Earnings Per Share

3 Months Ended

Feb. 29, 2024

Basic and diluted earnings per share were calculated as follows (in thousands, except per share amounts):


	Three Months Ended
	February 29, 2024		February 28, 2023
Numerator:
Net income	$	138,665	$	125,500
Less: Distributed earnings allocated to participating securities	(117)		(87)
Less: Undistributed earnings allocated to participating securities	(937)		(777)
Numerator for basic earnings per share	137,611		124,636
Effect of dilutive securities:

Add: Undistributed earnings allocated to participating securities	937		777
Less: Undistributed earnings reallocated to participating securities	(909)		(754)
Numerator for diluted earnings per share	$	137,639	$	124,659



Denominator:
Weighted average shares outstanding — basic	75,894		83,468
Effect of dilutive securities:
Share-based payments	2,370		2,527
Weighted average shares outstanding — diluted	78,264		85,995
Basic earnings per share	$	1.81	$	1.49
Diluted earnings per share	$	1.76	$	1.45

We compute earnings per share using the two-class method, which is an allocation of earnings between the holders of common stock and a company’s participating security holders. Our outstanding nonvested shares of restricted stock contain non-forfeitable rights to dividends and, therefore, are considered participating securities for purposes of computing earnings per share pursuant to the two-class method. We had no other participating securities at February 29, 2024 or February 28, 2023.

For the three-month periods ended February 29, 2024 and February 28, 2023, no outstanding stock options were excluded from the diluted earnings per share calculations. Contingently issuable shares associated with outstanding performance-based restricted stock units (each, a “PSU”) were not included in the basic earnings per share calculations for the periods presented, as the applicable vesting conditions had not been satisfied.