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 2012 and 2011, the Company's Class A shareholders converted 10,000, or 1%, and 11,500, or 1%, 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 2012, 2011 and 2010, the Company purchased a total of 301,231, 644,948 and 1,057,940 shares, respectively, of its Class B common stock at a cost of approximately $103.2 million, $248.1 million and $404.8 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, 2012, the Company had authorization from the Board of Directors to purchase up to 192,243 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 and market conditions and will be forfeited and revert to Company ownership if the conditions are not met. At December 31, 2012, there were 302,055 shares reserved for issuance under the incentive compensation plan. Of this number, 207,917 shares were subject to awards outstanding and 94,138 shares were available for future awards. Activity related to stock awards under the long-term incentive compensation plan for the years ended December 31, 2012 and 2011, and January 2, 2011, was as follows:


	2012			2011			2010
	Number	Average		Number	Average		Number	Average
	of	Grant-Date		of	Grant-Date		of	Grant-Date
	Shares	Fair Value		Shares	Fair Value		Shares	Fair Value
Beginning of year, unvested	77,319	$	424.45	48,359	$	498.95	66,020	$	494.97
Awarded	145,348		321.56	44,030		432.09	1,859		442.29
Vested	(7,134)		499.06	(13,132)		722.67	(2,644)		754.81
Forfeited	(7,616)		417.79	(1,938)		436.31	(16,876)		437.06
End of Year, Unvested	207,917	$	350.21	77,319	$	424.45	48,359	$	498.95

For the share awards outstanding at December 31, 2012, the aforementioned restriction will lapse in 2013 for 28,555 shares, in 2014 for 2,674 shares, in 2015 for 41,968 shares, in 2016 for 24,850 shares, in 2017 for 67,370 shares and in 2018 for 42,500 shares. Also, in early 2013, the Company made stock awards of 7,681 shares. Stock-based compensation costs resulting from Company stock awards were $11.4 million, $8.9 million and $4.8 million in 2012, 2011 and 2010, respectively.

As of December 31, 2012, there was $50.9 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 2.3 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 10 years. At December 31, 2012, there were 351,675 shares reserved for issuance under the stock option plan, of which 125,694 shares were subject to options outstanding and 225,981 shares were available for future grants.

Activity related to options outstanding for the years ended December 31, 2012, December 31, 2011 and January 2, 2011 was as follows:


	2012			2011			2010
	Number	Average		Number	Average		Number	Average
	of	Option		of	Option		of	Option
	Shares	Price		Shares	Price		Shares	Price
Beginning of year	129,044	$	494.95	87,919	$	495.05	90,569	$	525.44
Granted	7,500		378.00	51,000		499.45	22,500		395.68
Expired or forfeited	(10,850)		605.82	(9,875)		519.04	(25,150)		515.59
End of Year	125,694	$	478.32	129,044	$	494.95	87,919	$	495.05

Of the shares covered by options outstanding at the end of 2012, 64,021 are now exercisable; 25,423 will become exercisable in 2013; 19,750 will become exercisable in 2014; 14,625 will become exercisable in 2015; and 1,875 will become exercisable in 2016. For 2012, 2011 and 2010, the Company recorded expense of $2.9 million, $2.7 million and $1.4 million related to this plan, respectively. Information related to stock options outstanding and exercisable at December 31, 2012 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	12/31/2012	Life (yrs.)	Price		12/31/2012	Life (yrs.)	Price
$343–396	41,000	7.7	$	383.78	22,250	6.9	$	381.54
419–439	21,694	6.5		422.67	16,271	6.5		422.67
503	50,000	8.2		502.58	12,500	8.2		502.58
652	2,000	5.4		651.91	2,000	5.4		651.91
729–763	7,000	3.9		729.67	7,000	3.9		729.67
816	1,000	0.9		816.05	1,000	0.9		816.05
954	3,000	2.0		953.50	3,000	2.0		953.50
	125,694	7.2	$	478.32	64,021	6.3	$	495.72

At December 31, 2012, 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 $365.21 at December 31, 2012. At December 31, 2012, there were 61,673 unvested options related to this plan with an average exercise price of $460.24 and a weighted average remaining contractual term of 8.2 years. At December 31, 2011, there were 83,459 unvested options with an average exercise price of $463.53.

As of December 31, 2012, total unrecognized stock-based compensation expense related to this plan was $5.1 million, which is expected to be recognized on a straight-line basis over a weighted average period of approximately 2.3 years. There were no options exercised during 2012, 2011 and 2010.

All options granted during 2012 and 2010 were at an exercise price equal to the fair market value of the Company's common stock at the date of grant. 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 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 2012, 2011 and 2010 was $91.71, $110.67 and $106.70, respectively. Also, in early 2013, an additional 15,000 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.

At December 31, 2012, a Kaplan senior manager holds 6,447 Kaplan restricted shares, as well as 759 Kaplan restricted shares issued in 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 2013, the committee set the fair value price at $973 per share. No options were awarded during 2012, 2011 or 2010; no options were exercised during 2012 or 2010 and there are no options outstanding at December 31, 2012. In December 2011, a Kaplan senior manager exercised 2,000 Kaplan stock options at an option price of $652 per option.

Kaplan recorded a stock compensation credit of $1.1 million, $1.3 million and $1.2 million in 2012, 2011 and 2010, respectively. At December 31, 2012, the Company's accrual balance related to Kaplan stock-based compensation totaled $7.0 million. There were no payouts in 2012, 2011 or 2010. 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 the years ended December 31, 2012 and 2011, and January 2, 2011 are presented below:

(in thousands, except per share amounts)			2012		2011		2010
Income from continuing operations attributable to
	The Washington Post Company common stockholders		$	48,041	$	144,704	$	355,091
Less: Amount attributable to participating securities				(3,257)		(1,459)		(2,182)
Basic Income from Continuing Operations Attributable to
	The Washington Post Company Common Stockholders		$	44,784	$	143,245	$	352,909
Plus: Amount attributable to participating securities				3,257		1,459		2,182
Diluted Income from Continuing Operations Attributable to
	The Washington Post Company Common Stockholders		$	48,041	$	144,704	$	355,091
Basic weighted average shares outstanding				7,360		7,826		8,869
Plus: Effect of dilutive shares related to stock options and restricted stock				44		79		62
Diluted Weighted Average Shares Outstanding				7,404		7,905		8,931
Income Per Share from Continuing Operations Attributable to
	The Washington Post Company Common Stockholders:
		Basic	$	6.09	$	18.30	$	39.78
		Diluted	$	6.09	$	18.30	$	39.76

For the year ended December 31, 2012, the basic earnings per share computed under the two-class method is lower than the diluted earnings per share computed under the if-converted method for participating securities, resulting in the presentation of the lower amount in diluted earnings per share. The 2012, 2011 and 2010 diluted earnings per share amounts exclude the effects of 124,694, 115,294 and 30,225 stock options outstanding, respectively, as their inclusion would have been antidilutive. The 2012 diluted earnings per share amounts also exclude the effects of 52,200 restricted stock awards, as their inclusion would have been antidilutive.

In 2012, 2011 and 2010, the Company declared regular dividends totaling $9.80, $9.40 and $9.00 per share, respectively. In December 2012, the Company declared and paid an accelerated cash dividend totaling $9.80 per share, in lieu of regular quarterly dividends that the Company otherwise would have declared and paid in calendar year 2013.