Note 9 - Earnings Per Share

Basic net income or loss per common share is calculated by dividing net income or loss available to common stockholders by the basic weighted-average number of common shares outstanding for the respective period. Diluted net income or loss per common share is calculated by dividing adjusted net income or loss by the diluted weighted-average number of common shares outstanding, which includes the effect of potentially dilutive securities. Potentially dilutive securities for this calculation consist primarily of non-vested RSUs, contingent PSUs, and shares into which the Senior Convertible Notes are convertible, which are measured using the treasury stock method.

PSUs represent the right to receive, upon settlement of the PSUs after the completion of the three-year performance period, a number of shares of the Company’s common stock that may range from zero to two times the number of PSUs granted on the award date. The number of potentially dilutive shares related to PSUs is based on the number of shares, if any, which would be issuable at the end of the respective reporting period, assuming that date was the end of the contingency period applicable to such PSUs. For additional discussion on PSUs, please refer to Note 7 – Compensation Plans under the heading Performance Share Units.

On August 12, 2016, the Company issued $172.5 million in aggregate principal amount of Senior Convertible Notes due 2021. Upon conversion, the Senior Convertible Notes may be settled, at the Company’s election, in shares of the Company’s common stock, cash, or a combination of cash and common stock. The Company has initially elected a net-settlement method to satisfy its conversion obligation, which would result in the Company settling the principal amount of the Senior Convertible Notes in cash and the excess conversion value in shares. However, the Company has not made an irrevocable election and thereby reserves the right to settle the Senior Convertible Notes in any manner allowed under the indenture as business circumstances warrant. Shares of the Company’s common stock traded at an average closing price below the $40.50 conversion price for the years ended December 31, 2018, and 2017, and for the portion of the year ended December 31, 2016, during which the Senior Convertible Notes were outstanding; therefore, the Senior Convertible Notes had no dilutive impact. In connection with the offering of the Senior Convertible Notes, the Company entered into capped call transactions with affiliates of the underwriters that would effectively prevent dilution upon settlement up to the $60.00 cap price. The capped call transactions will always be anti-dilutive and therefore will never be reflected in diluted net income or loss per share. Please refer to Note 5 – Long-Term Debt for additional discussion.

When the Company recognizes a net loss from continuing operations, as was the case for the years ended December 31, 2017, and 2016, all potentially dilutive shares are anti-dilutive and are consequently excluded from the calculation of diluted net loss per common share.

The following table details the weighted-average dilutive and anti-dilutive securities for the years presented:



	For the Years Ended December 31,
	2018	2017	2016
	(in thousands)
Dilutive	1,590	—	—
Anti-dilutive	—	264	280

The following table sets forth the calculations of basic and diluted net income (loss) per common share:



	For the Years Ended December 31,
	2018		2017			2016
	(in thousands, except per share data)
Net income (loss)	$	508,407	$	(160,843	)	$	(757,744	)

Basic weighted-average common shares outstanding	111,912		111,428			76,568
Dilutive effect of non-vested RSUs and contingent PSUs	1,590		—			—
Dilutive effect of Senior Convertible Notes	—		—			—
Diluted weighted-average common shares outstanding	113,502		111,428			76,568

Basic net income (loss) per common share	$	4.54	$	(1.44	)	$	(9.90	)
Diluted net income (loss) per common share	$	4.48	$	(1.44	)	$	(9.90	)