Washington Post 2011 Annual Report Download - page 92

this plan, respectively. Information related to stock options
outstanding and exercisable at December 31, 2011 is as follows:
Options Outstanding Options Exercisable
Range of
Exercise
Prices
Shares
Outstanding
at
12/31/2011
Weighted
Average
Remaining
Contractual
Life (yrs.)
Weighted
Average
Exercise
Price
Shares
Exercisable
at
12/31/2011
Weighted
Average
Remaining
Contractual
Life (yrs.)
Weighted
Average
Exercise
Price
$343–396 .... 36,250 8.4 $385.62 14,938 7.8 $380.08
419–439 .... 23,294 8.0 423.25 11,647 8.0 423.25
503 .... 50,000 10.0 502.58 —— —
652 .... 2,000 7.0 651.91 1,500 7.0 651.91
729–763 .... 13,000 3.4 731.94 13,000 3.4 731.94
816 .... 1,500 2.0 816.05 1,500 2.0 816.05
954 .... 3,000 3.0 953.50 3,000 3.0 953.50
129,044 8.2 $494.95 45,585 6.1 $552.49
At December 31, 2011, the intrinsic value for all options outstanding,
exercisable and unvested was $0.1 million, $0.1 million and $0.1
million, respectively. The intrinsic value of a stock option is the amount by
which the market value of the underlying stock exceeds the exercise price
of the option. The market value of the Company’s stock was $376.81 at
December 31, 2011. At December 31, 2011, there were 83,459
unvested options related to this plan with an average exercise price of
$463.53 and a weighted average remaining contractual term of
9.4 years. At January 2, 2011, there were 47,845 unvested options
with an average exercise price of $407.68.
As of December 31, 2011, total unrecognized stock-based
compensation expense related to this plan was $7.5 million, which is
expected to be recognized on a straight-line basis over a weighted
average period of approximately 1.9 years. There were no options
exercised during 2011, 2010 and 2009.
During 2011, the Company granted 50,000 options at an exercise
price above the fair market value of its common stock at the date of
grant. All other options granted during 2011, and all options granted
during 2010 and 2009, were at 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 granted.
The fair value of options at date of grant was estimated using the Black-
Scholes method utilizing the following assumptions:
2011 2010
Expected life (years) .............. 77
Interest rate ..................... 1.49%–2.85% 2.51%
Volatility ....................... 30.35%–31.24% 30.19%
Dividend yield .................. 2.11%–2.74% 2.27%
The Company also maintains a stock option plan at Kaplan. Under the
provisions of this plan, options were issued with an exercise price equal
to the estimated fair value of Kaplan’s common stock, and options vested
ratably over the number of years specified (generally four to five years) at
the time of the grant. Upon exercise, an option holder may receive
Kaplan shares or cash equal to the difference between the exercise price
and the then fair value.
In December 2011, a Kaplan senior manager exercised 2,000 Kaplan
stock options at an option price of $652 per option. At December 31,
2011, this individual holds 3,750 Kaplan restricted shares, as well as
3,456 Kaplan restricted shares issued in 2009 and 2010 that vest over
a three-year period. The fair value of Kaplan’s common stock is
determined by the Company’s compensation committee of the Board of
Directors, and in January 2012, the committee set the fair value price at
$1,165 per share. No options were awarded during 2011, 2010 or
2009, no options were exercised during 2010 or 2009 and there are
no options outstanding at December 31, 2011.
Kaplan recorded a stock compensation credit of $1.3 million and
$1.2 million in 2011 and 2010, respectively, compared to stock
compensation expense of $0.9 million in 2009. At December 31,
2011, the Company’s accrual balance related to Kaplan stock-
based compensation totaled $8.1 million. There were no payouts in
2011, 2010 or 2009. The total intrinsic value of options exercised
during 2011 was $1.0 million.
Earnings Per Share. The Company’s earnings per share from
continuing operations (basic and diluted) for 2011, 2010 and
2009 are presented below:
Fiscal Year Ended
(in thousands, except
per share amounts) December 31, 2011 January 2, 2011 January 3, 2010
Income from continuing
operations attributable to
The Washington Post
Company common
stockholders ............. $120,404 $319,289$156,853
Less: Amount attributable to
participating securities ...... (1,211) (1,970) (1,075)
Basic income from continuing
operations attributable to
The Washington Post
Company common
stockholders ............. $119,193 $317,319$155,778
Plus: Amount attributable to
participating securities ...... 1,211 1,970 1,075
Diluted income from continuing
operations attributable to
The Washington Post
Company common
stockholders ............. $120,404 $319,289$156,853
Basic weighted average
shares outstanding ........ 7,826 8,869 9,332
Effect of dilutive shares
Stock options and
restricted stock ......... 79 62 60
Diluted weighted average
shares outstanding ........ 7,905 8,931 9,392
Income per share from continuing
operations attributable to The
Washington Post Company
common stockholders:
Basic .................... $ 15.23 $ 35.77$ 16.70
Diluted ................... $ 15.23 $ 35.75$ 16.70
The 2011, 2010 and 2009 diluted earnings per share amounts
exclude the effects of 115,294, 30,225 and 74,569 stock
options outstanding, respectively, as their inclusion would have
been antidilutive.
In 2011, 2010 and 2009, the Company declared regular dividends
totaling $9.40, $9.00 and $8.60 per share, respectively.
13. PENSIONS AND OTHER POSTRETIREMENT PLANS
The Company maintains various pension and incentive savings
plans and contributes to several multiemployer plans on behalf of
80 THE WASHINGTON POST COMPANY