BROWN & BROWN, INC. Earnings Per Share Disclosure
(in thousands, except per share data) | 2018 | 2017(1) | 2016(1) | ||||||||
Net income | $ | 344,255 | $ | 399,630 | $ | 257,491 | |||||
Net income attributable to unvested awarded performance stock | (8,297 | ) | (9,746 | ) | (6,705 | ) | |||||
Net income attributable to common shares | $ | 335,958 | $ | 389,884 | $ | 250,786 | |||||
Weighted average number of common shares outstanding – basic | 277,663 | 279,394 | 279,558 | ||||||||
Less unvested awarded performance stock included in weighted average number of common shares outstanding – basic | (6,692 | ) | (6,814 | ) | (7,280 | ) | |||||
Weighted average number of common shares outstanding for basic earnings per common share | 270,971 | 272,580 | 272,278 | ||||||||
Dilutive effect of stock options | 4,550 | 5,006 | 3,330 | ||||||||
Weighted average number of shares outstanding – diluted | 275,521 | 277,586 | 275,608 | ||||||||
Net income per share: | |||||||||||
Basic | $ | 1.24 | $ | 1.43 | $ | 0.92 | |||||
Diluted | $ | 1.22 | $ | 1.40 | $ | 0.91 | |||||
About Earnings Per Share Disclosures
The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.
Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.