Washington Post 2013 Annual Report Download - page 89

11. FAIR VALUE MEASUREMENTS
The Company’s financial assets and liabilities measured at fair
value on a recurring basis were as follows:
As of December 31, 2013
(in thousands) Level 1 Level 2 Total
Assets
Money market investments(1) ... $ — $431,836 $431,836
Marketable equity
securities(2) ............... 487,156 — 487,156
Other current investments(3) ... 11,826 23,336 35,162
Total Financial Assets ...... $498,982 $455,172 $954,154
Liabilities
Deferred compensation plan
liabilities(4) ............... $ — $ 67,603 $ 67,603
7.25% unsecured notes(5) ..... — 475,224 475,224
AUD revolving credit
borrowing(5) ............. — 44,625 44,625
Interest rate swap(6) ......... — 1,047 1,047
Total Financial Liabilities .... $ — $588,499 $588,499
As of December 31, 2012
(in thousands) Level 1 Level 2 Total
Assets
Money market investments(1) ..... $ —$432,670 $432,670
Marketable equity securities(2) .... 380,087 —380,087
Other current investments(3) ..... 14,134 24,717 38,851
Total Financial Assets ...... $394,221 $457,387 $851,608
Liabilities
Deferred compensation plan
liabilities(4) ............... $ —$62,297 $62,297
7.25% unsecured notes(5) ...... —481,424 481,424
AUD revolving credit
borrowing(5) ............... —51,915 51,915
Interest rate swap(6) ........... —1,567 1,567
Total Financial Liabilities .... $—$597,203 $597,203
(1) The Company’s money market investments are included in cash, cash
equivalents and restricted cash.
(2) The Company’s investments in marketable equity securities are classified as
available-for-sale.
(3) Includes U.S. Government Securities, corporate bonds, mutual funds and time
deposits (with original maturities greater than 90 days, but less than one year).
(4) Includes Graham Holdings Company’s Deferred Compensation Plan and
supplemental savings plan benefits under the Graham Holdings Company’s
Supplemental Executive Retirement Plan, which are included in accrued
compensation and related benefits.
(5) See Note 10 for carrying amount of these notes and borrowing.
(6) Included in Other liabilities. The Company utilized a market approach model
using the notional amount of the interest rate swap multiplied by the
observable inputs of time to maturity and market interest rates.
For the year ended December 31, 2013, the Company recorded
an intangible and other long-lived assets impairment charge of $3.3
million. For the year ended December 31, 2012, the Company
recorded a goodwill and other long-lived assets impairment charge
of $111.6 million (see Notes 2 and 8). The remeasurement of the
goodwill and other long-lived assets is classified as a Level 3 fair
valueassessmentduetothesignificanceofunobservableinputs
developed in the determination of the fair value.
12. REDEEMABLE PREFERRED STOCK
The Series A preferred stock has a par value of $1.00 per share
and a liquidation preference of $1,000 per share; it is redeemable
by the Company at any time on or after October 1, 2015, at a
redemption price of $1,000 per share. In addition, the holders of
such stock have a right to require the Company to purchase their
shares at the redemption price during an annual 60-day election
period. Dividends on the Series A preferred stock are payable four
times a year at the annual rate of $80.00 per share and in
preference to any dividends on the Company’s common stock. The
Series A preferred stock is not convertible into any other security of
the Company, and the holders thereof have no voting rights except
with respect to any proposed changes in the preferences and
special rights of such stock.
13. CAPITAL STOCK, STOCK AWARDS AND STOCK OPTIONS
Capital Stock. Each share of Class A common stock and Class B
common stock participates equally in dividends. The Class B stock
has limited voting rights and as a class has the right to elect 30% of
the Board of Directors; the Class A stock has unlimited voting rights,
including the right to elect a majority of the Board of Directors. In
2013 and 2012, the Company’s Class A shareholders converted
50,310, or 4%, and 10,000, or 1%, respectively, of the Class A
shares of the Company to an equal number of Class B shares. The
conversions had no impact on the voting rights of the Class A and
Class B common stock.
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.
Stock Awards. In 2001, the Company adopted an incentive
compensation plan, which, among other provisions, authorizes
the awarding of Class B common stock to key employees. Stock
awards made under this incentive compensation plan are primarily
subject to the general restriction that stock awarded to a partici-
pant will be forfeited and revert to Company ownership if the
participant’s employment terminates before the end of a specified
period of service to the Company. Some of the awards are also
subject to performance and market conditions and will be forfeited
and revert to Company ownership if the conditions are not met. At
December 31, 2013, there were 43,950 shares reserved for
issuance under this incentive compensation plan, which were all
subject to awards outstanding.
In 2012, the Company adopted a new incentive compensation
plan (the 2012 Plan), which, among other provisions, authorizes the
awarding of Class B common stock to key employees in the form of
stock awards, stock options and other awards involving the actual
transfer of shares. All stock awards, stock options and other awards
involving the actual transfer of shares issued subsequent to the
adoption of this plan are covered under this new incentive
compensation plan. Stock awards made under the 2012 incentive
compensation plan are primarily subject to the general restriction
2013 FORM 10-K 71