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Earnings Per Share

3 Months Ended

Mar. 31, 2020

17. Earnings per Share

Basic net income (loss) per common share is computed using the two-class method, which is an earnings allocation formula that determines net income (loss) per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. Under the two-class method, basic net income (loss) per common share is determined by dividing net income (loss), after deducting amounts allocated to participating securities, by the weighted average number of common shares outstanding for the period. Participating securities include unvested restricted stock and stock-settled restricted stock units that have nonforfeitable rights to receive dividends or dividend equivalents, whether paid or unpaid. During periods of net loss, no effect is given to participating securities because they do not have a contractual obligation to participate in our losses.

Diluted net income (loss) per common share is computed using the weighted average number of shares outstanding adjusted for the incremental common stock equivalents attributed to outstanding options, performance-based restricted stock units and stock to be issued pursuant to our employee stock purchase plan unless their effect would be anti-dilutive.

The following table shows net income (loss) used in the calculation of basic and diluted net income (loss) per common share (in thousands):


	Three Months Ended
	March 31,
	2020		2019
Income (loss) from continuing operations	$	(61,187)	$	19,729
Loss from discontinued operations, net of tax		—		(273)
Net income (loss)		(61,187)		19,456
Less: Net income attributable to participating securities		(322)		(356)
Net income (loss) attributable to common stockholders	$	(61,509)	$	19,100

The following table shows the potential shares of common stock that were included in computing diluted net income (loss) per common share (in thousands):


	Three Months Ended
	March 31,
	2020	2019
Weighted average common shares outstanding including participating securities	152,601	130,238
Less: Weighted average participating securities outstanding	(2,051)	(2,029)
Weighted average common shares outstanding used in basic net income (loss) per common share	150,550	128,209
Net dilutive potential common shares issuable:
On exercise of options and vesting of performance-based restricted stock units	—	40
On settlement of employee stock purchase plan shares	—	6
Weighted average common shares outstanding used in diluted net income (loss) per common share	150,550	128,255

The following table shows the potential shares of common stock issuable that were excluded from computing diluted net income (loss) per common share as their inclusion would have been anti-dilutive (in thousands):


	Three Months Ended
	March 31,
	2020	2019
On exercise of options where exercise price is greater than average market value for the period	126	154
On exercise of options and vesting of performance-based restricted stock units	57	—
On settlement of employee stock purchase plan shares	29	—
Net dilutive potential common shares issuable	212	154