Earnings Per Share

9 Months Ended

Sep. 30, 2023

12. 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 the Company’s stock compensation plans.

The components of basic earnings per share are as follows:


In millions, except per share amounts	Three months ended September 30				Nine months ended September 30
	2023		2022		2023		2022
Numerator:
Income (loss) from continuing operations	$	(124)	$	69	$	(95)	$	71
Dividends on Series A Convertible Preferred Stock	(4)		(4)		(12)		(12)

Income (loss) from continuing operations attributable to NCR common stockholders	(128)		65		(107)		59
Income (loss) from discontinued operations, net of tax	—		—		(1)		5
Net income (loss) attributable to NCR common stockholders	$	(128)	$	65	$	(108)	$	64

Denominator:
Basic weighted average number of shares outstanding	140.9		137.0		140.3		136.4

Basic earnings per share:
From continuing operations	$	(0.91)	$	0.47	$	(0.76)	$	0.43
From discontinued operations	—		—		(0.01)		0.04
Total basic earnings per share	$	(0.91)	$	0.47	$	(0.77)	$	0.47

The components of diluted earnings per share are as follows:


In millions, except per share amounts	Three months ended September 30				Nine months ended September 30
	2023		2022		2023		2022
Numerator:
Income (loss) from continuing operations	$	(124)	$	69	$	(95)	$	71
Dividends on Series A Convertible Preferred Stock	(4)		(4)		(12)		(12)

Income (loss) from continuing operations attributable to NCR common stockholders	(128)		65		(107)		59
Income from discontinued operations, net of tax	—		—		(1)		5
Net income (loss) attributable to NCR common stockholders	$	(128)	$	65	$	(108)	$	64

Denominator:
Basic weighted average number of shares outstanding	140.9		137.0		140.3		136.4


Dilutive effect of restricted stock units and stock options	—		3.3		—		4.5
Weighted average diluted shares	140.9		140.3		140.3		140.9

Diluted earnings per share:
From continuing operations	$	(0.91)	$	0.46	$	(0.76)	$	0.42
From discontinued operations	—		—		(0.01)		0.03
Total diluted earnings per share	$	(0.91)	$	0.46	$	(0.77)	$	0.45

For the three months ended September 30, 2023, due to the net loss from continuing operations attributable to NCR common stockholders, potential common shares that would have caused dilution, such as the Series A Convertible Preferred Stock, restricted stock units and stock options, have been 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 9.2 million for the as-if

converted Series A Preferred Stock because their effect would have been anti-dilutive. Additionally, weighted average restricted stock units and stock options of 10.9 million were excluded from the diluted share count because their effect would have been anti-dilutive.

For the three months ended September 30, 2022, shares related to the as-if converted Series A Convertible Preferred Stock of 9.2 million were excluded from the diluted share count because their effect would have been anti-dilutive. Additionally, weighted average restricted stock units and stock options of 9.0 million were excluded from the diluted share count because their effect would have been anti-dilutive.

For the nine months ended September 30, 2023, due to the net loss from continuing operations attributable to NCR common stockholders, potential common shares that would have caused dilution, such as the Series A Convertible Preferred Stock, restricted stock units and stock options, have been 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 9.2 million for the as-if converted Series A Preferred Stock because their effect would have been anti-dilutive. Additionally, for the nine months ended September 30, 2023, weighted average restricted stock units and stock options of 14.5 million were excluded from the diluted share count because their effect would have been anti-dilutive.

For the nine months ended September 30, 2022, shares related to the as-if converted Series A Convertible Preferred Stock of 9.2 million were excluded from the dilution share count because their effect would have anti-dilutive. Additionally, for the nine months ended September 30, 2022, weighted average restricted stock units and stock options of 6.2 million were excluded from the diluted share count because their effect would have been anti-dilutive.