| Earnings per Share |
Earnings per Share
Basic net income per common share is calculated by dividing the income available to common stockholders by the weighted average common shares outstanding during each reporting period. Diluted net income per common share adjusts the weighted average number of common shares outstanding for the potential dilution that could occur if common stock equivalents (convertible debt, preferred stock, warrants, stock options and restricted stock units) were exercised or converted into common stock, calculated using the treasury stock method. In 2013 and 2012, we utilized the two-class method in calculating basic net income per common share, as our Series B Preferred Stock was considered to be participating securities through January 18, 2013. On January 18, 2013, Liberty Media converted its remaining 6,250,100 outstanding shares of our Series B Preferred Stock into 1,293,509,076 shares of common stock. We had no participating securities during the year ended December 31, 2014.
Common stock equivalents of approximately 132,162,000, 365,177,000 and 147,125,000 for the years ended December 31, 2014, 2013 and 2012, respectively, were excluded from the calculation of diluted net income per common share as the effect would have been anti-dilutive.
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For the Years Ended December 31, |
(in thousands, except per share data) |
2014 |
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2013 |
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2012 |
Numerator: |
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Net income |
$ |
493,241 |
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$ |
377,215 |
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$ |
3,472,702 |
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Less: |
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Allocation of undistributed income to Series B Preferred Stock |
— |
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(3,825 |
) |
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(1,084,895 |
) |
Dividends paid to preferred stockholders |
— |
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— |
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(64,675 |
) |
Net income available to common stockholders for basic net income per common share |
$ |
493,241 |
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$ |
373,390 |
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$ |
2,323,132 |
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Add back: |
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Allocation of undistributed income to Series B Preferred Stock |
— |
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3,825 |
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1,084,895 |
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Dividends paid to preferred stockholders |
— |
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— |
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64,675 |
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Effect of interest on assumed conversions of convertible debt |
— |
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— |
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38,500 |
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Net income available to common stockholders for diluted net income per common share |
$ |
493,241 |
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$ |
377,215 |
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$ |
3,511,202 |
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Denominator: |
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Weighted average common shares outstanding for basic net income per common share (a) |
5,788,944 |
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6,227,646 |
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4,209,073 |
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Weighted average impact of assumed Series B Preferred Stock conversion |
— |
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63,789 |
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2,215,900 |
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Weighted average impact of assumed convertible debt (b) |
— |
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— |
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298,725 |
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Weighted average impact of other dilutive equity instruments |
73,076 |
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93,356 |
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150,088 |
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Weighted average shares for diluted net income per common share |
5,862,020 |
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6,384,791 |
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6,873,786 |
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Net income per common share: |
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Basic |
$ |
0.09 |
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$ |
0.06 |
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$ |
0.55 |
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Diluted |
$ |
0.08 |
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$ |
0.06 |
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$ |
0.51 |
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(a) |
For the year ended December 31, 2014, the weighted-average common shares outstanding for basic net income per common share includes approximately 31,078,000 shares of the 272,855,859 shares related to the conversion of the 7% Exchangeable Senior Subordinated Notes due 2014, due to the weighted-average in calculating earnings per share.
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(b) |
During the years ended December 31, 2013 and 2012, the common stock reserved for conversion in connection with the 7% Exchangeable Senior Subordinated Notes due 2014 were considered to be anti-dilutive and dilutive, respectively, in our calculation of diluted net income per share.
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