Review the Earnings per Share footnote for Grubhub Grubhub adds in 1,601,000 shares of stock representing stock options A. Is this the actual number of shares that could be exercised? B. How is the 1,601,000 number determined? Grubhub also lists the number of anti-dilutive shares from stock options at 216,451,000 shares. A. Explain what anti-dilutive means. B. Why aren't these shares included in the denominator in computing the diluted earnings per share? GRUBHUB INC. Notes to Consolidated Financial Statements (Continued) 14. Earnings per Share Attributable to Common Stockholders Basic earnings per share is computed by dividing net income attributable to common stockholders by the weighted-average number of common shares outstanding during the period without consideration for common stock equivalents. Diluted net income per share attributable to common stockholders is computed by dividing net income by the weighted-ave rage number of common shares outstanding during the period and potentially dilutive common stock equivalents, including stock options, restricted stock units and restricted stock awards, except in cases where the effect of the common stock equivalent would be antidilutive. Potential common stock equivalents consist of common stock issuable upon exercise of stock options and vesting of restricted stock units and restricted stock awards using the treasury stock method The sale of 2,820,464 shares of the Company's common stock to the Investor on April 25, 2018 resulted in an immediate increase in the outstanding shares used to calculate the weighted-average common shares outstanding for the year ended December 31, 2018 (see Note 12, Stockholders' Equity) The following table presents the calculation of basic and diluted net income per share attributable to common stockholders for the years ended December 31, 2018, 2017 and 2016: Year Ended December 31, 2018 2017 2016 (in thousands, except per share data) Basic earnings per share: Net income attributable to common stockholders (numerator) Shares used in computation (denominator) Weighted-average common shares outstanding Basic earnings per share $78,481 $98,983 $49,557 89,447 86,297 $ 0.88 $ 1.15 $ 0.58 85,069 Diluted earnings per share: Net income attributable to common stockholders (numerator) Shares used in computation (denominator) Weighted-average common shares outstanding Effect of dilutive securities: $78,481 $98,983 $49,557 89,447 86,297 85,069 Stock options Restricted stock units and restricted 1,601 1,059 792 stock awards 1,306 92,354 0.85 $ 1.12 $ 0.58 826 274 88,182 86,135 (a) Weighted-average diluted shares Diluted earnings per share (a)Prior to the adoption of ASU 2016-09, the treasury stock method calculation of weighted-average dilutive shares outstanding for the year ended December 31, 2016 included the estimated impact of tax benefits and deficiencies. During the year ended December 31, 2016, the Company repurchased and retired 724,473 shares of its common stock at a weighted-average share price of $20.37, or an aggregate of $14.8 million. The repurchases resulted in a reduction of the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted net earnings per share from the dates of the repurchases. See Note 12, Stockholders' Equity, for additional details The number of shares of common stock underlying stock-based awards excluded from the calculation of diluted net income per share attributable to common stockholders because their effect would have been antidilutive for the years ended December 31, 2018, 2017 and 2016 were as follows: Year Ended December 31, 2018 2017 2016 Anti-dilutive shares underlying stock based awards: Stock options Restricted stock units 216,451 222,984 35,646 212,170 552,108 Review the Earnings per Share footnote for Grubhub Grubhub adds in 1,601,000 shares of stock representing stock options A. Is this the actual number of shares that could be exercised? B. How is the 1,601,000 number determined? Grubhub also lists the number of anti-dilutive shares from stock options at 216,451,000 shares. A. Explain what anti-dilutive means. B. Why aren't these shares included in the denominator in computing the diluted earnings per share? GRUBHUB INC. Notes to Consolidated Financial Statements (Continued) 14. Earnings per Share Attributable to Common Stockholders Basic earnings per share is computed by dividing net income attributable to common stockholders by the weighted-average number of common shares outstanding during the period without consideration for common stock equivalents. Diluted net income per share attributable to common stockholders is computed by dividing net income by the weighted-ave rage number of common shares outstanding during the period and potentially dilutive common stock equivalents, including stock options, restricted stock units and restricted stock awards, except in cases where the effect of the common stock equivalent would be antidilutive. Potential common stock equivalents consist of common stock issuable upon exercise of stock options and vesting of restricted stock units and restricted stock awards using the treasury stock method The sale of 2,820,464 shares of the Company's common stock to the Investor on April 25, 2018 resulted in an immediate increase in the outstanding shares used to calculate the weighted-average common shares outstanding for the year ended December 31, 2018 (see Note 12, Stockholders' Equity) The following table presents the calculation of basic and diluted net income per share attributable to common stockholders for the years ended December 31, 2018, 2017 and 2016: Year Ended December 31, 2018 2017 2016 (in thousands, except per share data) Basic earnings per share: Net income attributable to common stockholders (numerator) Shares used in computation (denominator) Weighted-average common shares outstanding Basic earnings per share $78,481 $98,983 $49,557 89,447 86,297 $ 0.88 $ 1.15 $ 0.58 85,069 Diluted earnings per share: Net income attributable to common stockholders (numerator) Shares used in computation (denominator) Weighted-average common shares outstanding Effect of dilutive securities: $78,481 $98,983 $49,557 89,447 86,297 85,069 Stock options Restricted stock units and restricted 1,601 1,059 792 stock awards 1,306 92,354 0.85 $ 1.12 $ 0.58 826 274 88,182 86,135 (a) Weighted-average diluted shares Diluted earnings per share (a)Prior to the adoption of ASU 2016-09, the treasury stock method calculation of weighted-average dilutive shares outstanding for the year ended December 31, 2016 included the estimated impact of tax benefits and deficiencies. During the year ended December 31, 2016, the Company repurchased and retired 724,473 shares of its common stock at a weighted-average share price of $20.37, or an aggregate of $14.8 million. The repurchases resulted in a reduction of the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted net earnings per share from the dates of the repurchases. See Note 12, Stockholders' Equity, for additional details The number of shares of common stock underlying stock-based awards excluded from the calculation of diluted net income per share attributable to common stockholders because their effect would have been antidilutive for the years ended December 31, 2018, 2017 and 2016 were as follows: Year Ended December 31, 2018 2017 2016 Anti-dilutive shares underlying stock based awards: Stock options Restricted stock units 216,451 222,984 35,646 212,170 552,108