Earnings Per Share
The Company’s shares of restricted stock contain rights to receive nonforfeitable dividends and thus are participating securities requiring the computation of basic earnings per share using the two-class method. The shares of restricted stock are both potential shares of common stock and participating securities so the Company calculates diluted earnings per share by using the more dilutive of the treasury stock method or the two-class method. The calculation of earnings per share for the net income available to common shareholders excludes the distribution of dividends and the undistributed earnings attributable to the participating securities from the numerator. The diluted earnings per share includes stock options, PVRSUs, and RSUs in the calculation of the weighted average shares of common stock outstanding.
The computation of basic and diluted earnings per share was as follows:
| | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| (in thousands, except per share amounts) | 2025 | | 2024 | | 2023 |
| Numerator: | | | | | |
| Net income | $ | 369,946 | | | $ | 299,665 | | | $ | 258,507 | |
| Income allocated to participating securities | (1,780) | | | (1,521) | | | (1,379) | |
| Net income available to common shareholders | $ | 368,166 | | | $ | 298,144 | | | $ | 257,128 | |
| Denominator: | | | | | |
| Weighted average shares of common stock outstanding - basic | 46,170 | | | 47,653 | | | 50,341 | |
| Basic earnings per share | $ | 7.97 | | | $ | 6.26 | | | $ | 5.11 | |
| | | | | |
| Numerator: | | | | | |
| Net income | $ | 369,946 | | | $ | 299,665 | | | $ | 258,507 | |
| Income allocated to participating securities | (1,780) | | | (1,521) | | | (1,379) | |
| Net income available to common shareholders | $ | 368,166 | | | $ | 298,144 | | | $ | 257,128 | |
| Denominator: | | | | | |
| Weighted average shares of common stock outstanding - basic | 46,170 | | | 47,653 | | | 50,341 | |
| Dilutive effect of stock options, PVRSUs, and RSUs | 410 | | | 425 | | | 359 | |
| Weighted average shares of common stock outstanding - diluted | 46,580 | | | 48,078 | | | 50,700 | |
| | | | | |
| | | | | |
| Diluted earnings per share | $ | 7.90 | | | $ | 6.20 | | | $ | 5.07 | |
The following securities have been excluded from the calculation of the diluted weighted average shares of common stock outstanding because the inclusion of these securities would have an anti-dilutive effect:
| | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| (in thousands) | 2025 | | 2024 | | 2023 |
| Stock options | 202 | | | 147 | | | 232 | |
| PVRSUs | 46 | | | 7 | | | 71 | |
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.