Earnings per share. The Company’s basic earnings per share (EPS) attributable to Stewart is calculated by dividing net income attributable to Stewart by the weighted-average number of shares of Common Stock outstanding during the reporting periods. Outstanding shares of Common Stock granted to employees that are not yet vested (restricted shares) are excluded from the calculation of the weighted-average number of shares outstanding for calculating basic EPS. To calculate diluted earnings per share, the number of shares is adjusted to include the number of additional shares that would have been outstanding if the restricted shares and restricted units were vested. In periods of loss, dilutive shares are excluded from the calculation of the diluted EPS and diluted EPS is computed in the same manner as basic EPS.

The calculation of the basic and diluted EPS is as follows:



	For the Years Ended December 31,
	2018	2017	2016
	($000 omitted)
Numerator:
Net income attributable to Stewart	47,523	48,659	55,478
Less: Cash paid on Class B Common Shares conversion (a)	—	—	(12,000	)
Adjusted net income for calculating basic and diluted EPS	47,523	48,659	43,478

Denominator (000):
Basic average shares outstanding	23,543	23,445	23,364
Average number of dilutive shares relating to restricted shares and units	142	152	108
Diluted average shares outstanding	23,685	23,597	23,472

Basic earnings per share attributable to Stewart	2.02	2.08	1.86
Diluted earnings per share attributable to Stewart	2.01	2.06	1.85

(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 in 2016 (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.