Washington Post 2000 Annual Report Download - page 15

Mr. Warren Buffett, is a member of the Company’s Board of Directors.
Neither Berkshire nor Mr. Buffett participated in the Company’s evalu-
ation, approval, or execution of its decision to invest in Berkshire
common stock. The Company’s investment in Berkshire common
stock is less than 1 percent of the consolidated equity of Berkshire.
At December 31, 2000, the unrealized gain related to the Company’s
Berkshire stock investment totaled $25,271,000; the unrealized
loss on this investment was $19,134,000 at January 2, 2000. The
Company presently intends to hold the Berkshire common stock
investment long term; thus the investment has been classified as
a non-current asset in the Consolidated Balance Sheets.
During 2000, 1999, and 1998 proceeds from sales of marketable
equity securities were $6,332,000, $54,805,000, and $38,246,000,
respectively, and gross realized gains on such sales were $4,929,000,
$38,799,000, and $2,168,000, respectively. Gross realized gains or
losses upon the sale of marketable equity securities are included in
“Other (expense) income, net” in the Consolidated Statements of
Income. For purposes of computing realized gains and losses, the
cost basis of securities sold is determined by specific identification.
Investments in Affiliates. The Company’s investments in affiliates
at December 31, 2000 and January 2, 2000 include the following
(in thousands):
2000 1999
BrassRing, Inc.................................................. $ 73,310 $ 75,842
Bowater Mersey Paper Company ...................... 40,227 39,885
International Herald Tribune ............................. 17,561 19,890
Other ................................................................ 531 5,052
$ 131,629 $ 140,669
The Company’s investments in affiliates consist of a 42 percent
interest in BrassRing, Inc., which provides recruiting, career develop-
ment and hiring management services for employers and job candi-
dates; a 49 percent interest in the common stock of Bowater Mersey
Paper Company Limited, which owns and operates a newsprint mill in
Nova Scotia; a 50 percent common stock interest in the International
Herald Tribune newspaper, published near Paris, France; and a 50
percent common stock interest in the Los Angeles Times-Washington
Post News Service, Inc.
Summarized financial data for the affiliates’ operations are as
follows (in thousands):
2000 1999 1998
Financial Position:
Working capital .......................... $ 29,427 $ 69,155 $ 34,628
Property, plant, and equipment.. 143,749 133,425 125,025
Total assets ................................ 432,458 365,694 252,231
Long-term debt .......................... — — —
Net equity .................................. 291,481 236,597 122,267
Results of Operations:
Operating revenues.................... $ 345,913 $ 267,788 $ 279,779
Operating (loss) income ............. (27,505) (37,889) 10,978
Net loss...................................... (77,739) (40,035) (63)
The following table summarizes the status and results of the
Company’s investments in affiliates (in thousands):
2000 1999
Beginning investment ....................................... $ 140,669 $ 68,530
Issuance of stock by BrassRing, Inc.................. 21,973 83,493
Additional investment ....................................... 12,480 8,734
Equity in losses................................................. (36,466) (8,814)
Dividends and distributions received................. (940) (930)
Foreign currency translation.............................. (1,685) (3,289)
Other ................................................................ (4,402) (7,055)
Ending investment ............................................ $ 131,629 $ 140,669
On September 29, 1999, the Company merged its career fair and
HireSystems businesses together and renamed the combined opera-
tions BrassRing, Inc. On the same date, BrassRing issued stock repre-
senting a 46 percent equity interest to two parties under two separate
transactions for cash and businesses with an aggregate fair value of
$87,000,000. As a result of this transaction, the Company’s ownership
of BrassRing was reduced to 54 percent and the minority investors
were granted certain participatory rights. As such, the Company
de-consolidated BrassRing on September 29, 1999 and recorded its
investment under the equity method of accounting. The 1999 increase
in the basis of the Company’s investment in BrassRing resulting from
this transaction of $34,571,000, net of taxes, has been recorded as
contributed capital.
During 2000, BrassRing issued stock to various parties in
connection with its acquisitions of various career fair and recruiting
services companies. The effect of these transactions reduced the
Company’s investment interest in BrassRing to 42 percent, from
54 percent at January 2, 2000, and increased the Company’s invest-
ment basis in BrassRing by $13,332,000, net of taxes. The increase
in investment basis has been recorded as contributed capital.
40 The Washington Post Company