Net income per share

3 Months Ended

Mar. 31, 2023

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 12 to these unaudited interim condensed consolidated financial statements and Note 17 to the financial statements for the year ended December 31, 2022, contained in the Company’s 2022 10-K). The conversion of these notes is 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 three-month periods ended March 31, 2023 and 2022 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 17 to the financial statements for the year ended December 31, 2022, contained in the Company’s 2022 10-K for more details.

For the three-month period ended March 31, 2022, the effect of the conversion of the Notes would have been antidilutive and, as a consequence, it was not factored into the calculation of diluted earnings per share.

Net income per share of common stock is as follows for the three-month periods ended March 31, 2023 and 2022:


	Three Months Ended March 31,
	2023				2022
	Basic		Diluted		Basic		Diluted
Net income per common share (*)	$	4.01	$	3.97	$	1.30	$	1.30

Numerator (in millions):
Net income	$	201	$	201	$	65	$	65
Effect of dilutive Convertible Senior Notes	—		2		—		—
Net income corresponding to common stock	$	201	$	203	$	65	$	65

Denominator:
Weighted average of common stock outstanding for earnings per share	50,245,073		50,245,073		50,408,754		50,408,754
Adjustment for assumed conversions	—		990,268		—		—
Adjusted weighted average of common stock outstanding for earnings per share	50,245,073		51,235,341		50,408,754		50,408,754

(*) Figures have been calculated using non-rounded amounts.