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 net income and share data used in the basic and diluted earnings per share computations using the two-class method:



	Three Months Ended March 31
(in thousands, except per share amounts)	2019			2018
Numerator:
Numerator for basic earnings per share:
Net income attributable to Graham Holdings Company common stockholders	$	81,748		$	42,891
Less: Dividends paid-common stock outstanding and unvested restricted shares	(14,779		)	(14,638		)
Undistributed earnings	66,969			28,253
Percent allocated to common stockholders	99.43		%	99.30		%
	66,588			28,057
Add: Dividends paid-common stock outstanding	14,695			14,539
Numerator for basic earnings per share	$	81,283		$	42,596
Add: Additional undistributed earnings due to dilutive stock options	3			1
Numerator for diluted earnings per share	$	81,286		$	42,597
Denominator:
Denominator for basic earnings per share:
Weighted average shares outstanding	5,284			5,436
Add: Effect of dilutive stock options	42			37
Denominator for diluted earnings per share	5,326			5,473
Graham Holdings Company Common Stockholders:
Basic earnings per share	$	15.38		$	7.84
Diluted earnings per share	$	15.26		$	7.78

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 March 31
(in thousands)	2019	2018
Weighted average restricted stock	10	28

The diluted earnings per share amounts for the three months ended March 31, 2019 and March 31, 2018 exclude the effects of 104,000 stock options outstanding, as their inclusion would have been antidilutive due to a market condition. The diluted earnings per share amounts for the three months ended March 31, 2018 exclude the effects of 5,250 restricted stock awards as their inclusion would have been antidilutive due to a performance condition.

In the three months ended March 31, 2019 and March 31, 2018, the Company declared regular dividends totaling $2.78 and $2.66 per common share, respectively.