EARNINGS PER SHARE

The two-class method is utilized for the computation of Earnings Per Share (“EPS”). The two-class method requires a portion of net income to be allocated to participating securities, which are unvested awards of share-based payments with non-forfeitable rights to receive dividends or dividend equivalents. The Company’s restricted stock awards qualify as participating securities as each contain non-forfeitable rights to dividends. Income allocated to these participating securities is excluded from net earnings available to common shares, as shown in the table below. Basic EPS is computed by dividing net income available to basic common shares by the weighted average number of basic common shares outstanding during the period. Diluted EPS is computed by dividing net income available to diluted common shares by the weighted average number of dilutive common shares outstanding during the period.

The following table sets forth the calculation of EPS for the three and six months ended June 30, 2013 and 2012.



	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
	(In thousands, except per share amounts)
Weighted average basic common shares outstanding	23,315		21,650		22,796		21,640
Dilutive effect of contingently convertible notes and warrants	1,660		851		1,743		871
Dilutive effect of stock options, net of assumed repurchase of treasury stock	—		4		—		5
Dilutive effect of employee stock purchases, net of assumed repurchase of treasury stock	5		8		5		6
Weighted average dilutive common shares outstanding	24,980		22,513		24,544		22,522
Basic:
Net Income	$	37,388	$	28,625	59,506		51,742
Less: Earnings allocated to participating securities	1,689		1,628		2,684		2,822
Earnings available to basic common shares	$	35,699	$	26,997	$	56,822	$	48,920
Basic earnings per common share	$	1.53	$	1.25	$	2.49	$	2.26
Diluted:
Net Income	$	37,388	$	28,625	59,506		51,742
Less: Earnings allocated to participating securities	1,592		1,576		2,522		2,730
Earnings available to diluted common shares	$	35,796	$	27,049	$	56,984	$	49,012
Diluted earnings per common share	$	1.43	$	1.20	$	2.32	$	2.18

The weighted average number of stock-based awards not included in the calculation of the dilutive effect of stock-based awards was immaterial for the three and six months ended June 30, 2013 and 2012.

As discussed in Note 9, “Long-Term Debt” below, the Company is required to include the dilutive effect, if applicable, of the net shares issuable under the 2.25% Notes (as defined in Note 9) and the 2.25% Warrants sold in connection with the 2.25% Notes (“2.25% Warrants”) in its diluted common shares outstanding for the diluted earnings calculation. Although the ten-year call options that the Company purchased on its common stock in connection with the issuance of the 2.25% Notes (“2.25% Purchased Options”) have the economic benefit of decreasing the dilutive effect of the 2.25% Notes, the Company cannot factor this benefit into the diluted common shares outstanding for the diluted earnings calculation since the impact would be anti-dilutive. The average adjusted closing price of the Company's common stock for the three months ended March 31, 2013 and June 30, 2013 was more than the conversion price in effect at the end of each period. Therefore, the dilutive effect of the 2.25% Notes was included in the computation of diluted EPS for the three and six months ended June 30, 2013. Since the average price of the Company’s common stock for the three months ended March 31, 2012 and June 30, 2012 was less than the conversion price in effect at the end of the respective period, no net shares were included in the computation of diluted EPS for the three and six months ended June 30, 2012, as the impact would have been anti-dilutive. Refer to Note 9, "Long-Term Debt" for a description of the change to the conversion price, which occurred during the three months ended June 30, 2013 as a result of the Company’s decision to pay a cash dividend in excess of $0.14.

In addition, the Company is required to include the dilutive effect, if applicable, of the net shares issuable under the 3.00% Notes (as defined in Note 9, "Long-Term Debt" ) and the 3.00% Warrants sold in connection with the 3.00% Notes (“3.00% Warrants”). Although the ten-year call options that the Company purchased on its common stock in connection with the issuance of the 3.00% Notes (“3.00% Purchased Options”) have the economic benefit of decreasing the dilutive effect of the 3.00% Notes, the Company cannot factor this benefit into the diluted common shares outstanding for the diluted earnings calculation since the impact would be anti-dilutive. Since the average price of the Company’s common stock for the three months ended March 31, 2013 and 2012, as well as June 30, 2013 and 2012 was more than the conversion price in effect at the end of the respective periods, the dilutive effect of the 3.00% Notes was included in the computation of diluted earnings per share for the three and six months ended June 30, 2013 and 2012. The dilutive effect of the 3.00% Warrants was also included in the computation for the three and six months ended June 30, 2013. Refer to Note 9, "Long-Term Debt" for a description of the change to the conversion price, which occurred during the three months ended June 30, 2013 as a result of the Company’s decision to pay a cash dividend.