Washington Post 2008 Annual Report Download - page 78

E. ACQUISITIONS AND DISPOSITIONS
The Company completed business acquisitions totaling
approximately $123.5 million in 2008, $296.3 million in 2007
and $143.4 million in 2006. The assets and liabilities of the
companies acquired have been recorded at their estimated fair
values at the date of acquisition; the purchase price allocations
mostly comprised goodwill and other intangibles, and property,
plant and equipment.
During 2008, the Company acquired 10 businesses within its
education and newspaper segments for a total of $93.1 million,
financed with cash and $3.2 million in debt. Kaplan acquired 9
businesses in its higher education, test prep and professional
divisions. These include Kaplan Professional’s acquisition of a
majority interest in Shanghai Kai Bo Education Management
Investment Co., Ltd. (“Kaplan China”), a provider of education in
China that offers preparation courses for entry to U.K. universities,
along with degree and professional training programs at campuses
throughout China. In 2007, Kaplan purchased a 40% interest in
Kaplan China. In the first quarter of 2008, Kaplan exercised an
option to increase its investment in Kaplan China to an 85%
majority interest. The transaction was completed in November
2008, and Kaplan China’s results from the transaction date forward
have been included in the Company’s consolidated financial
statements. The purchase price allocations for these acquisitions
mostly comprised goodwill and other intangible assets.
Also in 2008, the cable television division acquired subscribers
primarily in the Mississippi area, for $15.3 million. The purchase
price allocations for these transactions mostly comprised intangible
assets and property, plant and equipment.
In connection with a 2008 acquisition, additional purchase
consideration of approximately $1.5 million is contingent on the
achievement of certain future operating results and is not included in
the Company’s purchase accounting as of December 28, 2008. In
connection with certain 2007 acquisitions, additional purchase
consideration of approximately $22 million was contingent on the
achievement of certain future operating results; such amounts were
largely funded in escrow in 2007 and were not included in the
Company’s purchase accounting as of December 30, 2007. In
2008, the Company recorded $15.1 million of additional
purchase consideration in connection with the achievement of
certain operating results by one of these acquired companies and
allocated the additional purchase consideration to goodwill. Any
additional purchase consideration related to these acquisitions is
expected to be recorded as goodwill.
In July 2008, the Company announced an agreement with NBC
Universal to acquire WTVJ, the NBC-owned and operated television
station in Miami, FL, for approximately $205 million. The agreement
was subject to approval by the Federal Communications Commission
and required that the transaction close by the end of 2008. The
regulatory approval process was not completed by the end of 2008;
consequently, the agreement expired.
During 2007, the Company acquired 11 businesses within its
education, newspaper, and other businesses and corporate office
segments for a total of $292.0 million, financed with cash and
$2.0 million in debt. Kaplan acquired 9 businesses in its higher
education, test prep and professional divisions, of which the largest
two were Kaplan Professional’s acquisitions of EduNeering
Holdings, Inc., a Princeton, NJ-based provider of knowledge
management solutions for organizations in the pharmaceutical,
medical device, healthcare, energy and manufacturing sectors; and
the education division of Financial Services Institute of Australasia. In
October 2007, the Company acquired the outstanding stock of
CourseAdvisor, Inc., a premier online lead generation provider,
headquartered in Wakefield, MA. Through its search engine
marketing expertise and proprietary technology platform,
CourseAdvisor generates student leads for the post-secondary
education market. CourseAdvisor operates as an independent
subsidiary of the Company. The purchase price allocations for these
acquisitions mostly comprised goodwill and other intangible assets.
Also in 2007, the cable television division acquired subscribers in
the Boise, ID, area for $4.3 million. Most of the purchase price for
this transaction was allocated to indefinite-lived intangible assets
and property, plant and equipment.
In July 2007, the television broadcasting division entered into a
transaction to sell and lease back its current Miami television station
facility; a $9.5 million gain was recorded as a reduction to
expense in the third quarter. An additional $1.9 million deferred
gain is being amortized over the leaseback period. The television
broadcasting division purchased land and is building a new Miami
television station facility that is expected to be completed in 2009.
During 2006, Kaplan acquired 11 businesses in its higher
education, professional and test prep divisions for a total of
$143.4 million. The largest of these included Tribeca, a leading
provider to the Australian financial services sector; SpellRead, the
originator of SpellRead Phonological Auditory Training, a reading
intervention program for struggling students; Aspect Education
Limited, a major provider of English-language instruction in the U.K.,
Ireland, Australia, New Zealand, Canada and the U.S.; and
PMBR, a nationwide provider of test preparation for the Multistate
Bar Exam. Most of the purchase price for the 2006 acquisitions
was allocated to goodwill and other intangible assets.
In December 2006, Cable ONE participated in the FCC’s
Advanced Wireless Service auction and purchased approximately
20 MHz of spectrum, which can be used to provide a variety of
advanced wireless services, in areas that cover more than 85% of
the homes passed by the cable division’s systems. Licenses for this
66 THE WASHINGTON POST COMPANY