Washington Post 2005 Annual Report Download - page 73

ment Institute, a private education provider for undergraduate and charges previously recorded from the amortization of goodwill and
postgraduate students in Asia. In addition, on January 14, 2005, the other intangibles.
Company completed the acquisition of Slate, the online magazine, which The Company's intangible assets with an indefinite life are principal-
is now included as part of the Company's newspaper publishing division. ly from franchise agreements at its cable division, as the Company
Most of the purchase price for the 2005 acquisitions was allocated to expects its cable franchise agreements to provide the Company
goodwill and other intangibles, and property, plant and equipment. with substantial benefit for a period that extends beyond the
During 2004, Kaplan acquired eight businesses in its higher educa- foreseeable horizon, and the Company's cable division historically
tion and professional divisions for a total of $59.6 million, financed has obtained renewals and extensions of such agreements for
with cash and $8.7 million of debt. In addition, the cable division nominal costs and without any material modifications to the agree-
completed two small transactions for $2.8 million. In May 2004, ments. Amortized intangible assets are primarily mastheads, custom-
the Company acquired El Tiempo Latino, a leading Spanish-lan- er relationship intangibles and non-compete agreements, with amor-
guage weekly newspaper in the greater Washington area. Most of tization periods up to ten years. Amortization expense was
the purchase price for the 2004 acquisitions was allocated to $7.5 million in 2005 and is estimated to be approximately $6 mil-
goodwill and other intangibles. lion in each of the next five years.
During 2003, Kaplan acquired 13 businesses in its higher education The Company's goodwill and other intangible assets as of
and professional divisions for a total of $166.8 million, financed January 1, 2006 and January 2, 2005 were as follows (in
with cash and $36.7 million of debt. The largest of these was the thousands):
March 2003 acquisition of the stock of The Financial Training Accumulated
Company (FTC), for 55.3 million ($87.4 million). Headquar- Gross Amortization Net
tered in London, FTC provides training services for accountants and
2005:
financial services professionals, with 28 training centers in the Goodwill ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $1,423,972 $298,402 $1,125,570
United Kingdom as well as operations in Asia. This acquisition was Indefinite-lived intangible
assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 658,498 163,806 494,692
financed with cash and $29.7 million of debt, primarily to employ- Amortized intangible assets 42,434 19,620 22,814
ees of the business. In November 2003, Kaplan acquired Dublin $2,124,904 $481,828 $1,643,076
Business School, Ireland's largest private undergraduate institution.
2004:
Most of the purchase price for the 2003 Kaplan acquisitions was Goodwill ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 1,321,542 $ 298,402 $ 1,023,140
allocated to goodwill and other intangibles and property, plant and Indefinite-lived intangible assetsÏÏ 656,998 163,806 493,192
Amortized intangible assets ÏÏÏÏÏÏ 20,021 12,142 7,879
equipment.
$ 1,998,561 $ 474,350 $ 1,524,211
In addition, the cable division acquired three additional systems in
Activity related to the Company's goodwill and intangible assets
2003 for $2.8 million. Most of the purchase price for these
during 2005 was as follows (in thousands):
acquisitions was allocated to franchise agreements, an indefinite-
lived intangible asset. Newspaper Television Magazine Cable
Publishing Broadcasting Publishing Television Education Total
On January 1, 2003, the Company sold its 50 percent interest in
the International Herald Tribune for $65 million and the Company
Goodwill, Net
Beginning of year ÏÏÏ $ 72,770 $203,165 $69,556 $ 85,666 $591,983 $1,023,140
recorded an after-tax non-operating gain of $32.3 million
Acquisitions ÏÏÏÏÏÏÏÏ 7,881 111,623 119,504
Foreign currency
($3.38 per share) in the first quarter of 2003.
exchange rate ÏÏÏÏ (17,074) (17,074)
End of year ÏÏÏÏÏÏÏÏ $ 80,651 $203,165 $69,556 $ 85,666 $686,532 $1,125,570
The results of operations for each of the businesses acquired are
IndeÑnite-Lived
included in the Consolidated Statements of Income from their
Intangible Assets,
Net
respective dates of acquisition. Pro forma results of operations for
Beginning of year ÏÏÏ $486,330 $ 6,862 $ 493,192
2005, 2004 and 2003, assuming the acquisitions and exchanges
Acquisitions ÏÏÏÏÏÏÏÏ 1,500 1,500
End of year ÏÏÏÏÏÏÏÏ $486,330 $ 8,362 $ 494,692
occurred at the beginning of 2003, are not materially different from
reported results of operations.
Amortized
Intangible Assets,
Net
Beginning of year ÏÏÏ $ 118 $ 2,474 $ 5,287 $ 7,879
K. GOODWILL AND OTHER INTANGIBLE ASSETS
Acquisitions ÏÏÏÏÏÏÏÏ 7,677 14,989 22,666
Foreign currency
The Company adopted Statement of Financial Accounting Standards
exchange rate ÏÏÏÏ (253) (253)
AmortizationÏÏÏÏÏÏÏÏ (1,119) (764) (5,595) (7,478)
No. 142 (SFAS 142), ""Goodwill and Other Intangible Assets''
End of year ÏÏÏÏÏÏÏÏ $ 6,676 $ 1,710 $ 14,428 $ 22,814
effective on the first day of its 2002 fiscal year. As a result of the
adoption of SFAS 142, the Company ceased most of the periodic
2005 FORM 10-K 57