Earnings Per Share

9 Months Ended

Sep. 30, 2022

Earnings Per Share

Earnings Per Share

Note 21—Earnings Per Share

Basic earnings per share is determined by dividing net income by the weighted average number of shares of common stock outstanding during the period. 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:

	Quarter ended September 30,				Nine months ended September 30,
	2022		2021		2022		2021
	(in thousands, except per share amounts)
Net income	$	135,134	$	249,310	$	437,890	$	830,407
Weighted average basic shares of common stock outstanding		52,170		62,085		54,043		65,671
Effect of dilutive securities - shares issuable under stock-based compensation plan		2,798		3,567		2,870		3,670
Weighted average shares of common stock applicable to diluted earnings per share		54,968		65,652		56,913		69,341
Basic earnings per share	$	2.59	$	4.02	$	8.10	$	12.65
Diluted earnings per share	$	2.46	$	3.80	$	7.69	$	11.98

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 RSUs and stock options excluded from the calculation of diluted earnings per share:

	Quarter ended September 30,				Nine months ended September 30,
	2022		2021		2022		2021
	(in thousands except for weighted average exercise price)
Performance-based RSUs (1)		325		302		268		244
Time-based RSUs		—		—		116		68
Stock options (2)		1,423		249		1,312		199
Total anti-dilutive units and options		1,748		551		1,696		511
Weighted average exercise price of anti-dilutive stock options (2)	$	58.49	$	58.85	$	58.61	$	58.85

(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.