EARNINGS PER SHARE (EPS)

6 Months Ended

Mar. 31, 2016

Basic EPS (and diluted EPS in periods when a loss exists) was calculated by dividing income available to common shareholders by the weighted average number of shares of common stock outstanding during the period. Diluted EPS was calculated by dividing income available to common shareholders by the weighted average number of shares of common stock outstanding plus additional common shares that could be issued in connection with stock based compensation and upon the settlement of the 2017 Convertible notes. In the six months ended March 31, 2015 , the 2017 Notes were anti-dilutive due to the conversion price being greater than the average stock price during the periods presented.

The following table is a reconciliation of the share amounts (in thousands) used in computing earnings per share:



	Three Months Ended March 31,		Six Months Ended March 31,
	2016	2015	2016	2015
Weighted average shares outstanding - basic	41,426	45,349	41,697	45,829
Incremental shares from stock based compensation	2,059	1,874	2,135	1,853
Convertible debt due 2017	406	446	895	—

Weighted average shares outstanding - diluted	43,891	47,669	44,727	47,682

Anti-dilutive options excluded from diluted EPS computation	416	567	418	580

Griffon has the intent and ability to settle the principal amount of the 2017 Notes in cash, and as such, the potential issuance of shares related to the principal amount of the 2017 Notes does not affect diluted shares.