Earnings Per Share

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

Basic earnings per common share is calculated by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per common share is calculated by dividing net income, adjusted for the effect of assumed conversion of convertible notes, by the weighted average number of common shares outstanding combined with dilutive common share equivalents outstanding, if the effect is dilutive.

In connection with the sale of the 2008 Notes, the Company entered into a Share Lending Agreement for 3.8 million shares of the Company’s common stock (see Note 9). Contractual undertakings of the Borrower had the effect of substantially eliminating the economic dilution that otherwise would result from the issuance of the Borrowed Shares, and all shares outstanding under the Share Lending Agreement were contractually obligated to be returned to the Company. As a result, shares loaned under the Share Lending Agreement were not considered outstanding for the purpose of computing and reporting earnings per share. The Share Lending Agreement was terminated on January 22, 2013 upon the return of all Borrowed Shares to the Company.

On February 15, 2013, the Company repurchased the remaining $5.2 million of outstanding 2008 Notes for cash. Following this repurchase, the Company no longer has any outstanding convertible senior notes. For the nine months ended September 30, 2013, the Company’s convertible notes were excluded from the calculation of diluted earnings per common share, as inclusion was anti-dilutive. In addition, for the three and nine months ended September 30, 2013, approximately 0.1 million stock options with an exercise price in excess of the average market price of the Company’s common stock were excluded from the calculation of diluted earnings per common share.

Basic and diluted earnings per common share are as follows (in thousands, except per share data):

	Three months ended September 30,				Nine months ended September 30,
	2014		2013		2014		2013
Net income - Basic and Diluted	$	14,272	$	8,968	$	37,330	$	25,173
Weighted average common shares outstanding - Basic	54,789		52,742		54,464		50,819
Assumed conversions:
Incremental common shares from warrants	—		1,365		162		1,404
Incremental common shares from stock options	867		1,134		901		1,143
Incremental common shares from restricted stock units	34		76		9		41
Weighted average common shares outstanding - Diluted	55,690		55,317		55,536		53,407
Basic earnings per common share	$	0.26	$	0.17	$	0.69	$	0.50
Diluted earnings per common share	$	0.26	$	0.16	$	0.67	$	0.47