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 outstanding under our equity incentive plans, our Employee Stock Purchase Plan (“ESPP”), and for certain periods, our 3.875% convertible senior notes (“3.875% Convertible Notes”) and the 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 nine months ended September 30, 2011 and 2010, respectively:


	Three months ended September 30,				Nine months ended September 30,
(Dollars and shares in thousands, except per share amounts)	2011		2010		2011		2010
Numerator:
Net income available to common stockholders	$	37,571	$	37,787	$	136,328	$	77,464

Denominator:
Weighted average common shares outstanding-basic		43,233		41,930		42,882		41,679
Weighted average effect of dilutive securities:
Stock options and ESPP		452		511		610		652
Restricted stock units		106		72		122		70
3.875% Convertible Notes		—		—		27		—

Denominator for diluted calculation		43,791		42,513		43,641		42,401

Earnings per common share:
Basic	$	0.87	$	0.90	$	3.18	$	1.86

Diluted	$	0.86	$	0.89	$	3.12	$	1.83

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 nine months ended September 30, 2011 and 2010, respectively:


	Three months ended September 30,				Nine months ended September 30,
(Shares in thousands)	2011		2010		2011		2010
Stock options		337		6		239		8
Restricted stock units		10		5		134		4

Total		347		11		373		12

Concurrent with the issuance of our 3.875% Convertible Notes, we entered into a convertible note hedge and warrant agreement. The warrants expired ratably over 60 business days beginning on July 15, 2011. The common shares under these warrants were excluded from the diluted EPS calculation for all periods presented as they were deemed to be anti-dilutive based on the conversion price of $64.43 per common share. For more information on our 3.875% Convertible Notes and the 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.