluted earnings per share because the effect would have been anti-dilutive. Anti-dilutive stock-based awards excluded from the calculations of diluted earnings per share were immaterial during the periods presented.

The Company uses the treasury stock method for calculating any potential dilutive effect of the conversion spread on its Convertible Notes on diluted earnings per share because upon conversion the Company paid cash up to the aggregate principal amount of the Convertible Notes converted and delivered shares of common stock in respect of the remainder of the Company’s conversion obligation in excess of the aggregate principal amount of the Convertible Notes converted. The conversion spread had a dilutive impact on diluted earnings per share when the average market price of the Company’s common stock for a given period exceeded the conversion price. For the years ended December 31, 2019, 2018, and 2017, the average market price of the Company's common stock exceeded the conversion price, therefore, the dilutive effect of the Convertible Notes was included in the denominator of diluted earnings per share. See Note 13 to for detailed information on the Convertible Notes offering.