Washington Post 2005 Annual Report Download - page 54

completed two small transactions. In May 2004, the Company acquired at a cost of $0.7 million. At January 1, 2006, the Company had
El Tiempo Latino, a leading Spanish-language weekly newspaper in the authorization from the Board of Directors to purchase up to
greater Washington area. Most of the purchase price for the 2004 542,800 shares of Class B common stock. The annual dividend
acquisitions was allocated to goodwill and other intangibles. rate for 2006 was increased to $7.80 per share, from $7.40 per
share in 2005 and from $7.00 per share in 2004.
During 2003, Kaplan acquired 13 businesses in its higher education
and professional divisions for a total of $166.8 million, financed Liquidity. At January 1, 2006, the Company had $215.9 million
with cash and $36.7 million of debt. The largest of these was the in cash and cash equivalents, compared to $119.4 million at
March 2003 acquisition of the stock of The Financial Training January 2, 2005. As of January 1, 2006, the Company had
Company (FTC), for 55.3 million ($87.4 million). Headquar- commercial paper investments of $59.2 million that are classified as
tered in London, FTC provides training services for accountants and ""Cash and cash equivalents'' in the Company's Consolidated
financial services professionals, with 28 training centers in the Balance Sheet.
United Kingdom as well as operations in Asia. This acquisition was At January 1, 2006, the Company had $428.4 million in total debt
financed with cash and $29.7 million of debt, primarily to employ- outstanding, which comprised $399.2 million of 5.5% unsecured
ees of the business. In November 2003, Kaplan acquired Dublin notes due February 15, 2009, and $29.2 million in other debt. The
Business School, Ireland's largest private undergraduate institution. unsecured notes require semi-annual interest payments of $11.0 mil-
Most of the purchase price for the 2003 Kaplan acquisitions was lion payable on February 15 and August 15.
allocated to goodwill and other intangibles, and property, plant
and equipment. During 2005, the Company's borrowings, net of repayments,
decreased by $55.7 million, and the Company's commercial paper
In addition, the cable division acquired three additional systems in investments increased to $59.2 million; this activity is primarily due
2003 for $2.8 million. Most of the purchase price for these to cash flow from operations. The Company also partially financed
acquisitions was allocated to franchise agreements, an indefinite- several acquisitions in 2005.
lived intangible asset.
During the third quarter of 2005, the Company replaced its expiring
On January 1, 2003, the Company sold its 50% interest in the $250 million 364-day revolving credit facility with a new $250 mil-
International Herald Tribune for $65 million and the Company lion revolving credit facility on essentially the same terms. The new
recorded an after-tax non-operating gain of $32.3 million facility expires in August 2006. The Company's five-year $350 mil-
($3.38 per share) in the first quarter of 2003. lion revolving credit facility, which expires in August 2007, remains
Capital Expenditures. During 2005, the Company's capital in effect. These revolving credit facility agreements support the
expenditures totaled $238.3 million; about $20.0 million is related issuance of the Company's short-term commercial paper and pro-
to rebuilding efforts on the Gulf Coast of Mississippi due to vide for general corporate purposes.
Hurricane Katrina. The Company's capital expenditures for 2005, During 2005 and 2004, the Company had average borrowings
2004 and 2003 are disclosed in Note N to the Consolidated outstanding of approximately $442.0 million and $516.0 million,
Financial Statements. The Company estimates that its capital respectively, at average annual interest rates of approximately
expenditures will be in the range of $275 million to $300 million in 5.4% and 4.8%, respectively. The Company incurred net interest
2006. costs on its borrowings of $23.4 million and $26.4 million during
Investments in Marketable Equity Securities. At 2005 and 2004, respectively.
January 1, 2006, the fair value of the Company's investments in At January 1, 2006 and January 2, 2005, the Company had
marketable equity securities was $329.9 million, which includes working capital of $123.6 million and $62.3 million, respectively.
$262.3 million in Berkshire Hathaway Inc. Class A and B common The Company maintains working capital levels consistent with its
stock and $67.6 million of various common stocks of publicly traded underlying business requirements and consistently generates cash
companies with education concentrations. from operations in excess of required interest or principal payments.
At January 1, 2006 and January 2, 2005, the gross unrealized The Company classified all of its commercial paper borrowing
gain related to the Company's Berkshire stock investment totaled obligations as a current liability at January 2, 2005, as the
$77.4 million and $75.5 million, respectively. The Company pres- Company's intention was to pay down commercial paper borrow-
ently intends to hold the Berkshire common stock investment long ings from operating cash flow. The Company continues to maintain
term, thus the investment has been classified as a non-current asset the ability to refinance any such obligations on a long-term basis
in the Consolidated Balance Sheets. The gross unrealized gain through new debt issuance and/or its revolving credit facility
related to the Company's other marketable security investments agreements.
totaled $18.3 million and $48.3 million at January 1, 2006 and The Company's net cash provided by operating activities, as
January 2, 2005, respectively. reported in the Company's Consolidated Statements of Cash Flows,
Common Stock Repurchases and Dividend Rate. During was $522.8 million in 2005, compared to $561.7 million in 2004.
2005 and 2004, there were no share repurchases. During 2003, The decline is primarily due to the Company's reduction in operating
the Company repurchased 910 shares of its Class B common stock income in 2005.
38 THE WASHINGTON POST COMPANY