EARNINGS (LOSS) PER SHARE

3 Months Ended

Sep. 30, 2019

(12) EARNINGS (LOSS) PER SHARE

Basic earnings per share is computed by dividing net income attributable to stockholders by the weighted average number of shares of common stock outstanding for the period. Net income attributable to stockholders includes the adjustment recorded in the period to reflect redeemable limited partners' capital at the redemption amount, which is due to the exchange benefit obtained by limited partners through the ownership of Class B common units. Except when the effect would be anti-dilutive, the diluted earnings (loss) per share calculation, which is calculated using the treasury stock method, includes the impact of shares that could be issued under the outstanding stock options, non-vested restricted stock units and awards, shares of non-vested performance share awards and the effect of the assumed redemption of Class B common units through the issuance of Class A common shares.

The following table provides a reconciliation of the numerator and denominator used for basic and diluted earnings (loss) per share (in thousands, except per share amounts):



	Three Months Ended September 30,
	2019			2018
Numerator for basic earnings (loss) per share:
Net income (loss) from continuing operations attributable to stockholders ^(a)	$	723,538		$	(680,766	)
Net income (loss) from discontinued operations attributable to stockholders	193			(567		)
Net income (loss) attributable to stockholders	$	723,731		$	(681,333	)

Numerator for diluted earnings (loss) per share:
Net income (loss) from continuing operations attributable to stockholders^(a)	$	723,538		$	(680,766	)
Adjustment of redeemable limited partners' capital to redemption amount	(694,309		)	—
Net income from continuing operations attributable to non-controlling interest in Premier LP	41,710			—
Net income (loss) from continuing operations	70,939			(680,766		)
Tax effect on Premier, Inc. net income ^(b)	(9,398		)	—
Adjusted net income (loss) from continuing operations	$	61,541		$	(680,766	)

Net income (loss) from discontinued operations attributable to stockholders	$	193		$	(567	)
Net income from discontinued operations attributable to non-controlling interest in Premier LP	197			—
Adjusted net income (loss) from discontinued operations	$	390		$	(567	)

Adjusted net income (loss)	$	61,931		$	(681,333	)

Denominator for basic earnings (loss) per share:
Weighted average shares ^(c)	62,785			53,221

Denominator for diluted earnings (loss) per share:
Weighted average shares ^(c)	62,785			53,221
Effect of dilutive securities: ^(d)
Stock options	479			—
Restricted stock	280			—
Class B shares outstanding	63,088			—
Weighted average shares and assumed conversions	126,632			53,221



	Three Months Ended September 30,
	2019		2018
Basic earnings (loss) per share:
Basic earnings (loss) per share from continuing operations	$	11.53	$	(12.79	)
Basic loss per share from discontinued operations	—		(0.01		)
Basic earnings (loss) per share attributable to stockholders	$	11.53	$	(12.80	)

Diluted earnings (loss) per share:
Diluted earnings (loss) per share from continuing operations	$	0.49	$	(12.79	)
Diluted earnings (loss) per share from discontinued operations	—		(0.01		)
Diluted earnings (loss) per share attributable to stockholders	$	0.49	$	(12.80	)


(a)	Net income (loss) from continuing operations attributable to stockholders was calculated as follows (in thousands):



	Three Months Ended September 30,
	2019			2018
Net income from continuing operations	$	70,939		$	83,372
Net income from continuing operations attributable to non-controlling interest in Premier LP	(41,710		)	(55,945		)
Adjustment of redeemable limited partners' capital to redemption amount	694,309			(708,193		)
Net income (loss) from continuing operations attributable to stockholders	$	723,538		$	(680,766	)


(b)	Represents income tax expense related to Premier, Inc. retaining the portion of net income attributable to income from non-controlling interest in Premier, LP for the purpose of diluted earnings (loss) per share.


(c)	Weighted average number of common shares used for basic earnings (loss) per share excludes weighted average shares of non-vested stock options, non-vested restricted stock, non-vested performance share awards and Class B shares outstanding for both of the three months ended September 30, 2019 and 2018.

(d)

For the three months ended September 30, 2019, the effect of 0.1 million stock options was excluded from diluted weighted average shares outstanding as they had an anti-dilutive effect for the period. Additionally, the effect of 0.8 million performance share awards was excluded from diluted weighted shares outstanding as the awards had not satisfied the applicable performance criteria at the end of the period.

For the three months ended September 30, 2018,the effect of 0.6 million stock options and restricted stock units was excluded from diluted weighted average shares outstanding as they had an anti-dilutive effect, and the effect of 1.0 million stock options and restricted stock units and 79.8 million Class B common units exchangeable for Class A common shares were excluded from diluted weighted average shares outstanding due to the net loss attributable to stockholders sustained for the quarter and as including them would have an anti-dilutive effect for the period. Additionally, the effect of 0.7 million performance share awards was excluded from diluted weighted shares outstanding as the awards had not satisfied the applicable performance criteria at the end of the period.

Pursuant to the terms of the Exchange Agreement, on a quarterly basis, the Company has the option, as determined by the independent Audit and Compliance Committee, to settle the exchange of Class B common units of Premier LP by member owners for cash, an equal number of Class A common shares of Premier, Inc. or a combination of cash and shares of Class A common stock. In connection with the exchange of Class B common units by member owners, regardless of the consideration used to settle the exchange, an equal number of shares of Premier's Class B common stock are surrendered by member owners and retired (see Note 10 - Redeemable Limited Partners' Capital). The following table presents certain information regarding the exchange of Class B common units and associated Class B common stock for Premier's Class A common stock and/or cash in connection with the quarterly exchanges pursuant to the terms of the Exchange Agreement, including activity related to the Class A and Class B common units and Class A and Class B common stock through the date of the applicable quarterly exchange:



Quarterly Exchange by Member Owners	Class B Common Shares Retired Upon Exchange ^(a)	Class B Common Shares Outstanding After Exchange ^(a)	Class A Common Shares Outstanding After Exchange ^(b)	Percentage of Combined Voting Power Class B/Class A Common Stock
July 31, 2019	1,310,771	62,767,860	63,274,182	49.8%/50.2%
October 31, 2019 ^(c)	6,873,699	55,581,646	66,522,023	46%/54%


(a)	The number of Class B common shares retired or outstanding is equivalent to the number of Class B common units retired upon exchange or outstanding after the exchange, as applicable.


(b)	The number of Class A common shares outstanding after exchange also includes activity related to the Company's share repurchase program (see Note 11 - Stockholders' Deficit) and equity incentive plan (see Note 13 - Stock-Based Compensation).

(c)

As the quarterly exchange occurred on October 31, 2019, the impact of the exchange is not reflected in the condensed consolidated financial statements for the quarter ended September 30, 2019. The Company utilized 5.0 million treasury shares to facilitate a portion of this exchange, and as a result had 0.2 million Class A common shares held in treasury as of October 31, 2019 after the exchange.