Net Income per Share

9 Months Ended

Sep. 30, 2013

Earnings Per Share Reconciliation [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, deferred stock units and restricted stock units (“RSUs”) issued by the Company.

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, 2013 and 2012 (in thousands, except per share data):

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2013		2012		2013		2012
Numerator:
Net income	$	79,756	$	48,231	$	213,138	$	135,697
Denominator:
Shares used for basic net income per share	178,235		177,455		178,008		178,040
Effect of dilutive securities:
Stock options	1,580		2,101		1,693		2,207
RSUs and deferred stock units	2,107		1,497		1,922		1,491
Shares used for diluted net income per share:	181,922		181,053		181,623		181,738
Basic net income per share	$	0.45	$	0.27	$	1.20	$	0.76
Diluted net income per share	$	0.44	$	0.27	$	1.17	$	0.75

For the three and nine months ended September 30, 2013 and 2012, certain potential outstanding stock options and service-based RSUs were excluded from the computation of diluted earnings per share because the effect of including these options and RSUs 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 earnings per share for the three and nine months ended September 30, 2013 and 2012 are as follows (in thousands):

	For the Three Months Ended September 30,		For the Nine Months Ended September 30,
	2013	2012	2013	2012
Options	1,308	2,438	1,782	2,735
Service-based RSUs	37	1,321	234	1,401
Performance-based RSUs	1,140	1,518	1,145	1,536
Total shares excluded from computation	2,485	5,277	3,161	5,672

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.