Earnings per Share

9 Months Ended

Sep. 30, 2015

Basic earnings per share (“EPS”) is calculated by dividing net income by the weighted average number of common shares outstanding during the reporting period. Diluted EPS includes the components of basic EPS and also gives effect to dilutive common equivalent shares outstanding during the reporting period. We calculate diluted EPS using the treasury stock method for unvested restricted stock, and the if-converted method for convertible debt instruments. For unvested restricted stock, assumed proceeds under the treasury stock method would include unamortized compensation expense and windfall tax benefits or shortfalls. The determination of potentially issuable shares from our convertible debt instruments does not consider satisfaction of the conversion requirements and the shares are included in the determination of diluted EPS as of the beginning of the period, if dilutive. In addition, interest expense, net of tax, related to dilutive convertible debt instruments is added back to earnings in calculating diluted EPS.

The following table reconciles the numerators and denominators used to calculate basic and diluted EPS and also indicates the number of antidilutive securities.



	Three months ended September 30,				Nine months ended September 30,
	2015		2014		2015		2014
	(In thousands, except per share data and as otherwise noted)
Basic earnings per share:

Net income	$	822,852	$	72,017	$	1,069,582	$	177,521

Weighted average common shares outstanding	339,701		338,626		339,504		338,488

Basic income per share	$	2.42	$	0.21	$	3.15	$	0.52

Diluted earnings per share:

Net income	$	822,852	$	72,017	$	1,069,582	$	177,521

Interest expense, net of tax (1):
2% Convertible Senior Notes due 2020	1,982		3,049		5,946		9,148
5% Convertible Senior Notes due 2017	3,050		—		9,150		—
9% Convertible Junior Subordinated Debentures due 2063	5,697		—		17,090		—

Diluted income available to common shareholders	$	833,581	$	75,066	$	1,101,768	$	186,669



Weighted average shares - basic	339,701		338,626		339,504		338,488

Effect of dilutive securities:
Unvested restricted stock units	1,983		3,008		2,128		3,043
2% Convertible Senior Notes due 2020	71,942		71,942		71,942		71,942
5% Convertible Senior Notes due 2017	25,670		—		25,670		—
9% Convertible Junior Subordinated Debentures due 2063	28,853		—		28,853		—

Weighted average shares - diluted	468,149		413,576		468,097		413,473

Diluted income per share	$	1.78	$	0.18	$	2.35	$	0.45

Antidilutive securities (in millions)	—		54.5		—		54.5

(1) Due to the valuation allowance recorded against deferred tax assets, the three and nine months ended September 30, 2014 were not tax effected. The three and nine months ended September 30, 2015 have been tax effected at a rate of 35%.