Washington Post 2007 Annual Report Download - page 90

Multi-employer Pension Plans. Contributions to multi-employer
pension plans, which are generally based on hours worked,
amounted to $1.5 million in 2007, $1.6 million in 2006 and
$2.6 million in 2005.
Savings Plans. The Company recorded expense associated
with retirement benefits provided under incentive savings plans
(primarily 401(k) plans) of approximately $20.7 million in 2007,
$19.4 million in 2006 and $18.3 million in 2005.
K. LEASE AND OTHER COMMITMENTS
The Company leases real property under operating agreements.
Many of the leases contain renewal options and escalation clauses
that require payments of additional rent to the extent of increases in
the related operating costs.
At December 30, 2007, future minimum rental payments under
non-cancelable operating leases approximate the following
(in thousands):
2008 . ............................. $125,526
2009 . ............................. 111,568
2010 . ............................. 98,143
2011 . ............................. 81,400
2012 . ............................. 69,358
Thereafter ............................ 214,206
$700,201
Minimum payments have not been reduced by minimum
sublease rentals of $3.0 milliondueinthefutureundernon-
cancelable subleases.
Rent expense under operating leases included in operating
costs was approximately $138.7 million, $116.9 million and
$113.0 million in 2007, 2006 and 2005, respectively.
Sublease income was approximately $1.9 million,
$1.9 million and $0.8 million in 2007, 2006 and 2005,
respectively.
The Company’s broadcast subsidiaries are parties to certain
agreements that commit them to purchase programming to be
produced in future years. At December 30, 2007, such
commitments amounted to approximately $139.2 million. If
such programs are not produced, the Company’s commitment
would expire without obligation.
L. OTHER NON-OPERATING INCOME (EXPENSE)
The Company recorded other non-operating income, net, of
$10.8 million in 2007, $73.5 million in 2006 and
$9.0 million in 2005. 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.
A summary of non-operating income (expense) for the years
ended December 30, 2007, December 31, 2006 and
January 1, 2006, follows (in millions):
2007 2006 2005
Foreign currency gains (losses), net . . . $8.8 $ 11.9 $ (8.1)
Gain on sales of marketable equity
securities . . ................ 0.4 33.8 12.7
Gain on sale of affiliate . . . ....... —43.2 —
Impairment write-downs on
investments . ................ —(15.1) (1.5)
Gain on sale of non-operating land . . . —— 5.1
Other gains (losses) . . ........... 1.6 (0.3) 0.8
Total . .................... $10.8 $ 73.5 $ 9.0
M. CONTINGENCIES AND LOSSES
Kaplan, Inc., a subsidiary of the Company, is a party to a
previously disclosed class action antitrust lawsuit filed on
April 29, 2005, by purchasers of BAR/BRI bar review
courses in the U.S. District Court for the Central District of
California. On February 2, 2007, the parties filed a
settlement agreement with the court together with documents
setting forth a procedure for class notice. In the fourth quarter of
2006, the Company recorded a charge of $13.0 million
related to an agreement to settle this lawsuit. The court
approved the terms of the settlement on July 9, 2007.
However, certain class members filed an appeal to the case
to the U.S. Court of Appeals for the Ninth Circuit, and that
appeal remains pending. Effectiveness of the settlement is
subject to court approval. On February 6, 2008, Kaplan was
served with a purported class action lawsuit alleging
substantially similar claims as the previously settled lawsuit.
The putative class is said to include all persons who
purchased a bar review course from BAR/BRI in the United
States since 2006 and all potential future purchasers of bar
review courses. The case is pending in the U.S. District Court for
the Central District of California. Kaplan intends to vigorously
defend this lawsuit.
The Company and its subsidiaries are parties to various other
civil lawsuits that have arisen in the ordinary course of their
businesses, including actions for libel and invasion of privacy,
violations of applicable wage and hour laws and claims
involving current and former students at the Company’s
schools. Management does not believe that any litigation
pending against the Company will have a material adverse
effect on its business or financial condition.
The Company’s education division derives a portion of its net
revenues from financial aid received by its students under Title IV
programs administered by the U.S. Department of Education
pursuant to the Federal Higher Education Act of 1965 (HEA), as
amended. In order to participate in Title IV programs, the
Company must comply with complex standards set forth in the
HEA and the regulations promulgated thereunder (the
Regulations). Failure to comply with the requirements of HEA
ortheRegulationscouldresultintherestrictionorlossofthe
ability to participate in Title IV programs and subject the
74 THE WASHINGTON POST COMPANY