EARNINGS PER SHARE
Basic EPS is computed based on the weighted average shares of common stock outstanding during the period. Diluted EPS is computed based on those shares used in the basic EPS computation, plus potentially dilutive shares issuable under our equity-based compensation plans using the treasury stock method. Shares that are potentially anti-dilutive are excluded.
The following table presents the computation of our basic and diluted EPS attributable to our common stock:
 Year Ended December 31,
(in millions, except per share data)202520242023
Net income$155 $173 $375 
Weighted average shares of common stock outstanding48 50 57 
Basic EPS$3.20 $3.47 $6.61 
Net income$155 $173 $375 
Weighted average shares of common stock outstanding48 50 57 
Dilutive effect of stock options and restricted stock units1 — — 
Weighted average shares of common stock outstanding49 50 57 
Diluted EPS$3.20 $3.43 $6.56 
Common stock equivalents excluded from income per
diluted share because of their anti-dilutive effect
2 

Historical Timeline

Fiscal YearFiled
2025Feb 12, 2026Showing above
2021Feb 14, 2022
2020Feb 16, 2021
2019Feb 13, 2020

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.