Washington Post 2011 Annual Report Download - page 85

approximately 23% of the common stock of the Company. The
chairman, chief executive officer and largest shareholder of
Berkshire, Mr. Warren Buffet, was a member of the Company’s
Board of Directors until May 2011, at which time Mr. Buffet retired
from the Company’s Board. The Company’s investment in Berkshire
common stock is less than 1% of the consolidated equity of
Berkshire. At December 31, 2011 and January 2, 2011, the
unrealized gain related to the Company’s Berkshire stock investment
totaled $129.1 million and $143.4 million, respectively.
At the end of the first quarter of 2011, the Company’s investment in
Corinthian Colleges, Inc. had been in an unrealized loss position
for over six months. The Company evaluated this investment for
other-than-temporary impairment based on various factors, including
the duration and severity of the unrealized loss, the reason for the
decline in value and the potential recovery period, and the
Company’s ability and intent to hold the investment. In the first
quarter of 2011, the Company concluded the loss was other-than-
temporary and recorded a $30.7 million write-down of the
investment. The investment continued to decline, and in the third
quarter of 2011, the Company recorded an additional $23.1
million write-down of the investment. The Company’s investment in
Corinthian Colleges, Inc. accounted for $16.8 million of the total
fair value of the Company’s investments in marketable equity
securities at December 31, 2011.
There were no new investments or sales of marketable equity securities
in 2011 and 2010. During 2009, the Company invested $10.8
million in the Class B common stock of Berkshire. There were no sales
of marketable equity securities during 2011, 2010 and 2009.
Investments in Affiliates. At the end of 2011, the Company’s
investments in affiliates include a 49% interest in the common stock
of Bowater Mersey Paper Company Limited, which owns and
operates a newsprint mill in Nova Scotia. The Company also holds
a 16.5% interest in Classified Ventures, LLC, which owns and
operates several leading businesses in the online classified
advertising space, and several other investments.
In the third quarter of 2011 and the third quarter of 2009, the
Company recorded impairment charges of $9.2 million and $27.4
million on the Company’s interest in Bowater Mersey Paper
Company, respectively, as a result of the challenging economic
environment for newsprint producers. An additional $1.6 million
impairment loss was recorded in 2009.
5. ACCOUNTS RECEIVABLE, ACCOUNTS PAYABLE AND ACCRUED
LIABILITIES
Accounts receivable at December 31, 2011 and January 2, 2011
consist of the following:
(in thousands) 2011 2010
Trade accounts receivable, less estimated
returns, doubtful accounts and allowances
of $50,225 and $70,181 ........... $375,577 $379,480
Other accounts receivable .............. 17,148 17,544
$392,725 $397,024
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:
(in thousands)
Balance at
Beginning
of Period
Additions –
Charged to
Costs and
Expenses Deductions
Balance
at
End of
Period
Year Ended December 31, 2011
Allowance for
doubtful accounts
and returns ..... $ 67,007 $ 61,327 $ (80,135) $ 48,199
Allowance for
advertising rate
adjustments and
discounts ....... 3,174 11,868 (13,016) 2,026
$ 70,181 $ 73,195 $ (93,151) $ 50,225
Year Ended January 2, 2011
Allowance for
doubtful accounts
and returns ...... $ 98,286 $137,888 $(169,167) $ 67,007
Allowance for
advertising rate
adjustments and
discounts ....... 8,495 12,216 (17,537) 3,174
$106,781 $150,104 $(186,704) $ 70,181
Year Ended January 3, 2010
Allowance for
doubtful accounts
and returns ...... $ 95,425 $168,455 $(165,594) $ 98,286
Allowance for
advertising rate
adjustments and
discounts ....... 9,228 24,208 (24,941) 8,495
$104,653 $192,663 $(190,535) $106,781
The reduced activity for 2011 and 2010 in the table above is
largely due to the sale of Newsweek on September 30, 2010.
Accounts payable and accrued liabilities at December 31, 2011
and January 2, 2011 consist of the following:
(in thousands) 2011 2010
Accounts payable and accrued liabilities . . . $333,282 $430,119
Accrued compensation and related benefits . . 161,759 196,069
$495,041 $626,188
Cash overdrafts of $2.1 million and $26.2 million are included in
accounts payable and accrued liabilities at December 31, 2011
and January 2, 2011, respectively.
6. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment at December 31, 2011 and
January 2, 2011 consist of the following:
(in thousands) 2011 2010
Land ......................... $ 41,093 $ 41,145
Buildings ...................... 350,939 350,051
Machinery, equipment and fixtures . . . 2,479,823 2,401,128
Leasehold improvements ........... 304,421 308,863
Construction in progress ........... 95,173 91,330
3,271,449 3,192,517
Less accumulated depreciation ...... (2,119,059) (1,991,791)
$ 1,152,390 $ 1,200,726
Depreciation expense was $253.4 million, $246.6 million and
$290.6 million in 2011, 2010 and 2009, respectively.
2011 FORM 10-K 73