Washington Post 2003 Annual Report Download - page 67

""Other income (expense), net'' in the Consolidated Statements of In addition to the income tax provision presented above, in 2002,
Income. the Company recorded a federal and state income tax benefit of
$6.9 million on the impairment loss recorded as a cumulative effect
Cost Method Investments. Most of the companies represent- of change in accounting principle in connection with the adoption of
ed by the Company's cost method investments have concentrations SFAS 142.
in Internet-related business activities. At December 28, 2003 and
December 29, 2002, the carrying value of the Company's cost The provision for income taxes exceeds the amount of income tax
method investments was $9.6 million and $9.5 million, respectively. determined by applying the U.S. Federal statutory rate of 35 per-
Cost method investments are included in ""Deferred Charges and cent to income before taxes as a result of the following (in
Other Assets'' in the Consolidated Balance Sheets. thousands):
During 2003, 2002 and 2001, the Company invested $0.8 mil- 2003 2002 2001
lion, $0.3 million and $11.7 million, respectively, in companies U.S. Federal statutory taxes ÏÏÏ $133,906 $123,784 $135,639
constituting cost method investments and recorded charges of State and local taxes, net of
$1.1 million, $19.2 million and $29.4 million, respectively, to U.S. Federal income tax
write-down cost method investments to estimated fair value. The benefit ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 11,058 14,025 13,832
Company's 2002 and 2001 write-downs relate to several invest- Amortization of goodwill not
ments. In 2002, three of the investments were written down by an deductible for income tax
aggregate of $15.6 million, primarily as a result of significant purposes ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ ÌÌ 6,988
recurring losses in each of the underlying businesses, with the write- Sale of affiliate with higher tax
basisÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (2,188) ÌÌ
downs recorded based on the Company's best estimate of the fair
Other, net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (1,276) (509) 1,441
value of each these investments. Another of the Company's invest-
Provision for income taxesÏÏÏÏÏ $141,500 $137,300 $157,900
ments was written down in 2002 by $2.8 million, based on
proceeds received by the Company arising from the investee's Deferred income taxes at December 28, 2003 and December 29,
merger. In 2001, two investments were written down by an aggre- 2002 consist of the following (in thousands):
gate of $19.5 million, as a result of recurring losses in the underly-
ing businesses, with the write-downs recorded based on the Com- 2003 2002
pany's best estimate of the fair value of each of the investments.
Accrued postretirement benefitsÏÏÏÏÏÏÏÏÏ $ 60,536 $ 58,874
Another of the Company's investments was written down by Other benefit obligationsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 102,791 94,280
$2.4 million to its net realizable value as the company was Accounts receivableÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 17,650 16,252
liquidated. Charges recorded to write-down cost method invest- State income tax loss carryforwardsÏÏÏÏÏ 12,068 13,693
ments are included in ""Other income (expense), net'' in the Affiliate operations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,334 Ì
Consolidated Statements of Income. Other ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 25,480 22,140
Deferred tax asset ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 222,859 205,239
D. INCOME TAXES Property, plant and equipmentÏÏÏÏÏÏÏÏÏÏ 153,615 135,520
Prepaid pension cost ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 207,312 200,315
The provision for income taxes consists of the following (in
Affiliate operations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì180
thousands):
Unrealized gain on available-for-sale
securitiesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 23,811 11,463
Current Deferred Total
Goodwill and other intangibles ÏÏÏÏÏÏÏÏÏ 141,945 118,914
2003 Deferred tax liabilityÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 526,683 466,392
U.S. FederalÏÏÏÏÏÏÏ $ 93,329 $27,189 $120,518 Deferred income taxesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $303,824 $261,153
Foreign ÏÏÏÏÏÏÏÏÏÏÏ 4,129 (159) 3,970
State and local ÏÏÏÏ 13,338 3,674 17,012 The Company has approximately $240 million in state income tax
$110,796 $30,704 $141,500 loss carryforwards. If unutilized, state income tax loss carryfor-
2002 wards will start to expire in 2008. Approximately $15 million,
U.S. FederalÏÏÏÏÏÏÏ $ 75,654 $38,934 $114,588 $2 million and $8 million of state income tax loss carryforwards will
Foreign ÏÏÏÏÏÏÏÏÏÏÏ 1,634 (499) 1,135 expire in 2008, 2009 and 2010, respectively, and $215 million of
State and local ÏÏÏÏ 9,897 11,680 21,577 state income tax loss carryforwards will expire between 2011 and
$ 87,185 $50,115 $137,300 2023.
2001
U.S. FederalÏÏÏÏÏÏÏ $ 48,253 $86,384 $134,637
Foreign ÏÏÏÏÏÏÏÏÏÏÏ 1,270 714 1,984
State and local ÏÏÏÏ 11,075 10,204 21,279
$ 60,598 $97,302 $157,900
2003 FORM 10-K 47