Net Income per Share

12 Months Ended

Dec. 31, 2020

24. Net Loss per Share


Net Loss per Basic and Diluted Share	Eight Months Ended August 31,		Year Ended December 31,
(in thousands, except per share amounts)	2020		2019		2018
Numerator


Net loss from continuing operations	$	(43,040)	$	(57,094)	$	(32,765)
Net loss from discontinued operations	$	(34,915)	$	(13,597)	$	(36,094)
Loss attributable to the PDL’s stockholders used to compute net loss per basic and diluted share	$	(77,296)	$	(70,411)	$	(68,859)

Denominator
Total weighted-average shares used to compute net loss attributable to PDL's stockholders, per basic share	118,001		118,631		145,669








Shares used to compute net loss attributable to PDL’s stockholders, per diluted share	118,001		118,631		145,669

Net loss per share - basic
Continuing operations	$	(0.36)	$	(0.48)	$	(0.22)
Discontinued operations	$	(0.30)	$	(0.11)	$	(0.25)
Net loss attributable to PDL’s stockholders per basic share	$	(0.66)	$	(0.59)	$	(0.47)

Net loss per share - diluted
Continuing operations	$	(0.36)	$	(0.48)	$	(0.22)
Discontinued operations	$	(0.30)	$	(0.11)	$	(0.25)
Net loss attributable to PDL’s stockholders per diluted share	$	(0.66)	$	(0.59)	$	(0.47)

The Company computes net loss 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 per diluted share include shares that may be issued pursuant to outstanding stock options and restricted stock awards in each case, on a weighted-average basis for the period they were outstanding, including, if applicable, the underlying shares using the treasury stock method.

The February 2018 Notes that were repaid on February 1, 2018, the December 2021 Notes and the December 2024 Notes allow, or previously allowed, for the settlement entirely or partially in cash, and are accounted for under the treasury stock method. Under the treasury stock method, the shares issuable upon conversion of the notes are not included in the calculation of diluted earnings per share except to the extent that the conversion value of the notes exceeds their principal amount. The effect of which, for diluted earnings per share purposes, is that only the number of shares of common stock that would be necessary to settle such excess, if the Company elected to settle such excess in shares, are included in the computation.

December 2021 Notes and December 2024 Notes Capped Call Potential Dilution

In November 2016, the Company issued $150.0 million in aggregate principal of the December 2021 Notes. In September 2019, the Company entered into the September 2019 Exchange Transaction through which it exchanged a portion of the December 2021 Notes for the December 2024 Notes. Both the December 2021 Notes and the December 2024 Notes provide in certain situations for the conversion of the outstanding principal amount into shares of the Company’s common stock at a predefined conversion rate. In conjunction with the issuance of the December 2021 Notes and the issuance of the December 2024 Notes pursuant to the September 2019 Exchange Transaction, the Company entered into capped call transactions, with a hedge counterparty. The capped call transactions are 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 or the December 2024 Notes. The Company has excluded the capped call transaction from the net loss 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 per diluted share would be dilutive or anti-dilutive. For additional information regarding the conversion rates and the capped call transactions related to the Company’s December 2021 Notes and December 2024 Notes; see Note 14, Convertible Senior Notes.

Anti-Dilutive Effect of Restricted Stock Awards and Stock Options

For the eight months ended August 31, 2020, and years ended December 31, 2019 and 2018, the Company excluded approximately 0.2 million, 1.0 million, and 1.1 million shares, respectively, underlying restricted stock awards, calculated on a weighted-average basis, from the Company’s net loss per diluted share calculations because their effect was anti-dilutive.

For the eight months ended August 31, 2020, and years ended December 31, 2019 and 2018, the Company excluded approximately 11.9 million, 11.2 million and 3.9 million shares underlying outstanding stock options, respectively, calculated on a weighted-average basis, from the Company’s net loss per diluted share calculations because their effect was anti-dilutive.