EARNINGS PER SHARE

The two-class method is utilized for the computation of EPS. The two-class method requires a portion of net income to be allocated to participating securities, which are unvested awards of share-based payments with non-forfeitable rights to receive dividends or dividend equivalents. The Company’s restricted stock awards qualify as participating securities as each contain non-forfeitable rights to dividends. Income allocated to these participating securities is excluded from net earnings available to common shares, as shown in the table below. Basic EPS is computed by dividing net income available to basic common shares by the weighted average number of basic common shares outstanding during the period. Diluted EPS is computed by dividing net income available to diluted common shares by the weighted average number of dilutive common shares outstanding during the period.

The following table sets forth the calculation of EPS for the years ended December 31, 2016, 2015, and 2014:



	Year Ended December 31,
	2016		2015		2014
	(In thousands, except per share amounts)
Weighted average basic common shares outstanding	21,161		23,148		23,380
Dilutive effect of contingently convertible notes and warrants	—		—		1,499
Dilutive effect of employee stock purchases, net of assumed repurchase of treasury stock	9		4		6
Weighted average dilutive common shares outstanding	21,170		23,152		24,885
Basic:
Net income	$	147,065	$	93,999	$	93,004
Less: Earnings allocated to participating securities	5,871		3,595		3,643
Earnings available to basic common shares	$	141,194	$	90,404	$	89,361
Basic earnings per common share	$	6.67	$	3.91	$	3.82
Diluted:
Net income	$	147,065	$	93,999	$	93,004
Less: Earnings allocated to participating securities	5,869		3,595		3,468
Earnings available to diluted common shares	$	141,196	$	90,404	$	89,536
Diluted earnings per common share	$	6.67	$	3.90	$	3.60

The Company was required to include the dilutive effect, if applicable, of the net shares issuable under the 2.25% Convertible Senior Notes due 2036 (“2.25% Notes”) and 3.00% Convertible Senior Notes due 2020 (“3.00% Notes”), as well as the 2.25% Warrants sold in connection with the 2.25% Notes (“2.25% Warrants”) and 3.00% Warrants sold in connection with the 3.00% Notes (“3.00% Warrants”), in its diluted common shares outstanding for the diluted earnings calculation, during the period in which each was outstanding. As a result, the number of shares included in the Company’s diluted shares outstanding each period varied based upon the Company’s average adjusted closing common stock price during the applicable period. Although the ten-year call options on its common stock for the 2.25% and 3.00% Notes had the economic benefit of decreasing the dilutive effect of the 2.25% and 3.00% Notes, the Company did not factor this benefit into the diluted common shares outstanding for the diluted earnings calculation since the impact would have been anti-dilutive. The average adjusted closing price of the Company's common stock for the first three quarters of 2014 was more than the respective conversion prices then in effect at the end of the periods for both the 2.25% and 3.00% Notes. Therefore, the dilutive effect of the 2.25% and 3.00% Notes was included in the computation of diluted EPS for such periods. In addition, the dilutive effect of the 2.25% and 3.00% Warrants was also included in the computation of diluted EPS for the first three quarters of 2014.

The 2.25% Notes and 2.25% Warrants were converted or redeemed and settled, respectively, during the three months ended September 30, 2014. The 3.00% Notes and 3.00% Warrants were repurchased during the second and third quarters of 2014. As a result, the dilution is calculated based on the weighted average length of time the 2.25% and 3.00% Notes, as well as the 2.25% and 3.00% Warrants were outstanding during the twelve months ended December 31, 2014.