Washington Post 2004 Annual Report Download - page 70

L. OTHER NON-OPERATING INCOME (EXPENSE) Newspaper publishing includes the publication of newspapers in the
Washington, D.C. area and Everett, Washington; newsprint ware-
The Company recorded other non-operating income, net, of housing and recycling facilities; and the Company's electronic
$8.1 million in 2004, $55.4 million in 2003 and $28.9 million in media publishing business (primarily washingtonpost.com).
2002. The 2003 non-operating income, net, mostly comprises a
$49.8 million pre-tax gain from the sale of the Company's 50 per- The magazine publishing division consists of the publication of a weekly
cent interest in the International Herald Tribune. The 2002 non- news magazine, Newsweek, which has one domestic and three interna-
operating income, net, includes a pre-tax gain of $27.8 million on tional editions, the publication of Arthur Frommer's Budget Travel, and the
the exchange of certain cable systems in the fourth quarter of 2002 publication of business periodicals for the computer services industry and
and a gain on the sale of marketable securities, offset by write- the Washington-area technology community.
downs recorded on certain investments. Revenues from both newspaper and magazine publishing operations are
A summary of non-operating income (expense) for the years derived from advertising and, to a lesser extent, from circulation.
ended January 2, 2005, December 28, 2003, and December 29, Television broadcasting operations are conducted through six VHF
2002 follows (in millions): television stations serving the Detroit, Houston, Miami, San Antonio,
2004 2003 2002 Orlando and Jacksonville television markets. All stations are net-
work-affiliated (except for WJXT in Jacksonville) with revenues
Foreign currency gains, net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 5.5 $ 4.2 $ Ì derived primarily from sales of advertising time.
Gain on sale of interest in IHT ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì49.8 Ì
Impairment write-downs on cost method and other Cable television operations consist of cable systems offering basic
investments ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (0.7) (1.3) (21.2)
Gain on sale or exchange of cable system businesses 0.5 Ì 27.8 cable, digital cable, pay television, cable modem and other ser-
Gain on sales of marketable securitiesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ ÌÌ 13.2 vices to subscribers in midwestern, western, and southern states.
Other ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2.8 2.7 9.1
TotalÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 8.1 $55.4 $ 28.9 The principal source of revenues is monthly subscription fees
charged for services.
M. CONTINGENCIES Education products and services are provided through the Company's
wholly-owned subsidiary, Kaplan, Inc. Kaplan's businesses include supple-
The Company and its subsidiaries are parties to various civil lawsuits
mental education services, which is made up of Kaplan Test Prep and
that have arisen in the ordinary course of their businesses, including
Admissions, providing test preparation services for college and graduate
actions for libel and invasion of privacy, and violations of applica-
school entrance exams; Kaplan Professional, providing education and
ble wage and hour laws. Management does not believe that any
career services to business people and other professionals; and Score!,
litigation pending against the Company will have a material adverse
offering multi-media learning and private tutoring to children and education-
effect on its business or financial condition.
al resources to parents. Kaplan's businesses also provide higher education
The Company's education division derives a portion of its net revenues services, which include all of Kaplan's post-secondary education business-
from financial aid received by its students under Title IV Programs adminis- es, including the fixed-facility colleges that offer Bachelor's degrees,
tered by the U.S. Department of Education pursuant to the Federal Higher Associate's degrees and diploma programs primarily in the fields of health
Education Act of 1965 (HEA), as amended. In order to participate in Title care, business and information technology; and online post-secondary and
IV Programs, the Company must comply with complex standards set forth in career programs (various distance-learning businesses).
the HEA and the regulations promulgated thereunder (the Regulations).
Corporate office includes the expenses of the Company's corpo-
The failure to comply with the requirements of HEA or the Regulations could
rate office.
result in the restriction or loss of the ability to participate in Title IV Programs
and subject the Company to financial penalties. For the years ended The Company's foreign revenues in 2004, 2003, and 2002 totaled
January 2, 2005, December 28, 2003 and December 29, 2002, approximately $209 million, $140 million, and $81 million, respectively,
approximately $430.0 million, $250.0 million and $161.7 million, respec- principally from Kaplan's foreign operations and the publication of the
tively, of the Company's education division revenues were derived from international editions of Newsweek. The Company's long-lived assets in
financial aid received by students under Title IV Programs. Management foreign countries (excluding goodwill and other intangibles), principally in
believes that the Company's education division schools that participate in the United Kingdom, totaled approximately $29 million at January 2, 2005
Title IV Programs are in material compliance with standards set forth in the and $19 million at December 28, 2003.
HEA and the Regulations.
Income from operations is the excess of operating revenues over operating
N. BUSINESS SEGMENTS expenses. In computing income from operations by segment, the effects of
equity in earnings of affiliates, interest income, interest expense, other non-
The Company operates principally in four areas of the media operating income and expense items, and income taxes are not included.
business: newspaper publishing, television broadcasting, magazine
publishing and cable television. Through its subsidiary Kaplan, Inc., Identifiable assets by segment are those assets used in the Company's
the Company also provides educational services for individuals, operations in each business segment. Investments in marketable equity
schools and businesses. securities and investments in affiliates are discussed in Note C.
54 THE WASHINGTON POST COMPANY