Washington Post 2005 Annual Report Download - page 74

Activity related to the Company's goodwill and intangible assets must comply with complex standards set forth in the HEA and the
during 2004 was as follows (in thousands): regulations promulgated thereunder (the Regulations). The failure
to comply with the requirements of HEA or the Regulations could
Newspaper Television Magazine Cable result in the restriction or loss of the ability to participate in Title IV
Publishing Broadcasting Publishing Television Education Total
Programs and subject the Company to financial penalties. For the
Goodwill, Net
years ended January 1, 2006, January 2, 2005 and Decem-
Beginning of year ÏÏÏ $71,277 $203,165 $ 69,556 $ 85,666 $536,030 $ 965,694
Acquisitions ÏÏÏÏÏÏÏÏ 1,493 44,143 45,636
ber 28, 2003, approximately $505.0 million, $430.0 million and
Foreign currency
exchange rate ÏÏÏÏ 11,810 11,810 $250.0 million, respectively, of the Company education division
End of year ÏÏÏÏÏÏÏÏ $72,770 $203,165 $ 69,556 $ 85,666 $591,983 $1,023,140
revenues were derived from financial aid received by students
IndeÑnite-Lived
under Title IV Programs. Management believes that the Company's
Intangible Assets,
education division schools that participate in Title IV Programs are in
Net
Beginning of year ÏÏÏ $484,556 $ 2,100 $ 486,656
material compliance with standards set forth in the HEA and the
Acquisitions ÏÏÏÏÏÏÏÏ 1,774 4,762 6,536
End of year ÏÏÏÏÏÏÏÏ $486,330 $ 6,862 $ 493,192
Regulations.
Amortized
Operating results for the Company in 2005 include the impact of
Intangible Assets,
Net
charges and lost revenues associated with Katrina and other hurri-
Beginning of year ÏÏÏ $ 30 $ 1,081 $ 4,115 $ 5,226
Acquisitions ÏÏÏÏÏÏÏÏ 107 2,045 9,845 11,997 canes. Most of the impact was at the cable division, but the
Foreign currency
television broadcasting and education divisions were also adversely
exchange rate ÏÏÏÏ (10) (10)
AmortizationÏÏÏÏÏÏÏÏ (19) (652) (8,663) (9,334)
impacted. About 94,000 of the cable division's pre-hurricane
End of year ÏÏÏÏÏÏÏÏ $ 118 $ 2,474 $ 5,287 $ 7,879
subscribers were located on the Gulf Coast of Mississippi, including
Gulfport, Biloxi, Pascagoula and other neighboring communities
L. OTHER NON-OPERATING INCOME (EXPENSE) where storm damage from Hurricane Katrina was significant.
The Company recorded other non-operating income, net, of Through the end of 2005, the cable division recorded $9.6 million
$9.0 million in 2005, $8.1 million in 2004 and $55.4 million in in property, plant and equipment losses; incurred an estimated
2003. The 2003 non-operating income, net, mostly comprises a $9.4 million in incremental cleanup, repair and other expenses in
$49.8 million pre-tax gain from the sale of the Company's 50 per- connection with the hurricane; and experienced an estimated
cent interest in the International Herald Tribune. $9.7 million reduction in operating income from subscriber losses
and the granting of a 30-day service credit to all its 94,000 pre-
A summary of non-operating income (expense) for the years hurricane Gulf Coast subscribers. As of December 31, 2005, the
ended January 1, 2006, January 2, 2005, and December 28, Company has recorded a $5.0 million receivable for recovery of a
2003 follows (in millions): portion of cable hurricane losses through December 31, 2005
under the Company's property and business interruption insurance
2005 2004 2003
program; this recovery was recorded as a reduction of cable
Gain on sales of marketable securitiesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $12.7 $Ì $ Ì division expense in the fourth quarter of 2005. Actual insurance
Gain on sale of non-operating land ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5.1 ÌÌ recovery amounts for cable losses through December 31, 2005
Foreign currency (losses) gains, net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (8.1) 5.5 4.2
Impairment write-downs on cost method and other may ultimately be higher than the estimated $5.0 million. Additional
investments ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (1.5) (0.7) (1.3) costs and losses related to the hurricane will continue to be incurred
Gain on sale of interest in IHT ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ ÌÌ 49.8
Gain on sale or exchange of cable system businesses Ì0.5 Ì in 2006, and property and business interruption insurance cover-
Other ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 0.8 2.8 2.7 age is expected to cover some of these losses.
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 9.0 $ 8.1 $ 55.4
N. BUSINESS SEGMENTS
M. CONTINGENCIES AND LOSSES
The Company operates principally in four areas of the media
The Company and its subsidiaries are parties to various civil lawsuits business: newspaper publishing, television broadcasting, magazine
that have arisen in the ordinary course of their businesses, including publishing and cable television. Through its subsidiary Kaplan, Inc.,
actions for libel and invasion of privacy, and violations of applica- the Company also provides educational services for individuals,
ble wage and hour laws. Kaplan Inc. is a party to a proposed class schools and businesses.
action antitrust lawsuit in California filed on April 29, 2005. The suit
Newspaper publishing includes the publication of newspapers in the
alleges violations of the Sherman Act. The Company intends to
Washington, D.C. area and Everett, Washington; newsprint ware-
defend the lawsuit vigorously. Management does not believe that
housing and recycling facilities; and the Company's electronic
any litigation pending against the Company will have a material
media publishing business (primarily washingtonpost.com).
adverse effect on its business or financial condition.
The magazine publishing division consists of the publication of a
The Company's education division derives a portion of its net
weekly news magazine, Newsweek, which has one domestic and
revenues from financial aid received by its students under Title IV
three English-language international editions (and, in conjunction
Programs administered by the U.S. Department of Education pursu-
with others, publishes eight foreign-language editions around the
ant to the Federal Higher Education Act of 1965 (HEA), as
world), the publication of Arthur Frommer's Budget Travel, and the
amended. In order to participate in Title IV Programs, the Company
58 THE WASHINGTON POST COMPANY