Income Per Share

9 Months Ended

Sep. 30, 2022

Basic income per common share is computed by dividing net income by the weighted average number of common shares outstanding. Shares issued and treasury shares repurchased during the year are weighted for the portion of the year that they were outstanding. Diluted income per share is computed in a manner consistent with that of basic income per share while giving effect to all potentially dilutive common shares that were outstanding during the period. The outstanding relative performance stock units, non-vested restricted stock units, market stock units, and non-qualified stock options are not considered outstanding for purposes of computing basic income per share. However, these instruments are included in the denominator for purposes of computing diluted income per share under the treasury stock method for periods when we have net income. The Convertible Senior Notes are convertible, under certain circumstances, into cash or combination of cash and Company’s common stock. Prior to adoption of ASU 2020-06, there was no dilutive effect for the Convertible Senior Notes due to the Company’s expectation to settle the liability in cash. Upon adoption of ASU 2020-06, on January 1, 2022, the Company is including the potential share settlements, if any, in the denominator for purposes of computing diluted income per share under the if converted method for periods when we have net income. The potential shares settlements are calculated as the excess of the Company's conversion obligation over the aggregate principal amount (which will be settled in cash), divided by the average share price for the period. For the periods ended September 30, 2022, there was no dilutive effect for the Convertible Senior Notes since there were no potential share settlements for these periods.

NRG's basic and diluted income per share is shown in the following table:


	Three months ended September 30,				Nine months ended September 30,
(In millions, except per share data)	2022		2021		2022		2021
Basic and diluted income per share:
Net income	$	67	$	1,618	$	2,316	$	2,614
Weighted average number of common shares outstanding - basic and diluted	235		245		238		245
Income per weighted average common share — basic and diluted	$	0.29	$	6.60	$	9.73	$	10.67

As of September 30, 2022, and 2021, the Company had an insignificant number of outstanding equity instruments that are anti-dilutive and were not included in the computation of the Company’s diluted income per share.