EARNINGS PER SHARE
The computation of basic earnings per share (EPS) is based on the weighted average number of the Company’s common shares outstanding. The computation of diluted EPS is based on the weighted average number of the Company’s common shares outstanding and potential dilutive common shares during the period as determined by using the treasury stock method.
The following are computations of basic and diluted earnings per share (in thousands, except for per share amounts):
| | | | | | | | | | | | | | | | | |
| | For the years ended December 31, |
| | 2025 | | 2024 | | 2023 |
| Numerator for basic and diluted earnings per share: | | | | | |
| Net income | $ | 390,974 | | | $ | 402,299 | | | $ | 377,856 | |
| Denominator: | | | | | |
| Weighted average shares outstanding, basic | 53,509 | | | 53,902 | | | 54,071 | |
| Dilutive impact of equity awards | 207 | | | 297 | | | 311 | |
| Weighted average shares outstanding, diluted | 53,716 | | | 54,199 | | | 54,382 | |
| | | | | |
| Basic earnings per share | $ | 7.31 | | | $ | 7.46 | | | $ | 6.99 | |
| Diluted earnings per share | $ | 7.28 | | | $ | 7.42 | | | $ | 6.95 | |
In the table above, potentially dilutive shares outstanding include the dilutive effect of unvested restricted stock awards. Shares under the Employee Stock Purchase Plan (“ESPP”) which commenced in 2024 are issued on the last day of the offering period and therefore are included in the weighted average shares outstanding when issued.
Potentially dilutive shares whose effect would have been antidilutive have been excluded from the computation of diluted earnings per share. The Company included all outstanding performance awards and restricted stock awards in the calculation of diluted earnings per share except as shown in the table below (in thousands):
| | | | | | | | | | | | | | | | | |
| | For the years ended December 31, |
| | 2025 | | 2024 | | 2023 |
| Antidilutive restricted stock awards | 2 | | | 10 | | | 12 | |
| Performance stock awards for which performance criteria was not attained at reporting date | 89 | | | 39 | | | 89 | |
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.