Basic and Diluted Net Income (Loss) Per Share

3 Months Ended

Mar. 31, 2020

Basic and Diluted Net Income (Loss) Per Share

Basic and Diluted Net Income (Loss) Per Share

3.Basic and Diluted Net Income (Loss) Per Share

We present both basic earnings per share (“EPS”) and diluted EPS. Basic EPS excludes potential dilution and is computed by dividing “Net income (loss) attributable to DISH Network” by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if stock awards were exercised and if our Convertible Notes were converted. The potential dilution from stock awards is accounted for using the treasury stock method based on the average market value of our Class A common stock. The potential dilution from conversion of the Convertible Notes is accounted for using the if-converted method, which requires that all of the shares of our Class A common stock issuable upon conversion of the Convertible Notes will be included in the calculation of diluted EPS assuming conversion of the Convertible Notes at the beginning of the reporting period (or at time of issuance, if later).

The following table presents EPS amounts for all periods and the basic and diluted weighted-average shares outstanding used in the calculation.

	For the Three Months Ended
	March 31,
	2020		2019
	(In thousands, except per share amounts)
Net income (loss)	$	99,274	$	361,299
Less: Net income (loss) attributable to noncontrolling interests, net of tax		26,175		21,538
Net income (loss) attributable to DISH Network - Basic		73,099		339,761
Interest on dilutive Convertible Notes, net of tax (1)		—		—
Net income (loss) attributable to DISH Network - Diluted	$	73,099	$	339,761
Weighted-average common shares outstanding - Class A and B common stock:
Basic (2)		523,152		467,953
Dilutive impact of Convertible Notes		58,192		58,192
Dilutive impact of stock awards outstanding		37		74
Diluted		581,381		526,219
Earnings per share - Class A and B common stock:
Basic net income (loss) per share attributable to DISH Network	$	0.14	$	0.73
Diluted net income (loss) per share attributable to DISH Network	$	0.13	$	0.65

(1) For both the three months ended March 31, 2020 and 2019, materially all of our interest expense was capitalized. See Note 2 for further information.

(2) The increase resulted from the Master Transaction Agreement, as discussed in Note 13, and the stock rights offering as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019.

Certain stock awards to acquire our Class A common stock are not included in the weighted-average common shares outstanding above, as their effect is anti-dilutive. In addition, vesting of performance based options and rights to acquire shares of our Class A common stock granted pursuant to our performance based stock incentive plans (“Restricted Performance Units”) are both contingent upon meeting certain goals, some of which are not yet probable of being achieved. Furthermore, the warrants that we issued to certain option counterparties in connection with the Convertible Notes due 2026 are only exercisable at their expiration if the market price per share of our Class A common stock is greater than the strike price of the warrants, which is approximately $86.08 per share, subject to adjustments. As a consequence, the following are not included in the diluted EPS calculation.

	As of March 31,
	2020	2019
	(In thousands)
Anti-dilutive stock awards	6,535	4,495
Performance based options	7,918	8,936
Restricted Performance Units/Awards	1,456	1,651
Common stock warrants	46,029	46,029
Total	61,938	61,111