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 June 30						Six months ended June 30
In millions, except per share amounts	2017			2016			2017			2016
Numerator
Income from continuing operations	$	97		$	76		$	154		$	108
Series A convertible preferred stock dividends	(12		)	(13		)	(24		)	(24		)
Deemed dividend on modification of Series A convertible preferred stock	—			—			(4		)	—
Deemed dividend on Series A convertible preferred stock redemption	—			—			(58		)	—
Net income from continuing operations attributable to NCR common stockholders	85			63			68			84
Income from discontinued operations, net of tax	5			—			5			—
Net income attributable to NCR common stockholders	$	90		$	63		$	73		$	84

Denominator
Basic weighted average number of shares outstanding	121.4			123.8			122.1			127.1

Basic earnings per share:
From continuing operations	$	0.70		$	0.51		$	0.56		$	0.66
From discontinued operations	0.04			—			0.04			—
Total basic earnings per share	$	0.74		$	0.51		$	0.60		$	0.66

The components of diluted earnings per share are as follows:



In millions, except per share amounts	Three months ended June 30				Six months ended June 30
In millions, except per share amounts	2017		2016		2017			2016
Numerator
Income from continuing operations	$	97	$	76	$	154		$	108
Series A convertible preferred stock dividends	—		—		(24		)	(24		)
Deemed dividend on modification of Series A convertible preferred stock	—		—		(4		)	—
Deemed dividend on Series A convertible preferred stock redemption	—		—		(58		)	—
Net income from continuing operations attributable to NCR common stockholders	97		76		68			84
Income from discontinued operations, net of tax	5		—		5			—
Net income attributable to NCR common stockholders	$	102	$	76	$	73		$	84

Basic weighted average number of shares outstanding	121.4		123.8		122.1			127.1
Dilutive effect of as-if converted Series A Convertible Preferred Stock	26.6		28.0		—			—
Dilutive effect of restricted stock units and employee stock options	4.7		2.7		5.1			2.5
Denominator - from continuing operations and total	152.7		154.5		127.2			129.6

Diluted earnings per share:
From continuing operations	$	0.64	$	0.49	$	0.53		$	0.65
From discontinued operations	0.03		—		0.04			—
Total diluted earnings per share	$	0.67	$	0.49	$	0.57		$	0.65

For the three months ended June 30, 2017 and June 30, 2016, it was more dilutive to assume the Series A Convertible Preferred Stock was converted to common stock and therefore weighted average outstanding shares of common stock were adjusted by the as-if converted Series A Convertible Preferred Stock and the diluted earnings per share was calculated excluding the quarterly dividends.

For the three months ended June 30, 2017, weighted average restricted stock units of 0.8 million were excluded from the diluted share count because their effect would have been anti-dilutive.

For the six months ended June 30, 2017, shares related to 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 as-if converted Series A Convertible Preferred Stock, considering the existing and redeemed shares, excluded were 27.7 million. Weighted average restricted stock units of 0.5 million were excluded from the diluted share count because their effect would have been anti-dilutive.

For the six months ended June 30, 2016, shares related to 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 as-if converted Series A Convertible Preferred Stock, excluded were 27.8 million.