EARNINGS PER SHARE

On June 30, 2014, the Company acquired 1,620,190 of its Class B common stock owned by Berkshire Hathaway, as described in Note 4.

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 income from continuing operations 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)	2014			2013			2014			2013
Numerator:
Numerator for basic earnings per share:
Income from continuing operations attributable to Graham Holdings Company common stockholders	$	83,331		$	54,132		$	588,645		$	121,857
Less: Dividends-common stock outstanding and unvested restricted shares	(14,773		)	—			(67,267		)	—
Undistributed earnings	68,558			54,132			521,378			121,857
Percent allocated to common stockholders	97.89		%	97.42		%	97.89		%	97.42		%
	67,112			52,736			510,384			118,714
Add: Dividends-common stock outstanding	14,462			—			66,021			—
Numerator for basic earnings per share	$	81,574		$	52,736		$	576,405		$	118,714
Add: Additional undistributed earnings due to dilutive stock options	6			3			48			4
Numerator for diluted earnings per share	$	81,580		$	52,739		$	576,453		$	118,718
Denominator:
Denominator for basic earnings per share:
Weighted average shares outstanding	5,671			7,231			6,737			7,229
Add: Effect of dilutive stock options	25			15			25			8
Denominator for diluted earnings per share	5,696			7,246			6,762			7,237
Graham Holdings Company Common Stockholders:
Basic earnings per share from continuing operations	$	14.38		$	7.29		$	85.55		$	16.42
Diluted earnings per share from continuing operations	$	14.32		$	7.28		$	85.24		$	16.41

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)	2014	2013	2014	2013
Weighted average restricted stock	61	91	61	79

The diluted earnings per share amounts for the three and nine months ended September 30, 2014 exclude the effects of 5,000 stock options outstanding as their inclusion would have been antidilutive. The diluted earnings per share amounts for the three and nine months ended September 30, 2013 exclude the effects of 13,000 and 63,000 stock options outstanding, respectively, as their inclusion would have been antidilutive. The diluted earnings per share amounts for the three and nine months ended September 30, 2014 exclude the effects of 6,075 restricted stock awards as their inclusion would have been antidilutive. The diluted earnings per share amounts for the three and nine months ended September 30, 2013 exclude the effects of 8,800 restricted stock awards, as their inclusion would have been antidilutive.

In the three and nine months ended September 30, 2014, the Company declared regular dividends totaling $2.55 and $10.20 per share, respectively. No dividends were paid in 2013.