Earnings (Loss) Per Share

9 Months Ended

Sep. 30, 2022

10. Earnings (Loss) Per Share

For the three and nine months ended September 30, 2022, approximately 2 million and 3 million, respectively, of potentially dilutive shares were excluded from the computation of diluted earnings per share due to their antidilutive effect. For the three and nine months ended September 30, 2021, approximately 4 million and 5 million of potentially dilutive shares were excluded from the computation of diluted earnings per share due to their antidilutive effect or the Company recognizing a net loss.

Basic and diluted earnings (loss) per share are as follows (in millions, except share data):


	Three Months Ended September 30,					Nine Months Ended September 30,
	2022			2021		2022			2021
Numerator:
Net income (loss) attributable to NOW Inc.	$	40		$	5	$	96		$	(7	)
Less: net income attributable to participating securities		(1	)		—		(1	)		—
Net income (loss) attributable to NOW Inc. stockholders	$	39		$	5	$	95		$	(7	)
Denominator:
Weighted average basic common shares outstanding		110,863,381			110,558,831		110,747,087			110,351,625
Effect of dilutive securities		569,398			71,857		363,754			—
Weighted average diluted common shares outstanding		111,432,779			110,630,688		111,110,841			110,351,625
Earnings (loss) per share attributable to NOW Inc. stockholders:
Basic	$	0.35		$	0.05	$	0.85		$	(0.06	)
Diluted	$	0.35		$	0.05	$	0.85		$	(0.06	)

Under ASC Topic 260, “Earnings Per Share”, the two-class method requires a portion of net income attributable to NOW Inc. to be allocated to participating securities, which are unvested awards of share-based payments with non-forfeitable rights to receive dividends or dividend equivalents, if declared. Net loss is not allocated to unvested awards in periods the Company determines that those shares are not obligated to participate in losses. For the periods that the Company recognized net income, net income allocated to these participating securities was excluded from net income attributable to NOW Inc. stockholders in the numerator of the earnings per share computation.