Earnings Per Share

Basic and diluted earnings per share were calculated as follows (in thousands, except per share amounts):



	Three Months Ended August 31,						Nine Months Ended August 31,
	2018			2017			2018			2017
Numerator:
Net income	$	87,476		$	50,208		$	73,529		$	96,249
Less: Distributed earnings allocated to nonvested restricted stock	(12		)	(14		)	(37		)	(43		)
Less: Undistributed earnings allocated to nonvested restricted stock	(472		)	(307		)	(388		)	(602		)
Numerator for basic earnings per share	86,992			49,887			73,104			95,604



	Three Months Ended August 31,						Nine Months Ended August 31,
	2018			2017			2018			2017
Effect of dilutive securities:
Interest expense and amortization of debt issuance costs associated with convertible senior notes, net of taxes	796			664			2,389			1,990
Add: Undistributed earnings allocated to nonvested restricted stock	472			307			388			602
Less: Undistributed earnings reallocated to nonvested restricted stock	(416		)	(267		)	(335		)	(528		)
Numerator for diluted earnings per share	$	87,844		$	50,591		$	75,546		$	97,668

Denominator:
Weighted average shares outstanding — basic	87,951			85,974			87,565			85,517
Effect of dilutive securities:
Share-based payments	4,719			4,536			5,246			3,705
Convertible senior notes	8,402			8,402			8,402			8,402
Weighted average shares outstanding — diluted	101,072			98,912			101,213			97,624
Basic earnings per share	$	.99		$	.58		$	.83		$	1.12
Diluted earnings per share	$	.87		$	.51		$	.75		$	1.00

We compute earnings per share using the two-class method, which is an allocation of earnings between the holders of common stock and a company’s participating security holders. Our outstanding nonvested shares of restricted stock contain non-forfeitable rights to dividends and, therefore, are considered participating securities for purposes of computing earnings per share pursuant to the two-class method. We had no other participating securities at August 31, 2018 or 2017.

For the three-month and nine-month periods ended August 31, 2018, outstanding stock options to purchase 1.6 million shares of our common stock were excluded from the diluted earnings per share calculation because the effect of their inclusion would be antidilutive. For the three-month and nine-month periods ended August 31, 2017, outstanding stock options to purchase 2.5 million shares of our common stock were excluded from the diluted earnings per share calculation because the effect of their inclusion would be antidilutive. Contingently issuable shares associated with outstanding performance-based restricted stock units (each, a “PSU”) were not included in the basic earnings per share calculations for the periods presented, as the applicable vesting conditions had not been satisfied.