Washington Post 2008 Annual Report Download - page 64

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Goodwill and Other Intangible Assets. The Company has a
significant amount of goodwill and indefinite-lived intangible assets
that are reviewed at least annually, as of November 30, for
possible impairment in accordance with SFAS No. 142, “Goodwill
and Other Intangible Assets.”
(in millions) December 28,
2008 December 30,
2007
Goodwill and indefinite-lived
intangible assets ............ $1,917.1 $2,019.1
Total assets .................. $5,158.4 $6,004.5
Percentage of goodwill and
indefinite-lived intangible assets
to total assets .............. 37% 34%
Goodwill and other intangible assets are considered impaired
when the carrying value of the reporting unit exceeds the fair value
for that reporting unit. An impairment charge is recorded for the
difference between the carrying value and the estimated fair value
of the asset. The Company uses its judgment in assessing whether
assets may have become impaired between annual valuations.
Indicators such as unexpected adverse economic factors,
unanticipated technological change or competitive activities, loss of
key personnel and acts by governments and courts may signal that
an asset has become impaired.
The Company’s impairment review is based on, among other
methods, a discounted cash flow approach that requires significant
management judgments. In the case of the Company’s cable
systems, both a discounted cash flow model and a market approach
employing comparable sales analysis are considered. The Company
must make estimates and assumptions regarding future cash flows,
market values, discount rates reflecting the risk of a market
participant and long-term growth rates to determine a reporting unit’s
estimated fair value. The Company recorded $135.4 million in pre-
tax impairment charges in 2008. Additionally, in 2007 and 2008,
Kaplan implemented restructuring plans at Kaplan Professional (U.S.)
and Score to improve operating results in the future. The outcome of
these restructuring activities could affect the fair value of these
businesses. Changes to the Company’s estimates or related
assumptions in the future may result in additional impairment charges.
Recent Accounting Pronouncements. See Note B to the
Company’s consolidated financial statements for discussion of
recent accounting pronouncements.
52 THE WASHINGTON POST COMPANY