2. Net Income per Share



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
Net Income per Basic and Diluted Share:	2014		2013		2014		2013
(in thousands except per share amounts)
Numerator
Net income used to compute net income per basic share	$	102,235	$	56,225	$	267,173	$	203,438
Add back interest expense for convertible notes, net of estimated tax of approximately $0 and $7 for the three months ended September 30, 2014 and 2013, respectively, and $0 and $13 for the nine months ended September 30, 2014 and 2013, respectively.	—		12		—		25
Net income used to compute net income per diluted share	$	102,235	$	56,237	$	267,173	$	203,463

Denominator
Weighted-average shares used to compute net income per basic share	160,268		139,848		157,274		139,830
Restricted stock outstanding	96		80		113		76
Effect of dilutive stock options	22		20		22		19
Assumed conversion of Series 2012 Notes	2,247		9,674		3,301		10,141
Assumed conversion of May 2015 Notes	4,261		4,910		4,431		5,160
Assumed conversion of February 2015 Notes	—		61		—		140
Weighted-average shares used to compute net income per diluted share	166,894		154,593		165,141		155,366

Net income per share - basic	$	0.64	$	0.40	$	1.70	$	1.45
Net income per share - diluted	$	0.61	$	0.36	$	1.62	$	1.31

We compute diluted net income per share using the sum of the weighted-average number of common and common equivalents shares outstanding. Common equivalent shares used in the computation of diluted net income per share include shares that may be issued under our stock options and restricted stock awards, our February 2018 Notes, our Series 2012 Notes and our May 2015 Notes on a weighted average basis for the period that the notes were outstanding, including the effect of adding back interest expense and the underlying shares using the if converted method. In the first quarter of 2012, $179.0 million aggregate principal of our February 2015 Notes was exchanged for our Series 2012 Notes, in the third quarter of 2013, $1.0 million aggregate principal of our February 2015 Notes was exchanged for our Series 2012 Notes, and the February 2015 Notes were retired, and in the first quarter of 2014, $131.7 million aggregate principal of our Series 2012 Notes was retired in a privately negotiated exchange and purchase agreements.

In May 2011, we issued our May 2015 Notes, in January and February 2012, we issued our Series 2012 Notes, and in February 2014, we issued our February 2018 Notes. The February 2018 Notes, Series 2012 Notes and May 2015 Notes are net share settled, with the principal amount settled in cash and the excess settled in our common stock. The weighted average share adjustments related to our February 2018 Notes, Series 2012 Notes and May 2015 Notes, shown in the table above, include the shares issuable in respect of such excess.

May 2015 Notes Purchase Call Option and Warrant Potential Dilution

We excluded from our calculations of diluted net income per share 22.2 million and 20.8 million shares for the three months ended September 30, 2014 and 2013, respectively, and 22.2 million and 20.8 million shares for the nine months ended September 30, 2014 and 2013, for warrants issued in 2011, because conversion of the underlying May 2015 Notes is not assumed. These securities could be dilutive in future periods. Our purchased call options, issued in 2011, will always be anti-dilutive and therefore 26.1 million and 24.4 million shares were excluded from our calculations of net income per diluted share for the three months ended September 30, 2014 and 2013, respectively, and 26.1 million and 24.4 million shares were excluded from our calculation of diluted net income per share for the nine months ended September 30, 2014 and 2013, respectively, because they have no effect on diluted net income per share. For information related to the conversion rates on our convertible debt, see Note 9.

February 2018 Notes Purchase Call Option and Warrant Potential Dilution

We excluded from our calculation of net income per diluted share 29.0 million shares for the three months ended September 30, 2014, 29.0 million shares for the nine months ended September 30, 2014, for warrants issued in February 2014, because the exercise price of the warrants exceeded the VWAP of our common stock and conversion of the underlying February 2018 Notes is not assumed, no stock would be issuable upon conversion. These securities could be dilutive in future periods. Our purchased call options, issued in February 2014, will always be anti-dilutive and therefore 32.7 million shares were excluded from our calculation of net income per diluted share for the three months ended September 30, 2014, and 32.7 million shares were excluded from our calculation of net income per diluted share for the nine months ended September 30, 2014, because they have no effect on diluted net income per share. For information related to the conversion rates on our convertible debt, see Note 9.

Anti-Dilutive Effect of Stock Options and Restricted Stock Awards

For the three and nine months ended September 30, 2014, we excluded approximately 4,000 and 47,000 shares underlying outstanding stock options, respectively, calculated on a weighted average basis, from our net income per diluted share calculations because their effect was anti-dilutive.

For the three months ended September 30, 2013, we excluded approximately 121,000 and 10,000 shares underlying outstanding stock options and restricted stock awards, respectively, calculated on a weighted average basis, from our net income per diluted share calculations because their effect was anti-dilutive. For the nine months ended September 30, 2013, we excluded approximately 133,000 and zero shares underlying outstanding stock options and restricted stock awards, respectively, calculated on a weighted average basis, from our net income per diluted share calculations because their effect was anti-dilutive.