Note 9 - Earnings per Share

Basic net income (loss) per common share is calculated by dividing net income (loss) available to common shareholders by the basic weighted-average common shares outstanding for the respective period. The Company’s earnings per share calculations reflect the impact of any repurchases of shares of common stock made by the Company.

Diluted net income per common share is calculated by dividing adjusted net income by the diluted weighted-average common shares outstanding, which includes the effect of potentially dilutive securities. Potentially dilutive securities for this calculation consist of in-the-money outstanding options, unvested RSUs, contingent PSUs, and shares into which the 3.50% Senior Convertible Notes were convertible. When there is a loss from from continuing operations, as was the case for the three months ended September 30, 2012, all potentially dilutive shares are anti-dilutive and are consequently excluded from the calculation of earnings per share.

PSUs represent the right to receive, upon settlement of the PSUs after completion of the three-year performance period, a number of shares of the Company’s common stock that may range from zero to two times the number of PSUs granted on the award date. The number of potentially dilutive shares related to PSUs is based on the number of shares, if any, that would be issuable at the end of the respective reporting period, assuming that date was the end of the contingency period applicable to such PSUs. For additional discussion on PSUs, please refer to Note 7 - Compensation Plans under the heading Performance Stock Units Under the Equity Incentive Compensation Plan.

The Company called for redemption its 3.50% Senior Convertible Notes on April 2, 2012, and the majority of the holders of the outstanding 3.50% Senior Convertible Notes elected to convert their notes. The Company issued 864,106 common shares upon conversion and these shares were included in the calculation of basic weighted-average common shares outstanding for the three and nine months ended September 30, 2012. Please refer to Note 5 - Long-Term Debt for additional discussion. Prior to calling the notes for redemption, the Company’s 3.50% Senior Convertible Notes had a net-share settlement right giving the Company the option to irrevocably elect, by notice to the trustee under the indenture for the notes, to settle the Company’s obligation, in the event that holders of the notes elected to convert all or a portion of their notes, by delivering cash in an amount equal to each $1,000 principal amount of notes surrendered for conversion and, if applicable, at the Company’s option, shares of common stock or cash, or any combination of common stock and cash, for the amount of conversion value in excess of the principal amount. Prior to the settlement of the Company’s 3.50% Senior Convertible Notes, potentially dilutive shares associated with this conversion feature were accounted for using the treasury stock method when shares of the Company’s common stock traded at an average closing price that exceeded the $54.42 conversion price. Prior to conversion, shares of the Company’s common stock traded at an average closing price exceeding the conversion price, and were included on an adjusted weighted basis for the portion of the nine months ended September 30, 2012, for which they were outstanding. Shares of the Company’s common stock traded at an average closing price exceeding the conversion price for the three-month and nine-month periods ended September 30, 2011, making them dilutive for those periods.

The treasury stock method is used to measure the dilutive impact of unvested RSUs, contingent PSUs, in-the-money stock options, and 3.50% Senior Convertible Notes.

The following table sets forth the calculations of basic and diluted earnings per share:



	For the Three Months Ended September 30,					For the Nine Months Ended September 30,
	2012			2011		2012		2011
	(in thousands, except per share amounts)
Net income (loss)	$	(38,336	)	$	230,097	$	12,889	$	336,127
Basic weighted-average common shares outstanding	65,745			63,904		64,815		63,665
Add: dilutive effect of stock options, unvested RSUs, and contingent PSUs	—			2,062		1,870		2,589
Add: dilutive effect of 3.50% Senior Convertible Notes	—			1,420		658		1,136
Diluted weighted-average common shares outstanding	65,745			67,386		67,343		67,390
Basic net income (loss) per common share	$	(0.58	)	$	3.60	$	0.20	$	5.28
Diluted net income (loss) per common share	$	(0.58	)	$	3.41	$	0.19	$	4.99