EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2022

13. 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 evaluate and reflect the maximum potential dilution, for each issue or series of issues of potential common shares in sequence from the most dilutive to the least dilutive. We adjust the numerator used in the basic EPS computation, subject to anti-dilution requirements, to add back the dividends (declared or cumulative undeclared) applicable to the Series A Convertible Preferred Stock. Such add-back would also include any adjustments to equity in the period to accrete the Series A Convertible Preferred Stock to its redemption price, or recorded upon a redemption or induced conversion. We adjust the denominator used in the basic EPS computation, subject to anti-dilution requirements, to include the dilution from potential shares resulting from the issuance of the Series A Convertible Preferred Stock, restricted stock units, and stock options.

The holders of Series A Convertible Preferred Stock, unvested restricted stock units and stock options do not have non-forfeitable 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 8, “Stock Compensation Plans”, for share information on NCR’s stock compensation plans.

The components of basic earnings (loss) per share are as follows:


In millions, except per share amounts	Year ended December 31
	2022		2021		2020
Numerator:
Income (loss) from continuing operations	$	64	$	97	$	(7)
Series A convertible preferred stock dividends	(16)		(16)		(31)
Net income (loss) from continuing operations attributable to NCR common stockholders	48		81		(38)
Loss from discontinued operations, net of tax	(4)		—		(72)
Net income (loss) attributable to NCR common stockholders	$	44	$	81	$	(110)

Denominator:
Basic weighted average number of shares outstanding	136.7		131.2		128.4

Basic earnings (loss) per share:
From continuing operations	$	0.35	$	0.62	$	(0.30)
From discontinued operations	(0.03)		—		(0.56)
Total basic earnings per share	$	0.32	$	0.62	$	(0.86)

The components of diluted earnings (loss) per share are as follows:


In millions, except per share amounts	Year ended December 31
	2022		2021		2020
Numerator:
Income (loss) from continuing operations	$	64	$	97	$	(7)
Series A convertible preferred stock dividends	(16)		(16)		(31)
Net income (loss) from continuing operations attributable to NCR common stockholders	48		81		(38)
Loss from discontinued operations, net of tax	(4)		—		(72)
Net income (loss) attributable to NCR common stockholders	$	44	$	81	$	(110)

Denominator:
Basic weighted average number of shares outstanding	136.7		131.2		128.4
Dilutive effect of as-if Series A Convertible Preferred Stock	—		—		—
Dilutive effect of employee stock options and restricted stock units	4.5		7.8		—
Weighted average diluted shares	141.2		139.0		128.4

Diluted earnings (loss) per share:
From continuing operations	$	0.34	$	0.58	$	(0.30)
From discontinued operations	(0.03)		—		(0.56)
Total diluted earnings per share	$	0.31	$	0.58	$	(0.86)

For 2022, the weighted average outstanding shares of common stock were not adjusted by 9.2 million for the as-if converted Series A Convertible Preferred Stock because the effect would be anti-dilutive. Additionally, for 2022, weighted average restricted stock units and stock options of 6.5 million were excluded from the diluted share count because their effect would have been anti-dilutive.

For 2021, the weighted average outstanding shares of common stock were not adjusted by 9.2 million for the as-if converted Series A Convertible Preferred Stock because the effect would be anti-dilutive. Additionally, for 2021, 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 2020, due to the net loss attributable to NCR common stockholders, potential common shares that would cause dilution, such as Series A Convertible Preferred Stock, restricted stock units and stock options, were excluded from the diluted share count because their effect would have been anti-dilutive. The weighted average outstanding shares of common stock were not adjusted by 9.1 million for the as-if converted Series A Convertible Preferred Stock because the effect would have been anti-dilutive. Additionally, for 2020, weighted average restricted stock units and stock options of 11.2 million were excluded from the diluted share count because their effect would have been anti-dilutive. Refer to Note 12, “Series A Convertible Preferred Stock”, for additional discussion related to the transaction impacting the Series A Convertible Preferred Stock.