Earnings Per Share

9 Months Ended

Sep. 30, 2019

Note 2 – Earnings Per Share

We calculate basic earnings per share (EPS) by dividing Net income by the weighted average number of common shares outstanding. Diluted EPS reflects the dilutive effects of potentially dilutive securities, which include in-the-money outstanding stock options and shares to be purchased under our employee stock purchase plan. Using the treasury stock method, the effect of dilutive securities includes these additional shares of common stock that would have been outstanding based on the assumption that these potentially dilutive securities had been issued.

Stock options with exercise prices that are higher than the average market prices of our common stock for the periods presented are excluded from the diluted EPS calculation because the effect is anti-dilutive.

The table below presents the computation of EPS, including the reconciliation of basic and diluted weighted average shares outstanding (in thousands, except EPS):


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2019		2018		2019		2018
Net income	$	79,525	$	69,261	$	243,551	$	217,649

Weighted average shares outstanding:
Basic	39,933		40,422		39,750		40,416
Effect of dilutive securities:
Stock options and employee stock purchase plan	932		1,375		1,061		1,415
Diluted	40,865		41,797		40,811		41,831

Earnings per share:
Basic	$	1.99	$	1.71	$	6.13	$	5.39
Diluted	$	1.95	$	1.66	$	5.97	$	5.20

Anti-dilutive stock options excluded from diluted earnings per share computations	—		—		1		—