Washington Post 2010 Annual Report Download - page 101

At January 2, 2011, future minimum rental payments under
noncancelable operating leases approximate the following:
(in thousands)
2011 ...................................... $129,958
2012 ...................................... 116,644
2013 ...................................... 98,768
2014 ...................................... 82,966
2015 ...................................... 65,585
Thereafter ................................... 274,504
$768,425
Minimum payments have not been reduced by minimum sublease
rentals of $0.5 million due in the future under noncancelable
subleases.
Rent expense under operating leases included in operating costs
was approximately $134.0 million, $131.7 million and $122.9
million in 2010, 2009 and 2008, respectively. Sublease income
was approximately $0.2 million, $0.7 million and $0.7 million in
2010, 2009 and 2008, respectively.
The Company’s broadcast subsidiaries are parties to certain
agreements that commit them to purchase programming to be
produced in future years. At January 2, 2011, such commitments
amounted to approximately $42.2 million. If such programs are not
produced, the Company’s commitment would expire without
obligation.
O. OTHER NON-OPERATING INCOME (EXPENSE)
A summary of non-operating income (expense) for the years ended
January 2, 2011, January 3, 2010 and December 28, 2008
follows:
(in millions) 2010 2009 2008
Foreign currency gains (losses), net ..... $6.7 $16.9 $(46.3)
Impairment write-downs on cost method
investments .................... —(3.8) (2.9)
Gain on sales of marketable equity
securities ...................... —— 47.3
Other gains (losses) ................ 2.0 0.1 (0.3)
Total ........................... $8.7 $13.2 $ (2.2)
A large part of the Company’s non-operating income (expense) is
from unrealized foreign currency gains or losses arising from the
translation of British pound and Australian dollar denominated
intercompany loans into U.S. dollars.
P. CONTINGENCIES AND LOSSES
Litigation and Legal Matters. A purported class action complaint
was filed against the Company, Donald E. Graham and Hal S.
Jones on October 28, 2010, in the U.S. District Court for the
District of Columbia, by the Plumbers Local #200 Pension Fund. The
complaint alleges that the Company and certain of its officers made
materially false and misleading statements, or failed to disclose
material facts relating to KHE, in violation of the U.S. Federal
securities laws. The complaint seeks damages, attorneys’ fees, costs
and equitable/injunctive relief. Based on an initial review of this
complaint, the Company believes the complaint is without merit and
intends to vigorously defend against it.
Kaplan, Inc., a subsidiary of the Company, is a party to a
previously disclosed class action antitrust lawsuit filed on April 29,
2005, by purchasers of BAR/BRI bar review courses from fall
1997 through July 2006, in the U.S. District Court for the Central
District of California. The court approved a settlement of the case on
July 9, 2007, and the U.S. Court of Appeals for the Ninth Circuit
affirmed the approval of the settlement on April 23, 2009. Though
the Ninth Circuit vacated the district court’s award of attorney’s fees
to class counsel and counsel to various objectors to the settlement,
and remanded to the U.S. District Court to consider the attorney’s
fees issue anew, and though that issue continues to be litigated, the
attorney’s fees award will be paid from the escrowed settlement
funds so Kaplan does not anticipate that it will be affected by the
ultimate determination of the attorney’s fees issue.
On February 6, 2008, Kaplan was served with another purported
class action lawsuit in the U.S. District Court for the Central District
of California alleging claims substantially similar to those alleged in
the previously settled lawsuit but on behalf of a putative class that
included all persons who purchased a bar review course from
BAR/BRI in the United States after the July 2006 cut-off for class
membership in the prior action. West Publishing Corporation, which
owns BAR/BRI, is a co-defendant. On April 15, 2008, the court
granted defendants’ motion to dismiss. On May 20, 2008,
the plaintiffs filed an appeal to the U.S. Court of Appeals for the
Ninth Circuit. On October 18, 2010, the parties entered into a
stipulation and settlement agreement, which requires court approval
to become effective. In December 2010, the U.S. Court of Appeals
for the Ninth Circuit remanded the case to the District Court to
consider approval of the settlement.
Several Kaplan subsidiaries are also subject to four unsealed
complaints that include, among other allegations, claims under the
U.S. Federal False Claims Act (31U.S.C. § 3729, et seq.) relating
to eligibility for Title IV funding. The U.S. Government declined to
intervene in all four cases, which are captioned:
United States of America ex rel. Carlos Urquilla-Diaz et al. v.
Kaplan University et al. (unsealed March 25, 2008); United States
of America ex rel. Jorge Torres v. Kaplan Higher Education Corp.
(unsealed April 7, 2008); United States of America ex rel. Victoria
Gatsiopoulos et al. v. ICM School of Business & Medical Careers
et al. (unsealed September 2, 2008); and United States of America
ex rel. Charles Jajdelski v. Kaplan Higher Education Corp. et al.
(unsealed January 6, 2009).
The Diaz,Torres and Gatsiopoulos cases have been transferred to
the U.S. District Court for the Southern District of Florida, where
motions to dismiss have been filed in each case and await decision
by the court. On December 22, 2010, the Court in the Southern
District of Florida granted in part the motion to dismiss in the
Gatsiopoulos case, with leave to file an amended pleading. The
Court has not rendered decisions as to the other pending motions to
dismiss. The Jajdelski case is pending in the U.S. District Court for
the District of Nevada, where a motion to dismiss was filed and
awaits decision by the court. The Company will continue to
vigorously defend each of these actions.
On October 21, 2010, KHE received a subpoena from the office
of the Florida Attorney General. The subpoena sought information
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