Basic and Diluted Net Income (Loss) Per Share

6 Months Ended

Jun. 30, 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				For the Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
	(In thousands, except per share amounts)
Net income (loss)	$	480,406	$	340,566	$	579,680	$	701,865
Less: Net income (loss) attributable to noncontrolling interests, net of tax		28,063		23,523		54,238		45,061
Net income (loss) attributable to DISH Network - Basic		452,343		317,043		525,442		656,804
Interest on dilutive Convertible Notes, net of tax (1)		—		—		—		—
Net income (loss) attributable to DISH Network - Diluted	$	452,343	$	317,043	$	525,442	$	656,804
Weighted-average common shares outstanding - Class A and B common stock:
Basic (2)		524,292		469,655		523,722		468,809
Dilutive impact of Convertible Notes		58,192		58,192		58,192		58,192
Dilutive impact of stock awards outstanding		135		136		157		106
Diluted		582,619		527,983		582,071		527,107
Earnings per share - Class A and B common stock:
Basic net income (loss) per share attributable to DISH Network	$	0.86	$	0.68	$	1.00	$	1.40
Diluted net income (loss) per share attributable to DISH Network	$	0.78	$	0.60	$	0.90	$	1.25

(1) For both the three and six months ended June 30, 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 June 30,
	2020	2019
	(In thousands)
Anti-dilutive stock awards	6,570	5,115
Performance based options (1)	6,618	8,582
Restricted Performance Units/Awards (1)	1,146	1,589
Common stock warrants	46,029	46,029
Total	60,363	61,315

(1) The decrease primarily resulted from certain performance based options and Restricted Performance Units/Awards that vested during the three months ended June 30, 2020.