Washington Post 2001 Annual Report Download - page 17

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THE WASHINGTON POST COMPANY
At December 30, 2001 and December 31, 2000, the Company’s own-
ership of 2,634 shares of Berkshire Hathaway Inc. (“Berkshire”) Class
Acommon stock and 9,845 shares of Berkshire Class B common stock
accounted for $219,039,000, or 93 percent, and $210,189,000, or 95
percent, respectively, of the total fair value of the Company’s invest-
ments in marketable equity securities. The remaining investments in
marketable equity securities at December 30, 2001 and December 31,
2000 consisted of common stock investments in various publicly
traded companies, most of which have concentrations in Internet busi-
ness activities. In most cases, the Company obtained ownership of
these common stocks as a result of merger or acquisition transactions
in which these companies merged or acquired various small Internet-
related companies in which the Company held minor investments.
Berkshire is a holding company owning subsidiaries engaged in a
number of diverse business activities; the most significant of which
consist of property and casualty insurance business conducted on both
a direct and reinsurance basis. Berkshire also owns approximately 18
percent of the common stock of the Company. The chairman, chief
executive officer, and largest shareholder of Berkshire, Mr. Warren
Buffett, is a member of the Company’s Board of Directors. Neither
Berkshire nor Mr. Buffett participated in the Company’s evaluation,
approval, or execution of its decision to invest in Berkshire common
stock. The Company’s investment in Berkshire common stock is less
than 1 percent of the consolidated equity of Berkshire. At December
30, 2001 and at December 31, 2000, the gross unrealized gain
related to the Company’s Berkshire stock investment totaled
$34,121,000 and $25,271,000, respectively. The Company presently
intends to hold the Berkshire common stock investment long term;
thus the investment has been classified as a non-current asset in
the Consolidated Balance Sheets.
During 2001, 2000, and 1999 proceeds from sales of marketable
equity securities were $145,000, $6,332,000, and $54,805,000,
respectively, and gross realized (losses) gains on such sales were
($354,000), $4,929,000, and $38,799,000, respectively. Gross
realized gains or losses upon the sale of marketable equity secu-
rities are included in “Other income (expense), net” in the
Consolidated Statements of Income. For purposes of computing
realized gains and losses, the cost basis of securities sold is deter-
mined by specific identification.
Investments in Affiliates. The Company’s investments in affiliates at
December 30, 2001 and December 31, 2000 include the following:
(in thousands) 2001 2000
BrassRing.................................. $ 19,992 $ 73,310
Bowater Mersey Paper Company ........ 45,822 40,227
International Herald Tribune............... 14,480 17,561
Other....................................... 642 531
$ 80,936 $ 131,629
The Company’s investments in affiliates consist of a 39.7 percent
common equity interest in BrassRing LLC, which provides recruit-
ing, career development, and hiring management services for
employers and job candidates; a 49 percent interest in the common
stock of Bowater Mersey Paper Company Limited, which owns and
operates a newsprint mill in Nova Scotia; a 50 percent common stock
interest in the International Herald Tribune Newspaper, published
near Paris, France; and a 50 percent common stock interest in the
Los Angeles Times-Washington Post News Service, Inc.
Summarized financial data for the affiliates’operations are as follows:
(in thousands) 2001 2000 1999
Financial Position:
Working capital........... $ (8,767) $ 29,427 $ 69,155
Property, plant, and
equipment ............. 126,682 143,749 133,425
Total assets .............. 246,321 432,458 365,694
Long-term debt........... ———
Net equity ................ 125,211 291,481 236,597
Results of Operations:
Operating revenues...... $ 317,389 $ 345,913 $ 267,788
Operating loss............ (14,793) (27,505) (37,889)
Net loss................... (157,409) (77,739) (40,035)
The following table summarizes the status and results of the
Company’s investments in affiliates:
(in thousands) 2001 2000
Beginning investment ..................... $131,629 $ 140,669
Issuance of stock by BrassRing, Inc...... — 21,973
Additional investment ..................... 21,112 12,480
Equity in losses ........................... (68,659) (36,466)
Dividends and distributions received ..... — (940)
Foreign currency translation .............. (3,122) (1,685)
Other ...................................... (24) (4,402)
Ending investment ........................ $ 80,936 $ 131,629