. Net (Loss) Income per Share



	Three Months Ended
	March 31,
Net (Loss) Income per Basic and Diluted Share	2020			2019
(in thousands, except per share amounts)
Numerator
Net loss from continuing operations	$	(31,767	)	$	(8,452	)
(Loss) income from discontinued operations	$	(244	)	$	15,069
Net (loss) income attributable to PDL’s shareholders used to compute net (loss) income per basic and diluted share	$	(31,723	)	$	6,680

Denominator
Total weighted-average shares used to compute net (loss) income attributable to PDL’s shareholders, per basic share	122,896			128,799
Shares used to compute net (loss) income attributable to PDL’s shareholders, per diluted share	122,896			128,799

Net loss from continuing operations	$	(0.26	)	$	(0.07	)
Net (loss) income from discontinued operations	$	0.00		$	0.12
Net (loss) income attributable to PDL’s shareholders per share - basic	$	(0.26	)	$	0.05
Net loss from continuing operations	$	(0.26	)	$	(0.07	)
Net (loss) income from discontinued operations	$	0.00		$	0.12
Net (loss) income attributable to PDL’s shareholders per share - diluted	$	(0.26	)	$	0.05

The Company computes net (loss) income per diluted share using the sum of the weighted-average number of common and common equivalent shares outstanding. Common equivalent shares used in the computation of net (loss) income per diluted share include shares that may be issued pursuant to outstanding stock options and restricted stock awards in each case, on a weighted-average basis for the period they were outstanding, including, if applicable, the underlying shares using the treasury stock method.

The December 2021 Notes and the December 2024 Notes allow for the settlement entirely or partially in cash, and are accounted for under the treasury stock method. Under the treasury stock method, the shares issuable upon conversion of the notes are not included in the calculation of diluted earnings per share except to the extent that the conversion value of the notes exceeds their principal amount. The effect of which, for diluted earnings per share purposes, is that only the number of shares of common stock that would be necessary to settle such excess, if we elected to settle such excess in shares, are included in the computation.

December 2021 Notes and December 2024 Notes Capped Call Potential Dilution

In November 2016, the Company issued $150.0 million in aggregate principal of the December 2021 Notes. The Company entered into an Exchange Transaction in September 2019 through which it exchanged a portion of the December 2021 Notes for the December 2024 Notes with a later maturity of December 2024. Both the notes that mature in December 2021 and those that mature in December 2024 provide in certain situations for the conversion of the outstanding principal amount into shares of the Company’s common stock at a predefined conversion rate. In conjunction with the issuance of the December 2021 Notes and the issuance of the December 2024 Notes pursuant to the Exchange Transaction, the Company entered into capped call transactions with a hedge counterparty. The capped call transactions are expected generally to reduce the potential dilution, and/or offset, to an extent, the cash payments the Company may choose to make in excess of the principal amount, upon conversion of the December 2021 Notes or the December 2024 Notes. The Company has excluded the capped call transaction from the net (loss) income per diluted share computation as such securities would have an anti-dilutive effect and those securities should be considered separately rather than in the aggregate in determining whether their effect on net (loss) income per diluted share would be dilutive or anti-dilutive. For additional information regarding the conversion rates and the capped call transaction related to the Company’s December 2021 Notes and December 2024 Notes, see Note 11, Convertible Senior Notes.

Anti-Dilutive Effect of Restricted Stock Awards and Stock Options

For the three months ended March 31, 2020 and 2019, the Company excluded approximately 0.1 million and 0.4 million shares underlying restricted stock awards, respectively, calculated on a weighted-average basis, from its net (loss) income per diluted share calculations because their effect was anti-dilutive.

For the three months ended March 31, 2020 and 2019, the Company excluded approximately 12.6 million and 7.8 million shares underlying outstanding stock options, respectively, calculated on a weighted-average basis, from its net (loss) income per diluted share calculations because their effect was anti-dilutive.