Washington Post 2010 Annual Report Download - page 104

expected to be largely completed by the end of 2011, and the
Company estimates that an additional $10.0 million in costs will be
incurred. Also in 2010, KHE recorded $9.3 million in severance
costs associated with a workforce reduction. In the fourth quarter of
2010, certain Kaplan operations moved to the former Newsweek
headquarters facility. In connection with this move, $11.5 million in
lease termination and other charges were recorded by the
Company’s corporate office.
In March 2009, the Company approved a plan to close its Score
tutoring centers. The Company recorded charges of $24.9 million
in asset write-downs, lease terminations, severance and accelerated
depreciation of fixed assets in the first half of 2009.
Restructuring-related expenses of $8.3 million and $11.0 million
were recorded in 2009 and 2008, respectively, at Kaplan’s
professional domestic training business (part of Test Preparation
division).
In the third quarter of 2009, KHE modified its method of recog-
nizing revenue ratably over the period of instruction as services are
delivered to students from a weekly convention to a daily
convention, on a prospective basis. If KHE’s revenue recognition
convention had been on a daily convention in prior periods,
revenues and operating income in the first quarter of 2009 would
have increased by $7.0 million and $6.5 million, respectively, and
revenues and operating income in the fourth quarter of 2008 would
have decreased by $7.8 million and $7.3 million, respectively. The
Company concluded that the impact of this change was not
material to the Company’s financial position or results of operations
for 2009 and 2008 and the related interim periods, based on its
consideration of quantitative and qualitative factors.
Cable television operations consist of cable systems offering video,
Internet, phone 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 the Company’s electronic media publishing business
(primarily washingtonpost.com and Slate). Revenues from news-
paper publishing operations are derived from advertising and, to a
lesser extent, from circulation.
Television broadcasting operations are conducted through six VHF
television stations serving the Detroit, Houston, Miami, San Antonio,
Orlando and Jacksonville television markets. All stations are network-
affiliated (except for WJXT in Jacksonville), with revenues derived
primarily from sales of advertising time.
Other businesses include the operating results of Avenue100 Media
Solutions and other small businesses. Previously, these businesses
were combined with the Corporate office in the Other businesses
and corporate office division. Segment operating results are now
reported separately for Other businesses and Corporate office and
results for fiscal years 2009 and 2008 have been restated to reflect
these changes.
Corporate office includes the expenses of the Company’s corporate
office and the pension credit previously reported in the magazine
publishing division.
Due to the sale of Newsweek, the magazine publishing division is no
longer included as a separate segment as its results have been
reclassified to discontinued operations. Newsweek employees were
participants in The Washington Post Company Retirement Plan, and
Newsweek was historically allocated a net pension credit for segment
reporting purposes. Since the associated pension assets and liabilities
were retained by the Company, the associated credit has been
excluded from the reclassification of Newsweek results to
discontinued operations. Pension cost arising from early retirement
programs at Newsweek, however, is included in discontinued
operations. The net pension credit of $35.4 million, $34.6 million
and $41.7 million is included with operating results for the Corporate
office for the fiscal years 2010, 2009 and 2008, respectively.
The Company’s foreign revenues in 2010, 2009 and 2008 totaled
approximately $540 million, $505 million and $528 million,
respectively, principally from Kaplan’s foreign operations. The
Company’s long-lived assets in foreign countries (excluding goodwill
and other intangible assets), principally in the United Kingdom,
totaled approximately $57 million at January 2, 2011, and
$58 million at January 3, 2010.
In computing income from operations by segment, the effects of equity
in losses of affiliates, interest income, interest expense, other
non-operating income and expense items and income taxes are not
included.
Identifiable assets by segment are those assets used in the
Company’s operations in each business segment. Investments in
marketable equity securities are discussed in Note F.
88 THE WASHINGTON POST COMPANY