Net Income Per Share

The calculation of net income per share for the three years ended December 31, 2018 is reflected in the following table (in thousands, except per share amounts):



	Years Ended December 31,
	2018		2017		2016

Net income	$	434,288	$	290,584	$	343,389
Basic:
Weighted average shares	120,513		124,152		127,991
Diluted:
Weighted average shares	120,513		124,152		127,991
Dilutive effect of potential common shares	1,089		740		775
Diluted weighted average shares	121,602		124,892		128,766
Net income per share:
Basic	$	3.60	$	2.34	$	2.68
Diluted	$	3.57	$	2.33	$	2.67

Potential common shares include the dilutive effect of stock options, unvested performance-based restricted stock, restricted stock which contains forfeitable rights to dividends, and stock units.

Employee stock options will have a dilutive effect under the treasury method only when the respective period’s average market value of the Company’s common stock exceeds the exercise proceeds. Under the treasury method, exercise proceeds include the amount the employee must pay for exercising stock options, the amount of compensation cost for future service that the Company has not yet recognized, and the amount of tax benefits that would be recorded in capital surplus, if the options were exercised and the stock units and performance-based restricted stock had vested.