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Net Income Per Share of Class A and Class B Common Stock
 12 Months Ended
Dec. 31, 2019
Earnings Per Share [Abstract]  
Net Income Per Share of Class A and Class B Common Stock Net Income Per Share of Class A and Class B Common Stock

We compute net income per share of Class A and Class B common stock using the two-class method. Under this method, basic net income per share is computed using the weighted average number of common shares outstanding during the period excluding unvested common shares subject to repurchase or cancellation. Diluted net income per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options and unvested restricted shares subject to repurchase or cancellation. The dilutive effect of outstanding stock options and other grants is reflected in diluted earnings per share by application of the treasury stock method. The computation of the diluted net income per share of Class A common stock assumes the conversion of Class B common stock, while the diluted net income per share of Class B common stock does not assume the conversion of those shares.

Except with respect to voting and transfer rights, the rights of the holders of our Class A and Class B common stock are identical. Our Restated Articles of Incorporation require that the Class A and Class B common stock must share equally in any dividends, liquidation proceeds or other distribution with respect to our common stock and the Articles of Incorporation can only be amended by a vote of the shareholders. Additionally, Oregon law limits amendments to our Articles of Incorporation that would alter the rights, powers or preferences of a given class of stock without the approval of the class of stock adversely affected by the proposed amendment. As a result, the undistributed earnings for each year are allocated based on the contractual participation rights of the Class A and Class B common shares as if the earnings for the year had been distributed. Because the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis.
Following is a reconciliation of net income and weighted average shares used for our basic earnings per share (“EPS”) and diluted EPS (in millions, except per share amounts):
Year Ended December 31,
 
2019
 
2018
 
2017
(in millions, except per share data)
 
Class A
 
Class B
 
Class A
 
Class B
 
Class A
 
Class B
Net income from continuing operations applicable to common stockholders
 
$
264.5

 
$
7.0

 
$
254.8

 
$
10.9

 
$
233.4

 
$
11.8

Reallocation of distributed net income due to conversion of Class B to Class A common shares outstanding
 
0.7

 
—

 
1.1

 
—

 
1.3

 
—

Conversion of Class B common shares into Class A common shares
 
6.3

 
—

 
9.8

 
—

 
10.5

 
—

Net income applicable to common stockholders - diluted
 
$
271.5

 
$
7.0

 
$
265.7

 
$
10.9

 
$
245.2

 
$
11.8

 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding – basic
 
22.6

 
0.6

 
23.4

 
1.0

 
23.9

 
1.2

Conversion of Class B common shares into Class A common shares
 
0.6

 
—

 
1.0

 
—

 
1.2

 
—

Effect of employee stock purchases and restricted stock units on weighted average common shares
 
0.2

 
—

 
0.1

 
—

 
—

 
—

Weighted average common shares outstanding – diluted
 
23.4

 
0.6

 
24.5

 
1.0

 
25.1

 
1.2

 
 
 
 
 
 
 
 
 
 
 
 
 
Net income per common share - basic
 
$
11.70

 
$
11.70

 
$
10.91

 
$
10.91

 
$
9.78

 
$
9.78

Net income per common share - diluted
 
$
11.60

 
$
11.60

 
$
10.86

 
$
10.86

 
$
9.75

 
$
9.75

 
 
 
 
 
 
 
 
 
 
 
 
 
Antidilutive Securities
 
 
 
 
 
 
 
 
 
 
 
 
Shares issuable pursuant to employee stock purchases not included since they were antidilutive
 
—

 
—

 
—

 
—

 
—

 
—