Earnings Per Share of Common Stock

12 Months Ended

Dec. 31, 2021

Earnings Per Share of Common Stock

Earnings Per Share of Common Stock

Note 21—Earnings Per Share of Common Stock

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

The Company’s potentially dilutive securities are 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:

	Year ended December 31,
	2021		2020		2019
	(in thousands, except per share data)
Net income	$	1,003,490	$	1,646,884	$	392,965
Weighted average basic shares of common stock outstanding		63,799		75,161		78,206
Effect of dilutive securities - shares issuable under stock-based compensation plan		3,672		3,567		2,134
Weighted average shares of common stock applicable to diluted earnings per share		67,471		78,728		80,340
Basic earnings per share	$	15.73	$	21.91	$	5.02
Diluted earnings per share	$	14.87	$	20.92	$	4.89

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 RSUs, time-based RSUs and stock options excluded from the calculation of diluted earnings per share:

	Year ended December 31,
	2021		2020		2019
	(in thousands except for weighted average exercise price)
Performance-based RSUs (1)		223		322		1,032
Time-based RSUs		1		—		—
Stock options (2)		211		83		572
Total anti-dilutive units and options		435		405		1,604
Weighted average exercise price of anti-dilutive stock options (2)	$	58.85	$	43.89	$	23.70

(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 during the year.