Capital Stock. Each share of Class A common stock and Class B common stock participates equally in dividends. The Class B stock has limited voting rights and as a class has the right to elect 30% of the Board of Directors; the Class A stock has unlimited voting rights, including the right to elect a majority of the Board of Directors. In 2011 and 2010, the Company's Class A shareholders converted 11,500, or 1%, and 50,810, or 4%, respectively, of the Class A shares of the Company to an equal number of Class B shares. The conversions had no impact on the voting rights of the Class A and Class B common stock.

During 2011, 2010 and 2009, the Company purchased a total of 644,948, 1,057,940 and 145,040 shares, respectively, of its Class B common stock at a cost of approximately $248.1 million, $404.8 million and $61.0 million, respectively. In September 2011, the Board of Directors increased the authorization to repurchase a total of 750,000 shares of Class B common stock. The Company did not announce a ceiling price or a time limit for the purchases. The authorization included 43,573 shares that remained under the previous authorization. At December 31, 2011, the Company had authorization from the Board of Directors to purchase up to 493,474 shares of Class B common stock.

Stock Awards. In 1982, the Company adopted a long-term incentive compensation plan, which, among other provisions, authorizes the awarding of Class B common stock to key employees. Stock awards made under this incentive compensation plan are primarily subject to the general restriction that stock awarded to a participant will be forfeited and revert to Company ownership if the participant's employment terminates before the end of a specified period of service to the Company. Some of the awards are also subject to performance conditions and will be forfeited and revert to Company ownership if the conditions are not met. At December 31, 2011, there were 316,805 shares reserved for issuance under the incentive compensation plan. Of this number, 77,319 shares were subject to awards outstanding and 239,486 shares were available for future awards. Activity related to stock awards under the long-term incentive compensation plan for the years ended December 31, 2011, January 2, 2011 and January 3, 2010, was as follows:


	2011			2010			2009
	Number	Average		Number	Average		Number	Average
	of	Award		of	Award		of	Award
	Shares	Price		Shares	Price		Shares	Price
Beginning of year, unvested	48,359	$	498.95	66,020	$	494.97	32,785	$	796.52
Awarded	44,030		432.09	1,859		442.29	48,440		415.08
Vested	(13,132)		722.67	(2,644)		754.81	(13,386)		920.32
Forfeited	(1,938)		436.31	(16,876)		437.06	(1,819)		672.40
End of year, unvested	77,319	$	424.45	48,359	$	498.95	66,020	$	494.97

For the share awards outstanding at December 31, 2011, the aforementioned restriction will lapse in 2012 for 3,200 shares, in 2013 for 31,555 shares, in 2014 for 674 shares and in 2015 for 41,890 shares. Also, in early 2012, the Company made stock awards of 26,675 shares. Stock-based compensation costs resulting from Company stock awards were $5.3 million, $2.9 million and $4.6 million in 2011, 2010 and 2009, respectively.

As of December 31, 2011, there was $18.7 million of total unrecognized compensation expense related to this plan. That cost is expected to be recognized on a straight-line basis over a weighted average period of 1.8 years.

Stock Options. The Company's employee stock option plan reserves 1,900,000 shares of the Company's Class B common stock for options to be granted under the plan. The purchase price of the shares covered by an option cannot be less than the fair value on the granting date. Options generally vest over four years and have a maximum term of ten years. At December 31, 2011, there were 362,525 shares reserved for issuance under the stock option plan, of which 129,044 shares were subject to options outstanding and 233,481 shares were available for future grants.

Activity related to options outstanding for the years ended December 31, 2011, January 2, 2011 and January 3, 2010 was as follows:


	2011			2010			2009
	Number	Average		Number	Average		Number	Average
	of	Option		of	Option		of	Option
	Shares	Price		Shares	Price		Shares	Price
Beginning of year	87,919	$	495.05	90,569	$	525.44	87,025	$	581.17
Granted	51,000		499.45	22,500		395.68	24,294		421.95
Expired or forfeited	(9,875)		519.04	(25,150)		515.59	(20,750)		637.99
End of year	129,044	$	494.95	87,919	$	495.05	90,569	$	525.44

Of the shares covered by options outstanding at the end of 2011, 45,585 are now exercisable; 27,886 will become exercisable in 2012; 24,448 will become exercisable in 2013; 18,375 will become exercisable in 2014; and 12,750 will become exercisable in 2015. For 2011, 2010 and 2009, the Company recorded expense of $2.7 million, $1.4 million and $1.3 million related to this plan, respectively. Information related to stock options outstanding and exercisable at December 31, 2011 is as follows:


	Options Outstanding				Options Exercisable
		Weighted				Weighted
	Shares	Average	Weighted		Shares	Average	Weighted
Range of	Outstanding	Remaining	Average		Exercisable	Remaining	Average
Exercise	at	Contractual	Exercise		at	Contractual	Exercise
Prices	12/31/2011	Life (yrs.)	Price		12/31/2011	Life (yrs.)	Price
$343–396	36,250	8.4	$	385.62	14,938	7.8	$	380.08
419–439	23,294	8.0		423.25	11,647	8.0		423.25
503	50,000	10.0		502.58	―	―		―
652	2,000	7.0		651.91	1,500	7.0		651.91
729–763	13,000	3.4		731.94	13,000	3.4		731.94
816	1,500	2.0		816.05	1,500	2.0		816.05
954	3,000	3.0		953.50	3,000	3.0		953.50
	129,044	8.2	$	494.95	45,585	6.1	$	552.49

At December 31, 2011, the intrinsic value for all options outstanding, exercisable and unvested was $0.1 million, $0.1 million and $0.1 million, respectively. The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the option. The market value of the Company's stock was $376.81 at December 31, 2011. At December 31, 2011, there were 83,459 unvested options related to this plan with an average exercise price of $463.53 and a weighted average remaining contractual term of 9.4 years. At January 2, 2011, there were 47,845 unvested options with an average exercise price of $407.68.

As of December 31, 2011, total unrecognized stock-based compensation expense related to this plan was $7.5 million, which is expected to be recognized on a straight-line basis over a weighted average period of approximately 1.9 years. There were no options exercised during 2011, 2010 and 2009.

During 2011, the Company granted 50,000 options at an exercise price above the fair market value of its common stock at the date of grant. All other options granted during 2011, and all options granted during 2010 and 2009, were at an exercise price equal to the fair market value of the Company's common stock at the date of grant. The weighted average grant-date fair value of options granted during 2011, 2010, and 2009 was $110.67, $106.70, and $108.92, respectively. Also, in early 2012, an additional 1,000 stock options were granted.

The fair value of options at date of grant was estimated using the Black-Scholes method utilizing the following assumptions:

The Company also maintains a stock option plan at Kaplan. Under the provisions of this plan, options were issued with an exercise price equal to the estimated fair value of Kaplan's common stock, and options vested ratably over the number of years specified (generally four to five years) at the time of the grant. Upon exercise, an option holder may receive Kaplan shares or cash equal to the difference between the exercise price and the then fair value.

In December 2011, a Kaplan senior manager exercised 2,000 Kaplan stock options at an option price of $652 per option. At December 31, 2011, this individual holds 3,750 Kaplan restricted shares, as well as 3,456 Kaplan restricted shares issued in 2009 and 2010 that vest over a three-year period. The fair value of Kaplan's common stock is determined by the Company's compensation committee of the Board of Directors, and in January 2012, the committee set the fair value price at $1,165 per share. No options were awarded during 2011, 2010 or 2009, no options were exercised during 2010 or 2009 and there are no options outstanding at December 31, 2011.

Kaplan recorded a stock compensation credit of $1.3 million and $1.2 million in 2011 and 2010, respectively, compared to stock compensation expense of $0.9 million in 2009. At December 31, 2011, the Company's accrual balance related to Kaplan stock-based compensation totaled $8.1 million. There were no payouts in 2011, 2010 or 2009. The total intrinsic value of options exercised during 2011 was $1.0 million.

Earnings Per Share. The Company's earnings per share from continuing operations (basic and diluted) for 2011, 2010 and 2009 are presented below:


		Fiscal Year Ended
		December 31,		January 2,		January 3,
(in thousands, except per share amounts)		2011		2011		2010
Income from continuing operations attributable to
	The Washington Post Company common stockholders	$	120,404	$	319,289	$	156,853
Less: Amount attributable to participating securities			(1,211)		(1,970)		(1,075)
Basic income from continuing operations attributable to
	The Washington Post Company common stockholders	$	119,193	$	317,319	$	155,778

Plus: Amount attributable to participating securities			1,211		1,970		1,075
Diluted income from continuing operations attributable to
	The Washington Post Company common stockholders	$	120,404	$	319,289	$	156,853

Basic weighted average shares outstanding			7,826		8,869		9,332
Effect of dilutive shares:
	Stock options and restricted stock		79		62		60
Diluted weighted average shares outstanding			7,905		8,931		9,392

Income per share from continuing operations attributable to
	The Washington Post Company common stockholders
Basic		$	15.23	$	35.77	$	16.70
Diluted		$	15.23	$	35.75	$	16.70

The 2011, 2010 and 2009 diluted earnings per share amounts exclude the effects of 115,294, 30,225 and 74,569 stock options outstanding, respectively, as their inclusion would have been antidilutive.

In 2011, 2010 and 2009, the Company declared regular dividends totaling $9.40, $9.00 and $8.60 per share, respectively.