| Earnings per Common Share (EPS) |
17. Earnings per Common Share (“EPS”)
Basic EPS is computed based upon the weighted average number of common shares outstanding for the year. Diluted EPS is computed based upon the weighted average number of common shares outstanding for the year plus the dilutive effect of common stock equivalents using the treasury stock method and the average market price of the Company’s common stock for the year. The Company includes participating securities (Redeemable Convertible Preferred Stock - Participation with Dividends on Common Stock that contain preferred dividend) in the computation of EPS pursuant to the two-class method. The two-class method of computing earnings per share is an allocation method that calculates earnings per share for common stock and participating securities. During periods of net loss, no effect is given to the participating securities because they do not share in the losses of the Company.
The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net income attributable to common stockholders per common share from continued and discontinued operations. | | | | | | | | | | | | | | Twelve Months Ended December 31, | | 2019 | | 2018 | | 2017 | Numerator - Basic: | | | | | | Net loss from continuing operations | $ | (103,467 | ) | | $ | (245,280 | ) | | $ | (194,224 | ) | Net (income) loss attributable to redeemable noncontrolling interests | (1,126 | ) | | 8,837 |
| | 9,291 |
| Preferred stock dividend | (32,134 | ) | | (25,593 | ) | | — |
| Net (loss) income from continuing operations attributable to Synchronoss | (136,727 | ) | | (262,036 | ) | | (184,933 | ) | | | | | | | Income from discontinued operations, net of taxes** | — |
| | 18,288 |
| | 75,495 |
| Net (loss) income attributable to Synchronoss | $ | (136,727 | ) | | $ | (243,748 | ) | | $ | (109,438 | ) | | | | | | | Numerator - Diluted: | | | | | | Net (loss) income from continuing operations attributable to Synchronoss | $ | (136,727 | ) | | $ | (262,036 | ) | | $ | (184,933 | ) | Income effect for interest on convertible debt, net of tax | — |
| | — |
| | — |
| Net loss from continuing operations adjusted for the convertible debt | (136,727 | ) | | (262,036 | ) | | (184,933 | ) | | | | | | | Income from discontinued operations, net of taxes** | — |
| | 18,288 |
| | 75,495 |
| Net loss attributable to Synchronoss | $ | (136,727 | ) | | $ | (243,748 | ) | | $ | (109,438 | ) | | | | | | | Denominator: | | | | | | Weighted average common shares outstanding — basic | 40,694 |
| | 40,277 |
| | 44,669 |
| Dilutive effect of: | | | | | | Shares from assumed conversion of convertible debt 1 | — |
| | — |
| | — |
| Shares from assumed conversion of preferred stock 2 | — |
| | — |
| | — |
| Options and unvested restricted shares | — |
| | — |
| | — |
| Weighted average common shares outstanding — diluted | 40,694 |
| | 40,277 |
| | 44,669 |
| | | | | | | Basic EPS | | | | | | Continuing operations | $ | (3.36 | ) | | $ | (6.51 | ) | | $ | (4.14 | ) | Discontinued operations** | $ | — |
| | $ | 0.46 |
| | $ | 1.69 |
| | $ | (3.36 | ) | | $ | (6.05 | ) | | $ | (2.45 | ) | Diluted EPS | | | | | | Continuing operations | $ | (3.36 | ) | | $ | (6.51 | ) | | $ | (4.14 | ) | Discontinued operations** | $ | — |
| | $ | 0.46 |
| | $ | 1.69 |
| | $ | (3.36 | ) | | $ | (6.05 | ) | | $ | (2.45 | ) | | | | | | | Anti-dilutive stock options excluded | — |
| | — |
| | — |
| Unvested shares of restricted stock awards | 3,375 |
| | 2,700 |
| | 2,648 |
|
| | (1) | The calculation does not include the effect of assumed conversion of convertible debt of 1,288,292, 3,972,939, and 4,325,646 shares for the year ended December 31, 2019, 2018 and 2017, respectively; which is based on 18.8072 shares per $1,000 principal amount of the Senior Convertible Notes. |
| | (2) | The calculation does not include the effect of assumed conversion of preferred stock of 11,383,105 and 9,312,528 shares for the year ended December 31, 2019 and 2018, respectively; which is based on 55.5556 shares per $1,000 principal amount of the preferred stock, because the effect would have been anti–dilutive. |
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