Net Income Per Share

6 Months Ended

Jun. 30, 2022

3. Net income per share

Basic earnings per share for the Company’s common stock is computed by dividing, net income available to common shareholders attributable to common stock for the period by the weighted average number of common shares outstanding during the period.

On August 24, 2018 and August 31, 2018 the Company issued an aggregate principal amount of $880 million of 2.00% Convertible Senior Notes due 2028 (see Note 11 to these interim condensed consolidated financial statements). The conversion of these notes are included in the calculation for diluted earnings per share utilizing the “if converted” method. Accordingly, conversion of these Notes is not assumed for purposes of computing diluted earnings per share if the effect is antidilutive.

The denominator for diluted net income per share for the six and three-month periods ended June 30, 2022 and 2021 does not include any effect from the capped call transactions entered into by the Company with certain financial institutions with respect to shares of the Company’s common stock (“2028 Notes Capped Call Transactions”) because it would be antidilutive. In the event of conversion of any or all of the 2028 Notes, the shares that would be delivered to the Company under the 2028 Notes Capped Call Transactions are designed to partially neutralize the dilutive effect of the shares that the Company would issue under the Notes. See Note 16 to the financial statements for the year ended December 31, 2021, contained in the Company’s Annual Report on Form 10-K filed with the SEC for more details.

Net income per share of common stock is as follows for the six and three-month periods ended June 30, 2022 and 2021:


	Six Months Ended June 30				Three Months Ended June 30
	2022		2021		2022		2021

	Basic	Diluted	Basic	Diluted	Basic	Diluted	Basic	Diluted
Net income per common share	$ 3.73	$ 3.73	$ 0.69	$ 0.69	$ 2.43	$ 2.43	$ 1.37	$ 1.37

Numerator (in millions):
Net income	$ 188	$ 188	$ 34	$ 34	$ 123	$ 123	$ 68	$ 68
Net income corresponding to common stock	$ 188	$ 188	$ 34	$ 34	$ 123	$ 123	$ 68	$ 68

Denominator:
Weighted average of common stock outstanding for Basic earnings per share	50,386,519	—	49,844,823	—	50,364,529	—	49,822,272	—
Adjusted weighted average of common stock outstanding for Diluted earnings per share	—	50,386,519	—	49,844,823	—	50,364,529	—	49,822,272