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2011 ANNUAL REPORT

Table of contents

  • Page 1
    2011 annual report

  • Page 2
    revenue by principal operations EDUCATION 58% CABLE TELEVISION 18% NEWSPAPER PUBLISHING 15% TELEVISION BROADCASTING 8% OTHER BUSINESSES 1%

  • Page 3
    ...35.75 1 6.70 1 0.57 30.68 DILUTED EARNINGS PER COMMON SHARE ($) 11 10 09 08 07 14.70 3 1 .04 9.78 6.87 30.1 9 *Computed on a comparable basis, excluding the impact of the adjustment for pensions and other postretirement plans on average common stockholders' equity. 1 THE WASHINGTON POST COMPANY

  • Page 4
    ...of us read and love the print Washington Post newspaper every day when we're at home. The Post team, led by publisher Katharine Weymouth, president Steve Hills and executive editor Marcus Brauchli, has managed the print newspaper business very well. While our circulation continued to decline in 2011...

  • Page 5
    ... Balz, Karen Tumulty and a brilliant cast of young reporters led our campaign coverage. The Post now has a strong top-management team across the board. Meanwhile, the WaPo Labs team created two new products: Trove, a personalized news site, and Washington Post Social Reader, a Facebook app. Trove...

  • Page 6
    ... those who care about fixing our national higher-education problems." Bill Gates called it "persuasive," "truly important" On Kaplan, I'll start with the bad news. Operating income fell from $347 million in 2010 to $89 million in 2011. It won't go up much, if at all, in 2012. We fell that much in...

  • Page 7
    ... great service to customers in its markets. Our profits were pinched by our own strategy. We've taken no rate increases since 2009 to hold market share against satellite and telephone competitors. Our capital expenditures will be high in 2012 and 2013 as we renovate our plant. 5 2011 ANNUAL REPORT

  • Page 8
    ...of excellence. KSAT, in San Antonio, has been number one in its market in news since we acquired it in 1994. Its leader since before we acquired the station, Jim Joslyn, retired last year with loud applause from everyone in The Washington Post Company. Phil Lane already looks like a strong successor...

  • Page 9
    ... last year, repurchasing more than 600,000 shares of our own stock. In 2010 and 2011, we repurchased roughly 18% of our outstanding shares, increasing your ownership by that amount. newspapers and an old Newsweek hand, will retire in May. John, one of my first bosses at The Post Company, has been...

  • Page 10

  • Page 11
    ... (State or other jurisdiction of incorporation or organization) 53-0182885 (I.R.S. Employer Identification No.) 1150 15th St., N.W., Washington, D.C. (Address of principal executive offices) 20071 (Zip Code) Registrant's Telephone Number, Including Area Code: (202) 334-6000 Securities Registered...

  • Page 12
    THE WASHINGTON POST COMPANY 2011 FORM 10-K Item 1. Business ...Education ...Cable Television Operations ...Newspaper Publishing ...Television Broadcasting ...Other Activities ...Production and Raw Materials ...Competition ...Executive Officers ...Employees ...Forward-Looking Statements ...Available ...

  • Page 13
    ... I Item 1. Business. The Washington Post Company (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...

  • Page 14
    ..., KHE provided loans directly to some Kaplan students under its third-party institutional loan program. Lending under Kaplan's institutional loan program totaled approximately 1% of its KHE revenues in 2011. Direct student payments, funds received under various 2 THE WASHINGTON POST COMPANY

  • Page 15
    ... not otherwise limit access to Title IV program funds by students attending the institution. Currently, one KHE OPEID, which had 539 students at the end of 2011, is provisionally certified. In addition, the DOE may fine a school, require a school to repay Title IV program funds, limit or terminate...

  • Page 16
    ... program for current students, and provides career counseling services. However, no assurances can be given that these resources will enable Kaplan's schools to maintain cohort default rates below the thresholds for sanctions. In the fourth quarter of 2010, most programs at Kaplan University and KHE...

  • Page 17
    ...have difficulty repaying their student loans; that the program is at risk of losing eligibility to receive U.S. Federal financial aid; and that transfer options exist, including providing resources to students to research other education options and compare program costs. Should a program fail three...

  • Page 18
    ... available information, management does not believe that any of the Kaplan OPEID units will have a 90/10 ratio over 90% in 2012. However, absent the adoption of the changes mentioned above, and if current trends continue, management estimates that in 2013, 19 of the 6 THE WASHINGTON POST COMPANY

  • Page 19
    ...the DOE will address this problem. Furthermore, the 90/10 rule and schools' inability to limit students' lending will make it more difficult for Kaplan's schools to comply with other important regulatory requirements, such as the cohort default rate regulations and the gainful employment regulations...

  • Page 20
    ..., then Kaplan University could be deemed to lack state authorization and could lose Title IV funding or be required to return federal aid previously disbursed. In addition, the new DOE rules require institutions offering postsecondary education to students through distance education in a state...

  • Page 21
    ... to operate this school. In September 2009, the DOE began a program review of Kaplan University at its offices in Fort Lauderdale, FL. Kaplan University is continuing to respond to all requests for information and is cooperating fully in the review. The reviewers completed their field work and are...

  • Page 22
    ... the exam pass-rate improves. Under the Florida Board of Nursing Rules, a failure to achieve the required NCLEX passage standard in either of the next two calendar years could result in the program losing its license to operate in Florida. On December 21, 2011, Kaplan College's North Hollywood, CA...

  • Page 23
    ... reduced the number of leased properties from 178 to 79 in 2011 and plans to close several more locations in 2012, as existing leases expire. Test Preparation. KTP's pre-college and graduate businesses prepare students for a broad range of college and graduate school admissions examinations...

  • Page 24
    ...Asia Pacific also includes the Kaplan Global Solutions business unit, which continues to develop partnerships with colleges, universities and non-profit corporations and foundations. Kaplan Global Solutions offers its clients an array of research, curriculum, design services and innovative education...

  • Page 25
    ...students. Kaplan VC LLC serves as Kaplan's corporate venture capital arm, identifying and investing in high-growth education technology companies. During 2011, Kaplan Ventures acquired Insight Schools, Inc., a competitor of its Kaplan Virtual Education (KVE) business. Insight Schools provides online...

  • Page 26
    ..., digital video, Internet and digital voice services-currently are exempt from regulation. "Must-Carry" and Retransmission Consent. U.S. Federal law provides that a commercial television broadcast station may, subject to certain limitations, insist on carriage of its signal on cable systems located...

  • Page 27
    ... strategies to enter the market for the delivery of multichannel video programming services. Initially, some telephone companies partnered with DBS operators to resell a DBS service to their telephone customers. Some telephone companies still do this, but other telephone companies have entered into...

  • Page 28
    ... in 2006, are now being adopted for the delivery of two-way broadband digital data and high-speed Internet access services capable of covering large areas. Initially, these services were going to be provided on a fixed basis, delivering access to houses and businesses, but they now are expected to...

  • Page 29
    ..., the FCC ruled that a telephone company's offering of digital subscriber line (DSL) Internet access service and a mobile wireless company's offering of similar wireless broadband service also are "information services." Cable ONE currently offers broadband Internet access service on virtually all...

  • Page 30
    ... requirements governing unsolicited commercial email. Voice Services Voice Over Internet Protocol (VoIP). Cable companies, including Cable ONE and others, offer voice service using VoIP technology, which permits users to make voice calls over broadband communications networks, including the Internet...

  • Page 31
    ... who use the public switched telephone network must provide its customers with the same enhanced 911 (E911) features that traditional telephone and wireless companies are obligated to provide. This requirement was upheld on appeal. The FCC is currently assessing whether additional rules related...

  • Page 32
    ... Sunday newspaper primarily distributed by home delivery in the Washington, DC, metropolitan area, including large portions of Maryland and northern Virginia. The Post's two primary sources of revenue are advertising and subscription fees, which accounted for 63% and 34% of its total revenue in 2011...

  • Page 33
    ...news boxes near Metro stations and in other locations in Washington, DC, and nearby suburbs with heavy daytime sidewalk traffic. A typical edition of Express is 48 to 60 pages and contains short news, entertainment and sports stories, as well as both classified and display advertising. Current daily...

  • Page 34
    ... newspaper that is distributed free of charge in northern Virginia, suburban Maryland and Washington, DC, using sidewalk news boxes and retail locations that provide space for distribution. El Tiempo Latino provides a mix of local, national and international news together with sports and community...

  • Page 35
    ... 1, 2014 Feb. 1, 2013 Expiration Date of Network Agreement Dec. 31, 2016 Dec. 31, 2016 Feb. 29, 2012(c) Apr. 6, 2015 Feb. 29, 2012(c) - Total Commercial Stations in DMA (b) 14 8 13 13 10 7 (a) Source: 2011/2012 DMA Market Rankings, Nielsen Media Research, fall 2011, based on television homes in DMA...

  • Page 36
    ... to provide "local-into-local" service (i.e., to distribute the signals of local television stations to viewers in the local market area). In 2008, the FCC ruled that if a DBS operator carries the signal of any television station in a market in HDTV, it will be required to carry all other local...

  • Page 37
    ... 2008 ownership rules review order, the FCC liberalized its daily newspaper/broadcast cross-ownership rule to presumptively allow newspaper/broadcast combinations in the 20 largest markets, subject to several fairly rigorous economic hardship and public interest criteria. A number of media companies...

  • Page 38
    ... programming delivered over the Internet and on commercial loudness could impose additional costs on the PNS stations that could affect PNS's operations. Political Advertising. The FCC regulates the sale of advertising by PNS's stations to candidates for public office and imposes other restrictions...

  • Page 39
    ... emerging technologies. In addition to working closely with the Company's news websites, the team created and launched two new products in 2011, Washington Post Social Reader (Social Reader) and Trove. Social Reader is a news application on Facebook that enables users to share what they are reading...

  • Page 40
    ... various other advertising media in its service area, including both daily and weekly free-distribution newspapers. The Post competes for readers and advertisers based on the quality of its journalism, the demographics and size of its subscriber base, advertising results, rates and customer service...

  • Page 41
    ... movies and television programming are available free of charge on the websites of the major TV networks, as well as on the advertising-supported website Hulu. Executive Officers The executive officers of the Company, each of whom is elected annually by the Board of Directors, are as follows: Donald...

  • Page 42
    ...of this Annual Report on Form 10-K are each available on the Company's website; printed copies of such documents may be obtained by any stockholder upon written request to the Secretary of the Company at 1150 15th Street, NW, Washington, DC 20071. Item 1A. Risk Factors. The Company faces a number of...

  • Page 43
    ... Available or Loss or Limitation of Eligibility to Receive Such Funds During the Company's 2011 fiscal year, funds provided under the student financial aid programs created under Title IV accounted for approximately $1,110 million of the revenues of the schools in KHE. Any legislative, regulatory...

  • Page 44
    ... U.S. Federal poverty income level relevant for calculating the discretionary income test, changes in the percentage of former students who are current in repayment of their student loans and other factors. To the extent any of these events occur, Kaplan may need to eliminate or limit enrollments in...

  • Page 45
    ...Continue to Do So In the fourth quarter of 2010, KHE phased in a new program, called the Kaplan Commitment. Under this program students of Kaplan University, Kaplan College and other KHE schools enroll in classes for several weeks and assess whether their educational experience meets their needs and...

  • Page 46
    ... states that require it, for Kaplan University online, could have a material adverse effect on KHE's business and operations. Some states have sought to assert jurisdiction over online education institutions that offer education services to residents in the state or to institutions that advertise or...

  • Page 47
    ...participate in the Title IV programs. In addition, new DOE rules currently under judicial review may require institutions offering postsecondary education to students through distance education in a state in which the institution is not physically located or in which it is otherwise subject to state...

  • Page 48
    ... Extent to Which Standardized Tests Are Used in the Admissions Process by Colleges or Graduate Schools Could Reduce Demand for KTP Offerings A substantial portion of Kaplan's revenue is generated by KTP. The source of this income is fees charged for courses that prepare students for a broad range of...

  • Page 49
    ... students, which could negatively impact Kaplan's operating results. • Changing Preferences of Readers or Viewers Away From Traditional Media Outlets The rates that the Company's print publishing and television broadcasting businesses can charge for advertising are directly related to the number...

  • Page 50
    ... total of nine properties: a 30,000-square-foot six-story building located at 131 West 56th Street in New York City, which serves as an education center primarily for international students; a redeveloped 47,410-square-foot four-story brick building in Lincoln, NE, which is used by Kaplan University...

  • Page 51
    ... on the corner of 15th and L Streets, NW, in Washington, DC, adjacent to the Post's office building. This land is leased on a long-term basis to the owner of a multistory office building that was constructed on the site in 1982. WP Company owns a printing plant in Fairfax County, VA, which was built...

  • Page 52
    ...of Business & Medical Careers et al. (unsealed September 2, 2008); and United States of America ex rel. Charles Jajdelski v. Kaplan Higher Education Corp. et al. (unsealed January 6, 2009). On August 17, 2011, the U.S. District Court for the Southern District of Florida issued a series of rulings in...

  • Page 53
    ... Company cannot predict the outcome of this inquiry. On July 20, 2011, Kaplan Higher Education Corporation received a subpoena from the Office of the Attorney General of the State of Delaware. The demand primarily sought information pertaining to Kaplan University's online and KHE Campuses' students...

  • Page 54
    ... a diversified education and media company. Its largest business is Kaplan, Inc., a leading global provider of educational services to individuals, schools and businesses. The graph reflects the investment of $100 on December 31, 2006, in the Company's Class B Common 42 THE WASHINGTON POST COMPANY

  • Page 55
    ... custom peer group index of education companies. COMPARISON OF CUMULATIVE FIVE YEAR TOTAL RETURN $200 $150 $100 $50 $0 2006 2007 2008 2009 2010 2011 The Washington Post Company S&P 500 Index S&P 1500 Publishing Index Peer Group December 31 2006 2007 2008 2009 2010 2011 The Washington...

  • Page 56
    ...rules and forms and is accumulated and communicated to management, including the Chief Executive Officer and Senior Vice President-Finance, in a manner that allows timely decisions regarding required disclosure. Management's Report on Internal Control Over Financial Reporting Management's report set...

  • Page 57
    ... Related Persons, Promoters and Certain Control Persons" and "Controlled Company" in the definitive Proxy Statement for the Company's 2012 Annual Meeting of Stockholders is incorporated herein by reference thereto. Item 14. Principal Accounting Fees and Services. The information contained under the...

  • Page 58
    ...to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on February 29, 2012: Donald E. Graham Chairman of the Board, Chief Executive Officer (Principal Executive Officer) and...

  • Page 59
    ... TO FINANCIAL INFORMATION THE WASHINGTON POST COMPANY Management's Discussion and Analysis of Results of Operations and Financial Condition (Unaudited) ...Financial Statements: Management's Report on Internal Control Over Financial Reporting ...Report of Independent Registered Public Accounting Firm...

  • Page 60
    ... should be read in conjunction with the Consolidated Financial Statements and the notes thereto. OVERVIEW The Washington Post Company is a diversified education and media company, with education as the largest business. Through its subsidiary Kaplan, Inc., the Company provides education services for...

  • Page 61
    ... from acquired businesses, education division revenue declined 16% in 2011. Kaplan reported operating income of $89.4 million for 2011, down from $346.7 million in 2010. In light of recent revenue declines and other business challenges, Kaplan has formulated and implemented restructuring plans at...

  • Page 62
    ... quarter of 2010, KTP began implementing a plan to reorganize its business consistent with the migration of students to Kaplan's online and hybrid test preparation offerings, reducing the number of leased test preparation centers; $10.4 million in costs were incurred, mostly comprised of charges...

  • Page 63
    ... revenue declined 11% in 2011, and online classified advertising revenue decreased 2% in 2011. The revenue declines from print advertising and newspaper online publishing activities were partially offset by increased revenue from new lines of business in 2011. Daily circulation at the Post declined...

  • Page 64
    ... accounted for the increase in education revenue. The increase in advertising revenue is due to increased revenues at the television broadcasting division and increases in newspaper publishing online revenue, offset by declines in print advertising at The Washington Post. The increase in circulation...

  • Page 65
    ... to Kaplan's online and hybrid test preparation offerings. In conjunction with this plan, in the fourth quarter of 2010, KTP began to reduce the number of leased test preparation centers and incurred $10.4 million in costs, mostly comprised of charges related to early lease termination and property...

  • Page 66
    ....com and Slate, increased 14% to $114.8 million, from $100.4 million in 2009. Display online advertising revenue grew 18% in 2010, and online classified advertising revenue on washingtonpost.com increased slightly in 2010. Daily circulation at the Post declined 7.5%, and Sunday circulation declined...

  • Page 67
    ...'s digital marketing business that sources leads for academic institutions and recruiting organizations, and other small businesses. In the third quarter of 2010, a goodwill and other intangible assets impairment charge of $27.5 million was recorded at Avenue100 Media Solutions. Corporate Office...

  • Page 68
    ... of the Company's investments in marketable equity securities at December 31, 2011. Common Stock Repurchases and Dividend Rate. During 2011, 2010 and 2009, the Company purchased a total of 644,948, 1,057,940 and 145,040 shares, respectively, of its Class B common stock at a cost of approximately...

  • Page 69
    ..."A3" and the commercial paper rating from "Prime-1" to "Prime-2." The outlook was changed from Rating Under Review to Negative. The Company's current credit ratings are as follows: Moody's Long-term ...Short-term ...A3 Prime-2 Standard & Poor's BBB+ A-2 During 2011 and 2010, the Company had average...

  • Page 70
    ..., Sales Returns and Allowance for Doubtful Accounts. Education tuition revenue is recognized ratably over the period of instruction as services are delivered to students, net of any refunds, corporate discounts, scholarships and employee tuition discounts. Starting in the fourth quarter of 2010...

  • Page 71
    ..., discount rates, long-term growth rates and market values to determine each reporting unit's estimated fair value. The methodology used to estimate the fair value of the Company's reporting units on November 30, 2011, was consistent with the one used during the 2010 annual goodwill impairment test...

  • Page 72
    ... for 2011, 2010 and 2009, respectively. The Company's pension benefit obligation and related costs are actuarially determined and are impacted significantly by the Company's assumptions related to future events, including the discount rate, expected return on plan assets and rate of compensation...

  • Page 73
    ... established against state and non-U.S. income tax benefits recorded may increase or decrease within the next 12 months, based on operating results, the market value of investment holdings or business and tax planning strategies; as a result, the Company is unable to estimate the potential tax...

  • Page 74
    ... or procedures may deteriorate. The Company's management assessed the effectiveness of internal control over financial reporting as of December 31, 2011. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO...

  • Page 75
    ... OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders of The Washington Post Company: In our opinion, the consolidated financial statements referred to under Item 15 (1) on page 45 and listed in the index on page 47 present fairly, in all material respects...

  • Page 76
    ... CONSOLIDATED STATEMENTS OF OPERATIONS Fiscal Year Ended (in thousands, except per share amounts) Operating Revenues Education ...Advertising ...Circulation and subscriber ...Other ...Operating Costs and Expenses Operating ...Selling, general and administrative ...Depreciation of property, plant and...

  • Page 77
    ... income taxes ...Inventories ...Other current assets ...Total Current Assets ...Property, Plant and Equipment, Net ...Investments in Affiliates ...Goodwill, Net ...Indefinite-Lived Intangible Assets, Net ...Amortized Intangible Assets, Net ...Prepaid Pension Cost ...Deferred Charges and Other Assets...

  • Page 78
    ...from sales of businesses, property, plant and equipment and other assets ...Purchases of marketable equity securities and other investments ...Other ...Net cash used in investing activities ... Cash Flows from Financing Activities Common shares repurchased ...Issuance (repayment) of commercial paper...

  • Page 79
    THE WASHINGTON POST COMPANY CONSOLIDATED STATEMENTS OF CHANGES IN COMMON STOCKHOLDERS' EQUITY Cumulative Foreign Currency Translation Adjustment Unrealized Unrealized Gain (Loss) Gain (Loss) on on Pensions and AvailableOther Cash for-Sale Postretirement Flow Securities Plans Hedge $(79,914) (in ...

  • Page 80
    ... 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...

  • Page 81
    ... customers who are eligible for advertising rate adjustments and discounts. Investments in Marketable Equity Securities-The Company's investments in marketable equity securities are classified as available-for-sale and, therefore, are recorded at fair value in the Consolidated Financial Statements...

  • Page 82
    ... fees for video, high-speed Internet and phone services, and from advertising. Cable subscriber revenue is recognized monthly as services are delivered. Advertising revenue is recognized when the commercials or programs are aired. Newspaper publishing and television broadcasting revenues. Media...

  • Page 83
    ... Adopted and Issued Accounting Pronouncements-In October 2009, the Financial Accounting Standards Board (FASB) issued new guidance that modifies the fair value requirement of multiple element revenue arrangements. The new guidance allows the use of the "best estimate of selling price" in addition to...

  • Page 84
    ... of the total fair value of the Company's investments in marketable equity securities at December 31, 2011 and January 2, 2011, respectively. Berkshire is a holding company owning subsidiaries engaged in a number of diverse business activities, the most significant of which consists of property and...

  • Page 85
    ... in 2009. 5. ACCOUNTS RECEIVABLE, ACCOUNTS PAYABLE AND ACCRUED LIABILITIES The changes in allowance for doubtful accounts and returns and allowance for advertising rate adjustments and discounts during 2011, 2010 and 2009 were as follows: Additions - Balance at Charged to Beginning Costs and...

  • Page 86
    ... purchase price allocations mostly comprised goodwill, other intangible assets, and property, plant and equipment. Kaplan completed the sales of KVE in July 2011 and KCS in October 2011, which were part of Kaplan Ventures and KHE, respectively. In April 2010, Kaplan completed the sale of Education...

  • Page 87
    ...The changes in carrying amount of goodwill at the Company's education division for 2011 and 2010 were as follows: (in thousands) Higher Education Test Preparation Kaplan International Kaplan Ventures Total Balance as of January 3, 2010 Goodwill ...Accumulated impairment losses ...Reallocation, net...

  • Page 88
    ... current year, offset by a change in estimate for 2010. During 2011, 2010 and 2009, in addition to the income tax provision presented above for continuing operations, the Company also recorded tax benefits on discontinued operations. Losses from discontinued operations and gains or losses on sales...

  • Page 89
    ... tax jurisdiction. The statute of limitations has expired on all consolidated U.S. Federal corporate income tax returns filed through 2007, and the Internal Revenue Service is not currently examining any of the post-2007 returns filed by the Company. The Company endeavors to comply with tax laws...

  • Page 90
    ... and $29.0 million during 2011, 2010 and 2009, respectively. At December 31, 2011 and January 2, 2011, the fair value of the Company's 7.25% unsecured notes, based on quoted market At December 31, 2011, the average interest rate on the Company's outstanding commercial paper borrowing was 0.5%. The...

  • Page 91
    ... common stock at a cost of approximately $248.1 million, $404.8 million and $61.0 million, respectively. In September 2011, the Board of Directors increased the authorization to repurchase a total of 750,000 shares of Class B common stock. The Company did not announce a ceiling price or a time limit...

  • Page 92
    ... an exercise price equal to the fair market value of the Company's common stock at the date of grant. The weighted average grant-date fair value of options granted during 2011, 2010, and 2009 was $110.67, $106.70, and $108.92, respectively. Also, in early 2012, an additional 1,000 stock options were...

  • Page 93
    ...pension plans. In connection with the Newsweek sale in 2010, the Company recorded $5.3 million in special termination benefits expense and $2.4 million in prior service cost expense; these amounts are included in discontinued operations. In 2009, 44 Newsweek employees accepted a Voluntary Retirement...

  • Page 94
    ... ...Net periodic benefit for the year ...Early retirement programs expense ...Special termination benefits ...Recognition of prior service cost ...Total (benefit) cost for the year ...Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income Current year actuarial...

  • Page 95
    ..., 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 determination...

  • Page 96
    ... after January 1, 2009, resulting in a $0.7 million curtailment gain. The discount rates utilized for determining the benefit obligation at December 31, 2011 and January 2, 2011 for the postretirement plans were 3.90% and 4.60%, respectively. The assumed health care cost trend rate used in measuring...

  • Page 97
    ... liability. The Company, through The Washington Post and The Daily Herald newspapers, contributed to the CWA/ITU Negotiated Pension Plan (Employer Identification Number - 13-6212879, Plan Number 001) on behalf of mailers, helpers and utility mailers. As of December 31, 2010 and 2009, the CWA...

  • Page 98
    ... to alleged violations of federal incentive compensation regulations and so-called "70 percent rules" and an individual employment claim, and limited the time frame applicable to these claims. Thereafter, the court recommended that the case be transferred back to its 86 THE WASHINGTON POST COMPANY

  • Page 99
    ... Company cannot predict the outcome of this inquiry. On July 20, 2011, Kaplan Higher Education Corporation received a subpoena from the Office of the Attorney General of the State of Delaware. The demand primarily sought information pertaining to Kaplan University's online and KHE Campuses' students...

  • Page 100
    ... on a number of factors that management uses to evaluate, view and run its business operations, which include, but are not limited to, customers, the nature of products and services and use of resources. The business segments disclosed in the Consolidated Financial 88 THE WASHINGTON POST COMPANY

  • Page 101
    ... and southern states. The principal source of revenue is monthly subscription fees charged for services. Newspaper Publishing. Newspaper publishing includes the publication of newspapers in the Washington, DC, area and Everett, WA; newsprint warehousing; and the Company's digital media publishing...

  • Page 102
    ... businesses ...Corporate office ...Identifiable assets Education ...Cable television ...Newspaper publishing ...Television broadcasting ...Other businesses ...Corporate office ...Investments in marketable equity securities ...Investments in affiliates ...Total Assets ... 2011 Fiscal Year Ended 2010...

  • Page 103
    ... Higher education ...Test preparation(1) ...Kaplan international ...Kaplan ventures ...Kaplan corporate and other ...Intersegment elimination ...Depreciation of property, plant and equipment Higher education ...Test preparation ...Kaplan international ...Kaplan ventures ...Kaplan corporate and...

  • Page 104
    ... year ended December 31, 2011 is as follows: (in thousands, except per share amounts) Operating Revenues Education ...Advertising ...Circulation and subscriber ...Other ...Operating Costs and Expenses Operating ...Selling, general and administrative ...Depreciation of property, plant and equipment...

  • Page 105
    ... the year ended January 2, 2011 is as follows: (in thousands, except per share amount) Operating Revenues Education ...Advertising ...Circulation and subscriber ...Other ...Operating Costs and Expenses Operating ...Selling, general and administrative ...Depreciation of property, plant and equipment...

  • Page 106
    ... pension plan at The Washington Post ($11.0 million and $1.6 million in the second and third quarters, respectively) ...Goodwill and other intangible assets impairment charge of $26.3 million at the Company's online lead generation business, included in other businesses ...Charges of $24...

  • Page 107
    ...business; at the Company's community newspapers, The Herald and other operations included in the newspaper publishing segment; and at two of the Company's equity affiliates • charges of $50.1 million ($5.27 per share) related to early retirement program expense at the Post and the corporate office...

  • Page 108
    [THIS PAGE INTENTIONALLY LEFT BLANK] 96 THE WASHINGTON POST COMPANY

  • Page 109
    ... 2012. The Washington Post Company Stock Option Plan as amended and restated effective May 31, 2003 (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 28, 2003).* The Washington Post Company Supplemental Executive Retirement Plan...

  • Page 110
    ... Washington post live WashingtonPostLive.com the capitol Deal TheCapitolDeal.com service alley ServiceAlley.com express ExpressNightOut.com el tiempo latino ElTiempoLatino.com social code llc SocialCode.com other Businesses avenue100 media solutions inc. Avenue100.com Washington post social reader...

  • Page 111
    ... report to shareholders. All of the Company's SEC filings are accessible from the Company's website, washpostco.com. annual MEEtinG The annual meeting of stockholders will be held on May 10, 2012, at 9:00 a.m., at The Washington Post Company, 1150 15th Street, NW, Washington, DC. CoMMon StoCK PriCES...

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    1150 15TH STREET, NW WASHINGTON, DC 20071 (202) 334-6000 WASHPOSTCO.COM