NOTE 18. NET (LOSS) INCOME PER SHARE

The following is a reconciliation of the numerator and denominator of basic and diluted net (loss) income per share for the three months ended March 31, 2014 and 2013 (in thousands, except per share data):



	Three Months Ended March 31,
	2014			2013
Numerator:
(Loss) income from continuing operations	$	(438,697	)	$	21,653
Less: Net income from continuing operations attributable to noncontrolling interests	100			—
(Loss) income from continuing operations attributable to Endo International plc ordinary shareholders	(438,797		)	21,653
Income (loss) from discontinued operations attributable to Endo International plc ordinary shareholders, net of tax	1,885			(6,304		)
Net (loss) income attributable to Endo International plc ordinary shareholders	$	(436,912	)	$	15,349
Denominator:
For basic per share data—weighted average shares	128,135			111,216
Dilutive effect of ordinary share equivalents	—			1,952
Dilutive effect of 1.75% Convertible Senior Subordinated Notes and warrants	—			21
For diluted per share data—weighted average shares	128,135			113,189

Basic net (loss) income per share data is computed based on the weighted average number of ordinary shares outstanding during the period. Diluted income per ordinary share is computed based on the weighted average number of ordinary shares outstanding and, if there is net income from continuing operations attributable to Endo International plc ordinary shareholders during the period, the dilutive impact of ordinary share equivalents outstanding during the period. Ordinary share equivalents are measured under the treasury stock method.

The 1.75% Convertible Senior Subordinated Notes due April 15, 2015 (the Convertible Notes) are only included in the dilutive net (loss) income per share calculations using the treasury stock method during periods in which the average market price of our ordinary shares was above the applicable conversion price of the Convertible Notes, or $29.20 per share and the impact would not be anti-dilutive. In these periods, under the treasury stock method, we calculated the number of shares issuable under the terms of these notes based on the average market price of the shares during the period, and included that number in the total diluted shares outstanding for the period.

We have entered into convertible note hedge and warrant agreements that, in combination, have the economic effect of reducing the dilutive impact of the Convertible Notes. However, we separately analyze the impact of the convertible note hedge and the warrant agreements on diluted weighted average shares outstanding. As a result, the purchases of the convertible note hedges are excluded because their impact would be anti-dilutive. The treasury stock method is applied when the warrants are in-the-money with the proceeds from the exercise of the warrant used to repurchase shares based on the average stock price in the calculation of diluted weighted average shares. Until the warrants are in-the-money, they have no impact to the diluted weighted average share calculation. The total number of shares that could potentially be included if the warrants were exercised is approximately 13.0 million at March 31, 2014.

The following reconciliation shows the maximum potential dilution of shares currently excluded from the diluted net (loss) income per share calculations for the three months ended March 31, 2014 and 2013 (in thousands):



	Three Months Ended March 31,
	2014	2013
Weighted average shares excluded:
1.75% Convertible senior subordinated notes due 2015 and warrants(1)	25,993	25,972
Employee share-based awards	178	4,422
Total excluded shares	26,171	30,394

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(1)	Amounts represent the incremental potential total dilution that could occur if our Convertible Notes and warrants were converted to ordinary shares.