Earnings per Share

6 Months Ended

Jun. 30, 2019

We compute earnings per share (EPS) of Class A and Class B common stock using the two-class method required for participating securities. We consider restricted stock awards to be participating securities because holders of such shares have non-forfeitable dividend rights in the event of our declaration of a dividend for common shares.

Undistributed earnings allocated to participating securities are subtracted from net income in determining net income attributable to common stockholders. Basic EPS is computed by dividing net income attributable to common stockholders by the weighted-average number of shares of our Class A and Class B common stock outstanding, adjusted for outstanding shares that are subject to repurchase.

For the calculation of diluted EPS, net income attributable to common stockholders for basic EPS is adjusted by the effect of dilutive securities, including awards under our equity compensation plans. In 2018, the calculation of diluted EPS also included the effect of inducement awards under separate non-plan restricted stock unit (RSU) award agreements.

In addition, the computation of the diluted EPS of Class A common stock assumes the conversion of our Class B common stock to Class A common stock, while the diluted EPS of Class B common stock does not assume the conversion of those shares to Class A common stock. Diluted EPS attributable to common stockholders is computed by dividing the resulting net income attributable to common stockholders by the weighted-average number of fully diluted common shares outstanding.

RSUs with anti-dilutive effect were excluded from the EPS calculation and they were not material for the three and six months ended June 30, 2019 and 2018, respectively.

Basic and diluted EPS are the same for each class of common stock because they are entitled to the same liquidation and dividend rights.

The numerators and denominators of the basic and diluted EPS computations for our common stock are calculated as follows (in millions, except per share amounts):



	Three Months Ended June 30,										Six Months Ended June 30,
	2019					2018					2019					2018
	Class A		Class B			Class A		Class B			Class A		Class B			Class A		Class B
Basic EPS:
Numerator
Net income	$	2,204	$	412		$	4,246	$	860		$	4,241	$	804		$	8,368	$	1,725
Less: Net income attributable to participating securities	—		—			—		—			—		—			1		—
Net income attributable to common stockholders	$	2,204	$	412		$	4,246	$	860		$	4,241	$	804		$	8,367	$	1,725
Denominator
Weighted average shares outstanding	2,405		450			2,407		488			2,400		455			2,405		495
Basic EPS	$	0.92	$	0.92		$	1.76	$	1.76		$	1.77	$	1.77		$	3.48	$	3.48
Diluted EPS:
Numerator
Net income attributable to common stockholders	$	2,204	$	412		$	4,246	$	860		$	4,241	$	804		$	8,367	$	1,725
Reallocation of net income attributable to participating securities	—		—			—		—			—		—			1		—
Reallocation of net income as a result of conversion of Class B to Class A common stock	412		—			860		—			804		—			1,725		—
Reallocation of net income to Class B common stock	—		(2		)	—		(4		)	—		(3		)	—		(9		)
Net income attributable to common stockholders for diluted EPS	$	2,616	$	410		$	5,106	$	856		$	5,045	$	801		$	10,093	$	1,716
Denominator
Number of shares used for basic EPS computation	2,405		450			2,407		488			2,400		455			2,405		495
Conversion of Class B to Class A common stock	450		—			488		—			455		—			495		—
Weighted average effect of dilutive RSUs and employee stock options	20		—			35		3			18		1			39		5
Number of shares used for diluted EPS computation	2,875		450			2,930		491			2,873		456			2,939		500
Diluted EPS	$	0.91	$	0.91		$	1.74	$	1.74		$	1.76	$	1.76		$	3.43	$	3.43