Net Income per Share

9 Months Ended

Sep. 30, 2011

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, deferred stock units, restricted stock units (“RSUs”) and convertible notes.

The following table sets forth the components used in the computation of basic and diluted net income per common share (in thousands, except per share data):



	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2011		2010		2011		2010
Numerator:
Net income	$	42,285	$	39,709	$	140,823	$	118,710
Add back of interest expense on 1% convertible senior notes (net of taxes)	—		146		—		964
Numerator for diluted net income per common share	$	42,285	$	39,855	$	140,823	$	119,674
Denominator:
Denominator for basic net income per common share	183,085		181,457		185,515		175,292
Effect of dilutive securities:
Stock options	1,928		3,988		2,698		3,807
Effect of escrow contingencies	—		339		—		339
RSUs and deferred stock units	691		1,399		876		1,332
Assumed conversion of 1% convertible senior notes	—		4,088		—		9,484
Denominator for diluted net income per common share	185,704		191,271		189,089		190,254
Basic net income per common share	$	0.23	$	0.22	$	0.76	$	0.68
Diluted net income per common share	$	0.23	$	0.21	$	0.74	$	0.63

Outstanding options to acquire an aggregate of 4.1 million and 0.9 million shares of common stock for the three months ended September 30, 2011 and 2010, respectively, were excluded from the calculation of diluted earnings per share because the exercise prices of these stock options were greater than the average market price of the Company’s common stock during the respective periods. As a result, the effect of including these options would be anti-dilutive. Similarly, outstanding options to acquire an aggregate of 2.8 million and 1.4 million shares of common stock for the nine months ended September 30, 2011 and 2010, respectively, were excluded from the calculation of diluted earnings per share because the exercise prices of the stock options were greater than the average market price of the Company's common stock during the respective periods. Additionally, 2.8 million and 3.0 million shares of common stock issuable in respect of outstanding performance-based RSUs were excluded from the computation of diluted net income per share for the three and nine months ended September 30, 2011, respectively, and 3.1 million and 3.3 million shares of common stock issuable in respect of outstanding performance-based RSUs were excluded from the computation of diluted net income per share for the three and nine months ended September 30, 2010, respectively, because the performance conditions had not been met as of those dates.

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.