Washington Post 2007 Annual Report Download - page 38

leads for the post-secondary education market. CourseAdvisor operates as an independent subsidiary of the
Company.
Bowater Mersey Paper Company
The Company owns 49% of the common stock of Bowater Mersey Paper Company Limited, the majority interest in
which is held by a subsidiary of AbitibiBowater, Inc. Bowater Mersey owns and operates a newsprint mill near Halifax,
Nova Scotia, and also owns extensive woodlands that provide part of the mill’s wood requirements. In 2007, Bowater
Mersey produced about 266,000 tons* of newsprint.
Production and Raw Materials
The Washington Post, Express and El Tiempo Latino are all produced at the printing plants of WP Company in Fairfax
County, VA, and Prince George’s County, MD. The Herald, The Enterprise Newspapers, the SCBJ and La Raza del
Noroeste are produced at The Daily Herald Company’s plant in Everett, WA, while The Gazette Newspapers and
Southern Maryland Newspapers are printed at the commercial printing facilities owned by Post–Newsweek Media,
Inc. (which facilities also produce the division’s military newspapers). Greater Washington Publishing’s periodicals are
produced by independentcontractprinters.The Post has announced plans to close its printing plant located in College
Park, MD, in 2010 after moving two printing presses to its Springfield, VA, plant.
In 2007, The Washington Post, Express and El Tiempo Latino collectively consumed about 152,258 tons* of
newsprint. Such newsprint was purchased from a number of suppliers, including AbitibiBowater, Inc., which supplied
approximately 28% of the 2007 newsprint requirements for these newspapers. Although for many years some of the
newsprint purchased by WP Company from Bowater Incorporated typically was provided by Bowater Mersey Paper
Company Limited (in which, as noted previously, the Company owns an interest), since 1999 none of the newsprint
delivered to WP Company has come from that source. In November 2007, Bowater Incorporated merged with Abitibi-
Consolidated, Inc., which supplied approximately 20% of the 2007 newsprint requirements for The Post newspapers.
The price of newsprint has historically been volatile. During 2007, the RISI East Coast Newsprint Price Index, which
provides monthly single-price estimates based on marketplace surveys of both buyers and sellers, for 30-lb. newsprint
(the kind of newsprint used by The Washington Post and most of the newspapers published by Post–Newsweek Media,
Inc.),ranged(onashort-tonbasis)fromahighof$565pertoninJanuarytoalowof$506pertoninOctober.
(Because of quantity discounts and other factors, the RISI index prices do not necessarily correspond with the prices
actually paid by the Company’s subsidiaries for newsprint.) The Company believes that adequate supplies of newsprint
are available to The Washington Post and the other newspapers published by the Company’s subsidiaries through
contracts with various suppliers. More than 90% of the newsprint consumed by WP Company’s printing plants includes
recycled content. The Company owns 80% of the stock of Capitol Fiber Inc., which handles and sells to recycling
industries old newspapers, paper and other recyclable materials collected in Washington, D.C., Maryland and
northern Virginia.
Newsweek’s domestic edition is produced by two independent contract printers at four separate plants in the United
States; advertising inserts and photo-offset films for the domestic edition are also produced by independent contrac-
tors. The international editions of Newsweek are printed in England, Singapore, the Netherlands, South Africa and
Hong Kong; insertions for The Bulletin were printed in Australia. Since 1997, Newsweek and a subsidiary of Time
Warner have used a jointly owned company based in England to provide and procure production and distribution
services for the Europe, Middle East and Africa edition of Newsweek and the Europe edition of Time. In 2002, this
jointly owned company began providing certain production and distribution services for the Asian editions of these
magazines. Budget Travel is produced by an independent contract printer.
The domestic edition of Newsweek consumed about 26,000 tons of paper in 2007, the bulk of which was purchased
from six major suppliers. The current cost of body paper (the principal paper component of the magazine) is
approximately $1,070 per ton.
In 2007, the operations of The Daily Herald Company and Post–NewsweekMedia,Inc.consumedapproximately
6,400 and 22,000 tons
*
of newsprint, respectively, which were obtained in each case from various suppliers.
Approximately 66% of the newsprint used by The Daily Herald Company and 56% of the newsprint used by
22 THE WASHINGTON POST COMPANY
*All references in this report to newsprint tonnage and prices refer to short tons (2,000 pounds) and not to metric tons (2,204.6 pounds), which are often used in
newsprint quotations.