Washington Post 1999 Annual Report Download - page 20

Dispositions. In June 1999, the Company sold the assets of Legi-
Slate, Inc., its on-line services subsidiary that covered federal legis-
lation and regulation. No significant gain or loss was realized as a
result of the sale.
In March 1998, Cowles Media Company (“Cowles”) and
McClatchy Newspapers, Inc. (“McClatchy”) completed a series of
transactions resulting in the merger of Cowles and McClatchy. In the
merger, each share of Cowles common stock was converted (based
upon elections of Cowles stockholders) into shares of McClatchy stock
or a combination of cash and McClatchy stock. As of the date of the
Cowles and McClatchy merger transaction, a wholly-owned subsidiary
of the Company owned 3,893,796 (equal to about 28 percent) of
the outstanding common stock of Cowles, most of which was acquired
in 1985. As a result of the transaction, the Company’s subsidiary
received $330,500,000 in cash from McClatchy and 730,525 shares
of McClatchy Class A common stock. The market value of the
McClatchy stock received approximated $21,600,000. The gain
resulting from this transaction, which is included in 1998 “Other
income, net” in the Consolidated Statements of Income, increased
net income by approximately $162,800,000 and basic and diluted
earnings per share by $16.14 and $16.07 respectively.
In July 1998, the Company completed the sale of 14 small
cable systems in Texas, Missouri and Kansas serving approximately
29,000 subscribers for approximately $41,900,000. The gain
resulting from this transaction, which is included in 1998 “Other
income, net” in the Consolidated Statements of Income, increased
net income by approximately $17,300,000 and basic and diluted
earnings per share by $1.71.
In August 1998, Junglee Corporation (“Junglee”) merged with
a wholly owned subsidiary of Amazon.com Inc. (“Amazon.com”).
As a result, each share of Junglee common and preferred stock was
converted into shares of Amazon.com. On the date of the merger, a
wholly-owned subsidiary of the Company owned 750,000 common
shares and 750,000 preferred shares of Junglee. As a result of
the merger, the Company’s subsidiary received 202,961 shares of
Amazon.com common stock. The market value of the Amazon.com
stock received approximated $25,200,000 on the date of the merger.
The gain resulting from this transaction, which is included in 1998
“Other income (expense), net” in the Consolidated Statements of
Income, increased net income by approximately $14,300,000 and
basic and diluted earnings per share by $1.42 and $1.41, respectively.
In September 1997, the Company sold the assets of its PASS
regional sports network for approximately $27,400,000. In
December 1997, the Company sold its 35 percent limited partner-
ship interest in both Bear Island Paper Company and Bear Island
Timberlands Company for approximately $92,800,000. The gains
resulting from these dispositions, which are included in “Other
income, net” in the Consolidated Statements of Income, increased
1997 net income by approximately $44,500,000 and basic and
diluted earnings per share by $4.16 and $4.15, respectively.
L. CONTINGENCIES
The Company and its subsidiaries are parties to various civil law-
suits that have arisen in the ordinary course of their businesses,
including actions for libel and invasion of privacy. Management does
not believe that any litigation pending against the Company will
have a material adverse effect on its business or financial condition.
M. BUSINESS SEGMENTS
The Company operates principally in four areas of the media business:
newspaper publishing, television broadcasting, magazine publishing,
and cable television. Through its subsidiary Kaplan, Inc., the Company
also provides educational and career services for individuals, schools
and businesses.
Newspaper operations involve the publication of newspapers in
the Washington, D.C. area and Everett, Washington, newsprint
warehousing and recycling facilities, and the Company’s electronic
media publishing business (primarily washingtonpost.com).
Magazine operations consist of the publication of a weekly news
magazine, Newsweek, which has one domestic and three international
editions and the publication of business periodicals for the computer
services industry and the Washington-area technology community.
Revenues from both newspaper and magazine publishing operations
are derived from advertising and, to a lesser extent, from circulation.
Broadcast operations are conducted primarily through six VHF
television stations. All stations are network-affiliated, with revenues
derived primarily from sales of advertising time.
Cable television operations consist of more than 50 cable
systems offering basic cable and pay television services to approxi-
mately 740,000 subscribers in midwestern, western, and southern
states. The principal source of revenues is monthly subscription
fees charged for services.
51THE WASHINGTON POST COMPANY