Washington Post 2012 Annual Report Download - page 87

that all changes in stockholders’ equity be presented either in a
single continuous statement of comprehensive income or in two
separate but consecutive statements. In addition, the amendment
requires companies to present on the face of the financial statements
reclassification adjustments for items that are reclassified from other
comprehensive income to net income in the statement(s) where
the components of net income and the components of other
comprehensive income are presented. The amendment does not
affect how earnings per share is calculated or presented. This
amendment is effective for interim and fiscal years beginning after
December 15, 2011, and must be applied retrospectively. In
December 2011, the FASB deferred the requirements related to the
presentation of reclassification adjustments. The adoption of the
amendment not deferred by the FASB in the first quarter of
2012 is reflected in the Company’s Consolidated Statements of
Comprehensive Income.
In February 2013, the FASB issued final guidance on the present-
ation of reclassifications out of other comprehensive income. The
amendments require an entity to provide information about the
amounts reclassified out of other comprehensive income by
component. In addition, an entity is required to present, either on
the face of the income statement or in a footnote, significant
amounts reclassified out of accumulated other comprehensive
income by the respective line items of net income, only if the amount
reclassified is required by GAAP to be reclassified to net income in
its entirety in the same reporting period. For other amounts that are
not required under GAAP to be reclassified in their entirety to net
income, an entity is required to cross-reference to other disclosures
required under GAAP that provide detail about those amounts. This
amendment is effective for interim and fiscal years beginning after
December 15, 2012. The amended standard will not impact the
Company’s financial position or results of operations.
In July 2012, the FASB issued new guidance that amends the
current indefinite-lived intangible assets impairment testing process.
The new guidance permits an entity to first assess qualitative factors
to determine whether it is more likely than not that the fair value of
its indefinite-lived intangible assets is less than its carrying amount as
a basis for determining whether it is necessary to perform the
quantitative impairment test. Previous guidance required an entity to
test indefinite-lived intangible assets for impairment, on at least an
annual basis, by comparing the fair value of an indefinite-lived
intangible asset with its carrying amount. The new guidance is
effective for annual and interim impairment tests performed for fiscal
years beginning after September 15, 2012. Early adoption is
permitted if an entity’s financial statements for the most recent period
have not yet been issued. The Company early adopted this
guidance at the beginning of the fourth quarter of 2012.
3. DISCONTINUED OPERATIONS
In August 2012, the Company completed the sale of Kidum and
recorded a pre-tax gain of $3.6 million and an after-tax gain of
$10.2 million related to this sale in the third quarter of 2012. On
July 31, 2012, the Company disposed of its interest in Avenue100
Media Solutions, Inc. and recorded a pre-tax loss of $5.7 million
related to the disposition. An income tax benefit of $44.5 million
was also recorded in the third quarter of 2012 as the Company
determined that Avenue100 had no value. The income tax benefit
was due to the Company’s tax basis in the stock of Avenue100
exceeding its net book value, as a result of goodwill and other
intangible asset impairment charges recorded in 2008, 2010 and
2011 for which no tax benefit was previously recorded. In April
2012, the Company completed the sale of Kaplan EduNeering.
Under the terms of the agreement, the purchaser acquired the stock
of EduNeering and received substantially all the assets and
liabilities. In the second quarter of 2012, the Company recorded
an after-tax gain of $18.5 million related to this sale. In February
2012, Kaplan completed the stock sale of Kaplan Learning
Technologies (KLT) and recorded an after-tax loss on the sale of
$1.9 million. The Company recorded $23.2 million of income tax
benefits in the first quarter of 2012 in connection with the sale of its
stock in EduNeering and KLT related to the excess of the outside
stock tax basis over the net book value of the net assets disposed.
This activity is included in Income (Loss) from Discontinued
Operations, Net of Tax in the Company’s Consolidated Statement
of Operations for the fiscal year ended December 31, 2012.
In October 2011, Kaplan completed the sale of Kaplan Compliance
Solutions (KCS). Under the terms of the asset purchase agreement,
the buyer received KCS’s net working capital, tangible and
intangible assets and assumed certain liabilities. The Company
recorded an after-tax gain on the transaction of $1.5 million. In July
2011, Kaplan completed the sale of Kaplan Virtual Education (KVE).
Under the terms of the asset purchase agreement, the buyer received
KVE’s intellectual property, education programs and selected other
long-lived assets. The Company recorded an after-tax loss on the
transaction of $1.2 million. This activity is included in Income (Loss)
from Discontinued Operations, Net of Tax in the Company’s
Consolidated Statement of Operations for fiscal year 2011.
In April 2010, Kaplan completed the sale of Education Connection
and in September 2010, the Company completed the sale of
Newsweek magazine. Newsweek employees were participants in
The Washington Post Company Retirement Plan, and the Company
had historically allocated Newsweek a net pension credit for
segment reporting purposes. Since the associated pension assets
and liabilities were retained by the Company, the associated
pension credit of $25.8 million for fiscal year 2010 has been
excluded from the reclassification of Newsweek results to
discontinued operations. In 2010, Newsweek recorded $4.7
million in accelerated depreciation and property, plant and
equipment write-downs in anticipation of the sale.
The results of operations of Kidum, Avenue100, Kaplan
EduNeering, KLT, KCS, KVE, Education Connection and the
magazine publishing division for 2012, 2011 and 2010, where
applicable, are included in the Company’s Consolidated
Statements of Operations as Income (Loss) from Discontinued
Operations, Net of Tax. All corresponding prior period operating
results presented in the Company’s Consolidated Financial
Statements and the accompanying notes have been reclassified to
reflect the discontinued operations presented. The Company did not
reclassify its Consolidated Statements of Cash Flows or prior year
Consolidated Balance Sheet to reflect the discontinued operations.
2012 FORM 10-K 75