Washington Post 2004 Annual Report Download - page 52

The following reflects a summary of the Company's contractual agement has made their best estimates and judgments of certain
obligations and commercial commitments as of January 2, 2005: amounts included in the financial statements. Actual results will
inevitably differ to some extent from these estimates.
Contractual Obligations The following are accounting policies that management believes are
(in thousands)
the most important to the Company's portrayal of the Company's
2005 2006 2007 2008 2009 Thereafter Total
financial condition and results and require management's most
Commercial paper $ 50,201 $ Ì $ Ì $ Ì $ Ì $ Ì $ 50,201
difficult, subjective or complex judgments.
Long-term debt 8,035 24,679 1,479 407 400,224 200 435,024
Programming
Revenue Recognition and Trade Accounts Receivable,
purchase
commitments
(1)
126,848 115,076 105,863 85,943 58,008 216,711 708,449
Less Estimated Returns, Doubtful Accounts and
Operating leases 80,842 75,974 71,181 61,767 52,303 154,541 496,608
Allowances. The Company's revenue recognition policies are
Other purchase
obligations
(2)
371,973 117,614 94,653 78,058 71,615 145,003 878,916
described in Note A to the Consolidated Financial Statements.
Long-term
Education revenue is generally recognized ratably over the period
liabilities
(3)
7,300 8,000 8,700 9,500 10,400 111,098 154,998
Total ÏÏÏÏÏÏÏÏÏÏÏ $645,199 $341,343 $281,876 $235,675 $592,550 $627,553 $2,724,196 during which educational services are delivered. For example, at
Kaplan's test preparation division, estimates of average student
course length are developed for each course, along with estimates
(1) Includes commitments for the Company's television broadcast-
for the anticipated level of student drops and refunds from test
ing and cable television businesses that are reflected in the
performance guarantees, and these estimates are evaluated on an
Company's Consolidated Balance Sheet and commitments to
ongoing basis and adjusted as necessary. As Kaplan's businesses
purchase programming to be produced in future years.
and related course offerings have expanded, including distance-
(2) Includes purchase obligations related to newsprint contracts, learning businesses, and contracts with school districts as part of its
printing contracts, employment agreements, circulation distri- K12 business, the complexity and significance of management
bution agreements, capital projects and other legally binding estimates have increased. Revenues from magazine retail sales are
commitments. Other purchase orders made in the ordinary recognized on the later of delivery or the cover date, with ade-
course of business are excluded from the table above. Any quate provision made for anticipated sales returns. The Company
amounts for which the Company is liable under purchase bases its estimates for sales returns on historical experience and has
orders are reflected in the Company's Consolidated Balance not experienced significant fluctuations between estimated and
Sheet as ""Accounts payable and accrued liabilities.'' actual return activity.
(3) Primarily made up of postretirement benefit obligations other
Accounts receivable have been reduced by an allowance for
than pensions. The Company has other long-term liabilities
amounts that may be uncollectible in the future. This estimated
excluded from the table above, including obligations for
allowance is based primarily on the aging category, historical
deferred compensation, long-term incentive plans and long-
trends and management's evaluation of the financial condition of the
term deferred revenue.
customer. Accounts receivable also have been reduced by an
Other Commercial Commitments estimate of advertising rate adjustments and discounts, based on
(in thousands) estimates of advertising volumes for contract customers who are
Lines of eligible for advertising rate adjustments and discounts.
Fiscal Year Credit
Pension Costs. Excluding special termination benefits related to
2005 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 250,000 early retirement programs, the Company's net pension credit was
2006 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì $42.0 million, $55.1 million and $64.4 million for 2004, 2003
2007 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 350,000 and 2002, respectively. The Company's pension benefit costs are
2008 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì actuarially determined and are impacted significantly by the Com-
2009 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì pany's assumptions related to future events, including the discount
Thereafter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì rate, expected return on plan assets and rate of compensation
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 600,000
increases. At December 29, 2002, the Company reduced its
discount rate assumption to 6.75%. Due to the reduction in the
Other. The Company does not have any off-balance sheet
discount rate, lower than expected investment returns in 2002, and
arrangements or financing activities with special-purpose entities
an amendment to the pension retirement program for certain
(SPEs). Transactions with related parties, as discussed in Note C to
employees at the Post effective June 1, 2003, the pension credit for
the Consolidated Financial Statements, are in the ordinary course of
2003 declined by $9.3 million compared to 2002. At Decem-
business and are conducted on an arm's-length basis.
ber 28, 2003, the Company reduced its discount rate assumption
CRITICAL ACCOUNTING POLICIES AND ESTIMATES to 6.25%. Due to the reduction in the discount rate, the plan
amendment from June 2003, and a reduction in the estimated
The preparation of financial statements in conformity with generally actuarial gain amortization, offset by higher than expected invest-
accepted accounting principles requires management to make esti- ment returns in 2003, the pension credit for 2004 declined by
mates and assumptions that affect the amounts reported in the $13.2 million compared to 2003. At January 2, 2005, the Compa-
financial statements. In preparing these financial statements, man-
36 THE WASHINGTON POST COMPANY