Basic and Diluted Net Income (Loss) Per Share

9 Months Ended

Sep. 30, 2023

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 for the reporting period. 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).

Merger Consideration

On the terms and subject to the conditions set forth in the Amended Merger Agreement, at the Effective Time, each share of our Class A Common Stock outstanding immediately prior to the Effective Time will be converted into EchoStar Class A Common Stock equal to the Exchange Ratio. See Note 1 for further information. In addition, on the terms and subject to the conditions set forth in the Amended Merger Agreement, prior to or at the Effective Time, we and EchoStar will cooperate and take all actions required to amend the terms and conditions of the Convertible Notes, the convertible note hedge transactions, and the warrant transactions. See Note 9 for further information.

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,
	2023		2022		2023		2022
	(In thousands, except per share amounts)
Net income (loss)	$	(116,839)	$	429,585	$	348,823	$	1,418,438
Less: Net income (loss) attributable to noncontrolling interests, net of tax		22,346		17,355		64,980		50,725
Net income (loss) attributable to DISH Network - Basic		(139,185)		412,230		283,843		1,367,713
Interest on dilutive Convertible Notes, net of tax (1)		—		—		—		—
Net income (loss) attributable to DISH Network - Diluted	$	(139,185)	$	412,230	$	283,843	$	1,367,713
Weighted-average common shares outstanding - Class A and B common stock:
Basic		534,034		530,436		532,788		529,870
Dilutive impact of Convertible Notes (2)		—		107,016		107,016		107,016
Dilutive impact of stock awards outstanding (2)		—		3		127		409
Diluted		534,034		637,455		639,931		637,295
Earnings per share - Class A and B common stock:
Basic net income (loss) per share attributable to DISH Network	$	(0.26)	$	0.78	$	0.53	$	2.58
Diluted net income (loss) per share attributable to DISH Network	$	(0.26)	$	0.65	$	0.44	$	2.15

(1) For both the three and nine months ended September 30, 2023 and 2022, substantially all of our interest expense was capitalized. See Note 2 for further information.

(2) For the three months ended September 30, 2023, the dilutive impact of 107 million weighted-average shares of Class A common stock were excluded from the computation of “Diluted net income (loss) per share attributable to DISH Network” because the effect would have been anti-dilutive as a result of the net loss attributable to DISH Network in the period.

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 certain adjustments. As a consequence, the following are not included in the diluted EPS calculation.

	As of September 30,
	2023	2022
	(In thousands)
Anti-dilutive stock awards	14,835	8,435
Performance/market based options	13,565	15,508
Restricted Performance Units/Awards	—	1,146
Common stock warrants	46,029	46,029
Total	74,429	71,118