Earnings Per Share

9 Months Ended

Sep. 30, 2021

EARNINGS PER SHAREThe 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 September 30						Nine Months Ended September 30
(in thousands, except per share amounts)	2021			2020			2021			2020
Numerator:
Numerator for basic earnings per share:
Net income attributable to Graham Holdings Company common stockholders	$	39,586		$	77,615		$	267,394		$	63,224
Less: Dividends paid-common stock outstanding and unvested restricted shares	(7,496)			(7,100)			(30,155)			(29,970)
Undistributed earnings	32,090			70,515			237,239			33,254
Percent allocated to common stockholders	99.32		%	99.43		%	99.32		%	99.43		%
	31,872			70,116			235,633			33,066
Add: Dividends paid-common stock outstanding	7,447			7,059			29,953			29,806
Numerator for basic earnings per share	$	39,319		$	77,175		$	265,586		$	62,872
Add: Additional undistributed earnings due to dilutive stock options	1			1			5			1
Numerator for diluted earnings per share	$	39,320		$	77,176		$	265,591		$	62,873
Denominator:
Denominator for basic earnings per share:
Weighted average shares outstanding	4,961			5,060			4,966			5,176
Add: Effect of dilutive stock options	16			12			14			16
Denominator for diluted earnings per share	4,977			5,072			4,980			5,192
Graham Holdings Company Common Stockholders:
Basic earnings per share	$	7.93		$	15.25		$	53.49		$	12.15
Diluted earnings per share	$	7.90		$	15.22		$	53.33		$	12.11

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 September 30		Nine Months Ended September 30
(in thousands)	2021	2020	2021	2020
Weighted average restricted stock	14	12	11	11

The diluted earnings per share amounts for the three and nine months ended September 30, 2021 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 and nine months ended September 30, 2020 exclude the effects of 181,258 and 104,000 stock options outstanding, respectively, as their inclusion would have been antidilutive due to a market condition.

In the three and nine months ended September 30, 2021, the Company declared regular dividends totaling $1.51 and $6.04 per common share, respectively. In the three and nine months ended September 30, 2020, the Company declared regular dividends totaling $1.45 and $5.80 per common share, respectively.