Basic and Diluted Net Income (Loss) Per Share

9 Months Ended

Sep. 30, 2021

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 Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
	(In thousands, except per share amounts)
Net income (loss)	$	567,520	$	532,959	$	1,890,534	$	1,112,638
Less: Net income (loss) attributable to noncontrolling interests, net of tax		10,478		28,360		32,221		82,597
Net income (loss) attributable to DISH Network - Basic		557,042		504,599		1,858,313		1,030,041
Interest on dilutive Convertible Notes, net of tax (1)		—		—		—		—
Net income (loss) attributable to DISH Network - Diluted	$	557,042	$	504,599	$	1,858,313	$	1,030,041
Weighted-average common shares outstanding - Class A and B common stock:
Basic		528,229		525,532		527,503		524,329
Dilutive impact of Convertible Notes (2)		107,016		58,192		107,016		58,192
Dilutive impact of stock awards outstanding		1,195		233		699		74
Diluted		636,440		583,957		635,218		582,595
Earnings per share - Class A and B common stock:
Basic net income (loss) per share attributable to DISH Network	$	1.05	$	0.96	$	3.52	$	1.96
Diluted net income (loss) per share attributable to DISH Network	$	0.88	$	0.86	$	2.93	$	1.77

(1) For both the three and nine months ended September 30, 2021 and 2020, materially all of our interest expense was capitalized. See Note 2 for further information.

(2) The increase resulted from the issuance of our 0% Convertible Notes due 2025 on December 21, 2020.

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 approximately $86.08 per share, subject to adjustments. As a consequence, the following are not included in the diluted EPS calculation.

	As of September 30,
	2021	2020
	(In thousands)
Anti-dilutive stock awards	6,898	8,761
Performance/market based options (1)	15,425	5,317
Restricted Performance Units/Awards	1,402	1,787
Common stock warrants	46,029	46,029
Total	69,754	61,894

(1) The increase primarily resulted from the grant of the Ergen 2020 Performance Award during the fourth quarter of 2020, as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020.