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SEC Filings

10-Q
GRAHAM HOLDINGS CO filed this Form 10-Q on 11/01/2017
Entire Document
 


7. 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 
 September 30
 
Nine Months Ended 
 September 30
(in thousands, except per share amounts)
2017
 
2016
 
2017
 
2016
Numerator:
 
 
 
 
 
 
 
Numerator for basic earnings per share:
  
 
  
 
  
 
  
Net income attributable to Graham Holdings Company common stockholders
$
24,784

 
$
33,126

 
$
87,866

 
$
131,672

Less: Dividends paid-common stock outstanding and unvested restricted shares
(7,047
)
 
(6,796
)
 
(28,329
)
 
(27,329
)
Undistributed earnings
17,737

 
26,330

 
59,537

 
104,343

Percent allocated to common stockholders
99.07
%
 
98.70
%
 
99.07
%
 
98.70
%
 
17,572

 
25,987

 
58,981

 
102,987

Add: Dividends paid-common stock outstanding
6,981

 
6,708

 
28,066

 
26,976

Numerator for basic earnings per share
$
24,553

 
$
32,695

 
$
87,047

 
$
129,963

Add: Additional undistributed earnings due to dilutive stock options
1

 
2

 
4

 
7

Numerator for diluted earnings per share
$
24,554

 
$
32,697

 
$
87,051

 
$
129,970

Denominator:
  

 
  

 
 
 
 
Denominator for basic earnings per share:


 


 


 


Weighted average shares outstanding
5,518

 
5,544

 
5,530

 
5,570

Add: Effect of dilutive stock options
36

 
30

 
37

 
30

Denominator for diluted earnings per share
5,554

 
5,574

 
5,567

 
5,600

Graham Holdings Company Common Stockholders:
  
 
  
 
  
 
  
Basic earnings per share
$
4.45

 
$
5.90

 
$
15.74

 
$
23.33

Diluted earnings per share
$
4.42

 
$
5.87

 
$
15.64

 
$
23.21

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)
2017
 
2016
 
2017
 
2016
Weighted average restricted stock
30

 
42

 
29

 
40

The diluted earnings per share amounts for the three and nine months ended September 30, 2017 and September 30, 2016 exclude the effects of 104,000 and 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 nine months ended September 30, 2017 and September 30, 2016 exclude the effects of 5,250 and 6,100 restricted stock awards, respectively, as their inclusion would have been antidilutive due to a performance condition.
In the three and nine months ended September 30, 2017, the Company declared regular dividends totaling $1.27 and $5.08 per common share, respectively. In the three and nine months ended September 30, 2016, the Company declared regular dividends totaling $1.21 and $4.84 per common share, respectively.

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