Computation of Earnings Per Share

12 Months Ended

Dec. 31, 2020

Basic earnings per share (“EPS”) is computed by dividing net income by the weighted average number of shares of Common Stock outstanding during the period. Diluted EPS reflects the potential dilution of securities that could share in earnings. When the impact of common stock equivalents is anti-dilutive, they are excluded from the calculation.

The table below sets forth the calculation of basic and diluted income per share for the years ended December 31 (in thousands, except per share data).


	2020		2019		2018
Numerator:
Net income used for calculating basic and diluted income per common share	$	266,745	$	233,290	$	122,456
Denominator:
Weighted average common shares used in the calculation of basic income per share	89,315		89,817		90,827
Common stock equivalents associated with stock-based compensation plans	702		1,154		1,295
Shares used in the calculation of diluted income per share	90,017		90,971		92,122
Income per share (1):
Basic	$	2.99	$	2.60	$	1.35
Diluted	$	2.96	$	2.56	$	1.33

(1)Both basic and diluted income per share for 2020 and 2019 included a tax benefit of approximately $0.31 and $0.42 per share, respectively, related to intercompany sales of certain intellectual property.

The table below presents the number of common stock equivalents that were not included in the computations of diluted income per share in the above table because the effect would have been anti-dilutive. During years with net income, the common stock equivalents were anti-dilutive because their exercise prices were greater than the average market price of a share of Common Stock during such year.


	Year Ended December 31,
	2020		2019		2018
Anti-dilutive common stock equivalents (in millions) (a)	0.5		0.2		—
Average market price per share of Common Stock during the year	$	130.95	$	148.38	$	135.60

(a) The number of anti-dilutive common stock equivalents for 2018 were minimal.