Net Income per Share

12 Months Ended

Dec. 31, 2014

Earnings Per Share [Abstract]

Net Income per Share

Net Income per Share

Basic net income per share is computed using the weighted average number of common shares outstanding during the applicable period. Diluted net income per share is computed using the weighted average number of common shares outstanding during the period, plus the dilutive effect of potential common stock. Potential common stock consists of shares issuable pursuant to stock options, RSUs, DSUs, convertible senior notes and warrants issued by the Company. The dilutive effect of outstanding awards and convertible securities is reflected in diluted earnings per share by application of the treasury stock method.

The following table sets forth the components used in the computation of basic and diluted net income per share for the years ended December 31, 2014, 2013 and 2012 (in thousands, except per share data):

	2014		2013		2012
Numerator:
Net income	$	333,948	$	293,487	$	203,989
Denominator:
Shares used for basic net income per share	178,279		178,196		177,900
Effect of dilutive securities:
Stock options	1,221		1,622		2,182
RSUs and DSUs	1,686		1,965		1,667
Convertible senior notes	—		—		—
Warrants related to issuance of convertible senior notes	—		—		—
Shares used for diluted net income per share	181,186		181,783		181,749
Basic net income per share	$	1.87	$	1.65	$	1.15
Diluted net income per share	$	1.84	$	1.61	$	1.12

For the years ended December 31, 2014, 2013 and 2012, certain potential outstanding shares from stock options, service-based RSUs, convertible notes and warrants were excluded from the computation of diluted net income per share because the effect of including these items would be anti-dilutive. Additionally, certain performance-based RSUs were excluded from the computation of diluted net income per share because the underlying performance conditions for such RSUs had not been met as of these dates. The number of potentially outstanding shares excluded from the computation of diluted net income per share for the years ended December 31, 2014, 2013 and 2012 (in thousands):

	2014	2013	2012
Stock options	402	1,649	2,551
Service-based restricted stock units	786	188	1,154
Performance-based restricted stock units	570	985	1,734
Convertible senior notes	—	—	—
Warrants related to issuance of convertible senior notes	—	—	—
Total shares excluded from computation	1,758	2,822	5,439

The calculation of assumed proceeds used to determine the diluted weighted average shares outstanding under the treasury stock method in the periods presented was adjusted by tax windfalls and shortfalls associated with all of the Company’s outstanding stock awards. Such windfalls and shortfalls are computed by comparing the tax deductible amount of outstanding stock awards to their grant-date fair values and multiplying the results by the applicable statutory tax rate. A positive result creates a windfall, which increases the assumed proceeds, and a negative result creates a shortfall, which reduces the assumed proceeds.