Net Income per Share

9 Months Ended

Sep. 30, 2015

Earnings Per Share Reconciliation [Abstract]

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, restricted stock units (“RSUs”), deferred stock units, 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 three and nine months ended September 30, 2015 and 2014 (in thousands, except per share data):



	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2015		2014		2015		2014
Numerator:
Net income	$	88,040	$	91,155	$	232,986	$	236,841
Denominator:
Shares used for basic net income per share	178,547		178,186		178,591		178,324
Effect of dilutive securities:
Stock options	667		1,146		858		1,257
RSUs and deferred stock units	1,150		1,623		1,193		1,697
Convertible senior notes	—		—		—		—
Warrants related to issuance of convertible senior notes	—		—		—		—
Shares used for diluted net income per share	180,364		180,955		180,642		181,278
Basic net income per share	$	0.49	$	0.51	$	1.30	$	1.33
Diluted net income per share	$	0.49	$	0.50	$	1.29	$	1.31

For the three and nine months ended September 30, 2015 and 2014, 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 was 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 potential outstanding shares excluded from the computation of diluted net income per share for the three and nine months ended September 30, 2015 and 2014 are as follows (in thousands):



	For the Three Months Ended September 30,		For the Nine Months Ended September 30,
	2015	2014	2015	2014
Stock options	3	261	10	462
Service-based RSUs	157	797	269	773
Performance-based RSUs	1,148	565	1,148	572
Convertible senior notes	7,704	7,704	7,704	7,704
Warrants related to issuance of convertible senior notes	7,704	7,704	7,704	7,704

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.