Basic and Diluted Net Income (Loss) Per Share

12 Months Ended

Dec. 31, 2023

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 EchoStar” 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 for the reporting period. 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).

Merger with DISH Network

On the terms and subject to the conditions set forth in the Amended Merger Agreement, at the Effective Time, each share of DISH Network Class A Common Stock outstanding immediately prior to the Effective Time was converted into EchoStar Class A Common Stock equal to the Exchange Ratio. See Note 1 for further information. In addition, on the terms and subject to the conditions set forth in the Amended Merger Agreement, at the Effective Time, the Convertible Notes, the convertible note hedge transactions, and the warrant transactions changed into a right to convert or purchase EchoStar Class A Common Stock. See Note 10 for further information.

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

	For the Years Ended December 31,
	2023		2022		2021
		(In thousands, except per share amounts)
Net income (loss)	$	(1,634,824)	$	2,536,892	$	2,521,435
Less: Net income (loss) attributable to noncontrolling interests, net of tax		67,233		59,172		35,150
Net income (loss) attributable to EchoStar - Basic		(1,702,057)		2,477,720		2,486,285
Interest on dilutive Convertible Notes, net of tax (1)		—		—		—
Net income (loss) attributable to EchoStar - Diluted	$	(1,702,057)	$	2,477,720	$	2,486,285
Weighted-average common shares outstanding - Class A and B common stock:
Basic		270,842		270,102		275,117
Dilutive impact of Convertible Notes (2)		—		37,550		37,550
Dilutive impact of stock awards outstanding (2)		—		81		455
Diluted		270,842		307,733		313,122
Earnings per share - Class A and B common stock:
Basic net income (loss) per share attributable to EchoStar	$	(6.28)	$	9.17	$	9.04
Diluted net income (loss) per share attributable to EchoStar	$	(6.28)	$	8.05	$	7.94

(1) For the years ended December 31, 2023, 2022 and 2021, substantially all of our interest expense was capitalized. See Note 2 for further information.

(2) For the year ended December 31, 2023, the dilutive impact of 38 million weighted-average shares of Class A common stock were excluded from the computation of “Diluted net income (loss) per share attributable to EchoStar” because the effect would have been anti-dilutive as a result of the net loss attributable to EchoStar in the period.

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/market 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 at price ranges of approximately $185.75 to $245.33 per share (adjusted per share price pursuant to the Amended Merger Agreement), subject to certain adjustments. As a consequence, the following are not included in the diluted EPS calculation.

	As of December 31,
	2023	2022	2021
	(In thousands)
Anti-dilutive stock awards	10,906	9,680	7,426
Performance/market based options	4,631	5,285	4,896
Restricted Performance Units/Awards	-	388	467
Common stock warrants	16,151	16,151	16,151
Total	31,688	31,504	28,940