Net Income per Share

12 Months Ended

Dec. 31, 2015

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, 2015, 2014 and 2013 (in thousands, except per share data):



	2015		2014		2013
Numerator:
Net income	$	321,406	$	333,948	$	293,487
Denominator:
Shares used for basic net income per share	178,391		178,279		178,196
Effect of dilutive securities:
Stock options	794		1,221		1,622
RSUs and DSUs	1,230		1,686		1,965
Convertible senior notes	—		—		—
Warrants related to issuance of convertible senior notes	—		—		—
Shares used for diluted net income per share	180,415		181,186		181,783
Basic net income per share	$	1.80	$	1.87	$	1.65
Diluted net income per share	$	1.78	$	1.84	$	1.61

For the years ended December 31, 2015, 2014 and 2013, 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 potentially outstanding shares excluded from the computation of diluted net income per share for the years ended December 31, 2015, 2014 and 2013 (in thousands):



	2015	2014	2013
Stock options	22	402	1,649
Service-based RSUs	660	786	188
Performance-based RSUs	1,007	570	985
Convertible senior notes	7,704	7,704	—
Warrants related to issuance of convertible senior notes	7,704	7,704	—
Total shares excluded from computation	17,097	17,166	2,822

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.