Income Per Share

12 Months Ended

Dec. 31, 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.

Dilutive effect for equity compensation and other equity instruments — The 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 there is 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 there is 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 year ended December 31, 2022, there was no dilutive effect for the Convertible Senior Notes since there were no potential share settlements for the period.

The reconciliation of NRG's basic income per share to diluted income per share is shown in the following table:


	Year Ended December 31,
(In millions, except per share amounts)	2022		2021		2020
Basic income per share attributable to NRG Energy, Inc;
Net income attributable to NRG Energy, Inc. common stockholders	$	1,221	$	2,187	$	510



Weighted average number of common shares outstanding-basic	236		245		245
Income per weighted average common share — basic	$	5.17	$	8.93	$	2.08
Diluted income per share attributable to NRG Energy, Inc;
Net income attributable to NRG Energy, Inc. common stockholders	$	1,221	$	2,187	$	510
Weighted average number of common shares outstanding-basic	236		245		245
Incremental shares attributable to the issuance of equity compensation (treasury stock method)	—		—		1
Weighted average number of common shares outstanding-diluted	236		245		246
Income per weighted average common share — diluted	$	5.17	$	8.93	$	2.07

As of December 31, 2022, 2021 and 2020, 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.