Earnings (Loss) Per Share

6 Months Ended

Jun. 30, 2020

EARNINGS (LOSS) 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 (loss) and share data used in the basic and diluted earnings (loss) per share computations using the two-class method:


	Three Months Ended June 30									Six Months Ended June 30
(in thousands, except per share amounts)	2020			2019			2020			2019
Numerator:
Numerator for basic earnings (loss) per share:
Net income (loss) attributable to Graham Holdings Company common stockholders	$	18,854		$	57,081		$	(14,391)		$	138,829
Less: Dividends paid-common stock outstanding and unvested restricted shares	(7,581)			(7,388)			(22,870)			(22,167)
Undistributed earnings (loss)	11,273			49,693			(37,261)			116,662
Percent allocated to common stockholders ⁽¹⁾	99.44		%	99.43		%	100.00		%	99.43		%
	11,210			49,410			(37,261)			115,997
Add: Dividends paid-common stock outstanding	7,539			7,346			22,745			22,041
Numerator for basic earnings (loss) per share	$	18,749		$	56,756		$	(14,516)		$	138,038
Add: Additional undistributed earnings due to dilutive stock options	—			2			—			5
Numerator for diluted earnings (loss) per share	$	18,749		$	56,758		$	(14,516)		$	138,043
Denominator:
Denominator for basic earnings (loss) per share:
Weighted average shares outstanding	5,196			5,285			5,235			5,285
Add: Effect of dilutive stock options	5			44			—			43
Denominator for diluted earnings (loss) per share	5,201			5,329			5,235			5,328
Graham Holdings Company Common Stockholders:
Basic earnings (loss) per share	$	3.61		$	10.74		$	(2.77)		$	26.12
Diluted earnings (loss) per share	$	3.60		$	10.65		$	(2.77)		$	25.91

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(1) Percent of undistributed losses allocated to common stockholders is 100% in the first six months of 2020 as participating securities are not contractually obligated to share in losses.

Diluted earnings (loss) 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)	2020	2019	2020	2019
Weighted average restricted stock	10	12	10	11
Weighted average stock options	—	—	17	—

The diluted earnings (loss) per share amounts for the three and six months ended June 30, 2020 and June 30, 2019 exclude the effects of 104,000 stock options outstanding, as their inclusion would have been antidilutive due to a market condition.

In the three and six months ended June 30, 2020, the Company declared regular dividends totaling $1.45 and $4.35 per common share, respectively. In the three and six months ended June 30, 2019, the Company declared regular dividends totaling $1.39 and $4.17 per common share, respectively.