Washington Post 2009 Annual Report Download - page 75

over the period of access. Course material revenue is recognized
over the same period as the tuition or online access, if related, or
when the products are delivered, if not related. Other revenues,
such as student support services, are recognized when the services
are provided.
Cable revenues: Cable revenues are primarily derived from
subscriber fees for video, high-speed Internet and phone services,
and from advertising. Cable subscriber revenue is recognized
monthly as services are delivered. Advertising revenue is recognized
when the commercials or programs are aired.
Newspaper and magazine publishing and television broadcasting
revenues: Media advertising revenues are recognized, net of
agency commissions, when the underlying advertisement is
published or broadcast. Revenues from newspaper and magazine
subscriptions and retail sales are recognized upon the later of
delivery or cover date, with adequate provision made for
anticipated sales returns.
Sales returns: Consistent with industry practice, certain of the
Company’s products, such as newspapers, magazines and books,
are sold with the right of return. The Company records, as a
reduction of revenue, the estimated impact of such returns. The
Company bases its estimates for sales returns on historical
experience and has not experienced significant fluctuations between
estimated and actual return activity.
Deferred revenue: Amounts received from customers in advance of
revenue recognition are deferred as liabilities. Deferred revenue to
be earned after one year is included in other liabilities in the
Company’s consolidated financial statements.
Leases—The Company leases substantially all of its educational
facilities and enters into various other lease agreements in
conducting its business. At the inception of each lease, the
Company evaluates the lease agreement to determine whether the
lease is an operating or capital lease. Additionally, many of the
Company’s lease agreements contain renewal options, tenant
improvement allowances, rent holidays and/or rent escalation
clauses. When such items are included in a lease agreement, the
Company records a deferred rent asset or liability in the
consolidated financial statements and records these items in rent
expense evenly over the terms of the lease.
The Company is also required to make additional payments under
operating lease terms for taxes, insurance and other operating
expenses incurred during the operating lease period; such items are
expensed as incurred. Rental deposits are included as other assets in
the consolidated financial statements for lease agreements that require
payments in advance or deposits held for security that are refundable,
less any damages, at the end of the respective lease.
Pensions and Other Postretirement Benefits—The Company
maintains various pension and incentive savings plans and
contributes to several multiemployer plans on behalf of certain union-
represented employee groups. Substantially all of the Company’s
employees are covered by these plans. The Company also provides
health care and life insurance benefits to certain retired employees.
These employees become eligible for benefits after meeting age
and service requirements.
The Company recognizes the overfunded or underfunded status of a
defined benefit postretirement plan (other than a multiemployer plan)
as an asset or liability in its statement of financial position and
recognizes changes in that funded status in the fiscal year in which
the changes occur through comprehensive income. The Company
measures changes in the funded status of its plans using the
projected unit credit method and several actuarial assumptions, the
most significant of which are the discount rate, the long-term rate of
asset return and rate of compensation increase. The Company uses
a measurement date of December 31 for its pension and other
postretirement benefit plans.
Self-Insurance—The Company uses a combination of insurance
and self-insurance for a number of risks, including claims related to
employee health care and dental care, disability benefits, workers’
compensation, general liability, property damage and business
interruption. Liabilities associated with these plans are estimated
based on, among other things, the Company’s historical claims
experience, severity factors and other actuarial assumptions. The
expected loss accruals are based on estimates, and while the
Company believes the amounts accrued are adequate, the ultimate
loss may differ from the amounts provided.
Income Taxes—The Company accounts for income taxes under
the asset and liability method, which requires the recognition of
deferred tax assets and liabilities for the expected future tax
consequences of events that have been included in the financial
statements. Under this method, deferred tax assets and liabilities
are determined based on the differences between the financial
statements and tax basis of assets and liabilities using enacted tax
rates in effect for the year in which the differences are expected to
reverse. The effect of a change in tax rates on deferred tax assets
and liabilities is recognized in income in the period that includes the
enactment date.
The Company records net deferred tax assets to the extent that it
believes these assets will more likely than not be realized. In making
such determination, the Company considers all available positive
and negative evidence, including future reversals of existing taxable
temporary differences, projected future taxable income, tax
planning strategies and recent financial operations; this evaluation
is made on an ongoing basis. In the event the Company were to
determine that it was able to realize net deferred income tax assets
in the future in excess of their net recorded amount, the Company
would record an adjustment to the valuation allowance, which
would reduce the provision for income taxes.
The Company recognizes a tax benefit from an uncertain tax
position when it is more likely than not that the position will be
sustained upon examination, including resolutions of any related
appeals or litigation processes, based on the technical merits. The
Company records a liability for the difference between the benefit
recognized and measured for financial statement purposes and the
tax position taken or expected to be taken on the Company’s tax
return. Changes in the estimate are recorded in the period in which
such determination is made.
Foreign Currency Translation—Income and expense accounts of
the Company’s foreign operations where the local currency is the
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