. Net (Loss) Income per Share



	Three Months Ended						Six Months Ended
	June 30,						June 30,
Net (Loss) Income per Basic and Diluted Share	2019			2018			2019		2018
(in thousands, except per share amounts)
Numerator
(Loss) income attributable to PDL’s shareholders used to compute net (loss) income per basic and diluted share	$	(4,419	)	$	(112,296	)	$	2,261	$	(110,694	)

Denominator
Total weighted-average shares used to compute net (loss) income attributable to PDL’s shareholders, per basic share	118,285			146,923			123,484		149,186
Restricted stock	—			—			507		—
Stock options	—			—			49		—
Shares used to compute net (loss) income attributable to PDL’s shareholders, per diluted share	118,285			146,923			124,040		149,186

Net (loss) income attributable to PDL’s shareholders per share - basic	$	(0.04	)	$	(0.76	)	$	0.02	$	(0.74	)
Net (loss) income attributable to PDL’s shareholders per share - diluted	$	(0.04	)	$	(0.76	)	$	0.02	$	(0.74	)

The Company computes net (loss) income per diluted share using the sum of the weighted-average number of common and common equivalent shares outstanding. Common equivalent shares used in the computation of net (loss) income per diluted share include shares that may be issued pursuant to outstanding stock options and restricted stock awards, the 4.0% Convertible Senior Notes due February 1, 2018 (the “February 2018 Notes”) that were repaid on February 1, 2018, and the 2.75% Convertible Senior Notes due December 1, 2021 (the “December 2021 Notes”), in each case, on a weighted-average basis for the period that the notes were outstanding, including, if applicable, the underlying shares using the treasury stock method.

December 2021 Notes Capped Call Potential Dilution

In November 2016, the Company issued $150.0 million in aggregate principal of the December 2021 Notes, which provide in certain situations for the conversion of the outstanding principal amount of the December 2021 Notes into shares of the Company’s common stock at a predefined conversion rate. In conjunction with the issuance of the December 2021 Notes, the Company entered into a capped call transaction with a hedge counterparty. The capped call transaction is expected generally to reduce the potential dilution, and/or offset, to an extent, the cash payments the Company may choose to make in excess of the principal amount, upon conversion of the December 2021 Notes. The Company has excluded the capped call transaction from the net (loss) income per diluted share computation as such securities would have an anti-dilutive effect and those securities should be considered separately rather than in the aggregate in determining whether their effect on net (loss) income per diluted share would be dilutive or anti-dilutive. For additional information regarding the conversion rates and the capped call transaction related to the Company’s December 2021 Notes, see Note 10, Convertible Senior Notes.

Anti-Dilutive Effect of Restricted Stock Awards and Stock Options

For the three months ended June 30, 2019 and 2018, the Company excluded approximately 1.1 million and 1.0 million shares underlying restricted stock awards, respectively, and for the six months ended June 30, 2019 and 2018, the Company excluded approximately 0.8 million and 1.1 million shares underlying restricted stock awards, respectively, in each case calculated on a weighted-average basis, from its net (loss) income per diluted share calculations because their effect was anti-dilutive.

For the three months ended June 30, 2019 and 2018, the Company excluded approximately 12.7 million and 4.9 million shares underlying outstanding stock options, respectively, and for the six months ended June 30, 2019 and 2018, the Company excluded approximately 10.4 million and 4.9 million shares underlying outstanding stock options, respectively, in each case calculated on a weighted-average basis, from its net (loss) income per diluted share calculations because their effect was anti-dilutive.