Q. INCOME PER COMMON SHARE
Basic and diluted income per common share are computed by dividing net income attributable to common shareholders by the weighted average common shares outstanding in the period. Reconciliations of the numerators and denominators used in the computations of basic and diluted income per common share were as follows, in millions:
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| Year Ended December 31, |
| | 2025 | | 2024 | | 2023 |
| Numerator (basic and diluted): | | | | | |
| Net income | $ | 810 | | | $ | 822 | | | $ | 908 | |
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| Less: Allocation to unvested restricted stock awards | — | | | — | | | — | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| Net income attributable to common shareholders | $ | 810 | | | $ | 822 | | | $ | 908 | |
| | | | | |
| Denominator: | | | | | |
| Basic common shares (based upon weighted average) | 209 | | | 218 | | | 225 | |
| Add: Dilutive effect of stock options and other stock-based incentives | — | | | 1 | | | 1 | |
| Diluted common shares | 210 | | | 219 | | | 226 | |
We follow accounting guidance regarding determining whether instruments granted in share-based payment transactions are participating securities. This accounting guidance clarifies that share-based payment awards that entitle their holders to receive non-forfeitable dividends prior to vesting should be considered participating securities. The dividends associated with the unvested restricted stock units are forfeitable, and consequently, the restricted stock units are not considered a participating security and are not accounted for under the two-class method. We have also granted restricted stock awards that contain non-forfeitable rights to dividends on unvested shares; such unvested restricted stock awards are considered participating securities. As participating securities, the unvested shares are required to be included in the calculation of our basic income per common share, using the two-class method. The two-class method of computing income per common share is an allocation method that calculates income per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. For the year ended December 31, 2025, diluted income per common share was calculated using the treasury stock method. For the years ended December 31, 2024 and 2023, we allocated dividends and undistributed earnings to the participating securities under the two-class method.
The following stock options, restricted stock units and performance restricted stock units were excluded from the computation of weighted-average diluted common shares outstanding due to their anti-dilutive effect, in thousands:
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| Year Ended December 31, |
| | 2025 | | 2024 | | 2023 |
| Number of stock options | 375 | | | 176 | | | 871 | |
| Number of restricted stock units | — | | | — | | | 5 | |
| Number of performance restricted stock units | 41 | | | 47 | | | — | |
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.