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K. GOODWILL AND OTHER INTANGIBLE ASSETS Activity related to the Company's goodwill and intangible assets
during 2006 was as follows (in thousands):
The Company adopted Statement of Financial Accounting Standards
No. 142 (SFAS 142), ""Goodwill and Other Intangible Assets,'' Television
Newspaper Broad- Magazine Cable
effective on the first day of its 2002 fiscal year. As a result of the
Education Publishing casting Publishing Television Total
adoption of SFAS 142, the Company ceased most of the periodic
Goodwill, Net
charges previously recorded from the amortization of goodwill and
Beginning of year ÏÏÏÏÏÏÏÏÏ $686,532 $80,651 $203,165 $ 69,556 $ 85,666 $1,125,570
other intangibles.
AcquisitionsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 133,340 133,340
Foreign currency
exchange rate ÏÏÏÏÏÏÏÏÏÏ 25,882 25,882
The Company's intangible assets with an indefinite life are principal-
Impairment charge ÏÏÏÏÏÏÏÏ (9,864) (9,864)
ly from franchise agreements at its cable division, as the Company
DispositionÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (34,677) (34,677)
expects its cable franchise agreements to provide the Company
End of year ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $845,754 $80,651 $203,165 $ 25,015 $ 85,666 $1,240,251
Indefinite-Lived
with substantial benefit for a period that extends beyond the
Intangible Assets,
foreseeable horizon, and the Company's cable division historically
Net
Beginning of year ÏÏÏÏÏÏÏÏÏ $ 8,362 $486,330 $ 494,692
has obtained renewals and extensions of such agreements for
AcquisitionsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9 00 22,150 23,050
nominal costs and without any material modifications to the agree-
End of year ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 9,262 $508,480 $ 517,742
ments. Amortized intangible assets are primarily mastheads, custom-
Amortized Intangible
er relationship intangibles and non-compete agreements, with amor-
Assets, Net
Beginning of year ÏÏÏÏÏÏÏÏÏ $ 14,428 $ 6,676 $ 1,710 $ 22,814
tization periods up to 10 years. Amortization expense was $7 mil-
AcquisitionsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 15,545 15,545
lion in 2006 and is estimated to be approximately $7 million in each
Foreign currency
exchange rate ÏÏÏÏÏÏÏÏÏÏ 483 483
of the next five years.
Amortization ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (5,186) (1,168) (689) (7,043)
End of year ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 25,2 70 $ 5,508 $ 1,021 $ 31,799
In the third quarter of 2006, as a result of a challenging advertising
environment, the Company completed a review of the carrying Activity related to the Company's goodwill and intangible assets
value of goodwill at PostNewsweek Tech Media, which was part of during 2005 was as follows (in thousands):
the magazine publishing division. As a result of this review, the
Company recorded an impairment charge of $9.9 million to write- Television
Newspaper Broad- Magazine Cable
down PostNewsweek Tech Media's goodwill to its estimated fair Education Publishing casting Publishing Television Total
value utilizing a discounted cash flow model. The Company subse-
Goodwill, Net
Beginning of year ÏÏÏÏÏÏÏÏÏ $591,983 $72,770 $203,165 $69,556 $ 85,666 $1,023,140
quently sold PostNewsweek Tech Media in December 2006.
Acquisitions ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 111,623 7,881 119,504
Foreign currency
The Company's goodwill and other intangible assets as of Decem-
exchange rateÏÏÏÏÏÏÏÏÏÏÏ (17,074) (17,074)
End of year ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $686,532 $80,651 $203,165 $69,556 $ 85,666 $1,125,570
ber 31, 2006 and January 1, 2006 were as follows (in thousands):
Indefinite-Lived
Intangible Assets,
Accumulated
Net
Gross Amortization Net
Beginning of year ÏÏÏÏÏÏÏÏÏ $ 6,862 $486,330 $ 493,192
Acquisitions ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,500 1,500
2006:
End of year ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 8,362 $486,330 $ 494,692
Goodwill ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $1,538,653 $298,402 $1,240,251
Amortized Intangible
Indefinite-lived intangible assets ÏÏÏ 681,548 163,806 517,742
Assets, Net
Amortized intangible assets ÏÏÏÏÏÏÏÏÏ 58,454 26,655 31,799
Beginning of year ÏÏÏÏÏÏÏÏÏ $ 5,287 $ 118 $ 2,474 $ 7,879
$2,278,655 $488,863 $1,789,792
Acquisitions ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 14,989 7,677 22,666
Foreign currency
2005:
exchange rateÏÏÏÏÏÏÏÏÏÏÏ (253) (253)
Goodwill ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 1,423,972 $ 298,402 $ 1,125,570
Amortization ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (5,595) (1,119) (764) (7,478)
Indefinite-lived intangible assetsÏÏÏÏÏÏÏÏÏÏÏ 658,498 163,806 494,692
End of year ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 14,428 $ 6,676 $ 1,710 $ 22,814
Amortized intangible assetsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 42,434 19,620 22,814
$ 2,124,904 $ 481,828 $ 1,643,076
L. OTHER NON-OPERATING INCOME (EXPENSE)
The Company recorded other non-operating income, net, of
$73.5 million in 2006, $9.0 million in 2005 and $8.1 million in
2004. The 2006 non-operating income, net, comprises a
$43.2 million pre-tax gain from the sale of the Company's 49%
interest in BrassRing, a $33.8 million pre-tax gain from the sale of
marketable equity securities and foreign currency gains of
$11.9 million, offset by $15.1 million of write-downs on
investments.
2006 FORM 10-K 65