Washington Post 2005 Annual Report Download - page 68

Deferred U.S. and state income taxes have been recorded for Interest on the 5.5% unsecured notes is payable semi-annually on
undistributed earnings of investments in foreign subsidiaries to the February 15 and August 15.
extent taxable dividend income would be recognized if such earn- At January 2, 2005, the average interest rate on the Company's
ings were distributed. Deferred income taxes recorded for undistrib- outstanding commercial paper borrowings was 2.2%. During the
uted earnings of investments in foreign subsidiaries are net of third quarter of 2005, the Company replaced its expiring $250 mil-
foreign tax credits estimated to be available. The Company's lion 364-day revolving credit facility with a new $250 million
estimate of foreign tax credits and the Company's change to revolving credit facility on essentially the same terms. The new
provide only deferred U.S. and state income taxes for a portion of facility expires in August 2006. The Company also has a five-year
the book value and tax basis differences related to investments in $350 million revolving credit facility, which expires in August 2007.
foreign subsidiaries resulted in a reduction of approximately These revolving credit facility agreements support the issuance of
$6.0 million in income tax expense in the fourth quarter of 2005. the Company's short-term commercial paper.
Deferred U.S. and state income taxes have not been recorded for Under the terms of the five-year $350 million revolving credit
the full book value and tax basis differences related to investments facility, interest on borrowings is at floating rates, and depending
in foreign subsidiaries because such investments are expected to be on the Company's long-term debt rating, the Company is required
indefinitely held. The book value exceeded the tax basis of invest- to pay an annual fee of 0.07% to 0.15% on the unused portion of
ments in foreign subsidiaries by approximately $35.2 million and the facility, and 0.25% to 0.75% on the used portion of the facility.
$30.0 million at January 1, 2006 and January 2, 2005, respec- Under the terms of the $250 million 364-day revolving credit
tively. If the investments in foreign subsidiaries were held for sale, facility, interest on borrowings is at floating rates, and based on the
instead of as permanent investments, then additional U.S. and state Company's long-term debt rating, the Company is required to pay
deferred income tax liabilities, net of foreign tax credits estimated to an annual fee of 0.04% to 0.10% on the unused portion of the
be available on undistributed earnings, of approximately $9.8 mil- facility, and 0.20% to 0.65% on the used portion of the facility.
lion and $4.5 million would have been recorded at January 1, Also under the terms of the $250 million 364-day revolving credit
2006 and January 2, 2005, respectively. facility, the Company has the right to extend the term of any
The Company has approximately $180 million in state income tax borrowings for up to one year from the credit facility's maturity date
loss carryforwards. If unutilized, state income tax loss carryfor- for an additional fee of 0.10%. Both revolving credit facilities
wards will start to expire approximately as follows (in millions): contain certain covenants, including a financial covenant that the
Company maintain at least $1 billion of consolidated shareholders'
2006 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 4.3 equity.
2007 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3.5
2008 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3.8 During 2005 and 2004, the Company had average borrowings
2009 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 7.7 outstanding of approximately $442.0 million and $516.0 million,
2010 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 8.6 respectively, at average annual interest rates of approximately
2011 to 2023ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 152.3 5.4% and 4.8%, respectively. The Company incurred net interest
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $180.2 costs on its borrowings of $23.4 million and $26.4 million during
2005 and 2004, respectively. No interest expense was capital-
E. DEBT ized in 2005 or 2004.
Long-term debt consists of the following (in millions): At January 1, 2006 and January 2, 2005, the fair value of the
Company's 5.5% unsecured notes, based on quoted market
January 1, January 2,
2006 2005 prices, totaled $404.1 million and $423.0 million, respectively,
compared with the carrying amount of $399.2 million and
Commercial paper borrowings ÏÏÏ $Ì $ 50.2 $398.9 million, respectively.
5.5% unsecured notes due
February 15, 2009 ÏÏÏÏÏÏÏÏÏÏÏ 399.2 398.9 The carrying value of the Company's other unsecured debt at
4.0% notes due 2006 January 1, 2006 approximates fair value.
(8.4 million)ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 14.4 16.1
Other indebtedness ÏÏÏÏÏÏÏÏÏÏÏÏÏ 14.8 18.9 F. REDEEMABLE PREFERRED STOCK
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 428.4 484.1
Less current portion ÏÏÏÏÏÏÏÏÏÏÏÏÏ (24.8) (58.2) In connection with the acquisition of a cable television system in
Total long-term debtÏÏÏÏÏÏÏÏÏÏÏÏÏ $403.6 $425.9 1996, the Company issued 11,947 shares of its Series A Preferred
Stock. On February 23, 2000, the Company issued an additional
During 2003, notes of 16.7 million were issued to FTC employees 1,275 shares related to this transaction. From 1998 to 2005,
who were former FTC shareholders in connection with the acquisi- 955 shares of Series A Preferred Stock were redeemed at the
tion. In 2004, 50% of the balance, or $15.0 million, on the notes request of Series A Preferred Stockholders.
was paid. The remaining balance outstanding of 8.4 million is due
The Series A Preferred Stock has a par value of $1.00 per share
for payment in August 2006.
and a liquidation preference of $1,000 per share; it is redeemable
by the Company at any time on or after October 1, 2015 at a
52 THE WASHINGTON POST COMPANY