Washington Post 2011 Annual Report Download - page 100

DOE Program Reviews. The DOE has undertaken program reviews
at various KHE campus locations and at Kaplan University. Six
program reviews were finalized in 2011 with no significant
findings. Currently, there are two pending program reviews,
including Kaplan University. In addition, the Company is awaiting
the DOE’s final report on the program review at KHE’s Broomall,
PA, location. The results of these open reviews and their impact on
Kaplan’s operations are uncertain.
Other. On December 15, 2011, the United Kingdom Border
Agency (UKBA) conducted a compliance review at Kaplan UK’ s
Borough High Street Center in London, England. The review
focused on Kaplan UK’s compliance with regulations regarding Tier
4 students, who are adult students seeking to study in the U.K.
Kaplan UK is fully cooperating with this inquiry and is in the process
of responding to requests for additional information. In cases of
noncompliance, the UKBA has the authority to take a range of
actions to limit, suspend or revoke an institution’s ability to sponsor
foreign students. At this time, Kaplan cannot predict what
determinations the UKBA will make or the ultimate impact of this
review on Kaplan UK.
Additionally, UKBA issued revised immigration rules that became
operational on April 21, 2011. Students from outside the European
Economic Area (EEA) and Switzerland who were issued a
Confirmation of Acceptance for Studies (CAS) after July 4, 2011 will
be given permission to work part-time during their studies only if they
attend an institution which qualifies as a Higher Education Institution
(HEI). Many of the Kaplan UK international students currently work
part-time. Kaplan UK is not in receipt of public funding for the
courses upon which international students study and, therefore, does
not qualify as an HEI. Also, certain Kaplan UK schools have gained,
applied for or are in the process of applying for Highly Trusted
Sponsor status (HTS). Without HTS, these schools cannot issue a
CAS to potential incoming international students starting in April
2012. These new rules have the potential to adversely impact the
number of international students studying at Kaplan UK.
17. FAIR VALUE MEASUREMENTS
Fair value measurements are determined based on the assumptions that
a market participant would use in pricing an asset or liability based on
a three-tiered hierarchy that draws a distinction between market
participant 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 determination of fair value
(Level 3). Financial assets and liabilities are classified 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 were as follows:
(in thousands) Level 1 Level 2 Total
At December 31, 2011
Assets:
Money market investments(1) ....$ — $ 180,136 $ 180,136
Marketable equity securities(2) ... 303,201 — 303,201
Other current investments(3) ..... 15,223 20,250 35,473
Interest rate swap(4) ........... —1414
Total financial assets ........ $ 318,424 $ 200,400 $ 518,824
Liabilities:
Deferred compensation plan
liabilities(5) ................$ — $ 63,403 $ 63,403
7.25% unsecured notes(6) ....... — 460,500 460,500
AUD 50M borrowing(6) ......... — 51,012 51,012
Total financial liabilities .... $—$ 574,915 $ 574,915
At January 2, 2011
Assets:
Money market investments(1) ......$—$308,927 $308,927
Marketable equity securities(2) .... 340,910 —340,910
Other current investments(3) ....... 11,835 21,005 32,840
Total financial assets ...... $352,745 $329,932 $682,677
Liabilities:
Deferred compensation plan
liabilities(5) .................$—$ 69,226 $ 69,226
7.25% unsecured notes(6) ....... —457,200 457,200
Total financial liabilities .......$—$526,426 $526,426
(1) The Company’s money market investments are included in cash, cash
equivalents and restricted cash.
(2) The Company’s investments in marketable equity securities are classified as
available-for-sale.
(3) Includes U.S. Government Securities, corporate bonds, mutual funds and time
deposits (with original maturities greater than 90 days, but less than one year).
(4) Included in deferred charges and other assets. The Company utilized a market
approach model using the notional amount of the interest rate swap multiplied
by the observable inputs of time to maturity and market interest rates.
(5) Includes The Washington Post Company Deferred Compensation Plan and
supplemental savings plan benefits under The Washington Post Company
Supplemental Executive Retirement Plan, which are included in accrued
compensation and related benefits.
(6) See Note 10 for carrying amount of these notes and borrowing.
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.
18. BUSINESS SEGMENTS
Basis of Presentation. The Company’s organizational structure is
based 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