LDK Solar Co., Ltd. - Asia Europe Clean Energy (Solar) Advisory Co ...

LDK SOLAR CO., LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
FOR THE PERIOD FROM JULY 5, 2005 TO DECEMBER 31, 2005
AND THE YEAR ENDED DECEMBER 31, 2006
(Amounts in US$ thousands, except share and per share data)
As of December 31, 2006, there was US$9,991 of total unrecognized compensation cost related to
nonvested share options. This cost is expected to be recognized over the next 2.6 years. The Company is
expected to issue new shares to satisfy share option exercises.
(20) NET (LOSS) INCOME PER SHARE
As discussed in note 17, the Company issued 75,000,000 ordinary shares in connection with the
Reorganization. For the purpose of calculating basic/diluted (loss) income per share as a result of the
Reorganization, the number of ordinary shares used in the calculation reflects the issuance of ordinary shares
as if it took place on July 5, 2005.
The computation of basic and diluted net (loss) income per share is as follows:
From
July 5,
2005 to Year ended
December 31, December 31,
2005 2006
Numerator used in basic and diluted net income per share
(Loss) income from continuing operations attributable to holders
of ordinary sharesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Shares (denominator):
(274) 25,885
Weighted average number of ordinary shares outstanding ÏÏÏÏÏÏÏ 75,000,000 75,000,000
Net (loss) income per share Ì basic ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (0.01) 0.35
Net (loss) income per share Ì dilutedÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (0.01) 0.35
During the year ended December 31, 2006, the Group's dilutive potential ordinary shares outstanding
consist of Series A, Series B and Series C redeemable convertible preferred shares, share options and warrants
issued in connection with the Series A Shares. The computation of diluted income per share for the year
ended December 31, 2006 did not assume conversion of the Series A, Series B and Series C redeemable
convertible preferred shares because, when applying the as-if-converted method, the effect of the 4,580,000,
8,000,000 and 3,000,000 ordinary shares issuable upon conversion of the Series A, Series B and Series C
redeemable convertible preferred shares under the conversion terms of the Series A, Series B and Series C
redeemable convertible preferred shares agreements was anti-dilutive. The conversion of the Series A,
Series B and Series C redeemable convertible preferred shares was anti-dilutive because the amount of the
accretion to the Series A, Series B and Series C redeemable convertible preferred shares redemption value and
the beneficial conversion feature relating to the Series A Shares for the period per ordinary share obtainable
upon conversion on a weighted average outstanding basis exceeded basic income per share. In addition, in
computing diluted income per share for the year ended December 31, 2006, there was no dilutive effect of
outstanding share options of 6,260,000 by applying the treasury stock method because the ordinary shares
assumed to be issued upon the exercise of the share options was less than the number of shares assumed to be
purchased at the average estimated fair value during the period. The proceeds used for the assumed purchase
include the sum of the exercise price of the share options and the average unrecognized compensation cost.
There was no dilutive effect of outstanding warrants because the condition to trigger the exercising of the
warrants was not satisfied at December 31, 2006, and was assumed to remain unchanged until the end of the
contingency period.
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