Earnings Per Share

6 Months Ended

Jun. 30, 2020

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						Six Months Ended
	June 30,						June 30,
	2020		2019		2020		2019
Net income	$	157,555	$	131,390	$	188,467	$	164,027

Weighted average shares outstanding:
Basic	39,973		39,827		40,049		39,654
Effect of dilutive securities:
Stock options and employee stock purchase plan	742		1,021		788		1,119
Diluted	40,715		40,848		40,837		40,773


Earnings per share:
Basic	$	3.94	$	3.30	$	4.71	$	4.14
Diluted	$	3.87	$	3.22	$	4.62	$	4.02

Anti-dilutive stock options excluded from diluted earnings per share computations	—		50		—		50