PDL BioPharma Just Filed Its Annual Report: 3. Net Income per Sh...

3. Net Income per Share

 
Year Ended December 31,
(In thousands, except per share amounts)
2015
 
2014
 
2013
Numerator
 
 
 
 
 
Net income
$
332,795

 
$
322,244

 
$
264,530

Add back interest expense for convertible notes, net of estimated tax of zero, zero and $13, for the years ended December 31, 2015, 2014 and 2013, respectively

 

 
25

Income used to compute net income per diluted share
$
332,795

 
$
322,244

 
$
264,555

Denominator
 
 
 
 
 
Total weighted-average shares used to compute net income per basic share
163,386

 
158,224

 
139,842

Effect of dilutive stock options
16

 
21

 
20

Restricted stock awards
152

 
126

 
83

Assumed conversion of Series 2012 Notes

 
3,532

 
12,373

Assumed conversion of February 2015 Notes

 

 
106

Assumed conversion of warrants

 
5,510

 

Assumed conversion of May 2015 Notes

 
5,697

 
6,919

Shares used to compute net income per diluted share
163,554

 
173,110

 
159,343

Net income per basic share
$
2.04

 
$
2.04

 
$
1.89

Net income per diluted share
$
2.03

 
$
1.86

 
$
1.66



We compute net income per diluted share using the sum of the weighted-average number of common and common equivalent shares outstanding. Common equivalent shares used in the computation of net income per diluted share include shares that may be issued under our stock options and restricted stock awards, the Series 2012 Notes and the May 2015 Notes on a weighted-average basis for the period that the notes were outstanding, including the effect of adding back interest expense and the underlying shares using the if converted method. In the first quarter of 2012, $179.0 million aggregate principal of the February 2015 Notes was exchanged for the Series 2012 Notes, and in the third quarter of 2013, $1.0 million aggregate principal of the February 2015 Notes was exchanged for the Series 2012 Notes, and the February 2015 Notes were retired, in the first quarter of 2014, $131.7 million aggregate principal of the Series 2012 Notes was retired in a privately negotiated exchange and purchase agreements, and in the fourth quarter of 2014, the Company entered into a privately negotiated exchange agreement under which it retired approximately $26.0 million in principal of the outstanding Series 2012 Notes, and, in the first quarter of 2015, the Company completed the retirement of the remaining $22.3 million of aggregate principal of its Series 2012 Notes.

In the second quarter of 2015, the Company completed the retirement of the remaining $155.1 million of aggregate principal of its May 2015 Notes. Concurrently with the retirement of the May 2015 Notes, we exercised our purchased call options and received 5.2 million of PDL's common shares, which was the amount equal to the number of shares required to be delivered by us to the note holders for the excess conversion value (Note 9).

In May 2011, we issued the May 2015 Notes, and in January and February 2012 we issued the Series 2012 Notes. The Series 2012 Notes and May 2015 Notes are net share settled, with the principal amount settled in cash and the excess settled in our common stock. The weighted-average share adjustments related to the Series 2012 Notes, May 2015 Notes and February 2018 Notes, shown in the table above, include the shares issuable in respect of such excess.

May 2015 Notes Purchase Call Option and Warrant Potential Dilution

We excluded from our calculation of net income per diluted share 3.0 million, zero and 21.1 million shares for the years ended December 31, 2015, 2014, and 2013, for warrants issued in 2011, because the exercise price of the warrants exceeded the VWAP of our common stock and conversion of the underlying May 2015 Notes is not assumed, no stock would be issuable upon conversion. Our purchased call options, issued in 2011, will always be anti-dilutive and therefore zero, 26.6 million and 24.8 million shares were excluded from our calculations of net income per diluted share for the years ended December 31, 2015, 2014 and 2013, respectively, because they have no effect on diluted net income per share. For information related to the conversion rates on our convertible debt, see Note 11.

February 2018 Notes Purchase Call Option and Warrant Potential Dilution

We excluded from our calculation of net income per diluted share 23.8 million and 29.0 million shares for the years ended December 31, 2015 and 2014, for warrants issued in February 2014, because the exercise price of the warrants exceeded the VWAP of our common stock and conversion of the underlying February 2018 Notes is not assumed, no stock would be issuable upon conversion. These securities could be dilutive in future periods. Our purchased call options, issued in February 2014, will always be anti-dilutive and therefore 26.9 million and 32.7 million shares were excluded from our calculation of net income per diluted share for the years ended December 31, 2015 and 2014, because they have no effect on diluted net income per share. For information related to the conversion rates on our convertible debt, see Note 11.

Anti-Dilutive Effect of Stock Options and Restricted Stock Awards

For the years ended December 31, 2015, 2014 and 2013, we excluded approximately 41,000, 35,000 and 115,000 shares underlying outstanding stock options, respectively, calculated on a weighted-average basis, from our net income per diluted share calculations because their effect was anti-dilutive. For the years ended December 31, 2015, 2014 and 2013, we excluded approximately 450,000, zero, and zero shares, respectively, underlying restricted stock awards, calculated on a weighted-average basis, from our net income per diluted share calculations because their effect was anti-dilutive.

The above information was disclosed in a filing to the SEC. To see the filing, click here.

To receive a free e-mail notification whenever PDL BioPharma makes a similar move, sign up!

Other recent filings from the company include the following:

PDL BioPharma's President just picked up 240,200 shares - Sept. 13, 2017
PDL BioPharma's President just declared 0 ownership of the company. - Sept. 13, 2017
Securities to be offered to employees in employee benefit plans - Sept. 12, 2017
PDL: Cook Williams Communications, Inc - Sept. 11, 2017
Current report, items 7.01 and 9.01 - Sept. 11, 2017

Auto Refresh

Feedback