7.	EARNINGS PER SHARE

Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the year. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. For CoreCivic, diluted earnings per share is computed by dividing net income by the weighted average number of common shares after considering the additional dilution related to restricted share grants and stock options.

A reconciliation of the numerator and denominator of the basic earnings per share computation to the numerator and denominator of the diluted earnings per share computation is as follows (in thousands, except per share data):

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2017		2016		2017		2016
NUMERATOR
Basic:
Net income	$	41,178	$	55,340	$	136,700	$	159,230
Diluted:
Net income	$	41,178	$	55,340	$	136,700	$	159,230
DENOMINATOR
Basic:
Weighted average common shares outstanding		118,182		117,443		118,044		117,360
Diluted:
Weighted average common shares outstanding		118,182		117,443		118,044		117,360
Effect of dilutive securities:
Stock options	262			207	353			384
Restricted stock-based awards	84			44	62			80
Weighted average shares and assumed conversions		118,528		117,694		118,459		117,824
BASIC EARNINGS PER SHARE	$	0.35	$	0.47	$	1.16	$	1.36
DILUTED EARNINGS PER SHARE	$	0.35	$	0.47	$	1.15	$	1.35

Approximately 16,000 and 5,000 stock options were excluded from the computation of diluted earnings per share for the three and nine months ended September 30, 2017, respectively, because they were anti-dilutive. Approximately 0.1 million and 48,000 stock options were excluded from the computation of diluted earnings per share for the three and nine months ended September 30, 2016, respectively, because they were anti-dilutive.