Washington Post 2009 Annual Report Download - page 41

business does not meet or exceed the financial projections that supported the purchase price; and the possible failure
of the due diligence process to identify significant business risks or undisclosed liabilities associated with the acquired
business. A failure to effectively manage growth and integrate acquired businesses could have a material adverse effect
on Kaplan’s operating results.
• Difficulties of Managing Foreign Operations
Kaplan has operations and investments in a growing number of foreign countries, including Canada, Mexico, the U.K.,
Ireland, France, Israel, Australia, New Zealand, Singapore, India and China. Operating in foreign countries presents a
number of inherent risks, including the difficulties of complying with unfamiliar laws and regulations, effectively managing
and staffing foreign operations, successfully navigating local customs and practices, preparing for potential political and
economic instability and adapting to currency exchange rate fluctuations. The failure to effectively manage these risks
could have a material adverse effect on Kaplan’s operating results.
• Changes in International Regulatory and Physical Environments Could Negatively Affect International Student
Enrollments
A substantial portion of Kaplan International’s revenue comes from programs that prepare international students to study
and travel to English-speaking countries, principally the U.S., the U.K., Australia, and Singapore. Any significant changes
to the regulatory environment, or a natural disaster or pandemic, in either the students’ counties of origin or the countries
to which they desire to travel or study, could negatively affect Kaplan’s ability to attract and retain such students, which
could negatively impact Kaplan’s operating results.
• Negative Impact of Recent Financial Market Crisis and Economic Downturn, Particularly in the Specific Geographic
Markets Served by the Company’s Publishing and Television Broadcasting Businesses
A significant portion of the Company’s revenues in its publishing and broadcasting businesses comes from advertising.
The demand for advertising is sensitive to the overall level of economic activity, both nationally and locally. The financial
market crisis and economic downturn has reduced advertising expenditures of many of our advertisers, which has
had a negative impact on the operating results of the Company’s newspaper and magazine publishing and television
broadcasting businesses. A continued decline in general economic conditions in the United States may have a material
adverse effect on the operating results of the Company’s businesses.
• Changing Preferences of Readers or Viewers Away From Traditional Media Outlets
The rates that the Company’s print publishing and television broadcasting businesses can charge for advertising are
directly related to the number of readers and viewers of its publications and broadcasts. There is tremendous competition
for readers and viewers from other media. The Company’s publishing and television broadcasting businesses will be
adversely affected to the extent that individuals decide to obtain news, entertainment, classified listings and local
shopping information from Internet-based or other media to the exclusion of the Company’s print publications and
broadcasts.
• Changing Perceptions About the Effectiveness of Publishing and Television Broadcasting in Delivering Advertising
Historically, newspaper and magazine publishing and television broadcasting have been viewed as cost-effective
methods of delivering various forms of advertising. There can be no guarantee that this historical perception will guide
future decisions on the part of advertisers. To the extent that advertisers shift advertising expenditures to other media
outlets, the profitability of the Company’s publishing and television broadcasting businesses will suffer.
• Increased Competition Resulting From Technological Innovations in News, Information and Video Programming
Distribution Systems
The development of direct broadcast satellite systems has significantly increased the competition faced by the Company’s
cable television systems. In addition, the continuing growth and technological expansion of Internet-based services
has increased competitive pressure on the Company’s media businesses. The development and deployment of new
technologies has the potential to negatively and dramatically affect the Company’s businesses in ways that cannot now
be reliably predicted and that may have a material adverse effect on the Company’s operating results.
• Changes in the Nature and Extent of Government Regulations in the Case of Television Broadcasting, Cable Television
and VoIP Services
The Company’s television broadcasting and cable television businesses operate in highly regulated environments.
The Company’s VoIP services business also is subject to a growing degree of regulation. Complying with applicable
regulations has significantly increased, and may continue to increase, the costs and reduced the revenues of these
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