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 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 June 30						Six Months Ended June 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	$	369,672		$	46,626		$	500,698		$	68,317
Less: Dividends-common stock outstanding and unvested restricted shares	(14,819		)	—			(52,494		)	—
Undistributed earnings	354,853			46,626			448,204			68,317
Percent allocated to common stockholders	97.88		%	97.40		%	97.88		%	97.40		%
	347,342			45,415			438,716			66,543
Add: Dividends-common stock outstanding	14,506			—			51,556			—
Numerator for basic earnings per share	$	361,848		$	45,415		$	490,272		$	66,543
Add: Additional undistributed earnings due to dilutive stock options	31			1			40			1
Numerator for diluted earnings per share	$	361,879		$	45,416		$	490,312		$	66,544
Denominator:
Denominator for basic earnings per share:
Weighted average shares outstanding	7,284			7,229			7,280			7,228
Add: Effect of dilutive stock options	24			4			24			3
Denominator for diluted earnings per share	7,308			7,233			7,304			7,231
Graham Holdings Company Common Stockholders:
Basic earnings per share from continuing operations	$	49.68		$	6.28		$	67.35		$	9.21
Diluted earnings per share from continuing operations	$	49.52		$	6.28		$	67.13		$	9.21

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 June 30		Six Months Ended June 30
(in thousands)	2014	2013	2014	2013
Weighted average restricted stock	55	50	57	45

The diluted earnings per share amounts for the three and six months ended June 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 six months ended June 30, 2013 exclude the effects of 63,000 and 63,750 stock options outstanding, respectively, as their inclusion would have been antidilutive. The diluted earnings per share amounts for the three and six months ended June 30, 2014 exclude the effects of 5,550 restricted stock awards as their inclusion would have been antidilutive. The diluted earnings per share amounts for the three and six months ended June 30, 2013 exclude the effects of 51,300 restricted stock awards, as their inclusion would have been antidilutive.

In the three and six months ended June 30, 2014, the Company declared regular dividends totaling $2.55 and $7.65 per share, respectively. No dividends were paid in 2013.