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Connection, which was part of Kaplan Ventures, and in September
2010, the Company completed the sale of Newsweek. Consequently,
the Company’s income from continuing operations excludes results
from these businesses, which have been reclassified to discontinued
operations (see Note 3).
8. GOODWILL AND OTHER INTANGIBLE ASSETS
As part of the Company’s annual impairment review, the KTP
reporting unit failed the step one goodwill impairment test, and,
therefore, a step two analysis was performed. As a result of the step
two analysis, the Company recorded a goodwill and other long-
lived asset impairment charge of $111.6 million. The Company
estimated the fair value utilizing a discounted cash flow model,
supported by a market approach. The impairment charge is the
result of a recent slowdown in enrollment growth at KTP, operating
losses for the past three years and other factors. A substantial
portion of the impairment charge is due to the amount of
unrecognized intangible assets identified in the step two analysis.
The education division made several changes to its operating and
reporting structure in the first quarter of 2011 and 2010, changing
the composition of the reporting units within KTP and KHE. The
changes resulted in the reassignment of the assets and liabilities to
the reporting units affected. The goodwill was allocated to the
reporting units affected using the relative fair value approach.
As a result of continued challenges in the lead generation industry,
in both the third quarters of 2011 and 2010, the Company performed
interim reviews of the carrying value of goodwill and other intangible
assets at its online lead generation business. The business failed the step
one goodwill impairment tests and the Company performed a step two
analysis, resulting in an $11.9 million and a $27.5 million goodwill
and other intangible assets impairment charge in the third quarters of
2011 and 2010, respectively. The Company estimated the fair value
utilizing a discounted cash flow model. The impairment charges are
included in “Income (Loss) from Discontinued Operations, Net of Tax” in
the Company’s Consolidated Statements of Operations (see Note 3).
Amortization of intangible assets for the years ended December 31,
2012 and 2011, and January 2, 2011, was $21.0 million,
$22.3 million and $21.6 million, respectively. Amortization of
intangible assets is estimated to be approximately $15 million in
2013, $9 million in 2014, $7 million in 2015, $6 million in
2016, $5 million in 2017 and $4 million thereafter.
78 THE WASHINGTON POST COMPANY