NET INCOME PER SHARE

9 Months Ended

Sep. 30, 2013

Earnings Per Share [Abstract]

NET INCOME PER SHARE

NET INCOME PER SHARE

The Company computes basic net income per share by dividing net income by the weighted average number of common shares outstanding during the period.  Diluted net income per share is based upon the weighted average number of common and common equivalent shares outstanding during the period.

Common equivalent shares related to stock options, restricted stock units and performance share units are calculated using the treasury stock method.  Performance share units are included in the weighted average common equivalent shares based on the number of shares that would be issued if the end of the reporting period were the end of the performance period, if the result would be dilutive.

The Company's convertible debt issues have net share settlement features requiring the Company upon conversion to settle the principal amount of the debt for cash and the conversion premium for cash or shares of the Company's common stock, at the Company's option.  The convertible notes are included in the calculation of diluted net income per share if their inclusion is dilutive under the treasury stock method.

A reconciliation of the weighted average number of shares outstanding used in calculating diluted earnings per share is as follows (in thousands): 

	Three Months Ended September 30,		Nine Months Ended September 30,
	2013	2012	2013	2012
Weighted average number of basic common shares outstanding	51,363	49,851	50,690	49,830
Weighted average dilutive stock options, restricted stock units and performance share units	338	353	359	475
Assumed conversion of convertible debt	1,283	981	1,177	990
Weighted average number of diluted common and common equivalent shares outstanding	52,984	51,185	52,226	51,295
Anti-dilutive potential common shares	2,923	2,335	2,931	2,246

Anti-dilutive potential common shares for the three and nine months ended September 30, 2013 include approximately 2.4 million and 2.5 million shares, respectively, that could be issued under the Company's outstanding convertible notes, if the Company experiences substantial increases in its common stock price.  Under the treasury stock method, the convertible notes will generally have a dilutive impact on net income per share if the Company's average stock price for the period exceeds the conversion price for the convertible notes.

In 2006, the Company issued $172.5 million aggregate principal amount of convertible notes due September 30, 2013 (the "2013 Notes"). In 2006, the Company also entered into hedge transactions (the "Conversion Spread Hedges") relating to the potential dilution of the Company's common stock upon conversion of the 2013 Notes at their stated maturity date.

The Conversion Spread Hedges were settled in October 2013 and the Company received 42,160 shares of common stock from the counterparties. The settlement will be accounted for as an equity transaction. Since the impact of the Conversion Spread Hedges was anti-dilutive, it is excluded from the calculation of net income per share until the shares of common stock are received in October.