Earnings per Share

9 Months Ended

Sep. 30, 2019

Basic earnings per share (“EPS”) is calculated by dividing net income by the weighted average number of shares of common stock outstanding. For purposes of calculating basic EPS, vested restricted stock and restricted stock units (“RSUs”) are considered outstanding. Diluted EPS includes the components of basic EPS and also gives effect to dilutive common stock equivalents. We calculate diluted EPS using the treasury stock method and if-converted method. Under the treasury stock method, diluted EPS reflects the potential dilution that could occur if unvested RSUs result in the issuance of common stock. Under the if-converted method, diluted EPS reflects the potential dilution that could occur if our 9% Debentures result in the issuance of common stock. The determination of potentially issuable shares does not consider the satisfaction of the conversion requirements and the shares are included in the determination of diluted EPS as of the beginning of the period, if dilutive.

Table 6.1 reconciles the numerators and denominators used to calculate basic and diluted EPS.



Earnings per share
Table	6.1
		Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands, except per share data)		2019		2018		2019		2018
Basic earnings per share:
Net income		$	176,934	$	181,900	$	496,653	$	512,351
Weighted average common shares outstanding - basic		351,475		362,180		354,272		367,190
Basic earnings per share		$	0.50	$	0.50	$	1.40	$	1.40

Diluted earnings per share:
Net income		$	176,934	$	181,900	$	496,653	$	512,351
Interest expense, net of tax ⁽¹⁾:
9% Debentures		4,566		4,566		13,698		13,698
Diluted income available to common shareholders		$	181,500	$	186,466	$	510,351	$	526,049

Weighted average common shares outstanding - basic		351,475		362,180		354,272		367,190
Effect of dilutive securities:
Unvested RSUs		2,072		1,697		1,966		1,547
9% Debentures		19,028		19,028		19,028		19,028
Weighted average common shares outstanding - diluted		372,575		382,905		375,266		387,765
Diluted earnings per share		$	0.49	$	0.49	$	1.36	$	1.36

⁽¹⁾

The periods ended September 30, 2019 and 2018 were tax-effected at a rate of 21%.