Quarterly report pursuant to Section 13 or 15(d)

Earnings per Share

v2.4.0.6
Earnings per Share
 9 Months Ended
Sep. 30, 2012
Earnings Per Share [Abstract]  
Earnings per Share
Earnings per Share

We utilize the two-class method of calculating basic net income per common share, as our Series B Preferred Stock are considered participating securities. Basic net income per common share is calculated using the weighted average common shares outstanding during each reporting period. Diluted net income per common share adjusts the weighted average common shares outstanding for the potential dilution that could occur if common stock equivalents (convertible debt and preferred stock, warrants, stock options, restricted stock and restricted stock units) were exercised or converted into common stock, calculated using the treasury stock method. Common stock equivalents of approximately 451,577,000 and 417,427,000 for the three months ended September 30, 2012 and 2011, respectively, and 144,014,000 and 407,649,000 for the nine months ended September 30, 2012 and 2011, respectively, were excluded from the calculation of diluted net income per common share as the effect would have been anti-dilutive.
 
For the Three Months Ended September 30,
 
For the Nine Months Ended September 30,
(in thousands, except per share data)
2012
 
2011
 
2012
 
2011
Net income
$
74,514

  
$
104,185

 
$
3,316,457

 
$
355,624

Less:
 
 
 
 
 
 
 
Allocation of income to Series B Preferred Stock
(27,825
)
 
(42,550
)
 
(1,309,647
)
 
(145,355
)
Net income available to common stockholders for basic net income per common share
46,689

 
61,635

 
2,006,810

 
210,269

Add back:
 
 
 
 
 
 
 
Allocation of income to Series B Preferred Stock
27,825

 
42,550

 
1,309,647

 
145,355

Effect of interest on assumed conversions of convertible debt
—

 
—

 
28,875

 
—

Net income available to common stockholders for diluted net income per common share
$
74,514

 
$
104,185

 
$
3,345,332

 
$
355,624

Weighted average common shares outstanding for basic net income per common share
4,034,122

  
3,747,381

 
3,870,031

 
3,742,309

Weighted average impact of assumed Series B Preferred Stock conversion
2,404,143

 
2,586,977

 
2,525,588

 
2,586,977

Weighted average impact of assumed convertible debt
—

 
—

 
293,333

 
—

Weighted average impact of other dilutive equity instruments
139,389

  
173,012

 
159,278

 
171,533

Total shares for diluted net income per common share
6,577,654

  
6,507,370

 
6,848,230

 
6,500,819

Net income per common share
 
 
 
 


 


Basic
$
0.01

  
$
0.02

 
$
0.52

 
$
0.06

Diluted
$
0.01

  
$
0.02

 
$
0.49

 
$
0.05


 
We identified and corrected an immaterial error affecting the historical presentation of basic earnings per share. The adjustment reflects the Series B Preferred Stock held by an affiliate of Liberty Media as participating securities as the holder of such preferred stock may participate in dividends and distributions ratably with holders of our common stock on an as-converted basis.  Net income per common share-basic for the three and nine months ended September 30, 2011 was previously reported as $0.03 and $0.10, respectively, and has been adjusted to be $0.02 and $0.06 for the three and nine months ended September 30, 2011, respectively.  The effects of the error were not material to any previously reported quarterly or annual period. The related corrections are reflected in the applicable prior periods.
    
In September 2012, Liberty Media converted 6,249,900 shares of the Series B Preferred Stock into 1,293,467,684 shares of common stock.