Washington Post 2006 Annual Report Download - page 72

Accounts payable and accrued liabilities at December 31, 2006 equity security of $14.2 million. For purposes of computing realized
and January 1, 2006 consist of the following (in thousands): gains and losses, the cost basis of securities sold is determined by
specific identification.
2006 2005
Investments in Affiliates. The Company's investments in affili-
Accounts payable and accrued expenses $322,044 $272,441 ates at December 31, 2006 and January 1, 2006 include the
Accrued compensation and related following (in thousands):
benefits ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 181,289 158,612
Due to affiliates (newsprint) ÏÏÏÏÏÏÏÏÏÏÏÏ 6,042 7,640 2006 2005
$509,375 $438,693
Bowater Mersey Paper Company ÏÏÏÏÏÏÏÏÏÏÏ $49,230 $54,407
Book overdrafts of $38.1 million and $33.7 million are included in BrassRingÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì11,349
Other ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,280 1,019
accounts payable and accrued expenses at December 31, 2006
$53,510 $66,775
and January 1, 2006, respectively.
At the end of 2006, the Company's investments in affiliates consist-
C. INVESTMENTS
ed of a 49% interest in the common stock of Bowater Mersey Paper
Investments in Marketable Equity Securities. Investments Company Limited, which owns and operates a newsprint mill in
in marketable equity securities at December 31, 2006 and Nova Scotia, and other investments. Summarized financial data for
January 1, 2006 consist of the following (in thousands): the affiliates' operations are as follows (in thousands):
2006 2005 2006 2005 2004
Total costÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $213,705 $234,196 Financial Position
Net unrealized gainsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 141,023 95,725 Working capital ÏÏÏÏÏÏÏÏÏ $ 26,046 $ 13,861 $ 9,014
Total fair valueÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $354,728 $329,921 Property, plant and
equipmentÏÏÏÏÏÏÏÏÏÏÏÏÏ 116,293 131,823 137,321
At December 31, 2006 and January 1, 2006, the Company's Total assets ÏÏÏÏÏÏÏÏÏÏÏÏÏ 172,819 214,333 202,904
ownership of 2,634 shares of Berkshire Hathaway Inc. (""Berk- Long-term debt ÏÏÏÏÏÏÏÏÏÏ ÌÌÌ
shire'') Class A common stock and 9,845 shares of Berkshire Net equity ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 125,660 164,801 155,147
Class B common stock accounted for $325.8 million or 92% and Results of Operations
$262.3 million or 80%, respectively, of the total fair value of the Operating revenues ÏÏÏÏÏÏ $247,919 $236,233 $221,618
Company's investments in marketable equity securities. Operating incomeÏÏÏÏÏÏÏÏ 11,020 3,513 1,695
Net income (loss)ÏÏÏÏÏÏÏ 1,352 (1,806) (4,577)
Berkshire is a holding company owning subsidiaries engaged in a
number of diverse business activities, the most significant of which The following table summarizes the status and results of the Compa-
consist of property and casualty insurance businesses conducted on ny's investments in affiliates (in thousands):
both a direct and reinsurance basis. Berkshire also owns approxi-
2006 2005
mately 18% of the common stock of the Company. The chairman,
chief executive officer and largest shareholder of Berkshire, Beginning investmentÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $66,775 $61,814
Mr. Warren Buffett, is a member of the Company's Board of Additional investment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,349 4,981
Directors. Neither Berkshire nor Mr. Buffett participated in the Equity in earnings (losses)ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 790 (881)
Company's evaluation, approval or execution of its decision to Dividends and distributions receivedÏÏÏÏÏÏÏÏÏ (900) (850)
Foreign currency translation ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (52) 1,711
invest in Berkshire common stock. The Company's investment in
Adjustment to initially apply SFAS 158 for
Berkshire common stock is less than 1% of the consolidated equity
pensions and other postretirement plans ÏÏÏ (7,642) Ì
of Berkshire. At December 31, 2006 and January 1, 2006, the
Sale of interest in BrassRing ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (8,810) Ì
unrealized gain related to the Company's Berkshire stock investment Ending investmentÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $53,510 $66,775
totaled $140.9 million and $77.4 million, respectively. The Com-
pany presently intends to hold the Berkshire common stock invest- On November 13, 2006, the Company sold its 49% interest in
ment long term, thus the investment has been classified as a non- BrassRing and recorded a $43.2 million pre-tax gain that is included
current asset in the Consolidated Balance Sheets. in ""Other income (expense), net'' in the Consolidated Statements
of Income.
During 2006 and 2004, the Company made $42.9 million and
$94.6 million in investments in marketable equity securities, respec- Cost Method Investments. Most of the companies represent-
tively. There were no investments in marketable equity securities in ed by the Company's cost method investments have concentrations
2005. During 2006 and 2005, proceeds from the sales of market- in Internet-related business activities. At December 31, 2006 and
able equity securities were $82.9 million and $64.8 million, respec- January 1, 2006, the carrying value of the Company's cost method
tively, and net realized gains on such sales were $33.8 million and investments was $19.6 million and $11.9 million, respectively. Cost
$12.7 million, respectively. During 2004, there were no sales of method investments are included in ""Deferred Charges and Other
marketable equity securities or realized gains (losses). During Assets'' in the Consolidated Balance Sheets.
2006, the Company recorded a write-down on a marketable
56 THE WASHINGTON POST COMPANY