Washington Post 2002 Annual Report Download - page 48

During 2002, 2001 and 2000, proceeds from sales of market- The following table summarizes the status and results of the Com-
able equity securities were $19.7 million, $0.1 million and pany’s investments in affiliates (in thousands):
$6.3 million, respectively, and gross realized gains (losses) on 2002 2001
such sales were $13.2 million, ($0.3 million) and $4.9 million,
respectively. During 2002 and 2001, the Company recorded Beginning investment ****************** $ 80,936 $131,629
write-downs on marketable equity securities of $2.0 million and Additional investment ****************** 7,610 21,112
Equity in losses************************ (19,308) (68,659)
$3.0 million, respectively. Realized gains or losses on market-
Dividends and distributions received**** (710) (700)
able equity securities are included in ‘‘Other income (expense),
Foreign currency translation ************ 2,175 (3,122)
net’’ in the Consolidated Statements of Income. For purposes of Other********************************* —676
computing realized gains and losses, the cost basis of securities Ending investment ********************* $ 70,703 $ 80,936
sold is determined by specific identification.
During 2000, BrassRing issued stock to various parties in con-
Investments in Affiliates. The Company’s investments in affili-
nection with its acquisitions of various career fair and recruiting
ates at December 29, 2002 and December 30, 2001 include
services companies. The effect of these transactions reduced the
the following (in thousands):
Company’s investment interest in BrassRing to 42 percent, from
2002 2001 54 percent at January 2, 2000, and increased the Company’s
investment basis in BrassRing by $13.3 million, net of taxes. The
BrassRing******************************* $ 13,658 $19,992 increase in investment basis was recorded as contributed
Bowater Mersey Paper Company ******** 42,519 45,822
capital.
International Herald Tribune ************* 13,776 14,480
Other ********************************** 750 642 In December 2001, BrassRing, Inc. was restructured and the
$ 70,703 $80,936 Company’s interest in BrassRing, Inc. was converted into an
interest in the newly-formed BrassRing LLC. At December 30,
At the end of 2002, the Company’s investments in affiliates
2001, the Company held a 39.7 percent interest in the Brass-
consisted of a 49.4 percent interest in BrassRing LLC, which
Ring LLC common equity and a $14.9 million Subordinated
provides recruiting, career development and hiring management
Convertible Promissory Note (‘‘Note’’) from BrassRing LLC. In
services for employers and job candidates; a 49 percent interest
February 2002, the Note was converted into Preferred Units,
in the common stock of Bowater Mersey Paper Company Limit-
which are convertible at the Company’s option to BrassRing LLC
ed, which owns and operates a newsprint mill in Nova Scotia; a
common equity. Assuming the conversion of the Preferred Units,
50 percent interest in the International Herald Tribune newspa-
the Company’s common equity interest in BrassRing LLC would
per, published near Paris, France; and a 50 percent common
have been approximately 49.5 percent.
stock interest in the Los Angeles Times-Washington Post News
Service, Inc. BrassRing accounted for approximately $13.9 million of the
2002 equity in losses of affiliates, compared to $75.1 million in
Summarized financial data for the affiliates’ operations are as
2001. The decrease from 2001 equity in affiliate losses from
follows (in thousands):
BrassRing is largely due to a non-cash goodwill and other
2002 2001 2000 intangibles impairment charge that BrassRing recorded in 2001
primarily to reduce the carrying value of its career fair business.
Financial Position: As a substantial portion of BrassRing’s losses arose from good-
Working capital ****** $ 10,366 $ (8,767) $ 29,427
will and intangible amortization expense for 2001, the
Property, plant and
$75.1 million of equity in affiliate losses recorded by the Com-
equipment********** 135,013 126,682 143,749
Total assets*********** 235,208 246,321 432,458 pany in 2001 did not require significant funding by the
Long-term debt******** ———
Company.
Net equity *********** 138,723 125,211 291,481 On January 1, 2003, the Company sold its 50 percent interest
Results of Operations: in The International Herald Tribune newspaper for $65 million;
Operating revenues*** $ 263,709 $317,389 $345,913 the Company will report an after-tax non-operating gain of
Operating loss ******* (21,725) (14,793) (27,505) approximately $32 million in the first quarter of 2003.
Net loss************** (36,326) (157,409) (77,739)
Cost Method Investments. Most of the companies represented
by the Company’s cost method investments have concentrations
in Internet-related business activities. At December 29, 2002
and December 30, 2001, the carrying value of the Company’s
cost method investments was $9.5 million and $29.6 million,
respectively. Cost method investments are included in ‘‘Deferred
Charges and Other Assets’’ in the Consolidated Balance Sheets.
46 THE WASHINGTON POST COMPANY