Washington Post 2003 Annual Report Download - page 73

provides pre-certiÑcation training for real estate, insurance and securities at the beginning of fiscal 2001, compared to $363.8 million and
professionals. $377.6 million for 2003 and 2002, respectively.
Southern Maryland Newspapers publishes the Maryland Indepen- Other pro forma results for the year ended December 30, 2001, to
dent in Charles County, Maryland; The Enterprise in St. Mary's exclude amortization of goodwill and indefinite-lived intangible
County, Maryland; and The Calvert Recorder in Calvert County, assets, were as follows (in thousands, except per share amounts):
Maryland, with a combined total paid circulation of approximately
2003 2002 2001
50,000.
Income before cumulative effect of
The cable system exchange with AT&T Broadband was completed change in accounting principle,
in March 2001 and consisted of the exchange by the Company of as reported ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $241,088 $216,368 $229,639
Amortization of goodwill and other
its cable systems in Modesto and Santa Rosa, California, and intangibles, net of tax ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ ÌÌ 54,989
approximately $42.0 million to AT&T Broadband for cable systems Pro forma income before cumulative effect
of change in
serving approximately 155,000 subscribers principally located in accounting principleÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 241,088 216,368 284,628
Idaho. The Idaho systems acquired in the exchange transactions Cumulative effect of change in method of
accounting for goodwill
were recorded at their estimated fair value, as determined based and other intangible assets, net of taxÏÏ Ì(12,100) Ì
on an appraisal completed by an independent third-party firm. In a Redeemable preferred stock dividendsÏÏÏÏ (1,027) (1,033) (1,052)
Pro forma net income available for
related transaction in January 2001, the Company completed the common shares ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $240,061 $203,235 $283,576
sale of a cable system serving about 15,000 subscribers in Green- Basic earnings per share:
wood, Indiana, for $61.9 million. The gain resulting from the cable Before cumulative effect of change in
accounting principle, as reported ÏÏÏÏ $ 25.19 $ 22.65 $ 24.10
system sale and exchange transactions increased net income by Cumulative effect of change in
$196.5 million, or $20.69 per share. For income tax purposes, accounting principleÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì(1.27) Ì
Amortization of goodwill and other
substantial components of the cable system sale and exchange intangibles ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ ÌÌ5.79
transactions qualify as like-kind exchanges and therefore, a large Pro forma net income available for
common shares ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 25.19 $ 21.38 $ 29.89
portion of these transactions does not result in a current tax liability.
Diluted earnings per share:
Before cumulative effect of change in
The results of operations for each of the businesses acquired are accounting principle, as reported ÏÏÏÏ $ 25.12 $ 22.61 $ 24.06
included in the Consolidated Statements of Income from their Cumulative effect of change in
accounting principleÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì(1.27) Ì
respective dates of acquisition. Pro forma results of operations for Amortization of goodwill and other
2003, 2002 and 2001, assuming the acquisitions and exchanges intangibles ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ ÌÌ5.79
occurred at the beginning of 2001, are not materially different from Pro forma net income available for
common shares ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 25.12 $ 21.34 $ 29.85
reported results of operations.
K. GOODWILL AND OTHER INTANGIBLE ASSETS As part of the adoption of SFAS 142 in 2002, the Company
reviewed its goodwill and other intangible assets and classified
The Company adopted Statement of Financial Accounting Standards
them in three categories (goodwill, indefinite-lived intangible assets
No. 142 (SFAS 142), ""Goodwill and Other Intangible Assets''
and amortized intangible assets). The Company's intangible assets
effective on the first day of its 2002 fiscal year. As a result of the
with an indefinite life are principally from franchise agreements at its
adoption of SFAS 142, the Company ceased most of the periodic
cable division, as the Company expects its cable franchise agree-
charges previously recorded from the amortization of goodwill and
ments to provide the Company with substantial benefit for a period
other intangibles.
that extends beyond the foreseeable horizon, and the Company's
As required under SFAS 142, the Company completed its transition- cable division historically has obtained renewals and extensions of
al impairment review of indefinite-lived intangible assets and good- such agreements for nominal costs and without any material modifi-
will in 2002. The expected future cash flows for PostNewsweek cations to the agreements. Amortized intangible assets are primarily
Tech Media (part of the magazine publishing segment), on a non-compete agreements, with amortization periods up to five
discounted basis, did not support the net carrying value of the years. Amortization expense was $1.4 million in 2003, and is
related goodwill. Accordingly, an after-tax goodwill impairment loss estimated to be approximately $2 million in each of the next five
of $12.1 million, or $1.27 per share, was recorded. The loss is years.
included in the Company's 2002 fiscal year results as a cumulative
effect of change in accounting principle.
On a pro forma basis, the Company's 2001 operating income
would have been $298.3 million, if SFAS 142 had been adopted
2003 FORM 10-K 53