EARNINGS PER SHARE

The Company's unvested restricted stock awards contain nonforfeitable rights to dividends and, therefore, are considered participating securities for purposes of computing earnings per share pursuant to the two-class method. The diluted earnings per share computed under the two-class method is lower than the diluted earnings per share computed under the treasury stock method, resulting in the presentation of the lower amount in diluted earnings per share. The computation of the earnings per share under the two-class method excludes the income attributable to the unvested restricted stock awards from the numerator and excludes the dilutive impact of those underlying shares from the denominator.

The following reflects the Company's income from continuing operations and share data used in the basic and diluted earnings per share computations using the two-class method:



	Three Months Ended June 30						Six Months Ended June 30
(in thousands, except per share amounts)	2016			2015			2016			2015
Numerator:
Numerator for basic earnings per share:
Income from continuing operations attributable to Graham Holdings Company common stockholder	$	60,766		$	39,280		$	98,546		$	36,597
Less: Dividends paid-common stock outstanding and unvested restricted shares	(6,775		)	(15,484		)	(20,533		)	(46,354		)
Undistributed earnings (loss)	53,991			23,796			78,013			(9,757		)
Percent allocated to common stockholders⁽¹⁾	98.68		%	98.18		%	98.68		%	100.00		%
	53,277			23,363			76,981			(9,757		)
Add: Dividends paid-common stock outstanding	6,685			15,201			20,264			45,506
Numerator for basic earnings per share	$	59,962		$	38,564		$	97,245		$	35,749
Add: Additional undistributed earnings due to dilutive stock options	4			2			5			—
Numerator for diluted earnings per share	$	59,966		$	38,566		$	97,250		$	35,749
Denominator:
Denominator for basic earnings per share:
Weighted average shares outstanding	5,544			5,720			5,584			5,712
Add: Effect of dilutive stock options	30			30			29			32
Denominator for diluted earnings per share	5,574			5,750			5,613			5,744
Graham Holdings Company Common Stockholders:
Basic earnings per share from continuing operations	$	10.82		$	6.74		$	17.42		$	6.26
Diluted earnings per share from continuing operations	$	10.76		$	6.71		$	17.33		$	6.22

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(1)	Percent of undistributed losses allocated to common stockholders is 100% in the first six months of 2015 as participating securities are not contractually obligated to share in losses.

Diluted earnings per share excludes the following weighted average potential common shares, as the effect would be antidilutive, as computed under the treasury stock method:



	Three Months Ended June 30		Six Months Ended June 30
(in thousands)	2016	2015	2016	2015
Weighted average restricted stock	41	55	39	54

The diluted earnings per share amounts for the three and six months ended June 30, 2016 exclude the effects of 102,000 stock options outstanding as their inclusion would have been antidilutive due to a market condition. The diluted earnings per share amounts for the three and six months ended June 30, 2015 exclude the effects of 50,000 stock options outstanding as their inclusion would have been antidilutive due to a market condition. The diluted earnings per share amounts for the three and six months ended June 30, 2016 exclude the effects of 6,100 restricted stock awards as their inclusion would have been antidilutive due to a performance condition. The diluted earnings per share amounts for the three and six months ended June 30, 2015 exclude the effects of 5,850 restricted stock awards, as their inclusion would have been antidilutive due to a performance condition.

In the three and six months ended June 30, 2016, the Company declared dividends totaling $1.21 and $3.63, respectively. In the three and six months ended June 30, 2015, the Company declared regular dividends totaling $2.65 and $7.95, respectively.