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Earnings Per Share | 12 Months Ended
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Dec. 31, 2021
Earnings Per Share [Abstract] |
Earnings Per Share | Earnings per ShareBasic earnings per share (“EPS”) is computed by dividing net income attributable to us by the weighted average number of Class A ordinary shares outstanding during the period. Diluted EPS is computed by dividing net income attributable to us, including the impact of potentially dilutive securities, by the weighted average number of Class A ordinary shares outstanding during the period, including the number of Class A ordinary shares that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include the outstanding Class B ordinary shares, Class B ordinary shares contingently issuable to EPA Holdings related to Equity Performance Awards, and unvested RSUs issued under our Equity Incentive Plan. We use the “if-converted” method to determine the potentially dilutive effect of our outstanding Class B ordinary shares, and the treasury stock method to determine the potentially dilutive effect of the unvested RSUs. Our Class B ordinary shares, Class R redeemable shares, and deferred shares do not share in the earnings or losses attributable to us and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share for Class B ordinary shares, Class R redeemable shares, and deferred shares under the two-class method has not been presented. Our Class B ordinary shares are, however, considered potentially dilutive shares of Class A ordinary shares because shares of Class B ordinary shares, together with the related RP Holdings Class B Interests, are exchangeable into Class A ordinary shares on a one-for-one basis. For the years ended December 31, 2021 and 2020, Class B ordinary shares contingently issuable to EPA Holdings were evaluated and were determined not to have any dilutive impact. Additionally, Class B ordinary shares in issue were evaluated under the if-converted method for potential dilutive effects and were determined to be anti-dilutive for the years ended December 31, 2021 and 2020, and therefore were excluded from the computation of diluted earnings per shares of Class A ordinary share. As of December 31, 2021 and 2020, we had 607,176 thousand and 607,111 thousand fully diluted Class A ordinary shares outstanding, respectively. The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per Class A ordinary share for the year ended December 31, 2021 (in thousands, except per share amounts).
|  |  | Year Ended December 31, 2021
Numerator |  |  |  |  |
Consolidated net income |  |  | $ | 1,241,201 |  |  |
Less: Net income attributable to Continuing Investors Partnerships |  |  | 297,321 |  |  |
Less: Net income attributable to Legacy Investors Partnerships and RPSFT |  |  | 324,152 |  |  |
Net income attributable to Royalty Pharma plc - basic and diluted |  |  | $ | 619,728 |  |  |
Denominator |  |  |  |  |
Weighted average Class A ordinary shares outstanding - basic |  |  | 414,794 |  |  |
Add: Dilutive effect of unvested RSUs |  |  | 8 |  |  |
Weighted average Class A ordinary shares outstanding - diluted |  |  | 414,802 |  |  |
Earnings per Class A ordinary share - basic |  |  | $ | 1.49 |  |  |
Earnings per Class A ordinary share - diluted |  |  | $ | 1.49 |  |  |
Prior to the IPO, our capital structure mainly included unitholder interests. We analyzed the calculation of earnings per interest for periods prior to the IPO and determined that the resultant values would not be meaningful to the users of these consolidated financial statements. Therefore, the basic and diluted earnings per share for the year ended December 31, 2020 are only applicable for the period from June 16, 2020 to December 31, 2020, which represents the period in which we had outstanding Class A ordinary shares. The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per Class A ordinary share for the year ended December 31, 2020 (in thousands, except per share amounts).
|  | Year Ended December 31, 2020
Numerator |  |
Consolidated net income |  | $ | 1,701,954 |
Less: Net income attributable to Continuing Investors Partnerships prior to the IPO (1) |  | 479,842 |
Less: Net income attributable to Continuing Investors Partnerships subsequent to the IPO |  | 316,993 |
Less: Net income attributable to Legacy Investors Partnerships and RPSFT |  | 409,921 |
Net income attributable to Royalty Pharma plc - basic and diluted |  | $ | 495,198 |
Denominator |  |
Weighted average Class A ordinary shares outstanding - basic |  | 375,444 |
Add: Dilutive effect of unvested RSUs |  | 11 |
Weighted average Class A ordinary shares outstanding - diluted |  | 375,455 |
Earnings per Class A ordinary share - basic |  | $ | 1.32 |
Earnings per Class A ordinary share - diluted |  | $ | 1.32 |
(1) Reflected as Net income attributable to controlling interest on the consolidated statements of operations.

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