Washington Post 2013 Annual Report Download - page 65

During 2011, the Company completed five business acquisitions.
Kaplan acquired three businesses in its Kaplan International division,
one business in its KHE division and one business in its Kaplan
Ventures division. These included the May 2011 acquisitions of
Franklyn Scholar and Carrick Education Group, national providers
of vocational training and higher education in Australia, and the
June 2011 acquisition of Structuralia, a provider of e-learning for
the engineering and infrastructure sector in Spain. The purchase
price allocations for these acquisitions mostly comprised goodwill,
other intangible assets and property, plant and equipment.
Dispositions. On October 1, 2013, the Company completed the
sale of its Publishing Subsidiaries that together conducted most of the
Company’s publishing business and related services, including
publishing The Washington Post, Express, The Gazette Newspapers,
Southern Maryland Newspapers, Greater Washington Publishing,
Fairfax County Times and El Tiempo Latino and related websites.
Slate magazine, TheRoot.com and Foreign Policy were not part of
the transaction and remain with the Company, as do the Trove and
SocialCode businesses, the Company’s interest in Classified Ventures
and certain real estate assets, including the headquarters building
in downtown Washington, DC. In March 2013, the Company
completed the sale of The Herald, a daily and Sunday newspaper
headquartered in Everett, WA. The Herald was previously reported in
the newspaper publishing division.
The Company divested its interest in Avenue100 Media Solutions in
July 2012, which was previously reported in other businesses.
Kaplan completed the sales of Kidum in August 2012, EduNeering
in April 2012, and KLT in February 2012, which were part of the
Kaplan Ventures division.
Kaplan completed the sales of KVE in July 2011 and KCS in
October 2011, which were part of Kaplan Ventures and KHE,
respectively.
Consequently, the Company’s income from continuing operations
excludes results from these businesses, which have been reclassified
to discontinued operations (see Note 3).
Capital Expenditures. During 2013, the Company’s capital expen-
ditures totaled $224.1 million. The Company’s capital expenditures
for businesses included in continuing operations for 2013, 2012
and 2011 are disclosed in Note 19 to the Consolidated Financial
Statements. The Company estimates that its capital expenditures will
be in the range of $240 million to $265 million in 2014.
Investments in Marketable Equity Securities. At December 31,
2013, the fair value of the Company’s investments in marketable
equity securities was $487.2 million, which includes $444.2
million in Berkshire Hathaway Inc. Class A and B common stock
and $43.0 million in the common stock of three publicly traded
companies.
At December 31, 2013 and 2012, the unrealized gain related to
the Company’s Berkshire stock investment totaled $286.9 million
and $177.6 million, respectively.
At the end of 2013 and 2012, the Company’s investment in
Strayer Education, Inc. had been in an unrealized loss position for
about six months. The Company evaluated this investment for other-
than-temporary impairment based on various factors, including the
duration and severity of the unrealized loss, the reason for the
decline in value, the potential recovery period and the Company’s
ability and intent to hold the investment. Based on this evaluation,
the Company concluded that the unrealized loss was other-than-
temporary and recorded a $10.4 million and $18.0 million write-
down of the investment in 2013 and 2012, respectively.
At the end of the first quarter of 2011, the Company’s investment in
Corinthian Colleges, Inc. had been in an unrealized loss position
for over six months. The Company evaluated this investment for
other-than-temporary impairment based on various factors, including
the duration and severity of the unrealized loss, the reason for the
decline in value, the potential recovery period and the Company’s
ability and intent to hold the investment. Based on this evaluation,
the Company concluded that the unrealized loss was other-than-
temporary and recorded a $30.7 million write-down of the
investment. The investment continued to decline, and in the third
quarter of 2011, the Company recorded an additional $23.1
million write-down of the investment.
Common Stock Repurchases and Dividend Rate. During 2013,
2012 and 2011, the Company purchased a total of 33,024,
301,231 and 644,948 shares, respectively, of its Class B
common stock at a cost of approximately $17.7 million, $103.2
million and $248.1 million, respectively. In September 2011, the
Board of Directors increased the authorization to repurchase a total
of 750,000 shares of Class B common stock. The Company did
not announce a ceiling price or a time limit for the purchases. The
authorization included 43,573 shares that remained under the
previous authorization. At December 31, 2013, the Company had
remaining authorization from the Board of Directors to purchase up
to 159,219 shares of Class B common stock. The annual dividend
rate for 2014 was increased to $10.20 per share, up from $9.80
in 2012. In December 2012, the Company declared and paid an
accelerated cash dividend totaling $9.80 per share of outstanding
common stock, in lieu of regular quarterly dividends that the
Company otherwise would have declared and paid in calendar
year 2013.
Liquidity. During 2013, the Company’s borrowings decreased by
$245.9 million and the Company’s cash and cash equivalents
increased by $57.3 million.
At December 31, 2013, the Company has $569.7 million in
cash and cash equivalents, compared to $512.4 million at
December 31, 2012. Restricted cash at December 31, 2013,
totaled $83.8 million, compared to $28.5 million at December 31,
2012. As of December 31, 2013 and 2012, the Company had
money market investments of $431.8 million and $432.7 million,
respectively, that are classified as cash, cash equivalents and rest-
ricted cash in the Company’s Consolidated Financial Statements.
At December 31, 2013, the Company has approximately $15.6
million in cash and cash equivalents in countries outside the U.S.,
which is not immediately available for use in operations or for
distribution.
At December 31, 2013 and 2012, the Company had borrowings
outstanding of $450.8 million and $696.7 million, respectively.
2013 FORM 10-K 47