Net Income (Loss) Per Common Share

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Net Income (Loss) Per Common Share

NOTE 4 — NET INCOME (LOSS) PER COMMON SHARE

The computation of basic net income (loss) per common share is based on the weighted-average number of common shares outstanding during each period. The computation of diluted net income (loss) per common share is based on the weighted-average number of common shares outstanding during the period plus, when their effect is dilutive, incremental shares consisting of shares subject to stock options, restricted stock units, stock appreciation rights, ESPP shares, warrants, and shares issuable upon conversion of convertible debt.

In periods in which the Company reports net income, the Company uses the “if-converted” method in calculating the diluted net income per common share effect of the assumed conversion of the Convertible Notes. Under the “if-converted” method, interest expense related to the Convertible Notes is added back to net income, and the Convertible Notes (see Note 5, “Convertible Senior Notes Due 2017”) are assumed to have been converted into common shares at the beginning of the period (or issuance date) in periods in which there would have been a dilutive effect. The Convertible Notes can be settled in common stock, cash, or a combination thereof, at the Company’s election. During periods of net income, the Company’s intent and ability to settle the Convertible Notes in cash could impact the computation of diluted net income per common share. For the three and nine months ended September 30, 2014, the impact of the Convertible Notes has been excluded from the calculation of diluted net income per common share because the effect of their inclusion would have been anti-dilutive (approximately 5.1 million potentially dilutive common shares have been excluded).

In periods in which the Company reports a net loss, all common stock equivalents are deemed anti-dilutive such that basic net loss per common share and diluted net loss per common share are equal.

The following table reconciles the numerator and denominator used to calculate diluted net income (loss) per common share:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2014		2013			2014		2013
Numerator:
Net income (loss)	$	77,993	$	(13,313	)	$	112,247	$	(45,381	)
Denominator:
Weighted-average common shares, basic		77,056		75, 255			76,629		75,032
Dilutive effect of common stock equivalents		4,167		—			4,095		—
Weighted-average common shares, diluted		81,223		75,255			80,724		75,032
Net income (loss) per common share:
Basic net income (loss) per common share	$	1.01	$	(0.18	)	$	1.46	$	(0.60	)
Diluted net income (loss) per common share	$	0.96	$	(0.18	)	$	1.39	$	(0.60	)

Approximately 12.8 million potentially dilutive common shares have been excluded from the diluted net loss per common share computations for the three and nine months ended September 30, 2013, because such securities have an anti-dilutive effect on net loss per common share due to the Company’s net loss in each of these periods.