EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2023

The Company presents basic and diluted earnings per share for its common stock. Basic earnings per share is calculated by dividing the net income of the Company by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is determined by adjusting the profit or loss and the weighted average number of shares of common stock outstanding for the effects of all potentially dilutive securities.

The earnings are used as the basis of determining whether the inclusion of common stock equivalents would be anti-dilutive. The computation of diluted shares for the three and nine months ended September 30, 2023 and 2022 includes the effect of shares that would be issued in connection with warrants, stock options, restricted stock awards and performance stock unit awards, as these common stock equivalents are dilutive to the earnings per share recorded in those periods.

The following table presents the Company’s common stock equivalents that were excluded from the calculation of earnings per share as they would be anti-dilutive:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2023	2022	2023	2022
Stock option awards	984,567	520,944	1,180,376	794,887
Restricted stock awards	16,564	13,561	569,831	476,329
Performance stock unit awards	—	—	288,680	—

The following table presents the Company’s basic earnings per share and shares outstanding (in thousands, except per share data):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Numerator:
Net income (1)	$	56,302	$	38,823	$	209,913	$	103,027
Denominator:
Weighted average number of common shares outstanding	178,826		181,884		179,956		180,829
Earnings per common share:
Earnings per common share, basic	$	0.31	$	0.21	$	1.17	$	0.57

(1) Net income for the nine months ended September 30, 2023 includes $62.8 million related to the termination payment received on behalf of Amedisys, under the terms of the Mutual Termination Agreement, net of merger-related expenses and taxes. See Note 3, Business Combinations, for further discussion.

The following table presents the Company’s diluted earnings per share and shares outstanding (in thousands, except per share data):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Numerator:
Net income (1)	$	56,302	$	38,823	$	209,913	$	103,027
Denominator:
Weighted average number of common shares outstanding	178,826		181,884		179,956		180,829
Effect of dilutive securities	1,702		1,138		1,330		931
Weighted average number of common shares outstanding, diluted	180,528		183,022		181,286		181,760
Earnings per common share:
Earnings per common share, diluted	$	0.31	$	0.21	$	1.16	$	0.57