Earnings per Share

Basic earnings per share (“EPS”) is calculated by dividing net income by the weighted average number of shares of common stock outstanding. For purposes of calculating basic EPS, vested restricted stock and restricted stock units (“RSUs”) are considered outstanding. Diluted EPS includes the components of basic EPS and also gives effect to dilutive common stock equivalents. We calculate diluted EPS using the treasury stock method and if-converted method. Under the treasury stock method, diluted EPS reflects the potential dilution that could occur if unvested RSU’s result in the issuance of common stock. Under the if-converted method, diluted EPS reflects the potential dilution that could occur if our convertible debt instruments result in the issuance of common stock. The determination of potentially issuable shares does not consider the satisfaction of the conversion requirements and the shares are included in the determination of diluted EPS as of the beginning of the period, if dilutive. During the three and six months ended June 30, 2018, we had 9% Debentures outstanding that could result in potentially issuable shares.

Table 6.1 reconciles the numerators and denominators used to calculate basic and diluted EPS.



	Table	6.1
Earnings per share			Three Months Ended June 30,				Six Months Ended June 30,
Earnings per share	(In thousands, except per share data)		2018		2017		2018		2017
	Basic earnings per share:
	Net income		$	186,814	$	118,622	$	330,451	$	208,420
	Weighted average common shares outstanding - basic		368,578		366,918		369,736		354,035
	Basic earnings per share		$	0.51	$	0.32	$	0.89	$	0.59

	Diluted earnings per share:
	Net income		$	186,814	$	118,622	$	330,451	$	208,420
	Interest expense, net of tax ⁽¹⁾:
	2% Notes		—		84		—		907
	5% Notes		—		427		—		1,709
	9% Debentures		4,566		3,757		9,132		7,514
	Diluted income available to common shareholders		$	191,380	$	122,890	$	339,583	$	218,550

	Weighted average common shares outstanding - basic		368,578		366,918		369,736		354,035
	Effect of dilutive securities:
	Unvested RSUs		1,275		1,140		1,472		1,314
	2% Notes		—		3,827		—		16,771
	5% Notes		—		3,557		—		7,154
	9% Debentures		19,028		19,028		19,028		19,028
	Weighted average common shares outstanding - diluted		388,881		394,470		390,236		398,302
	Diluted earnings per share		$	0.49	$	0.31	$	0.87	$	0.55


⁽¹⁾	The periods ended June 30, 2018 and 2017 were tax effected at a rate of 21% and 35%, respectively.