Earnings Per Share

6 Months Ended

Jun. 30, 2019

Earnings Per Share [Abstract]

EARNINGS PER SHARE

11. 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, unvested restricted stock units and stock options do not have nonforfeitable rights to common stock dividends or common stock dividend equivalents. Accordingly, the Series A Convertible Preferred Stock, unvested restricted stock units and stock options do not qualify as participating securities. See Note 7. 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
	2019			2018			2019			2018
Numerator
Income from continuing operations	$	88		$	(143	)	$	125		$	(88	)
Series A Convertible Preferred Stock dividends	(12		)	(12		)	(25		)	(24		)
Income from continuing operations attributable to NCR common stockholders	76			(155		)	100			(112		)
Loss from discontinued operations, net of tax	—			(2		)	—			(37		)
Net income attributable to NCR common stockholders	$	76		$	(157	)	$	100		$	(149	)
Denominator
Basic weighted average number of shares outstanding	120.2			117.9			119.8			118.6
Basic earnings per share:
From continuing operations	$	0.63		$	(1.31	)	$	0.83		$	(0.94	)
From discontinued operations	—			(0.02		)	—			(0.32		)
Total basic earnings per share	$	0.63		$	(1.33	)	$	0.83		$	(1.26	)

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
	2019		2018			2019			2018
Numerator
Income from continuing operations	$	88	$	(143	)	$	125		$	(88	)
Series A Convertible Preferred Stock dividends	—		(12		)	(25		)	(24		)
Income from continuing operations attributable to NCR common stockholders	88		(155		)	100			(112		)
Loss from discontinued operations, net of tax	—		(2		)	—			(37		)
Net income attributable to NCR common stockholders	$	88	$	(157	)	$	100		$	(149	)
Basic weighted average number of shares outstanding	120.2		117.9			119.8			118.6
Dilutive effect of as-if converted Series A Convertible Preferred Stock	29.6		—			—			—
Dilutive effect of restricted stock units	2.9		—			3.2			—
Denominator	152.7		117.9			123.0			118.6
Diluted earnings per share:
From continuing operations	$	0.58	$	(1.31	)	$	0.81		$	(0.94	)
From discontinued operations	—		(0.02		)	—			(0.32		)
Total diluted earnings per share	$	0.58	$	(1.33	)	$	0.81		$	(1.26	)

For the three months ended June 30, 2019, it was more dilutive to assume the Series A Convertible Preferred Stock was converted to common stock and therefore the weighted average outstanding shares of common stock were adjusted by the as-if converted Series A Convertible Preferred Stock. For the three months ended June 30, 2019, weighted average restricted stock units and stock options of 4.7 million were excluded from the diluted share count because their effect would have been anti-dilutive.

For the three months ended June 30, 2018, shares related to the as-if converted Series A Convertible Preferred Stock of 28.1 million were excluded from the diluted share count because their effect would have been anti-dilutive. For the three months ended June 30, 2018, weighted average restricted stock units and stock options of 2.3 million were excluded from the diluted share count because their effect would have been anti-dilutive.

For the six months ended June 30, 2019, shares related to the as-if converted Series A Convertible Preferred Stock of 29.4 million were excluded from the diluted share count because their effect would have been anti-dilutive. For the six months ended June 30, 2019, weighted average restricted stock units and stock options of 5.1 million were excluded from the diluted share count because their effect would have been anti-dilutive.

For the six months ended June 30, 2018, shares related to the as-if converted Series A Convertible Preferred Stock of 27.9 million were excluded from the diluted share count because their effect would have been anti-dilutive. For the six months ended June 30, 2018, weighted average restricted stock units and stock options of 2.3 million were excluded from the diluted share count because their effect would have been anti-dilutive.