10. EARNINGS PER SHARE

Basic earnings per share (EPS) is calculated by dividing net income or loss attributable to NCR, less any dividends (declared or cumulative undeclared), deemed dividends, accretion or decretion, redemption or induced conversion on our Series A Convertible Preferred Stock, by the weighted average number of shares outstanding during the period.

In computing diluted EPS, we adjust the numerator used in the basic EPS computation, subject to anti-dilution requirements, to add back the dividends (declared or cumulative undeclared), deemed dividends, accretion or decretion, redemption or induced conversion on our Series A Convertible Preferred Stock. We adjust the denominator used in the basic EPS computation, subject to anti-dilution requirements, to include the dilution from potential shares related to the Series A Convertible Preferred Stock and stock-based compensation plans.

The holders of Series A Convertible Preferred Stock and unvested restricted stock units do not have nonforfeitable rights to common stock dividends or common stock dividend equivalents. Accordingly, the Series A Convertible Preferred Stock and unvested restricted stock units do not qualify as participating securities. See Note 5, "Stock Compensation Plans," for share information on NCR’s stock compensation plans.

The components of basic earnings per share are as follows:



In millions, except per share amounts	Three months ended March 31
In millions, except per share amounts	2017			2016
Numerator
Income from continuing operations	$	57		$	32
Series A convertible preferred stock dividends	(12		)	(11		)
Deemed dividend on modification of Series A convertible preferred stock	(4		)	—
Deemed dividend on Series A convertible preferred stock redemption	(58		)	—
Net loss from continuing operations attributable to NCR common stockholders	(17		)	21
Loss from discontinued operations, net of tax	—			—
Net loss attributable to NCR common stockholders	$	(17	)	$	21

Denominator
Basic weighted average number of shares outstanding	122.8			130.4

Basic (loss) earnings per share:
From continuing operations	$	(0.14	)	$	0.16
From discontinued operations	—			—
Total basic (loss) earnings per share	$	(0.14	)	$	0.16

The components of diluted earnings per share are as follows:



In millions, except per share amounts	Three months ended March 31
In millions, except per share amounts	2017			2016
Numerator
Income from continuing operations	$	57		$	32
Series A convertible preferred stock dividends	(12		)	(11		)
Deemed dividend on modification of Series A convertible preferred stock	(4		)	—
Deemed dividend on Series A convertible preferred stock redemption	(58		)	—
Net loss from continuing operations attributable to NCR common stockholders	(17		)	21
Loss from discontinued operations, net of tax	—			—
Net loss attributable to NCR common stockholders	$	(17	)	$	21

Basic weighted average number of shares outstanding	122.8			130.4
Dilutive effect of employee stock options and restricted stock units	—			2.3
Denominator - from continuing operations and total	122.8			132.7

Diluted (loss) earnings per share:
From continuing operations	$	(0.14	)	$	0.16
From discontinued operations	—			—
Total diluted (loss) earnings per share	$	(0.14	)	$	0.16

For the three months ended March 31, 2017, due to the net loss attributable to NCR common stockholders, shares related to stock-based compensation plans as well as the as-if converted Series A Convertible Preferred Stock were excluded from the diluted share count because their effect would have been anti-dilutive. The weighted shares related to stock-based compensation plans excluded were 5.4 million and the weighed as-if converted Series A Convertible Preferred Stock, considering the existing and redeemed shares, excluded were 28.8 million.

For the three months ended March 31, 2016, the weighted as-if converted Series A Convertible Preferred Stock of 25.8 million and the weighted restricted stock units of 0.8 million were excluded from the diluted share count because their effect would have been anti-dilutive.