Computation of Earnings Per Share

12 Months Ended

Dec. 31, 2023

Earnings Per Share [Abstract]

Computation of Earnings Per Share

Computation of Earnings Per Share

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. Potential shares of common stock are excluded from the computation of diluted earnings per share when their effect would be anti-dilutive.

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).

	2023		2022		2021
Numerator:
Net income used for calculating basic and diluted income per share	$	882,466	$	807,799	$	793,560
Denominator:
Weighted average common shares used in the calculation of basic income per share	79,004		80,178		85,026
Dilutive effect of outstanding awards associated with stock-based compensation plans	676		889		1,151
Shares used in the calculation of diluted income per share	79,680		81,067		86,177
Income per share (1):
Basic	$	11.17	$	10.08	$	9.33
Diluted	$	11.08	$	9.96	$	9.21

(1)Both basic and diluted income per share for 2021 included a tax benefit of approximately $0.63 per share related to intercompany sales of certain intellectual property (see Note 12 — Income Taxes).

The table below presents the number of outstanding awards associated with stock-based compensation plans 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 outstanding awards were anti-dilutive because their exercise prices were greater than the average market price per share of Common Stock during such year.

	Year Ended December 31,
	2023		2022		2021
Anti-dilutive outstanding awards associated with stock-based compensation plans (in millions) (1)	0.1		0.1		—
Average market price per share of Common Stock during the year	$	351.31	$	289.73	$	252.07

(1)The number of anti-dilutive common stock equivalents for 2021 was de minimis.