NOTE 12 — EARNINGS PER SHARE

The following table sets forth the reconciliation of the numerator and denominator of basic and diluted earnings per share, as calculated using the two-class method for the three months ended August 31, 2018 and 2017.

	Three Months Ended
	August 31,			August 31,
(In thousands, except per share amounts)	2018			2017
Numerator for earnings per share:
Net income attributable to RPM International Inc. stockholders	$	69,764		$	116,416
Less: Allocation of earnings and dividends to participating securities		(611	)		(1,750	)
Net income available to common shareholders - basic		69,153			114,666
Add: Undistributed earnings reallocated to unvested shareholders		1			5
Add: Income effect of contingently issuable shares		1,480			1,377
Net income available to common shareholders - diluted	$	70,634		$	116,048
Denominator for basic and diluted earnings per share:
Basic weighted average common shares		131,861			131,236
Average diluted options		636			574
Additional shares issuable assuming conversion of convertible securities (1)		3,933			3,910
Total shares for diluted earnings per share (2)		136,430			135,720
Earnings Per Share of Common Stock Attributable to
RPM International Inc. Stockholders:
Basic Earnings Per Share of Common Stock	$	0.52		$	0.87
Diluted Earnings Per Share of Common Stock	$	0.52		$	0.86

(1)

Represents the number of shares that would be issued if our contingently convertible notes were converted. We include these shares in the calculation of diluted EPS as the conversion of the notes may be settled, at our election, in cash, shares of our common stock, or a combination of cash and shares of our common stock.

(2)

Restricted shares totaling 126,750 and 43,380 for the three months ended August 31, 2018 and 2017, respectively, were excluded from the calculation of diluted earnings per share because the grant price of the restricted shares exceeded the average market price of the shares during the period and their effect, accordingly, would have been anti-dilutive. In addition, stock appreciation rights (SARs) totaling 890,000 and 600,000 for the three months ended August 31, 2018 and 2017, respectively, were excluded from the calculation of diluted earnings per share as their effect would have been anti-dilutive.