Washington Post 2008 Annual Report Download - page 90

Company’s education division schools that participate in Title IV
programs are in material compliance with standards set forth in the
HEA and the Regulations.
O. FAIR VALUE MEASUREMENTS
In accordance with SFAS 157, a fair value measurement is de-
termined based on the assumptions that a market participant would
use in pricing an asset or liability. SFAS 157 also established a
three-tiered hierarchy that draws a distinction between market partic-
ipant assumptions based on (i) observable inputs, such as quoted
prices in active markets (Level 1); (ii) inputs other than quoted prices
in active markets that are observable either directly or indirectly
(Level 2); and (iii) unobservable inputs that require the Company to
use present value and other valuation techniques in the determi-
nation of fair value (Level 3). Financial assets and liabilities are clas-
sified in their entirety based on the lowest level of input that is
significant to the fair value measure. The Company’s assessment of
the significance of a particular input to the fair value measurements
requires judgment and may affect the valuation of the assets and
liabilities being measured and their placement within the fair value
hierarchy.
The Company’s financial assets and liabilities measured at fair
value on a recurring basis as of December 28, 2008 were as
follows:
Fair Value Measurements at
December 28, 2008
(in thousands)
Fair Value at
December 28,
2008
Quoted Prices in
Active Markets
for Identical
Items (Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Assets:
Marketable equity
securities(1) ............ $333.3 $333.3 $ —
Other current investments(2) . . 24.0 23.0 1.0
Total financial assets ....... $357.3 $356.3 $ 1.0
Liabilities: ...............
Deferred compensation plan
liabilities(3) ............ $ 65.9 $ — $65.9
Total financial liabilities ..... $ 65.9 $ — $65.9
(1) The Company’s investments in marketable equity securities are
classified as available-for-sale.
(2) Other current investments includes U.S. Government Securities,
corporate bonds, mutual funds and time deposits (with original
maturities greater than 90 days, but less than one year).
(3) Includes The Washington Post Company Deferred Compensation
Plan and supplemental savings plan benefits under The Washington
Post Company Supplemental Executive Retirement Plan.
For assets that are measured using quoted prices in active markets,
the total fair value is the published market price per unit multiplied
by the number of units held without consideration of transaction
costs. Assets and liabilities that are measured using significant other
observable inputs are primarily valued by reference to quoted prices
of similar assets or liabilities in active markets, adjusted for any
terms specific to that asset or liability.
P. BUSINESS SEGMENTS
Through its subsidiary Kaplan, Inc., the Company provides
educational services for individuals, schools and businesses. The
Company also operates principally in four areas of the media
business: cable television, newspaper publishing, television
broadcasting and magazine publishing.
Kaplan’s businesses include higher education services, comprised of
Kaplan’s domestic and international post-secondary education
businesses, including fixed-facility colleges that offer bachelor’s
degree, associate’s degree and diploma programs primarily in the
fields of healthcare, business and information technology; and
online post-secondary and career programs. Kaplan’s businesses
also include domestic and international test preparation, which
includes Kaplan’s standardized test prep and English-language
course offerings, as well as K12 and Score, which offer multimedia
learning and private tutoring to children and educational resources
to parents. Kaplan’s businesses also include Kaplan Professional,
which provides education and career services to businesspeople
and other professionals, both domestically and internationally. The
education division’s primary segments are higher education, test
prep and professional. Kaplan corporate and other is also included;
other includes Kaplan stock compensation expense and
amortization of certain intangibles.
In 2007, Kaplan announced plans to restructure the Score business.
The Score restructuring included the closing of 75 Score centers and
relocating certain management and terminating certain employees
from closed centers; Score incurred approximately $11.2 million in
expenses in the fourth quarter of 2007 related to lease obligations,
severance and accelerated depreciation of fixed assets. After
closings and consolidations, Score operates 78 centers that focus
on providing computer-assisted instruction and small-group tutoring.
Also in 2007, Kaplan announced plans to restructure Kaplan
Professional (U.S.) that involved product changes and decentral-
ization of certain operations, in addition to employee terminations.
A charge of $6.0 million was recorded in the fourth quarter of
2007 related to the write-off of an integrated software product
under development and severance costs in connection with the
restructuring; an additional $3 million was anticipated to be
incurred in 2008. In the fourth quarter of 2008, Kaplan expanded
the Kaplan Professional (U.S.) restructuring to include additional
operations. Total severance and other restructuring-related expenses
of $11.0 million were recorded in 2008; additional restructuring-
related expenses of $9.0 million are expected to be incurred in
2009.
Cable television operations consist of cable systems offering basic
cable, digital cable, pay television, cable modem, telephony and
other services to subscribers in midwestern, western and southern
states. The principal source of revenue is monthly subscription fees
charged for services.
Newspaper publishing includes the publication of newspapers in
the Washington, DC, area and Everett, WA; newsprint ware-
housing and recycling facilities; and the Company’s electronic
media publishing business (primarily washingtonpost.com).
In March 2008, the Company offered a Voluntary Retirement
Incentive Program to certain employees of The Washington Post
78 THE WASHINGTON POST COMPANY