Washington Post 2013 Annual Report Download - page 83

At December 31, 2013 and 2012, the Company owned 2,214
shares of Berkshire Hathaway Inc. (Berkshire) Class A common
stock and 424,250 shares of Berkshire Class B common stock,
respectively. The Company’s ownership of Berkshire accounted for
$444.2 million, or 91%, and $334.9 million, or 88%, of the total
fair value of the Company’s investments in marketable equity
securities at December 31, 2013 and 2012, respectively.
Berkshire is a holding company owning subsidiaries engaged in a
number of diverse business activities. Berkshire also owns approximately
23% of the common stock of the Company. The chairman, chief
executive officer and largest shareholder of Berkshire, Mr. Warren
Buffett, was a member of the Company’s Board of Directors until May
2011, at which time Mr. Buffett retired from the Company’s Board. The
Company’s investment in Berkshire common stock is less than 1% of the
consolidated equity of Berkshire. 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.
The Company invested $15.0 million and $45.0 million in
marketable equity securities during 2013 and 2012. There were
no new investments of marketable equity securities in 2011. During
2013 and 2012, proceeds from sales of marketable equity
securities were $3.6 million and $2.0 million, respectively, and net
realized gains on such sales were $0.9 million and $0.5 million,
respectively. There were no sales of marketable equity securities
during 2011.
Investments in Affiliates. At the end of 2013, the Company held a
16.5% interest in Classified Ventures, LLC, which owns and operates
several leading businesses in the online classified advertising space
and interests in several other investments.
In the third quarter of 2011, the Company recorded impairment
charges of $9.2 million on the Company’s interest in Bowater
Mersey Paper Company Limited as a result of the challenging
economic environment for newsprint producers. During the fourth
quarter of 2012, the Company sold its 49% interest in the common
stock of Bowater Mersey Paper Company Limited for a nominal
amount; no loss was recorded as the investment had previously
been written down to zero.
5. ACCOUNTS RECEIVABLE, ACCOUNTS PAYABLE AND ACCRUED
LIABILITIES
Accounts receivable consist of the following:
As of December 31
(in thousands) 2013 2012
Trade accounts receivable, less estimated
returns, doubtful accounts and allowances
of $33,834 and $35,462 ........... $398,014 $379,355
Other accounts receivable ............. 30,639 19,849
$428,653 $399,204
The changes in allowance for doubtful accounts and returns and
allowance for advertising rate adjustments and discounts were as
follows:
(in thousands)
Balance at
Beginning
of Period
Additions –
Charged to
Costs and
Expenses Deductions
Balance
at
End of
Period
2013
Allowance for
doubtful
accounts and
returns ...... $33,612 $57,245 $(57,023) $33,834
Allowance for
advertising rate
adjustments and
discounts ..... 1,850 — (1,850) —
$35,462 $57,245 $(58,873) $33,834
2012
Allowance for
doubtful accounts
and returns .... $48,199 $55,605 $(70,192) $33,612
Allowance for
advertising rate
adjustments and
discounts ...... 2,026 15,088 (15,264) 1,850
$50,225 $70,693 $(85,456) $35,462
2011
Allowance for
doubtful accounts
and returns .... $67,007 $61,327 $(80,135) $48,199
Allowance for
advertising rate
adjustments and
discounts ...... 3,174 11,868 (13,016) 2,026
$70,181 $73,195 $(93,151) $50,225
Accounts payable and accrued liabilities consist of the following:
As of December 31
(in thousands) 2013 2012
Accounts payable and accrued liabilities . . . $343,620 $310,294
Accrued compensation and related
benefits ..........................
162,079 176,102
$505,699 $486,396
2013 FORM 10-K 65