Earnings Per Share ("EPS")

12 Months Ended

Dec. 31, 2023

18. Earnings Per Share (“EPS”)

Basic EPS is based on net income attributable to the Company’s earnings and is calculated based upon the daily weighted-average number of common shares outstanding during the periods presented. Also, this calculation includes fully vested stock and unit awards that have not yet been issued as common stock. Diluted EPS includes the above, plus unvested stock, unit or option awards granted and vested unexercised stock options, but only to the extent these instruments dilute earnings per share.

For the years ended December 31, 2023, 2022 and 2021, a total of approximately 1 million, 2 million and 4 million, respectively, of potentially dilutive shares were excluded from the computation of diluted earnings per share due to their antidilutive effect.

Basic and diluted EPS are as follows (in millions, except share data):


	Year Ended December 31,
	2023			2022			2021
Numerator:
Net income attributable to DNOW Inc.	$	247		$	128		$	5
Less: net income attributable to participating securities		(4	)		(2	)		—
Net income attributable to DNOW Inc. stockholders	$	243		$	126		$	5
Denominator:
Weighted average basic common shares outstanding		107,395,890			110,676,078			110,403,853
Effect of dilutive securities		1,026,865			548,311			91,088
Weighted average diluted common shares outstanding		108,422,755			111,224,389			110,494,941
Earnings per share attributable to DNOW Inc. stockholders:
Basic	$	2.26		$	1.14		$	0.05
Diluted	$	2.24		$	1.13		$	0.05

Under ASC Topic 260, “Earnings Per Share,” the two-class method requires a portion of net income attributable to DNOW Inc. to be allocated to participating securities, which are unvested awards of share-based payments with non-forfeitable rights to receive dividends or dividend equivalents, if declared. Net income attributable to these participating securities was excluded from net income attributable to DNOW Inc. stockholders in the numerator of the earnings per share computation.