Washington Post 2007 Annual Report Download - page 45

Download and view the complete annual report

Please find page 45 of the 2007 Washington Post annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 106

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106

Higher Education campuses or enrolled in online programs to be eligible to participate in Title IV programs. The loss of
such authorization would preclude the campuses or online university from offering post-secondary education and
render students ineligible to participate in Title IV programs. Loss of authorization at those state campus locations or, in
states that require it for Kaplan University online, could have a material adverse effect on Kaplan Higher Education’s
business.
• Changes in the Extent to Which Standardized Tests Are Used in the Admissions Process by Colleges or Graduate
Schools
A substantial portion of Kaplan’s operating income is generated by its Test Prep and Admissions operations. The source
of this income is fees charged for courses that prepare students for a broad range of admissions examinations that are
required for admission to colleges and graduate schools. Historically, colleges and graduate schools have required
standardized tests as part of the admissions process. There has been some movement away from this historical reliance
on standardized admissions tests among a small number of colleges that have adopted “test-optional” admissions
policies. Any significant reduction in the use of standardized tests in the college or graduate school admissions process
could have an adverse effect on Kaplan’s operating results.
• Changes in the Extent to Which Licensing and Proficiency Examinations Are Used to Qualify Individuals to Pursue
Certain Careers
A substantial portion of Kaplan Professional’s revenue comes from preparing individuals for licensing or technical
proficiency examinations in various fields. Any significant relaxation or elimination of licensing or technical proficiency
requirements in those fields served by Kaplan’s Professional Division could negatively impact Kaplan’s operating
results.
• Failure to Successfully Assimilate Acquired Businesses
The Company’s Kaplan subsidiary has historically been an active acquirer of businesses that provide educational
services. Consistent with this historical trend, during 2007 Kaplan completed a total of nine acquisitions. Acquisitions
involve various inherent risks and uncertainties, including difficulties in efficiently integrating the service offerings,
accounting and other administrative systems of an acquired business; the challenges of assimilating and retaining key
personnel; the consequences of diverting the attention of senior management from existing operations; the possibility
that an acquired business does not meet or exceed the financial projections that supported the purchase price; and the
possible failure of the due diligence process to identify significant business risks or undisclosed liabilities associated
with the acquired business. A failure to effectively managegrowthandintegrateacquiredbusinessescouldhavea
material adverse effect on Kaplan’s operating results.
• Difficulties of Managing Foreign Operations
Kaplan has operations and investments in a growing number of foreign countries, including Canada, Mexico, the
United Kingdom, Ireland, France, Israel, Australia, New Zealand, Singapore and China. Operating in foreign
countries presents a number of inherent risks, including the difficulties of complying with unfamiliar laws and
regulations, effectively managing and staffing foreign operations, successfully navigating local customs and practices,
preparing for potential political and economic instability and adapting to currency exchange rate fluctuations. The
failure to manage these risks could have a material adverse effect on Kaplan’s operating results.
• Changes in Prevailing Economic Conditions, Particularly in the Specific Geographic Markets Served by the
Company’s Newspaper Publishing and Television Broadcasting Businesses
A significant portion of the Company’s revenues in its publishing and broadcasting businesses comes from advertising.
The demand for advertising is sensitive to the overall level of economic activity, both nationally and locally. A general
decline in economic activity could adversely affect the operating results of the Company’s newspaper and magazine
publishing and television broadcasting businesses.
• Changing Preferences of Readers Or Viewers Away From Traditional Media Outlets
The rates the Company’s publishing and television broadcasting businesses can charge for advertising are directly
related to the number of readers and viewers of its publications and broadcasts. There is tremendous competition for
readers and viewers from other media. The Company’s publishing and television broadcasting businesses will be
adversely affected to the extent individuals decide to obtain news, entertainment, classified listings and local shopping
information from Internet-based or other media to the exclusion of the Company’s publications and broadcasts.
2007 FORM 10-K 29