16. Net Income (Loss) Per Share
In the calculation of basic net income (loss) per common share attributable to common shareholders, participating securities are allocated earnings based on actual dividend distributions received plus a proportionate share of undistributed net income attributable to common shareholders, if any, after recognizing distributed earnings. The Company’s participating securities do not participate in undistributed net losses because they are not contractually obligated to do so. The computation of diluted net income (loss) per share attributable to common shareholders reflects the potential dilution that could occur if securities or other contracts to issue common shares that are dilutive were exercised or converted into common shares or resulted in the issuance of common shares that would then share in the earnings of the Company. During periods in which the Company realizes a loss from continuing operations attributable to common shareholders, securities would not be dilutive to net loss per share and conversion into common shares is assumed not to occur. Diluted net income (loss) per share attributable to common shareholders is calculated under both the two-class method and the treasury stock method and the more dilutive of the two calculations is presented.
Basic net income (loss) per share attributable to common shareholders is computed as (i) net income (loss) attributable to common shareholders, (ii) less income allocable to participating securities (iii) divided by weighted average basic shares outstanding. The Company’s diluted net income (loss) per share attributable to common shareholders is computed as (i) basic net income (loss) attributable to common shareholders, (ii) plus diluted adjustments to income allocable to participating securities (iii) divided by weighted average diluted shares outstanding.
Basic and diluted net income (loss) per share is not presented for periods prior to the completion of our IPO as the ownership structure of the Company prior to the IPO was not a common unit of ownership. Instead, pro forma net income (loss) attributable to common shares is presented. Pro forma net income (loss) attributable to common shares reflects net income (loss) as reported and gives effect to an adjustment to remove accretion on the Convertible Preferred Units. In our pro forma basic and diluted income (loss) per share attributable to common shareholders calculation, we assumed the conversion of the Convertible Preferred Units occurred on
January 1, 2011 and, therefore, we have removed the related accretion to determine pro forma net income (loss).
Pro forma weighted average common shares outstanding used in the computation of pro forma basic and diluted income (loss) per share attributable to common shareholders has been computed taking into account (1) the conversion ratio at the time of the IPO of all common units and Convertible Preferred Units into common shares as if the conversion occurred as of the beginning of the year and (2) the 34.5 million common shares issued by the Company in the IPO, which included 1.5 million common shares issued pursuant to the over-allotment option exercised by the underwriters of the IPO.
The following table is a reconciliation of the Company’s net income (loss) attributable to common shareholders to basic and pro forma basic net income (loss) attributable to common shareholders and to diluted and pro forma diluted net income (loss) attributable to common shareholders and a reconciliation of basic and pro forma basic weighted average common shares outstanding to diluted and pro forma diluted weighted average common shares outstanding for the three and nine months ended September 30, 2012 and 2011:
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
|
|
|
(In thousands, except per share data) |
|
Numerator: |
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to common shareholders |
|
$ |
(36,250 |
) |
$ |
51,776 |
|
$ |
(98,634 |
) |
$ |
(36,408 |
) |
Less: Basic income allocable to participating securities(1) |
|
— |
|
2,349 |
|
— |
|
— |
|
Basic net income (loss) attributable to common shareholders |
|
(36,250 |
) |
49,427 |
|
(98,634 |
) |
|
|
Plus: Accretion to redemption value of convertible preferred units |
|
— |
|
— |
|
— |
|
24,442 |
|
Pro forma basic net loss attributable to common shareholders |
|
— |
|
— |
|
— |
|
(11,966 |
) |
Diluted adjustments to income allocable to participating securities(1) |
|
— |
|
3 |
|
— |
|
— |
|
Diluted net income (loss) attributable to common shareholders |
|
$ |
(36,250 |
) |
$ |
49,430 |
|
$ |
(98,634 |
) |
|
|
Pro forma diluted net loss attributable to common shareholders |
|
|
|
|
|
|
|
$ |
(11,966 |
) |
|
|
|
|
|
|
|
|
|
|
Denominator: |
|
|
|
|
|
|
|
|
|
Weighted average number of shares used to compute net income (loss) per share: |
|
|
|
|
|
|
|
|
|
Basic |
|
373,448 |
|
368,996 |
|
371,140 |
|
|
|
Restricted stock awards(1)(2) |
|
— |
|
345 |
|
— |
|
|
|
Diluted |
|
373,448 |
|
369,341 |
|
371,140 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro forma basic |
|
|
|
|
|
|
|
349,792 |
|
Pro forma restricted stock awards(1)(2) |
|
|
|
|
|
|
|
— |
|
Pro forma diluted |
|
|
|
|
|
|
|
349,792 |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share attributable to common shareholders: |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.10 |
) |
$ |
0.13 |
|
$ |
(0.27 |
) |
|
|
Diluted |
|
$ |
(0.10 |
) |
$ |
0.13 |
|
$ |
(0.27 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Pro forma basic |
|
|
|
|
|
|
|
$ |
(0.03 |
) |
Pro forma diluted |
|
|
|
|
|
|
|
$ |
(0.03 |
) |
(1) Our service vesting restricted stock awards represent participating securities because they participate in nonforfeitable dividends with common equity owners. Income allocable to participating securities represents the distributed and undistributed earnings attributable to the participating securities. Our restricted stock awards with market and service vesting criteria and all restricted stock units are not considered to be participating securities and, therefore, are excluded from the basic net income (loss) per common share calculation. Our service vesting restricted stock awards do not participate in undistributed net losses and, therefore, are excluded from the basic net income (loss) per common share calculation in periods we are in a net loss position.
(2) Due to our basic net loss attributable to common shareholders for the three and nine months ended September 30, 2012, we excluded 17.1 million outstanding restricted stock awards and restricted stock units from the computations of diluted net loss per share because the effect would have been anti-dilutive. Due to our basic net loss attributable to common shareholders for the nine months ended September 30, 2011, we excluded 13.6 million outstanding restricted stock awards from the computations of pro forma diluted net loss per share because the effect would have been anti-dilutive. For the three months ended September 30, 2011, we excluded 5.5 million outstanding restricted stock awards from the computations of diluted net income per share because the effect would have been anti-dilutive.
|