EARNINGS PER SHARE
The company uses the two-class method to calculate basic and diluted earnings per common share because its Series G preferred stock are participating securities. Under the two-class method, undistributed earnings are allocated to common stock and participating securities according to their respective rights in undistributed earnings, as if all of the earnings for the period had been distributed. Basic earnings per common share is computed by dividing the net income attributable to common shareholders by the weighted average number of common shares outstanding during the period. Net income attributable to common shareholders is reduced for preferred stock dividends earned during the period. Series G preferred stock also receives a proportionate allocation of undistributed or overdistributed earnings for the period because Series G preferred stock has a contractual obligation to share in profits and losses of the company. Diluted earnings per share is computed by dividing the net income attributable to common shareholders by the weighted average number of common shares outstanding plus potentially dilutive common shares.
Anti-dilutive stock awards were as follows for the years presented:
| | | | | | | | | | | | | | | | | |
| (in thousands) | 2025 | | 2024 | | 2023 |
| | | | | |
| Stock awards | 71 | | | 89 | | | 455 | |
| Total | 71 | | | 89 | | | 455 | |
The following table presents the earnings per share calculation for the years presented:
| | | | | | | | | | | | | | | | | |
| 2025 | | 2024 | | 2023 |
| Net Income Attributable to CME Group (in millions) | $ | 4,072.2 | | | $ | 3,525.8 | | | $ | 3,226.2 | |
| Less: Preferred stock dividends | (22.9) | | | (47.7) | | | (44.2) | |
| Less: (Undistributed earnings) overdistributed earnings allocated to preferred stock | (28.3) | | | 3.4 | | | 3.6 | |
| Net Income Attributable to Common Shareholders of CME Group | $ | 4,021.0 | | | $ | 3,481.5 | | | $ | 3,185.6 | |
| | | | | |
| Weighted Average Common Shares Outstanding (in thousands): | | | | | |
| Basic | 359,648 | | | 359,389 | | | 359,023 | |
| | | | | |
| Effect of stock options and stock awards | 662 | | | 555 | | | 477 | |
| Diluted | 360,310 | | | 359,944 | | | 359,500 | |
| Earnings per Common Share Attributable to Common Shareholders of CME Group: | | | | | |
| Basic | $ | 11.18 | | | $ | 9.69 | | | $ | 8.87 | |
| Diluted | 11.16 | | | 9.67 | | | 8.86 | |
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.