Earnings Per Share
Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share is computed using the weighted average number of common shares outstanding and, when dilutive, common share equivalents. The computation of basic and diluted earnings per share was as follows:
Years Ended December 31,
(in millions, except share and per share data)202520242023
Net income$247.1 $418.3 $206.3 
Add back interest expense, net of tax attributable to assumed conversion of Convertible Senior Notes
3.0 9.1 10.4 
Net income, diluted$250.1 $427.4 $216.8 
Weighted average number of common shares outstanding, basic
(in thousands)
70,348 70,076 69,751 
Convertible Senior Notes
1,234 3,528 3,528 
Stock options100 150 286 
Restricted stock units204 136 68 
Weighted average number of common shares outstanding, diluted (in thousands)
71,886 73,891 73,633 
Earnings per share
    Basic
$3.51 $5.97 $2.96 
    Diluted
$3.48 $5.78 $2.94 
The number of common share equivalents excluded from the computation of diluted earnings per share because either the effect would have been anti-dilutive, or the performance criteria related to the units had not yet been met, were as follows:
Years Ended December 31,
(in thousands)202520242023
Restricted stock units425 464 322 
Stock options129 209 163 
Total554 673 485 

Historical Timeline

Fiscal YearFiled
2025Feb 18, 2026Showing above
2024Feb 21, 2025

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.