Earnings Per Share

9 Months Ended

Sep. 30, 2022

We calculate basic and diluted earnings per share using the two-class method. Earnings per share under the two-class method is calculated using net income attributable to common stockholders, which is net income reduced by the earnings allocated to participating securities. Our participating securities include share-based payment awards that contain a non-forfeitable right to receive dividends and are considered to participate in undistributed earnings with common shareholders. Participating securities excluded from weighted average common shares outstanding were 213 thousand in the third quarter of 2022 and 223 thousand for the nine months ended September 30, 2022.

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


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Net income	$	190,055	$	184,665	$	676,600	$	543,015
Amounts allocated to participating securities	(1,019)		—		(3,764)		—
Net income attributable to common stockholders	$	189,036	$	184,665	$	672,836	$	543,015

Weighted average common shares outstanding:
Basic	39,214		40,101		39,599		40,146
Effect of dilutive securities:
Stock options and employee stock purchase plan	366		590		413		620
Diluted	39,580		40,691		40,012		40,766

Earnings per share attributable to common stockholders:
Basic	$	4.82	$	4.60	$	16.99	$	13.53
Diluted	$	4.78	$	4.54	$	16.82	$	13.32

Anti-dilutive stock options excluded from diluted earnings per share computations (1)	33		—		33		—

(1)Since these options have exercise prices that are higher than the average market prices of our common stock, including them in the calculation would have an anti-dilutive effect on earnings per share.