Washington Post 2012 Annual Report Download - page 58

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On September 7, 2011, the Company borrowed AUD 50 million under its revolving credit facility. On the same date,
the Company entered into interest rate swap agreements with a total notional value of AUD 50 million and a maturity
date of March 7, 2015. These interest rate swap agreements will pay the Company variable interest on the AUD
50 million notional amount at the three-month bank bill rate, and the Company will pay the counterparties a fixed rate of
4.5275%. These interest rate swap agreements were entered into to convert the variable rate Australian dollar borrowing
under the revolving credit facility into a fixed rate borrowing.
Foreign Exchange Rate Risk. The Company is exposed to foreign exchange rate risk at its Kaplan international
operations and its Corporate entity, and the primary exposure relates to the exchange rate between the U.S. dollar and
both the British pound and the Australian dollar. This exposure includes British pound and Australian dollar denominated
intercompany loans on U.S. based Kaplan entities with a functional currency in U.S. dollars, and the AUD 50 million
borrowing. Net unrealized foreign currency gains on intercompany loans and the AUD 50 million borrowing of $3.1
million were recorded in 2012. In 2011, the Company reported unrealized foreign currency losses of $3.3 million. In
2010, the Company reported unrealized foreign currency gains of $6.7 million.
If the values of the British pound and the Australian dollar relative to the U.S. dollar had been 10% lower than the values
that prevailed during 2012, the Company’s pre-tax income for fiscal 2012 would have been approximately $15 million
lower. Conversely, if such values had been 10% higher, the Company’s reported pre-tax income for fiscal 2012 would
have been approximately $15 million higher.
Item 8. Financial Statements and Supplementary Data.
See the Company’s Consolidated Financial Statements at December 31, 2012, and for the periods then ended, together
with the report of PricewaterhouseCoopers LLP thereon and the information contained in Note 19 to said Consolidated
Financial Statements titled “Summary of Quarterly Operating Results and Comprehensive Income (Unaudited),” which are
included in this Annual Report on Form 10-K and listed in the index to financial information on page 49 hereof.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
Not applicable.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
An evaluation was performed by the Company’s management, with the participation of the Company’s Chief Executive
Officer (the Company’s principal executive officer) and the Company’s Senior Vice President–Finance (the Company’s
principal financial officer), of the effectiveness of the Company’s disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)), as of December 31, 2012. Based on that evaluation, the Company’s
Chief Executive Officer and Senior Vice President–Finance have concluded that the Company’s disclosure controls and
procedures, as designed and implemented, are effective in ensuring that information required to be disclosed by the
Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange Commission’s rules and forms and is accumulated and
communicated to management, including the Chief Executive Officer and Senior Vice President–Finance, in a manner that
allows timely decisions regarding required disclosure.
Management’s Report on Internal Control Over Financial Reporting
Management’s report set forth on page 64 is incorporated herein by reference.
Changes in Internal Control Over Financial Reporting
There has been no change in the Company’s internal control over financial reporting during the quarter ended
December 31, 2012, that has materially affected, or is reasonably likely to materially affect, the Company’s internal
control over financial reporting.
Item 9B. Other Information.
Not applicable.
46 THE WASHINGTON POST COMPANY