Note 3 - Net Income per Share

12 Months Ended

Dec. 31, 2011

Earnings Per Share [Text Block]

3. Net Income per Share

We compute net income per basic share using the weighted-average number of shares of common stock outstanding during the period less the weighted-average number of restricted stock shares that are subject to repurchase.

We compute net income per diluted share using the sum of the weighted-average number of common and common equivalent shares outstanding. Common equivalent shares used in the computation of net income per diluted share include shares that may be issued under our stock options and restricted stock awards, our 2.00% Convertible Senior Notes due February 15, 2012 (2012 Notes), our 2.875% Convertible Senior Notes due February 15, 2015 (February 2015 Notes), and our 2.75% Convertible Subordinated Notes due August 16, 2023 (2023 Notes), on a weighted average basis for the period that the notes were outstanding, including the effect of adding back interest expense and the underlying shares using the if-converted method. Our 2023 Notes were fully retired as of September 14, 2010. Our 2012 Notes were fully retired as of June 30, 2011.

The computation for net income per basic and diluted share was:

	Year Ended December 31,
(In thousands)	2011		2010		2009
Numerator
Net income	$	199,389	$	91,874	$	189,660
Add back interest expense for convertible notes, net of estimated tax of $3.0 million, $2.7 million, and $3.8 million for the years ended December 31, 2011, 2010 and 2009, respectively (see Note 12)		5,544		5,087		7,079
Income used to compute net income per diluted share	$	204,933	$	96,961	$	196,739
Denominator
Total weighted-average shares used to compute net income per basic share		139,663		126,578		119,402
Effect of dilutive stock options		13		9		18
Restricted stock outstanding		25		103		42
Assumed conversion of 2012 notes		9,790		29,870		28,809
Assumed conversion of February 2015 notes		27,950		4,229		-
Assumed conversion of 2023 notes		-		18,012		36,129
Shares used to compute net income per diluted share		177,441		178,801		184,400

We excluded 0.2 million, 0.3 million, and 2.5 million of outstanding stock options from our net income per diluted share calculations for the years ended December 31, 2011, 2010 and 2009, respectively, because the option exercise prices were greater than the average market prices of our common stock during these periods; therefore, their effect was anti-dilutive.

In May 2011, we issued 3.75% Senior Convertible Notes due May 1, 2015 (May 2015 Notes). If converted, the principal amount of our May 2015 Notes will be settled in cash and the difference between the conversion value and the principal amounts will be settled in shares of the Company’s common stock. For the year ended December 31, 2011, we excluded a weighted average of 13.3 million shares of potential dilution for our May 2015 Notes and a weighted average of 13.3 million shares of potential dilution for our warrants because the conversion price and exercise price exceeded the average market price of our common stock and were therefore anti-dilutive. These securities could be dilutive in future periods. In addition, we excluded a weighted average of (13.3) million shares for our purchased call options because they will always be anti-dilutive, therefore, will have no effect on diluted net income per share.

For information related to the conversion rates on our convertible debt, see Note 12.