The Washington Post Company (NYSE: WPO) today reported net income
attributable to common shares of $131.2 million ($17.39 per share) for
the fiscal year ended December 31, 2012, compared to $116.2 million
($14.70 per share) for the fiscal year ended December 31, 2011. Net
income includes $83.2 million in income ($11.30 per share) and $28.5
million in losses ($3.60 per share) from discontinued operations for
2012 and 2011, respectively. Income from continuing operations
attributable to common shares was $48.0 million ($6.09 per share) for
2012, compared to $144.7 million ($18.30 per share) for 2011. As a
result of the Company’s share repurchases, there were 6% fewer diluted
average shares outstanding in 2012. For the fourth quarter of 2012, the
Company reported a net loss attributable to common shares of $45.4
million ($6.57 per share), compared to net income of $61.7 million
($8.03 per share) for the same period of 2011. Net income includes $0.3
million ($0.03 per share) in income from discontinued operations for the
fourth quarter of 2011. The Company reported a loss from continuing
operations attributable to common shares of $45.4 million ($6.57 per
share) for the fourth quarter of 2012, compared to income from
continuing operations of $61.4 million ($8.00 per share) for the same
period of 2011.
The results for 2012 and 2011 were affected by a number of significant
items as described in the following paragraphs. Excluding these items,
income from continuing operations attributable to common shares was
$181.0 million ($24.39 per share) for 2012, compared to $206.5 million
($26.08 per share) for 2011. Excluding these items, income from
continuing operations attributable to common shares was $78.8 million
($10.61 per share) for the fourth quarter of 2012, compared to $68.4
million ($8.91 per share) for the fourth quarter of 2011. (Refer to the
Non-GAAP Financial Information schedule attached to this release for
additional details.)
Items included in the Company’s income from continuing operations for
2012 are listed below, and fourth quarter activity, if any, is
highlighted for each item:
-
a fourth quarter $111.6 million noncash goodwill and other long-lived
assets impairment charge at Kaplan Test Preparation (KTP) (after-tax
impact of $81.9 million, or $11.33 per share);
-
$63.7 million in early retirement, severance and other restructuring
charges at the education and newspaper publishing divisions (after-tax
impact of $45.5 million, or $6.18 per share); $41.2 million of these
charges were recorded in the fourth quarter (after-tax impact of $31.1
million, or $4.31 per share);
-
a fourth quarter $18.0 million write-down of a marketable equity
security (after-tax impact of $11.2 million, or $1.54 per share);
-
a $5.8 million gain on the sale of a cost method investment (after-tax
impact of $3.7 million, or $0.48 per share); and
-
$3.1 million in non-operating unrealized foreign currency gains
(after-tax impact of $2.0 million, or $0.27 per share).
Items included in the Company’s income from continuing operations for
2011 are listed below, and fourth quarter activity, if any, is
highlighted for each item:
-
$31.3 million in severance and other restructuring charges at the
education and newspaper publishing divisions (after-tax impact of
$19.4 million, or $2.46 per share); $11.7 million of these charges
were recorded in the fourth quarter (after-tax impact of $7.3 million,
or $0.94 per share);
-
a $9.2 million impairment charge at one of the Company’s affiliates
(after-tax impact of $5.7 million, or $0.72 per share);
-
a $53.8 million write-down of a marketable equity security (after-tax
impact of $34.6 million, or $4.34 per share); and
-
$3.3 million in non-operating unrealized foreign currency losses
(after-tax impact of $2.1 million, or $0.26 per share); $0.4 million
in gains were recorded in the fourth quarter (after-tax impact of $0.3
million, or $0.03 per share).
Revenue for 2012 was $4,017.7 million, down 3% from $4,131.1 million in
2011. Revenues were down at the education and newspaper publishing
divisions, partially offset by increases at the television broadcasting
and cable television divisions. Operating income for 2012 decreased to
$144.5 million, from $325.9 million in 2011. Operating results declined
at all of the Company’s divisions, except for the television
broadcasting division.
For the fourth quarter of 2012, revenue was $1,050.1 million, up 1% from
$1,040.4 million in 2011. The Company reported an operating loss of
$14.4 million in the fourth quarter of 2012, compared to operating
income of $109.3 million in 2011. Revenues and operating results were
down at the education and newspaper publishing divisions, while revenues
and operating income increased at the television broadcasting and cable
television divisions.
Division Results
Education
Education division revenue in 2012 totaled $2,196.5 million, a 9%
decline from $2,404.5 million in 2011. Excluding revenue from acquired
businesses, education division revenue declined 10% in 2012. For the
fourth quarter of 2012, education division revenue totaled $544.4
million, a 6% decline from $580.8 million for the same period of 2011.
Excluding revenue from acquired businesses, education division revenue
declined 7% in the fourth quarter of 2012.
Kaplan reported an operating loss of $105.4 million for 2012, compared
to operating income of $96.3 million in 2011; Kaplan reported an
operating loss for the fourth quarter of 2012 of $111.9 million,
compared to operating income of $30.9 million in the fourth quarter of
2011. Kaplan’s 2012 operating results were adversely impacted by a
significant decline in Kaplan Higher Education (KHE) results; a $111.6
million noncash goodwill and other long-lived assets impairment charge
related to KTP; and $45.2 million in restructuring costs. These were
offset by improved results at KTP and Kaplan International.
In response to student demand levels, Kaplan has formulated and
implemented restructuring plans at its various businesses that have
resulted in significant costs in 2012 and 2011, with the objective of
establishing lower cost levels in future periods. Across all businesses,
restructuring costs totaled $45.2 million in 2012 and $28.9 million in
2011. Restructuring costs totaled $35.9 million in the fourth quarter of
2012 and $9.3 million in the fourth quarter of 2011. (Refer to the
Education Division Information, Summary of Restructuring Charges
schedule attached to this release for additional details.) Kaplan
currently expects to incur approximately $25 million in additional
restructuring costs in 2013 at KHE and Kaplan International in
conjunction with completing these restructuring plans. Kaplan may also
incur additional restructuring charges in 2013 as the Company continues
to evaluate its cost structure.
A summary of Kaplan’s operating results by division, including and
excluding restructuring costs, for 2012 and the fourth quarter of 2012
compared to 2011, is as follows:
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Three Months Ended
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Twelve Months Ended
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December 31,
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December 31,
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(in thousands)
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2012
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2011
|
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% Change
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2012
|
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2011
|
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% Change
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Revenue
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Higher education
|
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$
|
276,459
|
|
|
$
|
323,532
|
|
|
(15
|
)
|
|
$
|
1,149,407
|
|
|
$
|
1,399,583
|
|
|
(18
|
)
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|
Test preparation
|
|
|
60,485
|
|
|
|
66,901
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|
(10
|
)
|
|
|
284,252
|
|
|
|
303,093
|
|
|
(6
|
)
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|
Kaplan international
|
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208,285
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|
|
|
190,821
|
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|
9
|
|
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764,184
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|
|
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704,581
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|
8
|
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Kaplan corporate
|
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1,487
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|
|
1,110
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34
|
|
|
|
4,645
|
|
|
|
4,585
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|
1
|
|
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Intersegment elimination
|
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(2,287
|
)
|
|
|
(1,601
|
)
|
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―
|
|
|
|
(5,992
|
)
|
|
|
(7,383
|
)
|
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―
|
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|
|
|
$
|
544,429
|
|
|
$
|
580,763
|
|
|
(6
|
)
|
|
$
|
2,196,496
|
|
|
$
|
2,404,459
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|
(9
|
)
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Operating Income (Loss)
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|
|
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|
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Restructuring Costs Included in Divisions
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Higher education
|
|
$
|
10,916
|
|
|
$
|
28,025
|
|
|
(61
|
)
|
|
$
|
27,245
|
|
|
$
|
148,915
|
|
|
(82
|
)
|
|
Test preparation
|
|
|
(6,732
|
)
|
|
|
520
|
|
|
―
|
|
|
|
(10,799
|
)
|
|
|
(28,498
|
)
|
|
62
|
|
|
Kaplan international
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15,733
|
|
|
|
22,771
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|
|
(31
|
)
|
|
|
49,069
|
|
|
|
41,506
|
|
|
18
|
|
|
Kaplan corporate
|
|
|
(14,474
|
)
|
|
|
(16,202
|
)
|
|
11
|
|
|
|
(42,617
|
)
|
|
|
(45,100
|
)
|
|
6
|
|
|
Amortization of intangible assets
|
|
|
(6,191
|
)
|
|
|
(4,394
|
)
|
|
(41
|
)
|
|
|
(17,719
|
)
|
|
|
(19,417
|
)
|
|
9
|
|
|
Impairment of goodwill and other long-lived assets
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|
|
(111,593
|
)
|
|
|
―
|
|
|
―
|
|
|
|
(111,593
|
)
|
|
|
―
|
|
|
―
|
|
|
Intersegment elimination
|
|
|
467
|
|
|
|
173
|
|
|
―
|
|
|
|
1,046
|
|
|
|
(1,120
|
)
|
|
―
|
|
|
|
|
$
|
(111,874
|
)
|
|
$
|
30,893
|
|
|
―
|
|
|
$
|
(105,368
|
)
|
|
$
|
96,286
|
|
|
―
|
|
|
Operating Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Restructuring Costs Excluded from Divisions
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Higher education*
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|
$
|
27,860
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|
|
$
|
34,137
|
|
|
(18
|
)
|
|
$
|
50,640
|
|
|
$
|
162,116
|
|
|
(69
|
)
|
|
Test preparation*
|
|
|
(6,732
|
)
|
|
|
1,009
|
|
|
―
|
|
|
|
(10,799
|
)
|
|
|
(15,959
|
)
|
|
32
|
|
|
Kaplan international*
|
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|
30,615
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|
|
|
23,806
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|
29
|
|
|
|
65,511
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|
|
|
42,541
|
|
|
54
|
|
|
Kaplan corporate*
|
|
|
(12,989
|
)
|
|
|
(14,507
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)
|
|
10
|
|
|
|
(39,807
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)
|
|
|
(42,930
|
)
|
|
7
|
|
|
|
|
|
38,754
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|
|
|
44,445
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|
|
(13
|
)
|
|
|
65,545
|
|
|
|
145,768
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|
|
(55
|
)
|
|
Restructuring costs*
|
|
|
(35,906
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)
|
|
|
(9,331
|
)
|
|
―
|
|
|
|
(45,242
|
)
|
|
|
(28,945
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)
|
|
(56
|
)
|
|
Amortization of intangible assets*
|
|
|
(3,596
|
)
|
|
|
(4,394
|
)
|
|
18
|
|
|
|
(15,124
|
)
|
|
|
(19,417
|
)
|
|
22
|
|
|
Impairment of goodwill and other long-lived assets
|
|
|
(111,593
|
)
|
|
|
―
|
|
|
―
|
|
|
|
(111,593
|
)
|
|
|
―
|
|
|
―
|
|
|
Intersegment elimination
|
|
|
467
|
|
|
|
173
|
|
|
―
|
|
|
|
1,046
|
|
|
|
(1,120
|
)
|
|
―
|
|
|
|
|
$
|
(111,874
|
)
|
|
$
|
30,893
|
|
|
―
|
|
|
$
|
(105,368
|
)
|
|
$
|
96,286
|
|
|
―
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Non-GAAP Measure
|
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|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Kaplan sold Kidum in August 2012, EduNeering in April 2012 and Kaplan
Learning Technologies in February 2012. Consequently, the education
division’s operating results exclude these businesses.
KHE includes Kaplan’s domestic postsecondary education businesses, made
up of fixed-facility colleges and online postsecondary and career
programs. KHE also includes the domestic professional training and other
continuing education businesses.
In September 2012, KHE announced a plan to consolidate its market
presence at certain of its fixed-facility campuses. Under this plan, KHE
has ceased new enrollments at nine ground campuses as it considers
alternatives for these locations, and is in the process of consolidating
operations of four other campuses into existing, nearby locations.
Revenues at these campuses represent approximately 4% of KHE’s total
revenues. In the fourth quarter of 2012, KHE also began implementing
plans to consolidate facilities and reduce workforce at its online
programs. In connection with these and other plans, KHE incurred $23.4
million in restructuring costs from accelerated depreciation, and
severance and lease obligations in 2012 ($16.9 million was recorded in
the fourth quarter).
In 2012 and the fourth quarter of 2012, KHE revenue declined 18% and
15%, respectively, due largely to declines in average enrollments that
reflect weaker market demand over the past year. Operating income
decreased 82% and 61% for 2012 and the fourth quarter of 2012,
respectively. These declines were due primarily to lower revenue, a
decline in operating results from campuses planned for closure, and
significant restructuring costs noted above that exceed similar charges
in 2011. Offsetting the declines were expense reductions associated with
lower enrollments and recent restructuring efforts.
New student enrollments at Kaplan University and KHE Campuses decreased
1% in 2012. Total students at December 31, 2012 were down 12% compared
to December 31, 2011, and down 11% compared to September 30, 2012, as
follows:
|
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|
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|
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|
Students as of
|
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|
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|
December 31,
|
|
September 30,
|
|
December 31,
|
|
|
|
|
|
|
2012
|
|
2012
|
|
2011
|
|
Kaplan University
|
|
|
|
|
44,371
|
|
49,132
|
|
50,190
|
|
KHE Campuses
|
|
|
|
|
21,099
|
|
24,129
|
|
24,360
|
|
|
|
|
|
|
65,470
|
|
73,261
|
|
74,550
|
|
|
|
|
|
|
|
|
|
|
|
Kaplan University students included 5,625, 6,822 and 5,799 campus-based
students as of December 31, 2012, September 30, 2012, and December 31,
2011, respectively.
Kaplan University and KHE Campuses enrollments at December 31, 2012 and
2011, by degree and certificate programs, are as follows:
|
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|
|
|
|
|
|
|
|
|
|
As of December 31,
|
|
|
|
|
|
|
2012
|
|
|
2011
|
|
Certificate
|
|
|
|
|
23.2
|
%
|
|
|
23.6
|
%
|
|
Associate’s
|
|
|
|
|
29.1
|
%
|
|
|
30.3
|
%
|
|
Bachelor’s
|
|
|
|
|
33.8
|
%
|
|
|
34.6
|
%
|
|
Master’s
|
|
|
|
|
13.9
|
%
|
|
|
11.5
|
%
|
|
|
|
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
KTP includes Kaplan’s standardized test preparation and tutoring
offerings. KTP revenue declined 6% in 2012 and 10% in the fourth quarter
of 2012. Enrollment increased 5% and 11% for the fourth quarter and
fiscal year 2012, respectively, driven by strength in pre-college,
nursing and bar review programs. Enrollment increases were offset by
competitive pricing pressure and a continued shift in demand to lower
priced online test preparation offerings. The improvement in KTP
operating results in 2012 is largely as a result of lower operating
expenses due to restructuring activities in prior years, including $12.5
million in total KTP restructuring costs recorded in 2011. Fourth
quarter 2012 results declined largely due to revenue reductions from a
slowdown in enrollment growth in the fourth quarter of 2012.
While overall results improved at KTP in 2012, Kaplan recorded a $111.6
million noncash goodwill and other long-lived assets impairment charge
in connection with KTP in the fourth quarter of 2012. This impairment
charge was determined as part of the Company’s annual goodwill and
intangible assets impairment testing based on KTP operating losses for
the past three years and a recent slowdown in enrollment growth. KTP
produced positive cash flow from operations in 2012.
Kaplan International includes English-language programs, and
postsecondary education and professional training businesses outside the
United States. In May 2011, Kaplan Australia acquired Franklyn Scholar
and Carrick Education Group, national providers of vocational training
and higher education in Australia. In June 2011, Kaplan acquired
Structuralia, a provider of e-learning for the engineering and
infrastructure sector in Spain. Kaplan International revenue increased
8% and 9% in 2012 and the fourth quarter of 2012, respectively.
Excluding revenue from acquired businesses, Kaplan International revenue
increased 4% in 2012 due to enrollment growth in the English-language
and Singapore higher education programs. Excluding revenue from acquired
businesses, Kaplan International revenue increased 6% in the fourth
quarter of 2012 due to enrollment growth in the pathways and Singapore
higher education programs.
Kaplan International operating income increased in 2012 due largely to
strong results in Singapore, offset by combined losses from businesses
acquired in 2011. These losses occurred primarily at certain businesses
in Australia where Kaplan has been consolidating and restructuring its
businesses to optimize operations. Restructuring costs at Kaplan
International totaled $16.4 million in 2012 ($14.9 million in the fourth
quarter of 2012). These restructuring costs were largely in Australia
and included lease obligations, accelerated depreciation and severance
charges. The decline in Kaplan International operating income in the
fourth quarter of 2012 is due to these restructuring costs.
Corporate represents unallocated expenses of Kaplan, Inc.’s corporate
office and other minor shared activities.
In the fourth quarter of 2012, $2.6 million in restructuring costs is
included in amortization of intangible assets, largely from accelerated
intangible asset amortization associated with changes to business
operations in Australia.
Cable Television
Cable television division revenue for 2012 increased 4% to $787.1
million, from $760.2 million in 2011; revenue totaled $201.7 million for
the fourth quarter of 2012, a 6% increase from $190.8 million for the
fourth quarter of 2011. The revenue results reflect continued growth of
the division’s Internet and telephone service revenues and rate
increases for many subscribers in June 2012, offset by a decline in
basic video subscribers.
Cable television division operating income in 2012 decreased 1% to
$154.6 million, from $156.8 million in 2011; operating income for the
fourth quarter of 2012 increased 4% to $43.4 million, from $41.9 million
in the fourth quarter of 2011. The cable television division’s operating
income for 2012 declined primarily due to increased programming and
depreciation costs, offset partially by increased revenues. The
division’s operating income for the fourth quarter of 2012 increased
primarily due to higher revenues, offset by increased programming and
depreciation costs.
At December 31, 2012, Primary Service Units (PSUs) were down 1% from the
prior year due to a decline in basic video subscribers, offset by growth
in high-speed data and telephony subscribers. A summary of PSUs is as
follows:
|
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|
|
|
|
|
|
|
|
|
|
As of December 31,
|
|
|
|
|
|
|
2012
|
|
2011
|
|
Basic video
|
|
|
|
|
593,615
|
|
621,423
|
|
High-speed data
|
|
|
|
|
459,235
|
|
451,082
|
|
Telephony
|
|
|
|
|
184,528
|
|
179,989
|
|
|
|
|
|
|
1,237,378
|
|
1,252,494
|
|
|
|
|
|
|
|
|
|
Newspaper Publishing
Newspaper publishing division revenue in 2012 declined 7% to $581.7
million, from $622.5 million in 2011; revenue totaled $162.1 million for
the fourth quarter of 2012, a 6% decrease from $172.1 million for the
fourth quarter of 2011. Print advertising revenue at The Washington Post
in 2012 declined 14% to $228.2 million, from $264.5 million in 2011, and
decreased 12% to $67.5 million for the fourth quarter of 2012, from
$77.1 million for the fourth quarter of 2011. The decline is largely due
to reductions in general and retail advertising. Revenue generated by
the Company’s online publishing activities, primarily washingtonpost.com
and Slate, increased 5% to $110.6 million, from $105.8 million in 2011;
revenue increased 5% to $33.1 million in the fourth quarter of 2012,
versus $31.5 million for the fourth quarter of 2011. Display online
advertising revenue increased 6% in 2012, and 7% for the fourth quarter
of 2012. Online classified advertising revenue decreased 1% in 2012 and
2% for the fourth quarter of 2012.
In 2012, daily circulation at The Washington Post declined 8.6%, and
Sunday circulation declined 6.2%; average daily circulation at The
Washington Post totaled 471,800 and average Sunday circulation totaled
687,200.
The newspaper publishing division reported an operating loss of $53.7
million in 2012, compared to an operating loss of $21.2 million in 2011,
after including pension expense of $42.4 million and $25.3 million,
respectively. For the fourth quarter of 2012, the newspaper division
reported operating income of $2.6 million, compared to operating income
of $6.8 million in the fourth quarter of 2011, after including pension
expense of $9.9 million and $8.1 million, respectively. Included in
pension expense for 2012 was an $8.5 million Voluntary Retirement
Incentive Program (VRIP) for certain employees and a $0.9 million fourth
quarter charge at The Herald in connection with its withdrawal from a
multiemployer pension plan. Included in pension expense in the fourth
quarter of 2011 was a $2.4 million charge at The Herald in connection
with its withdrawal from a multiemployer pension plan. In addition,
voluntary severance and other early retirement expense of $9.0 million
and $4.4 million was recorded at The Washington Post in 2012 and the
fourth quarter of 2012, respectively.
The decline in operating results for 2012 and the fourth quarter of 2012
is primarily due to the revenue reductions discussed above and the
increase in the combined early retirement, severance and multiemployer
pension plan withdrawal expense, offset partially by a decline in other
operating expenses. Newsprint expense was down 10% in 2012 and the
fourth quarter of 2012 due to a decline in newsprint consumption.
In February 2013, the Company announced that it had signed an agreement
to sell The Herald, a daily and Sunday newspaper headquartered in
Everett, WA; the transaction is expected to close in March 2013.
Television Broadcasting
Revenue for the television broadcasting division increased 25% to $399.7
million in 2012, from $319.2 million in 2011; for the fourth quarter of
2012, revenue increased 32% to $116.2 million, from $88.3 million in
2011. Television broadcasting division operating income for 2012
increased 64% to $191.6 million, from $117.1 million in 2011. For the
fourth quarter of 2012, operating income increased 54% to $62.8 million,
from $40.9 million in 2011.
The increase in revenue and operating income for 2012 and the fourth
quarter of 2012 reflects improved advertising demand across many product
categories. These results include a $48.1 million and $25.9 million
increase in political advertising revenue in 2012 and the fourth quarter
of 2012, respectively; $10.8 million in incremental summer
Olympics-related advertising at the Company’s NBC affiliates in the
third quarter of 2012; and increased retransmission revenues.
Other Businesses
Other businesses includes the operating results of Social Code, a
marketing solutions provider helping companies with marketing on
social-media platforms; WaPo Labs, a digital team focused on emerging
technologies and new product development; and Celtic Healthcare, Inc., a
provider of home healthcare and hospice services in the northeastern and
mid-Atlantic regions that was acquired by The Washington Post Company in
November 2012.
Corporate Office
Corporate office includes the expenses of the Company’s corporate office
as well as a net pension credit.
Equity in Earnings (Losses) of Affiliates
The Company holds a 16.5% interest in Classified Ventures, LLC, and
interests in several other affiliates.
In the fourth quarter of 2012, the Company sold its 49% interest in
Bowater Mersey Paper Company for a nominal amount; no gain or loss was
recorded as the investment balance had previously been written-down to
zero.
The Company’s equity in earnings of affiliates, net, for 2012 was $14.1
million, compared to $5.9 million in 2011. For the fourth quarter of
2012, the Company’s equity in earnings of affiliates totaled $2.8
million, compared to $0.6 million for the fourth quarter of 2011. In
2011, a $9.2 million impairment charge was recorded on the Company’s
interest in Bowater Mersey Paper Company.
Other Non-Operating (Expense) Income
The Company recorded other non-operating expense, net, of $5.5 million
in 2012, compared to other non-operating expense, net, of $55.2 million
in 2011. For the fourth quarter of 2012, the Company recorded other
non-operating expense, net, of $17.6 million, compared to other
non-operating income, net, of $1.1 million for the fourth quarter of
2011.
The 2012 non-operating expense, net, included an $18.0 million fourth
quarter write-down of a marketable equity security, offset by $6.6
million in net gains from cost method investments, $3.1 million in
unrealized foreign currency gains and other items. The 2011
non-operating expense, net, included a $53.8 million write-down of a
marketable equity security, $3.3 million in unrealized foreign currency
losses ($0.4 million in unrealized foreign currency gains in the fourth
quarter) and other items.
During 2012, on an overall basis, the fair value of the Company’s
marketable securities appreciated by $32.5 million.
Net Interest Expense and Related Balances
The Company incurred net interest expense of $32.6 million in 2012,
compared to $29.1 million in 2011; net interest expense totaled $8.2
million for the fourth quarter of 2012, versus $7.5 million for the
fourth quarter of 2011. At December 31, 2012, the Company had $696.7
million in borrowings outstanding at an average interest rate of 5.1%,
and cash, marketable securities and other investments of $959.9 million.
At December 31, 2011, the Company had $565.2 million in borrowings
outstanding at an average interest rate of 5.7%, and cash, marketable
securities and other investments of $745.1 million.
Provision for Income Taxes
The effective tax rate for income from continuing operations in 2012 was
59.4%. This effective tax rate was adversely impacted by $12.5 million
in state and non-U.S. valuation allowances provided against deferred
income tax benefits where realization is doubtful, and $12.8 million
from nondeductible goodwill in connection with an impairment charge
recorded in 2012, offset by tax benefits from lower rates at
jurisdictions outside the United States.
The effective tax rate for income from continuing operations in 2011 was
41.2%. This effective tax rate was adversely impacted by $17.8 million
in state and non-U.S. valuation allowances provided against deferred
income tax benefits where realization is doubtful, offset by tax
benefits from lower rates at jurisdictions outside the United States.
Discontinued Operations
Kaplan sold Kidum in August 2012, EduNeering in April 2012 and Kaplan
Learning Technologies in February 2012. The Company also divested its
interest in Avenue100 Media Solutions on July 31, 2012. Consequently,
the Company’s income from continuing operations excludes these
businesses, which have been reclassified to discontinued operations, net
of tax.
The sale of Kaplan Learning Technologies resulted in a pre-tax loss of
$3.1 million, which was recorded in the first quarter of 2012. The sale
of EduNeering resulted in a pre-tax gain of $29.5 million, which was
recorded in the second quarter of 2012. The sale of Kidum resulted in a
pre-tax gain of $3.6 million, which was recorded in the third quarter of
2012.
In connection with each of the sales of the Company’s stock in
EduNeering and Kaplan Learning Technologies, in the first quarter of
2012, the Company recorded $23.2 million of income tax benefits related
to the excess of the outside stock tax basis over the net book value of
the net assets disposed.
In connection with the disposal of Avenue100 Media Solutions, Inc., the
Company recorded a pre-tax loss of $5.7 million in the third quarter of
2012. An income tax benefit of $44.5 million was also recorded in the
third quarter of 2012 as the Company determined that Avenue100 Media
Solutions, Inc. had no value. The income tax benefit is due to the
Company’s tax basis in the stock of Avenue100 exceeding its net book
value as a result of goodwill and other intangible asset impairment
charges recorded in 2008, 2010 and 2011, for which no tax benefit was
previously recorded.
Earnings (Loss) Per Share
The calculation of diluted earnings (loss) per share for 2012 and the
fourth quarter of 2012 were based on 7,403,946 and 7,223,281 weighted
average shares, respectively, compared to 7,904,983 and 7,681,799
weighted average shares, respectively, for 2011 and the fourth quarter
of 2011. In 2012, the Company repurchased 301,231 shares of its Class B
common stock at a cost of $103.2 million. At December 31, 2012, there
were 7,427,501 shares outstanding and the Company had remaining
authorization from the Board of Directors to purchase up to 192,243
shares of Class B common stock.
Forward-Looking Statements
This report contains certain forward-looking statements that are based
largely on the Company’s current expectations. Forward-looking
statements are subject to certain risks and uncertainties that could
cause actual results and achievements to differ materially from those
expressed in the forward-looking statements. For more information about
these forward-looking statements and related risks, please refer to the
section titled “Forward-Looking Statements” in Part I of the Company’s
Annual Report on Form 10-K.
|
|
|
|
|
|
THE WASHINGTON POST COMPANY
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
December 31,
|
|
|
%
|
|
(in thousands, except per share amounts)
|
|
2012
|
|
2011
|
|
|
Change
|
|
Operating revenues
|
|
$
|
1,050,096
|
|
|
$
|
1,040,421
|
|
|
|
1
|
|
|
Operating expenses
|
|
|
(865,438
|
)
|
|
|
(863,184
|
)
|
|
|
0
|
|
|
Depreciation of property, plant and equipment
|
|
|
(79,880
|
)
|
|
|
(62,932
|
)
|
|
|
27
|
|
|
Amortization of intangible assets
|
|
|
(7,610
|
)
|
|
|
(5,042
|
)
|
|
|
51
|
|
|
Impairment of goodwill and other long-lived assets
|
|
|
(111,593
|
)
|
|
|
―
|
|
|
|
―
|
|
|
Operating (loss) income
|
|
|
(14,425
|
)
|
|
|
109,263
|
|
|
|
―
|
|
|
Equity in earnings of affiliates, net
|
|
|
2,785
|
|
|
|
568
|
|
|
|
―
|
|
|
Interest income
|
|
|
901
|
|
|
|
1,174
|
|
|
|
(23
|
)
|
|
Interest expense
|
|
|
(9,064
|
)
|
|
|
(8,638
|
)
|
|
|
5
|
|
|
Other (expense) income, net
|
|
|
(17,572
|
)
|
|
|
1,073
|
|
|
|
―
|
|
|
(Loss) income from continuing operations before income taxes
|
|
|
(37,375
|
)
|
|
|
103,440
|
|
|
|
―
|
|
|
Provision for income taxes
|
|
|
8,000
|
|
|
|
42,000
|
|
|
|
(81
|
)
|
|
(Loss) income from continuing operations
|
|
|
(45,375
|
)
|
|
|
61,440
|
|
|
|
―
|
|
|
Income from discontinued operations, net of tax
|
|
|
―
|
|
|
|
291
|
|
|
|
―
|
|
|
Net (loss) income
|
|
|
(45,375
|
)
|
|
|
61,731
|
|
|
|
―
|
|
|
Net income attributable to noncontrolling interests
|
|
|
(64
|
)
|
|
|
(17
|
)
|
|
|
―
|
|
|
Net (loss) income attributable to The Washington Post Company
|
|
|
(45,439
|
)
|
|
|
61,714
|
|
|
|
―
|
|
|
Redeemable preferred stock dividends
|
|
|
―
|
|
|
|
―
|
|
|
|
―
|
|
|
Net (Loss) Income Attributable to The Washington Post Company
Common Stockholders
|
|
$
|
(45,439
|
)
|
|
$
|
61,714
|
|
|
|
―
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts Attributable to The Washington Post Company Common
Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from continuing operations
|
|
$
|
(45,439
|
)
|
|
$
|
61,423
|
|
|
|
―
|
|
|
Income from discontinued operations, net of tax
|
|
|
―
|
|
|
|
291
|
|
|
|
―
|
|
|
Net (loss) income
|
|
$
|
(45,439
|
)
|
|
$
|
61,714
|
|
|
|
―
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share Information Attributable to The Washington Post
Company Common Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss) income per common share from continuing operations
|
|
$
|
(6.57
|
)
|
|
$
|
8.00
|
|
|
|
―
|
|
|
Basic income per common share from discontinued operations
|
|
|
―
|
|
|
|
0.03
|
|
|
|
―
|
|
|
Basic net (loss) income per common share
|
|
$
|
(6.57
|
)
|
|
$
|
8.03
|
|
|
|
―
|
|
|
Basic average number of common shares outstanding
|
|
|
7,223
|
|
|
|
7,601
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss) income per common share from continuing operations
|
|
$
|
(6.57
|
)
|
|
$
|
8.00
|
|
|
|
―
|
|
|
Diluted income per common share from discontinued operations
|
|
|
―
|
|
|
|
0.03
|
|
|
|
―
|
|
|
Diluted net (loss) income per common share
|
|
$
|
(6.57
|
)
|
|
$
|
8.03
|
|
|
|
―
|
|
|
Diluted average number of common shares outstanding
|
|
|
7,223
|
|
|
|
7,682
|
|
|
|
|
|
|
|
|
|
|
|
|
THE WASHINGTON POST COMPANY
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended
|
|
|
|
|
|
|
|
December 31,
|
|
|
%
|
|
(in thousands, except per share amounts)
|
|
2012
|
|
2011
|
|
|
Change
|
|
Operating revenues
|
|
$
|
4,017,653
|
|
|
$
|
4,131,145
|
|
|
|
(3
|
)
|
|
Operating expenses
|
|
|
(3,471,884
|
)
|
|
|
(3,533,887
|
)
|
|
|
(2
|
)
|
|
Depreciation of property, plant and equipment
|
|
|
(268,643
|
)
|
|
|
(249,065
|
)
|
|
|
8
|
|
|
Amortization of intangible assets
|
|
|
(21,002
|
)
|
|
|
(22,335
|
)
|
|
|
(6
|
)
|
|
Impairment of goodwill and other long-lived assets
|
|
|
(111,593
|
)
|
|
|
―
|
|
|
|
―
|
|
|
Operating income
|
|
|
144,531
|
|
|
|
325,858
|
|
|
|
(56
|
)
|
|
Equity in earnings of affiliates, net
|
|
|
14,086
|
|
|
|
5,949
|
|
|
|
―
|
|
|
Interest income
|
|
|
3,393
|
|
|
|
4,147
|
|
|
|
(18
|
)
|
|
Interest expense
|
|
|
(35,944
|
)
|
|
|
(33,226
|
)
|
|
|
8
|
|
|
Other expense, net
|
|
|
(5,456
|
)
|
|
|
(55,200
|
)
|
|
|
(90
|
)
|
|
Income from continuing operations before income taxes
|
|
|
120,610
|
|
|
|
247,528
|
|
|
|
(51
|
)
|
|
Provision for income taxes
|
|
|
71,600
|
|
|
|
101,900
|
|
|
|
(30
|
)
|
|
Income from continuing operations
|
|
|
49,010
|
|
|
|
145,628
|
|
|
|
(66
|
)
|
|
Income (loss) from discontinued operations, net of tax
|
|
|
83,177
|
|
|
|
(28,471
|
)
|
|
|
―
|
|
|
Net income
|
|
|
132,187
|
|
|
|
117,157
|
|
|
|
13
|
|
|
Net income attributable to noncontrolling interests
|
|
|
(74
|
)
|
|
|
(7
|
)
|
|
|
―
|
|
|
Net income attributable to The Washington Post Company
|
|
|
132,113
|
|
|
|
117,150
|
|
|
|
13
|
|
|
Redeemable preferred stock dividends
|
|
|
(895
|
)
|
|
|
(917
|
)
|
|
|
(2
|
)
|
|
Net Income Attributable to The Washington Post Company Common
Stockholders
|
|
$
|
131,218
|
|
|
$
|
116,233
|
|
|
|
13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts Attributable to The Washington Post Company Common
Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
$
|
48,041
|
|
|
$
|
144,704
|
|
|
|
(67
|
)
|
|
Income (loss) from discontinued operations, net of tax
|
|
|
83,177
|
|
|
|
(28,471
|
)
|
|
|
―
|
|
|
Net income
|
|
$
|
131,218
|
|
|
$
|
116,233
|
|
|
|
13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share Information Attributable to The Washington Post
Company Common Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income per common share from continuing operations
|
|
$
|
6.09
|
|
|
$
|
18.30
|
|
|
|
(67
|
)
|
|
Basic income (loss) per common share from discontinued operations
|
|
|
11.30
|
|
|
|
(3.60
|
)
|
|
|
―
|
|
|
Basic net income per common share
|
|
$
|
17.39
|
|
|
$
|
14.70
|
|
|
|
18
|
|
|
Basic average number of common shares outstanding
|
|
|
7,360
|
|
|
|
7,826
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income per common share from continuing operations
|
|
$
|
6.09
|
|
|
$
|
18.30
|
|
|
|
(67
|
)
|
|
Diluted income (loss) per common share from discontinued operations
|
|
|
11.30
|
|
|
|
(3.60
|
)
|
|
|
―
|
|
|
Diluted net income per common share
|
|
$
|
17.39
|
|
|
$
|
14.70
|
|
|
|
18
|
|
|
Diluted average number of common shares outstanding
|
|
|
7,404
|
|
|
|
7,905
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE WASHINGTON POST COMPANY
|
|
BUSINESS SEGMENT INFORMATION
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
Twelve Months Ended
|
|
|
|
|
|
|
December 31,
|
|
%
|
|
December 31,
|
|
%
|
|
(in thousands)
|
|
2012
|
|
2011
|
|
Change
|
|
2012
|
|
2011
|
|
Change
|
|
Operating Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
|
|
$
|
544,429
|
|
|
$
|
580,763
|
|
|
(6
|
)
|
|
|
$
|
2,196,496
|
|
|
$
|
2,404,459
|
|
|
(9
|
)
|
|
Cable television
|
|
|
201,703
|
|
|
|
190,818
|
|
|
6
|
|
|
|
|
787,117
|
|
|
|
760,221
|
|
|
4
|
|
|
Newspaper publishing
|
|
|
162,136
|
|
|
|
172,121
|
|
|
(6
|
)
|
|
|
|
581,686
|
|
|
|
622,532
|
|
|
(7
|
)
|
|
Television broadcasting
|
|
|
116,192
|
|
|
|
88,253
|
|
|
32
|
|
|
|
|
399,691
|
|
|
|
319,206
|
|
|
25
|
|
|
Other businesses
|
|
|
25,761
|
|
|
|
8,890
|
|
|
―
|
|
|
|
|
53,540
|
|
|
|
25,507
|
|
|
―
|
|
|
Corporate office
|
|
|
―
|
|
|
|
―
|
|
|
―
|
|
|
|
|
―
|
|
|
|
―
|
|
|
―
|
|
|
Intersegment elimination
|
|
|
(125
|
)
|
|
|
(424
|
)
|
|
―
|
|
|
|
|
(877
|
)
|
|
|
(780
|
)
|
|
―
|
|
|
|
|
$
|
1,050,096
|
|
|
$
|
1,040,421
|
|
|
1
|
|
|
|
$
|
4,017,653
|
|
|
$
|
4,131,145
|
|
|
(3
|
)
|
|
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
|
|
$
|
656,303
|
|
|
$
|
549,870
|
|
|
19
|
|
|
|
$
|
2,301,864
|
|
|
$
|
2,308,173
|
|
|
0
|
|
|
Cable television
|
|
|
158,258
|
|
|
|
148,901
|
|
|
6
|
|
|
|
|
632,536
|
|
|
|
603,377
|
|
|
5
|
|
|
Newspaper publishing
|
|
|
159,503
|
|
|
|
165,328
|
|
|
(4
|
)
|
|
|
|
635,388
|
|
|
|
643,736
|
|
|
(1
|
)
|
|
Television broadcasting
|
|
|
53,359
|
|
|
|
47,399
|
|
|
13
|
|
|
|
|
208,049
|
|
|
|
202,117
|
|
|
3
|
|
|
Other businesses
|
|
|
32,339
|
|
|
|
11,954
|
|
|
―
|
|
|
|
|
76,784
|
|
|
|
34,242
|
|
|
―
|
|
|
Corporate office
|
|
|
4,884
|
|
|
|
8,130
|
|
|
(40
|
)
|
|
|
|
19,378
|
|
|
|
14,422
|
|
|
34
|
|
|
Intersegment elimination
|
|
|
(125
|
)
|
|
|
(424
|
)
|
|
―
|
|
|
|
|
(877
|
)
|
|
|
(780
|
)
|
|
―
|
|
|
|
|
$
|
1,064,521
|
|
|
$
|
931,158
|
|
|
14
|
|
|
|
$
|
3,873,122
|
|
|
$
|
3,805,287
|
|
|
2
|
|
|
Operating Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
|
|
$
|
(111,874
|
)
|
|
$
|
30,893
|
|
|
―
|
|
|
|
$
|
(105,368
|
)
|
|
$
|
96,286
|
|
|
―
|
|
|
Cable television
|
|
|
43,445
|
|
|
|
41,917
|
|
|
4
|
|
|
|
|
154,581
|
|
|
|
156,844
|
|
|
(1
|
)
|
|
Newspaper publishing
|
|
|
2,633
|
|
|
|
6,793
|
|
|
(61
|
)
|
|
|
|
(53,702
|
)
|
|
|
(21,204
|
)
|
|
―
|
|
|
Television broadcasting
|
|
|
62,833
|
|
|
|
40,854
|
|
|
54
|
|
|
|
|
191,642
|
|
|
|
117,089
|
|
|
64
|
|
|
Other businesses
|
|
|
(6,578
|
)
|
|
|
(3,064
|
)
|
|
―
|
|
|
|
|
(23,244
|
)
|
|
|
(8,735
|
)
|
|
―
|
|
|
Corporate office
|
|
|
(4,884
|
)
|
|
|
(8,130
|
)
|
|
40
|
|
|
|
|
(19,378
|
)
|
|
|
(14,422
|
)
|
|
(34
|
)
|
|
|
|
$
|
(14,425
|
)
|
|
$
|
109,263
|
|
|
―
|
|
|
|
$
|
144,531
|
|
|
$
|
325,858
|
|
|
(56
|
)
|
|
Depreciation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
|
|
$
|
37,431
|
|
|
$
|
22,100
|
|
|
69
|
|
|
|
$
|
101,183
|
|
|
$
|
83,735
|
|
|
21
|
|
|
Cable television
|
|
|
32,366
|
|
|
|
31,322
|
|
|
3
|
|
|
|
|
129,107
|
|
|
|
126,302
|
|
|
2
|
|
|
Newspaper publishing
|
|
|
6,280
|
|
|
|
6,443
|
|
|
(3
|
)
|
|
|
|
25,072
|
|
|
|
26,336
|
|
|
(5
|
)
|
|
Television broadcasting
|
|
|
3,545
|
|
|
|
3,067
|
|
|
16
|
|
|
|
|
13,018
|
|
|
|
12,448
|
|
|
5
|
|
|
Other businesses
|
|
|
258
|
|
|
|
―
|
|
|
―
|
|
|
|
|
263
|
|
|
|
―
|
|
|
―
|
|
|
Corporate office
|
|
|
―
|
|
|
|
―
|
|
|
―
|
|
|
|
|
―
|
|
|
|
244
|
|
|
―
|
|
|
|
|
$
|
79,880
|
|
|
$
|
62,932
|
|
|
27
|
|
|
|
$
|
268,643
|
|
|
$
|
249,065
|
|
|
8
|
|
|
Amortization of Intangible Assets and Impairment of Goodwill
and Other Long-Lived Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
|
|
$
|
117,784
|
|
|
$
|
4,394
|
|
|
―
|
|
|
|
$
|
129,312
|
|
|
$
|
19,417
|
|
|
―
|
|
|
Cable television
|
|
|
52
|
|
|
|
66
|
|
|
(21
|
)
|
|
|
|
211
|
|
|
|
267
|
|
|
(21
|
)
|
|
Newspaper publishing
|
|
|
149
|
|
|
|
182
|
|
|
(18
|
)
|
|
|
|
654
|
|
|
|
1,051
|
|
|
(38
|
)
|
|
Television broadcasting
|
|
|
―
|
|
|
|
―
|
|
|
―
|
|
|
|
|
―
|
|
|
|
―
|
|
|
―
|
|
|
Other businesses
|
|
|
1,218
|
|
|
|
400
|
|
|
―
|
|
|
|
|
2,418
|
|
|
|
1,600
|
|
|
51
|
|
|
Corporate office
|
|
|
―
|
|
|
|
―
|
|
|
―
|
|
|
|
|
―
|
|
|
|
―
|
|
|
―
|
|
|
|
|
$
|
119,203
|
|
|
$
|
5,042
|
|
|
―
|
|
|
|
$
|
132,595
|
|
|
$
|
22,335
|
|
|
―
|
|
|
Pension Expense (Credit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
|
|
$
|
3,701
|
|
|
$
|
1,486
|
|
|
―
|
|
|
|
$
|
11,584
|
|
|
$
|
6,345
|
|
|
83
|
|
|
Cable television
|
|
|
802
|
|
|
|
454
|
|
|
77
|
|
|
|
|
2,540
|
|
|
|
1,924
|
|
|
32
|
|
|
Newspaper publishing(1) |
|
|
9,882
|
|
|
|
8,057
|
|
|
23
|
|
|
|
|
42,436
|
|
|
|
25,283
|
|
|
68
|
|
|
Television broadcasting
|
|
|
1,523
|
|
|
|
363
|
|
|
―
|
|
|
|
|
4,970
|
|
|
|
1,669
|
|
|
―
|
|
|
Other businesses
|
|
|
22
|
|
|
|
4
|
|
|
―
|
|
|
|
|
60
|
|
|
|
17
|
|
|
―
|
|
|
Corporate office
|
|
|
(8,982
|
)
|
|
|
(9,254
|
)
|
|
(3
|
)
|
|
|
|
(36,197
|
)
|
|
|
(36,983
|
)
|
|
(2
|
)
|
|
|
|
$
|
6,948
|
|
|
$
|
1,110
|
|
|
―
|
|
|
|
$
|
25,393
|
|
|
$
|
(1,745
|
)
|
|
―
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Includes $0.9 million in charges for the fourth quarter and fiscal
year 2012 and $2.4 million in charges for the fourth quarter and
fiscal year 2011 related to the withdrawal from a multiemployer
pension plan.
|
|
|
|
|
|
|
|
|
THE WASHINGTON POST COMPANY
|
|
EDUCATION DIVISION INFORMATION
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
Twelve Months Ended
|
|
|
|
|
|
|
December 31,
|
|
%
|
|
December 31,
|
|
%
|
|
(in thousands)
|
|
2012
|
|
2011
|
|
Change
|
|
2012
|
|
2011
|
|
Change
|
|
Operating Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Higher education
|
|
$
|
276,459
|
|
|
$
|
323,532
|
|
|
(15
|
)
|
|
$
|
1,149,407
|
|
|
$
|
1,399,583
|
|
|
(18
|
)
|
|
Test preparation
|
|
|
60,485
|
|
|
|
66,901
|
|
|
(10
|
)
|
|
|
284,252
|
|
|
|
303,093
|
|
|
(6
|
)
|
|
Kaplan international
|
|
|
208,285
|
|
|
|
190,821
|
|
|
9
|
|
|
|
764,184
|
|
|
|
704,581
|
|
|
8
|
|
|
Kaplan corporate
|
|
|
1,487
|
|
|
|
1,110
|
|
|
34
|
|
|
|
4,645
|
|
|
|
4,585
|
|
|
1
|
|
|
Intersegment elimination
|
|
|
(2,287
|
)
|
|
|
(1,601
|
)
|
|
―
|
|
|
|
(5,992
|
)
|
|
|
(7,383
|
)
|
|
―
|
|
|
|
|
$
|
544,429
|
|
|
$
|
580,763
|
|
|
(6
|
)
|
|
$
|
2,196,496
|
|
|
$
|
2,404,459
|
|
|
(9
|
)
|
|
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Higher education
|
|
$
|
265,543
|
|
|
$
|
295,507
|
|
|
(10
|
)
|
|
$
|
1,122,162
|
|
|
$
|
1,250,668
|
|
|
(10
|
)
|
|
Test preparation
|
|
|
67,217
|
|
|
|
66,381
|
|
|
1
|
|
|
|
295,051
|
|
|
|
331,591
|
|
|
(11
|
)
|
|
Kaplan international
|
|
|
192,552
|
|
|
|
168,050
|
|
|
15
|
|
|
|
715,115
|
|
|
|
663,075
|
|
|
8
|
|
|
Kaplan corporate
|
|
|
15,961
|
|
|
|
17,312
|
|
|
(8
|
)
|
|
|
47,262
|
|
|
|
49,685
|
|
|
(5
|
)
|
|
Amortization of intangible assets
|
|
|
6,191
|
|
|
|
4,394
|
|
|
41
|
|
|
|
17,719
|
|
|
|
19,417
|
|
|
(9
|
)
|
|
Impairment of goodwill and other long-lived assets
|
|
|
111,593
|
|
|
|
―
|
|
|
―
|
|
|
|
111,593
|
|
|
|
―
|
|
|
―
|
|
|
Intersegment elimination
|
|
|
(2,754
|
)
|
|
|
(1,774
|
)
|
|
―
|
|
|
|
(7,038
|
)
|
|
|
(6,263
|
)
|
|
―
|
|
|
|
|
$
|
656,303
|
|
|
$
|
549,870
|
|
|
19
|
|
|
$
|
2,301,864
|
|
|
$
|
2,308,173
|
|
|
0
|
|
|
Operating Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Higher education
|
|
$
|
10,916
|
|
|
$
|
28,025
|
|
|
(61
|
)
|
|
$
|
27,245
|
|
|
$
|
148,915
|
|
|
(82
|
)
|
|
Test preparation
|
|
|
(6,732
|
)
|
|
|
520
|
|
|
―
|
|
|
|
(10,799
|
)
|
|
|
(28,498
|
)
|
|
62
|
|
|
Kaplan international
|
|
|
15,733
|
|
|
|
22,771
|
|
|
(31
|
)
|
|
|
49,069
|
|
|
|
41,506
|
|
|
18
|
|
|
Kaplan corporate
|
|
|
(14,474
|
)
|
|
|
(16,202
|
)
|
|
11
|
|
|
|
(42,617
|
)
|
|
|
(45,100
|
)
|
|
6
|
|
|
Amortization of intangible assets
|
|
|
(6,191
|
)
|
|
|
(4,394
|
)
|
|
(41
|
)
|
|
|
(17,719
|
)
|
|
|
(19,417
|
)
|
|
9
|
|
|
Impairment of goodwill and other long-lived assets
|
|
|
(111,593
|
)
|
|
|
―
|
|
|
―
|
|
|
|
(111,593
|
)
|
|
|
―
|
|
|
―
|
|
|
Intersegment elimination
|
|
|
467
|
|
|
|
173
|
|
|
―
|
|
|
|
1,046
|
|
|
|
(1,120
|
)
|
|
―
|
|
|
|
|
$
|
(111,874
|
)
|
|
$
|
30,893
|
|
|
―
|
|
|
$
|
(105,368
|
)
|
|
$
|
96,286
|
|
|
―
|
|
|
Depreciation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Higher education
|
|
$
|
22,916
|
|
|
$
|
13,416
|
|
|
71
|
|
|
$
|
58,514
|
|
|
$
|
48,379
|
|
|
21
|
|
|
Test preparation
|
|
|
5,410
|
|
|
|
3,799
|
|
|
42
|
|
|
|
19,718
|
|
|
|
15,489
|
|
|
27
|
|
|
Kaplan international
|
|
|
8,660
|
|
|
|
4,350
|
|
|
99
|
|
|
|
21,173
|
|
|
|
16,953
|
|
|
25
|
|
|
Kaplan corporate
|
|
|
445
|
|
|
|
535
|
|
|
(17
|
)
|
|
|
1,778
|
|
|
|
2,914
|
|
|
(39
|
)
|
|
|
|
$
|
37,431
|
|
|
$
|
22,100
|
|
|
69
|
|
|
$
|
101,183
|
|
|
$
|
83,735
|
|
|
21
|
|
|
Pension Expense (Credit):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Higher education
|
|
$
|
2,535
|
|
|
$
|
1,046
|
|
|
―
|
|
|
$
|
7,943
|
|
|
$
|
4,249
|
|
|
87
|
|
|
Test preparation
|
|
|
626
|
|
|
|
322
|
|
|
94
|
|
|
|
2,007
|
|
|
|
1,288
|
|
|
56
|
|
|
Kaplan international
|
|
|
93
|
|
|
|
(58
|
)
|
|
―
|
|
|
|
241
|
|
|
|
167
|
|
|
44
|
|
|
Kaplan corporate
|
|
|
447
|
|
|
|
176
|
|
|
―
|
|
|
|
1,393
|
|
|
|
641
|
|
|
―
|
|
|
|
|
$
|
3,701
|
|
|
$
|
1,486
|
|
|
―
|
|
|
$
|
11,584
|
|
|
$
|
6,345
|
|
|
83
|
|
|
|
|
THE WASHINGTON POST COMPANY
|
|
EDUCATION DIVISION INFORMATION
|
|
SUMMARY OF RESTRUCTURING CHARGES
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease
|
|
|
|
|
|
|
|
|
|
|
|
Accelerated
|
|
Obligation
|
|
Accelerated
|
|
|
|
|
|
(in thousands)
|
|
Severance
|
|
Depreciation
|
|
Losses
|
|
Amortization
|
|
Other
|
|
Total
|
|
Three Months Ended December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Higher education
|
|
$
|
3,211
|
|
|
$
|
12,291
|
|
|
$
|
1,420
|
|
|
$
|
―
|
|
|
$
|
22
|
|
|
$
|
16,944
|
|
Test preparation
|
|
|
―
|
|
|
|
―
|
|
|
|
―
|
|
|
|
―
|
|
|
|
―
|
|
|
|
―
|
|
Kaplan international
|
|
|
1,172
|
|
|
|
4,294
|
|
|
|
8,374
|
|
|
|
―
|
|
|
|
1,042
|
|
|
|
14,882
|
|
Kaplan corporate and amortization of intangible assets
|
|
|
1,485
|
|
|
|
―
|
|
|
|
―
|
|
|
|
2,595
|
|
|
|
―
|
|
|
|
4,080
|
|
|
|
$
|
5,868
|
|
|
$
|
16,585
|
|
|
$
|
9,794
|
|
|
$
|
2,595
|
|
|
$
|
1,064
|
|
|
$
|
35,906
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Higher education
|
|
$
|
4,048
|
|
|
$
|
1,219
|
|
|
$
|
676
|
|
|
$
|
―
|
|
|
$
|
169
|
|
|
$
|
6,112
|
|
Test preparation
|
|
|
439
|
|
|
|
50
|
|
|
|
―
|
|
|
|
―
|
|
|
|
―
|
|
|
|
489
|
|
Kaplan international
|
|
|
1,035
|
|
|
|
―
|
|
|
|
―
|
|
|
|
―
|
|
|
|
―
|
|
|
|
1,035
|
|
Kaplan corporate and amortization of intangible assets
|
|
|
1,695
|
|
|
|
―
|
|
|
|
―
|
|
|
|
―
|
|
|
|
―
|
|
|
|
1,695
|
|
|
|
$
|
7,217
|
|
|
$
|
1,269
|
|
|
$
|
676
|
|
|
$
|
―
|
|
|
$
|
169
|
|
|
$
|
9,331
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Higher education
|
|
$
|
8,807
|
|
|
$
|
12,936
|
|
|
$
|
1,420
|
|
|
$
|
―
|
|
|
$
|
232
|
|
|
$
|
23,395
|
|
Test preparation
|
|
|
―
|
|
|
|
―
|
|
|
|
―
|
|
|
|
―
|
|
|
|
―
|
|
|
|
―
|
|
Kaplan international
|
|
|
2,732
|
|
|
|
4,294
|
|
|
|
8,374
|
|
|
|
―
|
|
|
|
1,042
|
|
|
|
16,442
|
|
Kaplan corporate and amortization of intangible assets
|
|
|
2,810
|
|
|
|
―
|
|
|
|
―
|
|
|
|
2,595
|
|
|
|
―
|
|
|
|
5,405
|
|
|
|
$
|
14,349
|
|
|
$
|
17,230
|
|
|
$
|
9,794
|
|
|
$
|
2,595
|
|
|
$
|
1,274
|
|
|
$
|
45,242
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended December 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Higher education
|
|
$
|
11,101
|
|
|
$
|
1,219
|
|
|
$
|
676
|
|
|
$
|
―
|
|
|
$
|
205
|
|
|
$
|
13,201
|
|
Test preparation
|
|
|
2,899
|
|
|
|
2,746
|
|
|
|
6,894
|
|
|
|
―
|
|
|
|
―
|
|
|
|
12,539
|
|
Kaplan international
|
|
|
1,035
|
|
|
|
―
|
|
|
|
―
|
|
|
|
―
|
|
|
|
―
|
|
|
|
1,035
|
|
Kaplan corporate and amortization of intangible assets
|
|
|
2,170
|
|
|
|
―
|
|
|
|
―
|
|
|
|
―
|
|
|
|
―
|
|
|
|
2,170
|
|
|
|
$
|
17,205
|
|
|
$
|
3,965
|
|
|
$
|
7,570
|
|
|
$
|
―
|
|
|
$
|
205
|
|
|
$
|
28,945
|
NON-GAAP FINANCIAL INFORMATION
THE WASHINGTON POST COMPANY
(Unaudited)
In addition to the results reported in accordance with accounting
principles generally accepted in the United States (GAAP) included in
this press release, the Company has provided information regarding
income from continuing operations excluding certain items described
below reconciled to the most directly comparable GAAP measures.
Management believes that these non-GAAP measures, when read in
conjunction with the Company’s GAAP financials, provide useful
information to investors by offering:
-
the ability to make meaningful period-to-period comparisons of the
Company’s ongoing results;
-
the ability to identify trends in the Company’s underlying business;
and
-
a better understanding of how management plans and measures the
Company’s underlying business.
Income from continuing operations excluding certain items should not be
considered substitutes or alternatives to computations calculated in
accordance with and required by GAAP. These non-GAAP financial measures
should be read only in conjunction with financial information presented
on a GAAP basis.
The following table reconciles the non-GAAP financial measures to the
most directly comparable GAAP measures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Twelve Months Ended
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
(in thousands, except per share amounts)
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
Amounts Attributable to The Washington Post Company Common
Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(loss) income from continuing operations, as reported
|
|
$
|
(45,439
|
)
|
|
$
|
61,423
|
|
|
$
|
48,041
|
|
|
$
|
144,704
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill and other long-lived assets impairment charge
|
|
|
81,875
|
|
|
|
―
|
|
|
|
81,875
|
|
|
|
―
|
|
Early retirement and restructuring charges
|
|
|
31,126
|
|
|
|
7,263
|
|
|
|
45,510
|
|
|
|
19,415
|
|
Marketable equity securities write-down
|
|
|
11,159
|
|
|
|
―
|
|
|
|
11,159
|
|
|
|
34,643
|
|
Gain on sale of a cost method investment
|
|
|
―
|
|
|
|
―
|
|
|
|
(3,657
|
)
|
|
|
―
|
|
Foreign currency (gain) loss
|
|
|
29
|
|
|
|
(261
|
)
|
|
|
(1,968
|
)
|
|
|
2,062
|
|
Investment in affiliates impairment charge
|
|
|
―
|
|
|
|
―
|
|
|
|
―
|
|
|
|
5,703
|
|
Income from continuing operations, adjusted (non-GAAP)
|
|
$
|
78,750
|
|
|
$
|
68,425
|
|
|
$
|
180,960
|
|
|
$
|
206,527
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share Information Attributable to The Washington Post
Company Common Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss) income per common share from continuing operations,
as reported
|
|
$
|
(6.57
|
)
|
|
$
|
8.00
|
|
|
$
|
6.09
|
|
|
$
|
18.30
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill and other long-lived assets impairment charge
|
|
|
11.33
|
|
|
|
―
|
|
|
|
11.33
|
|
|
|
―
|
|
Early retirement and restructuring charges
|
|
|
4.31
|
|
|
|
0.94
|
|
|
|
6.18
|
|
|
|
2.46
|
|
Marketable equity securities write-down
|
|
|
1.54
|
|
|
|
―
|
|
|
|
1.54
|
|
|
|
4.34
|
|
Gain on sale of a cost method investment
|
|
|
―
|
|
|
|
―
|
|
|
|
(0.48
|
)
|
|
|
―
|
|
Foreign currency (gain) loss
|
|
|
―
|
|
|
|
(0.03
|
)
|
|
|
(0.27
|
)
|
|
|
0.26
|
|
Investment in affiliates impairment charge
|
|
|
―
|
|
|
|
―
|
|
|
|
―
|
|
|
|
0.72
|
|
Diluted income per common share from continuing operations,
adjusted (non-GAAP)
|
|
$
|
10.61
|
|
|
$
|
8.91
|
|
|
$
|
24.39
|
|
|
$
|
26.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The adjusted diluted per share amounts may not compute due to
rounding.
|
