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 March 31
(in thousands, except per share amounts)	2015			2014
Numerator:
Numerator for basic earnings per share:
Income from continuing operations attributable to Graham Holdings Company common stockholders	$	21,390		$	130,366
Less: Dividends-common stock outstanding and unvested restricted shares	(30,870		)	(37,675		)
Undistributed (losses) earnings	(9,480		)	92,691
Percent allocated to common stockholders⁽¹⁾	100.00		%	98.33		%
	(9,480		)	91,141
Add: Dividends-common stock outstanding	30,228			37,044
Numerator for basic earnings per share	$	20,748		$	128,185
Add: Additional undistributed earnings due to dilutive stock options	—			5
Numerator for diluted earnings per share	$	20,748		$	128,190
Denominator:
Denominator for basic earnings per share:
Weighted average shares outstanding	5,704			7,275
Add: Effect of dilutive stock options	33			26
Denominator for diluted earnings per share	5,737			7,301
Graham Holdings Company Common Stockholders:
Basic earnings per share from continuing operations	$	3.64		$	17.62
Diluted earnings per share from continuing operations	$	3.62		$	17.56

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(1)	Percent of undistributed losses allocated to common stockholders is 100% in the first quarter of 2015 as participating securities are not contractually obligated to share in losses.

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 March 31
(in thousands)	2015	2014
Weighted average restricted stock	54	51

The diluted earnings per share amounts for the three months ended March 31, 2015 exclude the effects of 50,000 stock options outstanding as their inclusion would have been antidilutive. The diluted earnings per share amounts for the three months ended March 31, 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 months ended March 31, 2015 exclude the effects of 5,850 restricted stock awards as their inclusion would have been antidilutive. The diluted earnings per share amounts for the three months ended March 31, 2014 exclude the effects of 5,550 restricted stock awards, as their inclusion would have been antidilutive.

The Company declared regular dividends totaling $5.30 and $5.10 for the three months ended March 31, 2015 and March 31, 2014, respectively.