Earnings Per Share

Earnings per common share ("EPS") is computed by dividing net income by the weighted average number of common shares outstanding during the period on a basic and diluted basis.

Our potentially dilutive securities include potential common shares related to our stock options and restricted stock units granted in connection with the Livent Plan. See Note 12 to our annual consolidated and combined financial statements in Part II, Item 8 of our 2018 Annual Report on Form 10-K for more information. Diluted earnings per share (“Diluted EPS”) considers the impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential common shares would have an anti-dilutive effect. Diluted EPS excludes the impact of potential common shares related to our stock options in periods in which the option exercise price is greater than the average market price of our common stock for the period.

The weighted average common shares outstanding for both basic and diluted earnings per share for the condensed consolidated financial statements for the three months ended March 31, 2018 was calculated, in accordance with ASC 260, Earnings Per Share (ASC 260), using 123.0 million shares of common stock outstanding, which reflects the number of shares held by FMC prior to the IPO. In connection with our IPO, we issued 20 million shares of our common stock to the public at a public offering price of $17.00 per share. The IPO closed on October 15, 2018. On November 13, 2018 the Company closed on the sale of an additional 3 million shares of its common stock pursuant to the Over-allotment Option Exercise. In accordance with ASC 260, the 23 million shares issued in connection with the IPO are included in earnings per share calculations for periods subsequent to the closing of the IPO and are not included in the earning per share calculations for periods prior to the closing of the IPO.

Earnings applicable to common stock and common stock shares used in the calculation of basic and diluted earnings per share are as follows:



(in Millions, Except Share and Per Share Data)	Three Months Ended March 31,
(in Millions, Except Share and Per Share Data)	2019		2018
Numerator:
Net income	$	16.9	$	32.2

Denominator:
Weighted average common shares outstanding - basic	146.0		123.0
Weighted average additional shares assuming conversion of potential common shares	0.5		—
Weighted average common shares outstanding - diluted	146.5		123.0

Basic earnings per common share:
Net income per weighted average share - basic	$	0.12	$	0.26
Diluted earnings per common share:
Net income per weighted average share - diluted	$	0.12	$	0.26

Anti-dilutive stock options

For the three months ended March 31, 2019, options to purchase 716,256 shares of our common stock at an average exercise price of $16.99 per share were anti-dilutive and not included in the computation of diluted earnings per share because the exercise price of the options was greater than the average market price of the common stock for the full year.

Additional dilution - the FMC Plan

FMC has a share-based compensation plan, in which Lithium Business employees were eligible to participate prior to the IPO. Effective March 1, 2019 (the "Distribution Date") each outstanding FMC equity award pursuant to the FMC Plan held by a Lithium Business employee was converted into a Livent equity award ("Converted Award") pursuant to the Livent Plan. The number of Livent shares subject to each Converted Award (and in the case of stock options, the exercise price of the award) was adjusted to preserve the aggregate intrinsic value of the original FMC Plan award as measured before and after the conversion, subject to rounding. Additionally, each outstanding award of FMC RSUs held by FMC employees and issued prior to 2019 was converted into Adjusted FMC RSUs which will vest in both FMC and Livent common stock shares, subject to the same terms and conditions as were applicable immediately prior to the conversion. See Note 12 for more information on the FMC Plan. There were $0.5 million incremental shares related to the Converted Awards and Adjusted FMC RSUs that were included for diluted earnings per share for the three months ended March 31, 2019.