EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2023

4. EARNINGS PER SHARE

The following table presents the calculation of basic and diluted earnings per share for our Common and Class B common stock:


Years Ended December 31,	2023		2022		2021
Basic Earnings per Share:
Net income attributable to Watsco, Inc. shareholders	$	536,337	$	601,167	$	418,945
Less: distributed and undistributed earnings allocated to restricted common stock		36,966		51,365		37,273

Earnings allocated to Watsco, Inc. shareholders	$	499,371	$	549,802	$	381,672


Weighted-average common shares outstanding—Basic		36,406,148		35,564,203		35,244,230

Basic earnings per share for Common and Class B common stock	$	13.72	$	15.46	$	10.83

Allocation of earnings for Basic:
Common stock	$	455,186	$	499,792	$	353,873
Class B common stock		44,185		50,010		27,799

	$	499,371	$	549,802	$	381,672

Diluted Earnings per Share:
Net income attributable to Watsco, Inc. shareholders	$	536,337	$	601,167	$	418,945
Less: distributed and undistributed earnings allocated to restricted common stock		36,932		51,294		37,222

Earnings allocated to Watsco, Inc. shareholders	$	499,405	$	549,873	$	381,723


Weighted-average common shares outstanding—Basic		36,406,148		35,564,203		35,244,230
Effect of dilutive stock options		125,535		119,431		179,608

Weighted-average common shares outstanding—Diluted		36,531,683		35,683,634		35,423,838

Diluted earnings per share for Common and Class B common stock	$	13.67	$	15.41	$	10.78

Diluted earnings per share for our Common stock assumes the conversion of all our Class B common stock into Common stock as of the beginning of the fiscal year; therefore, no allocation of earnings to Class B common stock is required. At December 31, 2023, 2022, and 2021, our outstanding Class B common stock was convertible into 3,221,259, 3,234,939, and 2,566,990 shares of our Common stock, respectively.

Diluted earnings per share excluded 18,489, 190,462, and 40,529 shares for the years ended December 31, 2023, 2022, and 2021, respectively, related to stock options with an exercise price per share greater than the average market value, resulting in an anti-dilutive effect on diluted earnings per share.