Washington Post 2012 Annual Report Download - page 83

THE WASHINGTON POST COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. 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).
Education—Kaplan, Inc. provides an extensive range of educational
services for students and professionals. Kaplan’s various businesses
comprise three categories: Higher Education, Test Preparation and
Kaplan International.
Media—The Company’s diversified media operations consist of
cable television operations, newspaper publishing and television
broadcasting.
Cable television. 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 in the Washington,
DC, metropolitan area (including large portions of Maryland and
northern Virginia), primarily distributed by home delivery. 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 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.
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.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Fiscal Year. In 2011, the Company changed its fiscal year
from a 52 to 53-week fiscal year ending on the Sunday nearest
December 31 to a quarterly month end, with the new fiscal year
ending on December 31 of each year. The fiscal years 2012
and 2011, which ended on December 31, 2012 and 2011,
respectively, included approximately 52 weeks. Fiscal year
2010, which ended on January 2, 2011, included 52 weeks.
Subsidiaries of the Company report on a calendar-year basis, with
the exception of most of the newspaper publishing operations,
which report on a 52 to 53-week fiscal year ending on the Sunday
nearest December 31.
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 2012
presentation, which includes the reclassification of the results of
operations of certain businesses 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 govern-
ments under various aid grant and loan programs, such as Title IV
of the U.S. Federal Higher Education Act of 1965 (Higher
Education Act), 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. At December 31,
2012, restricted cash also includes funds required to be held by
higher education institutions in Australia for prepaid tuition.
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
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