2. Stockholders’ Equity and Earnings Per Share (“EPS”)

Earnings Per Share

Basic EPS is the amount of earnings available to each share of common stock outstanding during the reporting period. Diluted EPS is the amount of earnings available to each share of common stock outstanding during the reporting period adjusted to include the effect of potentially dilutive common shares. Potentially dilutive common shares include incremental shares issued for stock options and restricted stock units and awards outstanding under our equity incentive plans, our Employee Stock Purchase Plan (“ESPP”), our 3.875% convertible senior notes (“3.875% Convertible Notes”) and associated convertible note hedge and warrant agreement. Potentially dilutive common shares are excluded from the computation of dilutive EPS in periods in which the effect would be anti-dilutive. The following is a reconciliation of basic EPS to diluted EPS for the three and six months ended June 30, 2011 and 2010, respectively:


	Three months ended June 30,				Six months ended June 30,
(Dollars and shares in thousands, except per share amounts)	2011		2010		2011		2010
Numerator:
Net income available to common stockholders	$	65,750	$	21,120	$	98,757	$	39,677

Denominator:
Weighted average common shares outstanding-basic		42,924		41,720		42,704		41,558
Weighted average effect of dilutive securities:
Stock options and ESPP		654		694		678		712
Restricted stock units		101		62		100		70
3.875% Convertible Notes		61		—		77		—

Denominator for diluted calculation		43,740		42,476		43,559		42,340

Earnings per common share:
Basic	$	1.53	$	0.51	$	2.31	$	0.95

Diluted	$	1.50	$	0.50	$	2.27	$	0.94

The following table summarizes the common shares excluded from the diluted EPS calculation as they were deemed to be anti-dilutive for the three and six months ended June 30, 2011 and 2010, respectively:


	Three months ended June 30,				Six months ended June 30,
(Shares in thousands)	2011		2010		2011		2010
Stock options		44		7		60		8
Restricted stock units		—		1		2		7

Total		44		8		62		15

In addition to the above, at June 30, 2011, 4.7 million common shares under warrants associated with our 3.875% Convertible Notes were outstanding but also excluded from the diluted EPS calculation as they were deemed to be anti-dilutive based on the conversion price of $64.43 per common share. Concurrent with the issuance of our 3.875% Convertible Notes, we entered into a convertible note hedge and warrant agreement. For more information on our 3.875% Convertible Notes and associated convertible note hedge and warrant agreement, see Note 7—“Short-Term Borrowings and Long-Term Debt” and Note 8—“Derivative Financial Instruments”.

Our $250 million 3.875% Convertible Notes matured on April 15, 2011. All of the notes were converted prior to maturity and we made an aggregate $260.4 million conversion settlement payment. We paid $250.0 million in cash (representing total principal) and $10.4 million through the issuance of 187,760 shares of our common stock (representing total conversion premium value). In addition, in connection with the conversion settlement, we received 186,736 shares of our common stock, valued at $10.3 million, from the associated convertible note hedge. Accordingly, there was no significant net impact on our total stockholders’ equity with respect to settling the conversion premium value.