Earnings per share. The Company’s basic earnings (loss) per share (EPS) attributable to Stewart is calculated by dividing net income (loss) attributable to Stewart by the weighted-average number of shares of Common Stock outstanding during the reporting periods. To calculate diluted earnings per share, the number of shares is adjusted for the effects of any applicable dilutive shares. The treasury stock method is used to calculate the dilutive number of shares related to the Company’s long term incentive and stock option plans. In periods of loss, dilutive shares are excluded from the calculation of the diluted earnings per share and diluted earnings per share is computed in the same manner as basic earnings per share.

The calculation of the basic and diluted earnings (loss) per share is as follows:



	For the Years Ended December 31,
	2017	2016		2015
	($000 omitted)
Numerator:
Net income (loss) attributable to Stewart	48,659	55,478		(6,204	)
Less: Cash paid on Class B Common Shares conversion (a)	—	(12,000	)	—
Adjusted net income (loss) for calculating basic and diluted EPS	48,659	43,478		(6,204	)

Denominator (000):
Basic average shares outstanding	23,445	23,364		23,544
Average number of dilutive shares relating to restricted shares grants	152	108		—
Diluted average shares outstanding	23,597	23,472		23,544
Basic earnings (loss) per share attributable to Stewart	2.08	1.86		(0.26	)
Diluted earnings (loss) per share attributable to Stewart	2.06	1.85		(0.26	)

(a) - In accordance with the ASC 260, Earnings Per Share, the $12.0 million payment to the holders of the Class B Common Stock shares (refer to Note 12) is treated in a manner similar to the treatment of dividends on preferred stock for the purpose of calculating EPS. Accordingly, the $12.0 million payment was deducted from the 2016 net income to arrive at the adjusted net income for calculating basic and diluted EPS.