Net Income per Share

9 Months Ended

Sep. 30, 2016

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 ("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 three and nine months ended September 30, 2016 and 2015 (in thousands, except per share data):



	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2016		2015		2016		2015
Numerator:
Net income	$	76,000	$	88,040	$	224,493	$	232,986
Denominator:
Shares used for basic net income per share	174,429		178,547		175,444		178,591
Effect of dilutive securities:
Stock options	341		667		380		858
RSUs and DSUs	847		1,150		701		1,193
Convertible senior notes	—		—		—		—
Warrants related to issuance of convertible senior notes	—		—		—		—
Shares used for diluted net income per share	175,617		180,364		176,525		180,642
Basic net income per share	$	0.44	$	0.49	$	1.28	$	1.30
Diluted net income per share	$	0.43	$	0.49	$	1.27	$	1.29

For the three and nine months ended September 30, 2016 and 2015, certain potential outstanding shares from stock options, service-based RSUs, convertible senior 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 three and nine months ended September 30, 2016 and 2015 are as follows (in thousands):



	For the Three Months Ended September 30,		For the Nine Months Ended September 30,
	2016	2015	2016	2015
Stock options	36	3	74	10
Service-based RSUs	1,450	157	2,672	269
Performance-based RSUs	1,245	1,148	884	1,148
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.