NOTE 4 – EARNINGS PER SHARE

The Company presents basic net income per share using the two-class method. The two-class method is an earnings allocation formula that treats a participating security as having rights to earnings that otherwise would have been available to common stockholders and that determines basic net income per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings that would have been available to common stockholders. A participating security is defined as a security that may participate in undistributed earnings with common stock. The Company’s capital structure includes securities that participate with common stock on a one-for-one basis for distribution of dividends. These are the restricted stock awards and restricted stock units issued pursuant to the 2013 Equity Incentive Award Plan. The Company determines the diluted net income per share by using the more dilutive of the two class-method or the treasury stock method and by including the basic weighted average of outstanding performance stock units in the calculation of diluted net income per share under the two-class method and including all potential common shares assumed issued in the calculation of diluted net income per share under the treasury stock method.

The following table sets forth the computation of net income per share for the three and six months ended February 28, 2019 and 2018 (in thousands, except per share amounts):



	Three Months Ended				Six Months Ended
	February 28,		February 28,		February 28,		February 28,
	2019		2018		2019		2018
Net income attributable to PriceSmart, Inc.	$	23,810	$	14,148	$	38,422	$	36,638
Less: Allocation of income to unvested stockholders		(27)		—		(219)		(398)
Net income attributable to PriceSmart, Inc. per share available for distribution:	$	23,783	$	14,148	$	38,203	$	36,240
Basic weighted average shares outstanding		30,206		30,100		30,189		30,089
Add dilutive effect of performance stock units (two-class method)		5		—		11		1
Diluted average shares outstanding		30,211		30,100		30,200		30,090
Basic net income per share	$	0.79	$	0.47	$	1.27	$	1.21
Diluted net income per share	$	0.79	$	0.47	$	1.27	$	1.21