Net Income Per Share

6 Months Ended

Jun. 30, 2021

We compute net income per share using the two-class method. Under this method, basic net income per share is computed using the weighted average number of common shares outstanding during the period excluding common shares underlying equity awards that are unvested or subject to forfeiture. Diluted net income per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the common shares issuable upon the net exercise of stock options and unvested RSUs and is reflected in diluted earnings per share by application of the treasury stock method. The computation of the diluted net income per share of Class A common stock assumes the conversion of Class B common stock, while the diluted net income per share of Class B common stock does not assume the conversion of those shares.

Prior to June 7, 2021, our common stock was classified as Class A common stock. The Class A common stock reclassification as common stock occurred pursuant to an amendment and restatement of our Articles of Incorporation in connection with the elimination of the Company’s classified common stock structure following the conversion of all Class B common stock to Class A common stock. Prior to the reclassification, except with respect to voting and transfer rights, the rights of the holders of our Class A and Class B common stock were identical.

Under our Articles of Incorporation, the Class A and Class B common stock shared equally in any dividends, liquidation proceeds or other distribution with respect to our common stock and the Articles of Incorporation can only be amended by a vote of the shareholders. Additionally, Oregon law provides that amendments to our Articles of Incorporation that would adversely alter the rights, powers or preferences of a given class of stock, must be approved by the class of stock adversely affected by the proposed amendment. As a result, the undistributed earnings for each year are allocated based on the contractual participation rights of the Class A and Class B common shares as if the earnings for the year had been distributed. Because the liquidation and dividend rights were identical, the undistributed earnings are allocated on a proportionate basis.

The following is a reconciliation of net income and weighted average shares used for our basic earnings per share (EPS) and diluted EPS:


Three Months Ended June 30,	2021				2020
(in millions, except per share amounts)	Class A		Class B		Class A		Class B
Net income applicable to common stockholders - basic	$	304.9	$	—	$	76.3	$	1.4

Reallocation of net income due to conversion of Class B to Class A common shares outstanding	—		—		0.1		—
Conversion of Class B common shares into Class A common shares	—		—		1.3		—

Net income applicable to common stockholders - diluted	$	304.9	$	—	$	77.7	$	1.4

Weighted average common shares outstanding – basic	28.1		—		22.4		0.4
Conversion of Class B common shares into Class A common shares	—		—		0.4		—
Effect of dilutive stock options on weighted average common shares	0.3		—		0.2		—
Weighted average common shares outstanding – diluted	28.4		—		23.0		0.4

Net income per common share - basic	$	10.83	$	—	$	3.40	$	3.40
Net income per common share - diluted	$	10.75	$	—	$	3.38	$	3.38

The effect of antidilutive securities on Class A and Class B common stock was evaluated for the three-month periods ended June 30, 2021, and 2020 and was determined to be immaterial.


Six Months Ended June 30,	2021				2020
(in millions, except per share amounts)	Class A		Class B		Class A		Class B
Net income applicable to common stockholders - basic	$	460.5	$	0.6	$	121.8	$	2.1

Reallocation of net income due to conversion of class B to class A common shares outstanding	—		—		0.2		—
Conversion of class B common shares into class A common shares	0.6		—		1.9		—

Net income applicable to common stockholders - diluted	$	461.1	$	0.6	$	123.9	$	2.1

Weighted average common shares outstanding – basic	27.4		—		22.7		0.4
Conversion of class B common shares into class A common shares	—		—		0.4		—
Effect of employee stock purchases and restricted stock units on weighted average common shares	0.2		—		0.2		—
Weighted average common shares outstanding – diluted	27.6		—		23.3		0.4

Net income per common share - basic	$	16.83	$	16.83	$	5.37	$	5.37
Net income per common share - diluted	$	16.69	$	16.69	$	5.32	$	5.32

The effect of antidilutive securities on Class A and Class B common stock was evaluated for the six-month periods ended June 30, 2021, and 2020 and was determined to be immaterial.