Washington Post 2010 Annual Report Download - page 83

THE WASHINGTON POST COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. ORGANIZATION AND NATURE OF OPERATIONS
The Washington Post Company, Inc. (the “Company”) is a
diversified education and media company. The Company’s Kaplan
subsidiary provides a wide variety of educational services, both
domestically and outside the United States. The Company’s media
operations consist of the ownership and operation of cable
television systems, newspaper publishing (principally The
Washington Post), and television broadcasting (through the
ownership and operation of six television broadcast stations).
The Company announced on August 2, 2010, that it had entered
into an agreement to sell Newsweek. On September 30, 2010,
the Company completed such sale. The operating results of
Newsweek have been presented in loss from discontinued
operations, net of tax, for all periods presented.
Education—Kaplan, Inc. provides an extensive range of
educational services for children, students and professionals.
Kaplan’s various businesses comprise four categories: Higher
Education, Test Preparation, Kaplan International and Kaplan
Ventures.
Media—The Company’s diversified media operations consist of
cable television operations, newspaper publishing and television
broadcasting.
Cable television operations: Cable ONE provides cable services
that include basic video, digital video, high-speed data and
telephone service in the midwestern, western and southern states of
the United States.
Newspaper publishing: Washington Post Media publishes The
Washington Post (“the Post”), which is the largest and most widely
circulated morning daily and Sunday newspaper, primarily
distributed by home delivery in the Washington, DC, metropolitan
area (including large portions of Maryland and northern Virginia).
Washington Post Media also produces washingtonpost.com, an
Internet site that features news and information products, as well as
the full editorial content of The Washington Post. Through the
Company’s other newspaper publishing businesses, the Company
also publishes weekly publications and tabloids distributed within
the Washington, DC, metropolitan area and elsewhere, and
produces other websites and online magazines.
Television broadcasting: The Company owns six VHF television
stations located in Houston, TX; Detroit, MI; Miami, FL; Orlando, FL;
San Antonio, TX; and Jacksonville, FL. Other than the Company’s
Jacksonville station, WJXT, the Company’s television stations are
affiliated with one of the major national networks.
B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Fiscal Year—The Company reports on a 52 to 53-week fiscal year
ending on the Sunday nearest December 31. Fiscal year 2010,
which ended on January 2, 2011, included 52 weeks. The fiscal
years 2009 and 2008, which ended on January 3, 2010, and
December 28, 2008, respectively, included 53 and 52 weeks,
respectively. With the exception of most of the newspaper print
publishing operations and corporate office, subsidiaries of the
Company report on a calendar-year basis.
Basis of Presentation and Principles of Consolidation—The
accompanying Consolidated Financial Statements have been
prepared in accordance with generally accepted accounting principles
(“GAAP”) in the United States and include the assets, liabilities, results
of operations and cash flows of the Company and its majority-owned
and controlled subsidiaries. All significant intercompany accounts and
transactions have been eliminated in consolidation.
Reclassifications—Certain amounts in previously issued financial
statements have been reclassified to conform with the 2010
presentation, which includes the reclassification of the results of
operations of the magazine publishing segment as discontinued
operations for all periods presented.
Use of Estimates—The preparation of financial statements in
conformity with GAAP requires management to make estimates and
judgments that affect the amounts reported in the financial
statements. Management bases its estimates and assumptions on
historical experience and on various other factors that are believed
to be reasonable under the circumstances. Due to the inherent
uncertainty involved in making estimates, actual results reported in
future periods may be affected by changes in those estimates. On
an ongoing basis, the Company evaluates its estimates and
assumptions.
Business Combinations—The purchase price of an acquisition is
allocated to the assets acquired, including intangible assets, and
liabilities assumed, based on their respective fair values at the
acquisition date. Acquisition-related costs are expensed as incurred.
The excess of the cost of an acquired entity over the net of the
amounts assigned to the assets acquired and liabilities assumed is
recognized as goodwill. The net assets and results of operations of
an acquired entity are included in the Company’s Consolidated
Financial Statements from the acquisition date.
Cash and Cash Equivalents—Cash and cash equivalents consist of
cash on hand, short-term investments with original maturities of three
months or less and investments in money market funds with
weighted average maturities of three months or less.
Restricted Cash—Restricted cash represents amounts held for
students that were received from U.S. Federal and state governments
under various aid grant and loan programs, such as Title IV of the
Higher Education Act of 1965, as amended, that the Company is
required to maintain pursuant to U.S. Department of Education (DOE)
and other regulations. Restricted cash also includes certain funds that
the Company may be required to return if a student who receives
Title IV program funds withdraws from a program. Prior-year amounts
have been revised to conform with the 2010 presentation.
Concentration of Credit Risk—Cash and cash equivalents are
maintained with several financial institutions domestically and
internationally. Deposits held with banks may exceed the amount of
insurance provided on such deposits. Generally, these deposits may
be redeemed upon demand and are maintained with financial
institutions with investment grade credit ratings. The Company
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