Net Income (Loss) per Share

3 Months Ended

Mar. 31, 2021

16. Net Income (Loss) per Share

We compute net income (loss) per share of common stock using the treasury stock method. The basic and diluted net income (loss) per share computations were calculated as follows:

	Three Months Ended March 31,
	2021			2020
	(Dollars in millions, except share and per share data)
Numerator:
Net (loss) income	$	(19.2	)	$	8.6

Denominator:
Weighted-average shares outstanding - basic		148,716,050			144,645,325
Effect of dilutive equity instruments		—			6,533,173
Weighted-average shares outstanding - diluted		148,716,050			151,178,498

Net (loss) income per share - basic	$	(0.13	)	$	0.06
Net (loss) income per share - diluted	$	(0.13	)	$	0.06

The following potentially dilutive weighted-average shares were excluded from the calculation of diluted net income (loss) per share because their effect would have been anti-dilutive:

	Three Months Ended March 31,
	2021		2020
Stock options		5,448,133		121,381
Restricted stock units		518,939		21,869
Performance stock units		604,193		—

The shares underlying the conversion option in the Notes were not considered in the calculation of diluted net income (loss) per share as the effect would have been anti-dilutive. Based on the initial conversion price, the entire outstanding principal amount of the Notes as of March 31, 2021 would have been convertible into approximately 4.3 million shares of our common stock. Since we expect to settle the principle amount of the Notes in cash, we use the treasury stock method for calculating any potential dilutive effect on diluted net income per share, if applicable. As a result, only the amount by which the conversion value exceeds the aggregate principal amount of the Notes (the “conversion spread”) is considered in the diluted earnings per share computation. The conversion spread has a dilutive impact on diluted net income per share when the average market price of our common stock for a given period exceeds the initial conversion price of $132.20 per share for the Notes. We excluded the potentially dilutive effect of the conversion spread of the Notes as the average market price of our common stock during the three months ended March 31, 2021 was less than the conversion price of the Notes. In connection with the issuance of the Notes, we entered into Capped Calls, which were not included for purposes of calculating the number of diluted shares outstanding, as their effect would have been anti-dilutive.