Washington Post 2006 Annual Report Download - page 58

Israel. Also included in supplemental education is The Financial Training Division operating income for 2005 totaled $125.4 million, a
Company (FTC). Headquartered in London, FTC provides training decrease of 12% from $143.1 million in 2004. The decline in
services for accountants and Ñnancial services professionals, with training operating income in 2005 reflects a 4% increase in newsprint
centers in the U.K. and Asia. FTC revenues grew by 14% in 2005. expense at The Washington Post, as well as increased pension and
Supplemental education results also include professional real estate, payroll costs; in addition, operating results for 2005 include losses
insurance and security courses. In April 2005, Kaplan Professional from the recent Slate acquisition. The declines were offset by
completed the acquisition of BISYS Education Services, a provider of improved results at Washingtonpost.Newsweek Interactive and
licensing education and compliance solutions for Ñnancial services institu- Gazette Newspapers. Operating margin at the newspaper publish-
tions and professionals. Real estate publishing and training courses ing division was 13% for 2005 and 15% for 2004.
contributed to growth in supplemental education in 2005, as did the Print advertising revenue at The Washington Post newspaper in
BISYS business. These results were oÅset by soft market demand for 2005 declined 1% to $595.8 million, from $603.3 million in
Kaplan Professional's securities and insurance course oÅerings. The Ñnal 2004. The decline was partially due to one less week included in
component of supplemental education is Score!, which provides academ- 2005 compared to 2004. The Post reported declines in national,
ic enrichment to children and has lower operating margins than the other retail and supplements advertising in 2005, offset by increases in
supplemental education businesses due to higher Ñxed costs. Revenues at zoned and classified advertising. Classified recruitment advertising
Score! were about equal compared to 2004, while there was a drop in revenue was up 6% to $79.3 million in 2005, from $74.8 million in
operating income. There were 168 Score! centers at the end of 2004.
December 2005, compared to 162 at the end of December 2004.
Circulation revenue at The Post was down 2% for 2005 due to
Higher education includes all of Kaplan's post-secondary education declining circulation and one less week in fiscal 2005 compared to
businesses, including fixed-facility colleges as well as online post- fiscal 2004. Daily circulation at The Post declined 4.3% and
secondary and career programs. In May 2005, Kaplan acquired Sunday circulation declined 4.1% in 2005; average daily circula-
Singapore-based Asia Pacific Management Institute (APMI), a tion totaled 694,100 (unaudited) and average Sunday circulation
private education provider for undergraduate and postgraduate totaled 969,000 (unaudited).
students in Asia. Excluding revenue from acquired businesses, higher
education revenues grew by 23% in 2005. Higher education During 2005, revenues generated by the Company's online pub-
enrollments increased by 21% to 70,900 at December 31, 2005, lishing activities (including Slate, which was acquired in January
compared to 58,500 at the end of 2004, with most of the new 2005), primarily washingtonpost.com, increased 29% to
enrollment growth occurring in the online programs. Increased $80.2 million, from $62.0 million in 2004. Local and national
operating costs associated with expansion activities at both the online advertising revenues grew 49%, partly due to Slate. Online
online and the fixed-facility operations, including new program classified advertising revenue on washingtonpost.com increased
offerings and higher facility and advertising expenses, contributed 22%.
significantly to the year-to-date declines in operating income. Television Broadcasting Division. Revenue for the television
Corporate overhead represents unallocated expenses of Kaplan, broadcasting division declined 8% to $331.8 million in 2005, from
Inc.'s corporate office. $361.7 million in 2004, due to strong 2004 revenues that included
$34.3 million in political advertising and $8.0 million in incremental
Other includes charges for incentive compensation arising from summer Olympics-related advertising at the Company's NBC
equity awards under the Kaplan stock option plan, which was affiliates.
established for certain members of Kaplan's management (the
general provisions of which are discussed in Note G to the Operating income for 2005 decreased 18% to $142.5 million,
Consolidated Financial Statements). In addition, Other includes from $174.2 million in 2004. The operating income declines are
amortization of certain intangibles. Under the stock-based incentive primarily related to the absence of significant political and Olympics
plan, the amount of compensation expense varies directly with the revenue in 2005, as well as the adverse impact of 2005 hurricanes
estimated fair value of Kaplan's common stock and the number of in Florida and Texas. Operating margin at the broadcast division
stock options and stock awards outstanding. The Company record- was 43% for 2005 and 48% for 2004.
ed total stock compensation expense of $3.0 million in 2005, which Competitive market position remained strong for the Company's
includes a Kaplan award of $4.8 million that was recorded in the television stations. KSAT in San Antonio ranked number one in the
fourth quarter. In 2004, total stock compensation expense was November 2005 ratings period, Monday through Friday, sign-on to
$32.5 million. The decline in the charge for 2005 reflects slower sign-off; WDIV in Detroit and WKMG in Orlando ranked second;
growth in Kaplan's operating results and an overall decline in public WPLG in Miami tied for second among English-language stations in
market values of other education companies. the Miami market; WJXT in Jacksonville ranked third; and KPRC in
Newspaper Publishing Division. At the newspaper publish- Houston ranked fourth.
ing division, 2005 included 52 weeks while 2004 generally includ- Magazine Publishing Division. Revenue for the magazine
ed 53 weeks. Newspaper publishing division revenue in 2005 publishing division totaled $344.9 million for 2005, a 6% decline
increased 2% to $957.1 million, from $938.1 million in 2004.
42 THE WASHINGTON POST COMPANY