Earnings Per Share of Common Stock

9 Months Ended

Sep. 30, 2020

Earnings Per Share of Common Stock

Earnings Per Share of Common Stock

Note 20—Earnings Per Share of Common Stock

Basic earnings per share of common stock is determined by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share of common stock is determined by dividing net income by the weighted average number of shares of common stock outstanding, assuming all dilutive shares of common stock were issued.

Potentially dilutive shares of common stock include non-vested stock-based compensation awards. The Company applies the treasury stock method to determine the diluted weighted average number of shares of common stock outstanding based on the outstanding stock-based compensation awards.

The following table summarizes the basic and diluted earnings per share calculations:

	Quarter ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
	(in thousands, except per share amounts)
Net income	$	535,160	$	121,473	$	1,194,080	$	240,304
Weighted average basic shares of common stock outstanding		72,439		78,361		76,292		78,119
Effect of dilutive shares:
Common shares issuable under stock-based compensation plan		3,699		2,021		3,326		1,702
Weighted average shares of common stock applicable to diluted earnings per share		76,138		80,382		79,618		79,821
Basic earnings per share of common stock	$	7.39	$	1.55	$	15.65	$	3.08
Diluted earnings per share of common stock	$	7.03	$	1.51	$	15.00	$	3.01

Calculations of diluted earnings per share require certain potentially dilutive shares to be excluded when their inclusion in the diluted earnings per share calculation would be anti-dilutive. The following table summarizes the weighted-average number of anti-dilutive outstanding performance-based restricted share units (“RSUs”) and stock options excluded from the calculation of diluted earnings per share:

	Quarter ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
	(in thousands except for weighted-average exercise price)
Performance-based RSUs (1)		—		1,157		335		985
Stock options (2)		—		566		217		888
Total anti-dilutive shares and units		—		1,723		552		1,873
Weighted average exercise price of anti-dilutive stock options (2)	$	—	$	23.50	$	35.03	$	23.98

(1) Certain performance-based RSUs were outstanding but not included in the computation of earnings per share because the performance thresholds included in such RSUs have not been achieved.

(2) Certain stock options were outstanding but not included in the computation of diluted earnings per share because the weighted-average exercise prices were above the average stock prices for the period.