Dish Network 2008 Annual Report Download - page 99

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DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-17
The potential dilution from our subordinated notes convertible into common stock was computed using the
“if converted method.” The potential dilution from stock options exercisable into common stock for the
periods below was computed using the treasury stock method based on the average market value of our
Class A common stock. The following table reflects the basic and diluted weighted-average shares
outstanding used to calculate basic and diluted earnings per share. Earnings per share amounts for all
periods are presented below in accordance with the requirements of SFAS 128.
2008 2007 2006
Numerator:
Numerator for basic net income (loss) per share - Net income (loss)...................... $ 902,947 $ 756,054 $ 608,272
Interest on dilutive subordinated convertible notes, net of related tax effect........... 6,638 9,517 9,834
Numerator for diluted net income (loss) per common share.................................... $ 909,585 $ 765,571 $ 618,106
Denominator:
Denominator for basic net income (loss) per common share –
weighted-average common shares outstanding..................................................... 448,786 447,302 444,743
Dilutive impact of options outstanding.................................................................... 2,659 2,267 677
Dilutive impact of subordinated notes convertible into common shares.................. 8,781 7,265 7,265
Denominator for diluted net income (loss) per share –
weighted-average diluted common shares outstanding......................................... 460,226 456,834 452,685
Net income (loss) per share:
Basic net income (loss)......................................................................................... $ 2.01 $ 1.69 $ 1.37
Diluted net income (loss)...................................................................................... $ 1.98 $ 1.68 $ 1.37
Shares of Class A common stock issuable upon conversion of:
5 3/4% Convertible Subordinated Notes due 2008............................................... - - 23,100
3% Convertible Subordinated Note due 2010 (1)................................................. 8,299 6,866 6,866
3% Convertible Subordinated Note due 2011 (2)................................................. 482 399 399
For the Years Ended December 31,
(In thousands, except per share data)
(1) Effective as of close of business on January 15, 2008, the conversion price was adjusted to $60.25
per share (8,298,755 shares) as a result of the Spin-off.
(2) Effective as of close of business on January 15, 2008, the conversion price was adjusted to $51.88
per share (481,881 shares) as a result of the Spin-off.
As of December 31, 2008, 2007 and 2006, there were options to purchase 4.9 million, 1.3 million and 10.2
million shares of Class A common stock outstanding, respectively, not included in the above denominator
as their effect is antidilutive.
Vesting of options and rights to acquire shares of our Class A common stock (“Restricted Performance
Units”) granted pursuant to our long term incentive plans is contingent upon meeting certain long-term
goals which have not yet been achieved. As a consequence, the following are not included in the diluted
EPS calculation:
2008 2007 2006
Performance based options....................... 10,253 10,112 11,007
Restricted performance units.................... 633 617 725
For the Years Ended December 31,
(In thousands)