Basic and Diluted Net Income (Loss) Per Share

12 Months Ended

Dec. 31, 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 3 3/8% Convertible Notes due 2026 issued August 8, 2016 (the “Convertible Notes due 2026”), our 2 3/8% Convertible Notes due 2024 issued March 17, 2017 (the “Convertible Notes due 2024”) and our 0% Convertible Notes due 2025 issued December 21, 2020 (the “Convertible Notes due 2025,” and collectively with the Convertible Notes due 2026 and the Convertible Notes due 2024, the “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 Years Ended December 31,
	2021		2020		2019
		(In thousands, except per share amounts)
Net income (loss)	$	2,455,946	$	1,873,936	$	1,492,569
Less: Net income (loss) attributable to noncontrolling interests, net of tax		45,304		111,263		93,057
Net income (loss) attributable to DISH Network - Basic		2,410,642		1,762,673		1,399,512
Interest on dilutive Convertible Notes, net of tax (1)		—		—		—
Net income (loss) attributable to DISH Network - Diluted	$	2,410,642	$	1,762,673	$	1,399,512
Weighted-average common shares outstanding - Class A and B common stock:
Basic (2)		527,844		524,761		479,657
Dilutive impact of Convertible Notes (3)		107,016		59,526		58,192
Dilutive impact of stock awards outstanding		1,203		73		115
Diluted		636,063		584,360		537,964
Earnings per share - Class A and B common stock:
Basic net income (loss) per share attributable to DISH Network	$	4.57	$	3.36	$	2.92
Diluted net income (loss) per share attributable to DISH Network	$	3.79	$	3.02	$	2.60

(1) For the years ended December 31, 2021, 2020 and 2019, materially all of our interest expense was capitalized. See Note 2 for further information.

(2) The 2020 increase primarily resulted from the Master Transaction Agreement, as discussed in Note 20, and the stock rights offering as discussed in Note 13.

(3) The impact of the potential dilution from conversion of our 0% Convertible Notes due 2025, as discussed above, is included assuming conversion as of the December 21, 2020 issuance date into approximately 48.8 million shares of our Class A common stock.

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 December 31,
	2021	2020	2019
	(In thousands)
Anti-dilutive stock awards	7,582	9,083	5,471
Performance/market based options (1)	13,954	17,403	7,966
Restricted Performance Units/Awards	1,331	1,755	1,484
Common stock warrants	46,029	46,029	46,029
Total	68,896	74,270	60,950

(1) The increase primarily resulted from the grant of the Ergen 2020 Performance Award during the fourth quarter of 2020. As of December 31, 2021, approximately 20% of the Ergen 2020 Performance Award had vested. See Note 15 for further information.