Washington Post 2000 Annual Report Download - page 16

The Washington Post Company 41
Cost Method Investments. The Company’s cost method investments
consist of minority investments in non-public companies where the
Company does not have significant influence over the investees’ oper-
ating and management decisions. Most of the companies represented
by these cost method investments have concentrations in Internet-
related business activities. At December 31, 2000 and January 2, 2000,
the carrying value of the Company’s cost method investments was
$48,617,000 and $30,009,000, respectively. Cost method investments
are included in Deferred Charges and Other Assets in the Consolidated
Balance Sheets.
During 2000 and 1999, the Company invested $42,459,000 and
$33,549,000, respectively, in companies constituting cost method
investments and recorded charges of $23,097,000 and $13,555,000,
respectively, to write-down cost method investments to estimated fair
value. The company made no significant investments in cost method
investments during 1998. Charges recorded to write-down cost
method investments are included in “Other (expense) income, net”
in the Consolidated Statements of Income.
During 2000, proceeds from sales of cost method investments
were $7,070,000, and gross realized gains on such sales were
$6,570,000. There were no sales of cost method investments in 1999
or 1998. Gross realized gains or losses upon the sale of cost method
investments are included in “Other (expense) income, net” in the
Consolidated Statements of Income.
ID IINCOME TAXES
The provision for income taxes consists of the following (in thousands):
Current Deferred
2000
U.S. Federal ..................................................... $ 77,517 $ 4,854
Foreign ............................................................. 1,033 75
State and local.................................................. 22,593 (12,672)
$ 101,143 $ (7,743)
1999
U.S. Federal ..................................................... $ 94,609 $ 30,346
Foreign ............................................................. 1,306 (22)
State and local.................................................. 23,697 (336)
$ 119,612 $ 29,988
1998
U.S. Federal ..................................................... $ 200,898 $ 20,446
Foreign ............................................................. 1,233 255
State and local.................................................. 21,682 6,286
$ 223,813 $ 26,987
The provision for income taxes exceeds the amount of income tax
determined by applying the U.S. Federal statutory rate of 35 percent
to income before taxes as a result of the following (in thousands):
2000 1999 1998
U.S. Federal statutory taxes .......... $ 80,455 $ 131,385 $ 233,821
State and local taxes,
net of U.S. Federal
income tax benefit...................... 6,449 15,185 18,179
Amortization of goodwill
not deductible for
income tax purposes.................. 5,011 4,178 5,644
IRS approved accounting
change....................................... — — (3,550)
Other, net...................................... 1,485 (1,148) (3,294)
Provision for income taxes ............ $ 93,400 $ 149,600 $ 250,800
Deferred income taxes at December 31, 2000 and January 2,
2000 consist of the following (in thousands):
2000 1999
Accrued postretirement benefits ....................... $ 55,280 $ 53,819
Other benefit obligations ................................... 60,676 54,101
Accounts receivable.......................................... 17,296 14,016
State income tax loss carryforwards .................. 12,013 4,767
Other ................................................................ 20,693 12,081
Deferred tax asset............................................. 165,958 138,784
Property, plant, and equipment......................... 90,391 77,907
Prepaid pension cost ........................................ 152,609 140,640
Affiliate operations ............................................ 18,365 21,741
Unrealized gain on available-
for-sale securities ........................................... 8,476 3,379
Amortized goodwill............................................ 12,050 8,513
Other ................................................................ 1,798 607
Deferred tax liability .......................................... 283,689 252,787
Deferred income taxes...................................... $ 117,731 $ 114,003
IE IDEBT
At December 31, 2000, the Company had $923,267,000 in total debt
outstanding, which was comprised of $525,386,000 of commercial
paper borrowings and $397,881,000 of 5.5 percent unsecured notes
due February 15, 2009. At December 31, 2000, the Company has
classified $475,386,000 of its commercial paper borrowings as Long-
Term Debt in its Consolidated Balance Sheets as the Company has
the ability and intent to finance such borrowings on a long-term basis
under its credit agreements.
Interest on the 5.5 percent unsecured notes is payable semi-
annually on February 15 and August 15.