Earnings Per Share

3 Months Ended

Nov. 30, 2022

EARNINGS PER SHARE

Basic earnings per share ("EPS") is computed by dividing net income by the number of weighted average common shares outstanding during the period. Diluted EPS is computed using the treasury stock method, by dividing net income by the cumulative weighted average common shares that are outstanding or are issuable upon the exercise of outstanding stock-based compensation awards during the period. Stock-based compensation awards that are out-of-the-money and performance share units ("PSUs") in which the performance criteria have not been met as of November 30, 2022 are omitted from the calculation of diluted EPS.

A reconciliation of the weighted average shares outstanding used in the basic and diluted earnings per share ("EPS") computation is as follows:


	Three Months Ended
	November 30,
(in thousands, except per share data)	2022		2021
Numerator
Net income used for calculating basic and diluted income per share	$	136,798	$	107,647
Denominator
Weighted average common shares used in the calculation of basic income per share	38,122		37,678
Common stock equivalents associated with stock-based compensation plan(1)	792		963
Shares used in the calculation of diluted income per share	38,914		38,641
Basic income per share	$	3.59	$	2.86
Diluted income per share	$	3.52	$	2.79

(1)Dilutive potential common shares consist of stock options and unvested PSUs. For the three months ended November 30, 2022 and November 30, 2021, there were 545,510 and 298,900 common stock equivalents associated with our stock options excluded from the calculation of diluted EPS, respectively, as they were out-of-the-money and their inclusion would have been anti-dilutive. Common stock equivalents associated with our PSUs excluded from the calculation of diluted EPS for the three months ended November 30, 2022 and November 30, 2021, were 94,162 and 97,511, respectively.