Earnings Per Share

9 Months Ended

Sep. 30, 2021

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,
	2021		2020		2021		2020
Net income	$	184,665	$	119,098	$	543,015	$	307,565

Weighted average shares outstanding:
Basic	40,101		40,123		40,146		40,073
Effect of dilutive securities:
Stock options and employee stock purchase plan	590		716		620		776
Diluted	40,691		40,839		40,766		40,849


Earnings per share:
Basic	$	4.60	$	2.97	$	13.53	$	7.68
Diluted	$	4.54	$	2.92	$	13.32	$	7.53

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