Earnings Per Share of Common Stock

12 Months Ended

Dec. 31, 2022

Earnings Per Share of Common Stock

Earnings Per Share of Common Stock

Note 21—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 year. Diluted earnings per share of common stock is determined by dividing net income by the weighted average number of shares of common stock and dilutive securities outstanding.

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,
	2022		2021		2020
	(in thousands, except per share amounts)
Net income	$	475,507	$	1,003,490	$	1,646,884
Weighted average shares of common stock outstanding		53,065		63,799		75,161
Effect of dilutive securities - shares issuable under stock-based compensation plan		2,885		3,672		3,567
Weighted average diluted shares of common stock outstanding		55,950		67,471		78,728
Basic earnings per share	$	8.96	$	15.73	$	21.91
Diluted earnings per share	$	8.50	$	14.87	$	20.92

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,
	2022		2021		2020
	(in thousands except for weighted average exercise price)
Performance-based RSUs (1)		281		223		322
Time-based RSUs		62		1		—
Stock options (2)		1,339		211		83
Total anti-dilutive units and options		1,682		435		405
Weighted average exercise price of anti-dilutive stock options (2)	$	58.58	$	58.85	$	43.89

(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 price for the year.