10-Q 1 d10Q.htm FORM 10-Q  

 

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

x     Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended September 30, 2012

or

     Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number 1-6714

 

THE WASHINGTON POST COMPANY

(Exact name of registrant as specified in its charter)

 

 

 

 

Delaware

53-0182885

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

 

1150 15th Street, N.W. Washington, D.C.

20071

(Address of principal executive offices)

(Zip Code)

(202) 334-6000

(Registrant’s telephone number, including area code)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes  x.    No  ¨.  

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x.    No  ¨.  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer,” accelerated filer” and “small reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

x

Accelerated filer

¨

Non-accelerated filer

¨

Smaller reporting company

¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨.    No  x.  

Shares outstanding at November 2, 2012:

                                                    Class A Common Stock – 1,219,383 Shares

                                                    Class B Common Stock – 6,158,779 Shares

 

 

 

 

 


 

 

 

THE WASHINGTON POST COMPANY

Index to Form 10-Q

 

 

 

 

PART I. FINANCIAL INFORMATION

 

 

 

 

Item 1.

Financial Statements

 

 

 

 

 

a.     Condensed Consolidated Statements of Operations (Unaudited) for the Three and Nine Months Ended September 30, 2012 and October 2, 2011                                                  

           1

 

 

 

 

b.     Condensed Consolidated Statements of Comprehensive Income (Unaudited) for the Three and Nine Months Ended September 30, 2012 and October 2, 2011

           2

 

 

 

 

c.      Condensed Consolidated Balance Sheets at September 30, 2012 (Unaudited) and December 31, 2011

           3

 

 

 

 

d.     Condensed Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended September 30, 2012 and October 2, 2011

           4

 

 

 

 

e.     Notes to Condensed Consolidated Financial Statements (Unaudited)

           5

 

 

 

Item 2.

Management’s Discussion and Analysis of Results of Operations and Financial Condition

         22

 

 

 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

         30

 

 

 

Item 4.

Controls and Procedures

         31

 

 

PART II. OTHER INFORMATION

 

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

         31

 

 

 

Item 6.

Exhibits

         32

 

 

Signatures

         33

 

 

 


 

 

 

PART I. FINANCIAL INFORMATION

 

Item  1.       Financial Statements

THE WASHINGTON POST COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

  

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

Three Months Ended

 

Nine Months Ended

  

 

 

September 30,

 

October 2,

 

September 30,

 

October 2,

(In thousands, except per share amounts)

 

2012 

 

2011 

 

2012 

 

2011 

Operating Revenues

  

  

  

 

  

 

 

  

 

 

  

 

 

Education

 

$

 552,585 

 

$

 601,611 

 

$

 1,652,067 

 

$

 1,823,696 

 

Advertising

 

 

 195,158 

 

 

 170,552 

 

 

 555,994 

 

 

 541,289 

 

Circulation and Subscriber

 

 

 220,668 

 

 

 212,145 

 

 

 655,184 

 

 

 643,274 

 

Other

 

 

 42,923 

 

 

 28,190 

 

 

 104,312 

 

 

 82,465 

 

 

 

 

 1,011,334 

 

 

 1,012,498 

 

 

 2,967,557 

 

 

 3,090,724 

Operating Costs and Expenses

  

  

 

 

  

 

 

  

 

 

  

 

 

Operating

 

 

 483,622 

 

 

 486,615 

 

 

 1,411,343 

 

 

 1,438,495 

 

Selling, general and administrative

 

 

 382,961 

 

 

 387,735 

 

 

 1,195,103 

 

 

 1,232,208 

 

Depreciation of property, plant and equipment

 

 

 63,739 

 

 

 61,589 

 

 

 188,763 

 

 

 186,133 

 

Amortization of intangible assets

 

 

 5,091 

 

 

 6,320 

 

 

 13,392 

 

 

 17,293 

 

 

 

 

 935,413 

 

 

 942,259 

 

 

 2,808,601 

 

 

 2,874,129 

Income from Operations

 

 

 75,921 

 

 

 70,239 

 

 

 158,956 

 

 

 216,595 

 

Equity in earnings (losses) of affiliates, net

 

 

 4,099 

 

 

 (1,494) 

 

 

 11,301 

 

 

 5,381 

 

Interest income

 

 

 648 

 

 

 994 

 

 

 2,492 

 

 

 2,973 

 

Interest expense

 

 

 (8,738) 

 

 

 (8,667) 

 

 

 (26,880) 

 

 

 (24,588) 

 

Other income (expense), net

 

 

 4,163 

 

 

 (29,650) 

 

 

 12,116 

 

 

 (56,273) 

Income from Continuing Operations Before Income Taxes

 

 

 76,093 

 

 

 31,422 

 

 

 157,985 

 

 

 144,088 

Provision for Income Taxes

 

 

 31,200 

 

 

 18,600 

 

 

 63,600 

 

 

 59,900 

Income from Continuing Operations

 

 

 44,893 

 

 

 12,822 

 

 

 94,385 

 

 

 84,188 

Income (Loss) from Discontinued Operations, Net of Tax

 

 

 49,054 

 

 

 (18,788) 

 

 

 83,177 

 

 

 (28,762) 

Net Income (Loss)

 

 

 93,947 

 

 

 (5,966) 

 

 

 177,562 

 

 

 55,426 

Net Loss (Income) Attributable to Noncontrolling Interests

 

 

 71 

 

 

 (16) 

 

 

 (10) 

 

 

 10 

Net Income (Loss) Attributable to The Washington Post Company

 

 

 94,018 

 

 

 (5,982) 

 

 

 177,552 

 

 

 55,436 

Redeemable Preferred Stock Dividends

 

 

 (222) 

 

 

 (226) 

 

 

 (895) 

 

 

 (917) 

Net Income (Loss) Attributable to The Washington Post

  

  

 

 

  

 

 

  

 

 

  

 

 

Company Common Stockholders

 

$

 93,796 

 

$

 (6,208) 

 

$

 176,657 

 

$

 54,519 

Amounts Attributable to The Washington Post Company

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stockholders

  

  

 

 

  

 

 

  

 

 

  

 

Income from continuing operations

 

$

 44,742 

 

$

 12,580 

 

$

 93,480 

 

$

 83,281 

Income (loss) from discontinued operations, net of tax

 

 

 49,054 

 

 

 (18,788) 

 

 

 83,177 

 

 

 (28,762) 

Net income (loss) attributable to The Washington Post Company

 

 

 

 

 

 

 

 

 

 

 

 

 

common stockholders

 

$

 93,796 

 

$

 (6,208) 

 

$

 176,657 

 

$

 54,519 

Per Share Information Attributable to The Washington

 

 

 

 

 

 

 

 

 

 

 

 

 

Post Company Common Stockholders

  

  

 

 

  

 

 

  

 

 

  

 

Basic income per common share from continuing operations

 

$

 6.03 

 

$

 1.59 

 

$

 12.38 

 

$

 10.44 

Basic income (loss) per common share from discontinued operations

 

 

 6.61 

 

 

 (2.41) 

 

 

 11.01 

 

 

 (3.63) 

Basic net income (loss) per common share

 

$

 12.64 

 

$

 (0.82) 

 

$

 23.39 

 

$

 6.81 

Basic average number of common shares outstanding

 

 

 7,272 

 

 

 7,802 

 

 

 7,405 

 

 

 7,900 

Diluted income per common share from continuing operations

 

$

 6.03 

 

$

 1.59 

 

$

 12.38 

 

$

 10.44 

Diluted income (loss) per common share from discontinued operations

 

 

 6.61 

 

 

 (2.41) 

 

 

 11.01 

 

 

 (3.63) 

Diluted net income (loss) per common share

 

$

 12.64 

 

$

 (0.82) 

 

$

 23.39 

 

$

 6.81 

Diluted average number of common shares outstanding

 

 

 7,376 

 

 

 7,883 

 

 

 7,508 

 

 

 7,979 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

1

 


 

 

 

THE WASHINGTON POST COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

Three Months Ended

 

Nine Months Ended

  

 

 

 

September 30,

 

October 2,

 

September 30,

 

October 2,

(In thousands)

2012 

 

2011 

 

2012 

 

2011 

Net Income (Loss)

$

 93,947 

 

$

 (5,966) 

 

$

 177,562 

 

$

 55,426 

Other Comprehensive Income (Loss), Before Tax

  

  

 

 

  

 

 

  

 

 

  

 

Foreign currency translation adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

Translation adjustments arising during the period

 

 5,321 

 

 

 (32,969) 

 

 

 4,233 

 

 

 (19,911) 

 

 

Adjustment for sales of businesses with foreign operations

 

 (1,409) 

 

 

 ― 

 

 

 (888) 

 

 

 ― 

 

 

 

 

 

 3,912 

 

 

 (32,969) 

 

 

 3,345 

 

 

 (19,911) 

 

Unrealized (losses) gains on available-for-sale securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized (losses) gains for the period

 

 (5,966) 

 

 

 (47,237) 

 

 

 32,939 

 

 

 (62,342) 

 

 

Reclassification adjustment for (gain) or write-down on

 

 

 

 

 

 

 

 

 

 

 

 

 

 

available-for-sale securities included in net income

 

 ― 

 

 

 23,097 

 

 

 (772) 

 

 

 53,793 

 

 

 

 

 

 (5,966) 

 

 

 (24,140) 

 

 

 32,167 

 

 

 (8,549) 

 

Pension and other postretirement plans:

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of net prior service credit included in net income

 

 (469) 

 

 

 (465) 

 

 

 (1,390) 

 

 

 (1,397) 

 

 

Amortization of net actuarial loss (gain) included in net income

 

 2,592 

 

 

 (127) 

 

 

 6,839 

 

 

 (382) 

 

 

Foreign affiliate pension adjustments

 

 ― 

 

 

 6,701 

 

 

 ― 

 

 

 2,088 

 

 

 

 

 2,123 

 

 

 6,109 

 

 

 5,449 

 

 

 309 

 

Cash flow hedge, net change

 

 217 

 

 

 479 

 

 

 (1,160) 

 

 

 479 

Other Comprehensive Income (Loss), Before Tax

 

 286 

 

 

 (50,521) 

 

 

 39,801 

 

 

 (27,672) 

 

Income tax benefit (expense) related to items of other comprehensive

 

 

 

 

 

 

 

 

 

 

 

 

 

income

 

 1,451 

 

 

 15,316 

 

 

 (14,580) 

 

 

 9,047 

Other Comprehensive Income (Loss), Net of Tax

 

 1,737 

 

 

 (35,205) 

 

 

 25,221 

 

 

 (18,625) 

Comprehensive Income (Loss)

 

 95,684 

 

 

 (41,171) 

 

 

 202,783 

 

 

 36,801 

 

Comprehensive loss (income) attributable to noncontrolling interests

 

 76 

 

 

 (54) 

 

 

 (31) 

 

 

 (92) 

Total Comprehensive Income (Loss) Attributable to The Washington

 

 

 

 

 

 

 

 

 

 

 

 

Post Company

$

 95,760 

 

$

 (41,225) 

 

$

 202,752 

 

$

 36,709 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying Notes to Consolidated Financial Statements.

 

2

 


 

 

 

THE WASHINGTON POST COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

September 30,

 

December 31,

(In thousands)

 

2012 

 

2011 

 

 

 

 

 

(Unaudited)

 

 

 

Assets

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

 305,654 

 

$

 381,099 

 

Restricted cash

 

 

 21,485 

 

 

 25,287 

 

Investments in marketable equity securities and other investments

 

 

 424,277 

 

 

 338,674 

 

Accounts receivable, net

 

 

 391,003 

 

 

 392,725 

 

Income taxes receivable

 

 

 51,160 

 

 

 16,990 

 

Deferred income taxes

 

 

 2,935 

 

 

 13,343 

 

Inventories

 

 

 4,424 

 

 

 6,571 

 

Other current assets

 

 

 77,181 

 

 

 70,936 

 

 

Total Current Assets

 

 

 1,278,119 

 

 

 1,245,625 

Property, Plant and Equipment, Net

 

 

 1,100,885 

 

 

 1,152,390 

Investments in Affiliates

 

 

 25,219 

 

 

 17,101 

Goodwill, Net

 

 

 1,406,930 

 

 

 1,414,997 

Indefinite-Lived Intangible Assets, Net

 

 

 525,833 

 

 

 530,641 

Amortized Intangible Assets, Net

 

 

 46,794 

 

 

 54,622 

Prepaid Pension Cost

 

 

 528,438 

 

 

 537,262 

Deferred Charges and Other Assets

 

 

 54,232 

 

 

 64,348 

 

 

Total Assets

 

$

 4,966,450 

 

$

 5,016,986 

 

 

 

 

 

 

 

 

Liabilities and Equity

 

  

 

 

  

 

Current Liabilities

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

 493,040 

 

$

 495,041 

 

Deferred revenue

 

 

 390,650 

 

 

 387,532 

 

Dividends declared

 

 

 18,299 

 

 

 ― 

 

Short-term borrowings

 

 

 3,043 

 

 

 112,983 

 

 

Total Current Liabilities

 

 

 905,032 

 

 

 995,556 

Postretirement Benefits Other Than Pensions

 

 

 69,749 

 

 

 67,864 

Accrued Compensation and Related Benefits

 

 

 225,625 

 

 

 228,304 

Other Liabilities

 

 

 115,421 

 

 

 107,741 

Deferred Income Taxes

 

 

 536,515 

 

 

 545,361 

Long-Term Debt

 

 

 453,471 

 

 

 452,229 

 

 

Total Liabilities

 

 

 2,305,813 

 

 

 2,397,055 

Redeemable Noncontrolling Interest

 

 

 6,750 

 

 

 6,740 

Redeemable Preferred Stock

 

 

 11,096 

 

 

 11,295 

Preferred Stock

 

 

 ― 

 

 

 ― 

Common Stockholders’ Equity

 

  

 

 

  

 

 

Common stock

 

 

 20,000 

 

 

 20,000 

 

Capital in excess of par value

 

 

 248,937 

 

 

 252,767 

 

Retained earnings

 

 

 4,665,007 

 

 

 4,561,989 

 

Accumulated other comprehensive income, net of tax

 

  

 

 

  

 

 

 

Cumulative foreign currency translation adjustment

 

 

 24,683 

 

 

 21,338 

 

 

Unrealized gain on available-for-sale securities

 

 

 99,659 

 

 

 80,358 

 

 

Unrealized gain on pensions and other postretirement plans

 

 

 66,895 

 

 

 63,625 

 

 

Cash flow hedge

 

 

 (687) 

 

 

 8 

 

Cost of Class B common stock held in treasury

 

 

 (2,481,703) 

 

 

 (2,398,189) 

 

 

Total Equity

 

 

 2,642,791 

 

 

 2,601,896 

 

 

 

Total Liabilities and Equity

 

$

 4,966,450 

 

$

 5,016,986 

 

 

 

 

 

 

 

 

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

3

 


 

 

 

THE WASHINGTON POST COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

  

 

 

 

September 30,

 

October 2,

(In thousands)

 

2012 

 

2011 

Cash Flows from Operating Activities:

 

 

 

 

 

 

Net Income

 

$

 177,562 

 

$

 55,426 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation of property, plant and equipment

 

 

 190,111 

 

 

191,935 

 

Amortization of intangible assets

 

 

 13,833 

 

 

 23,514 

 

Goodwill impairment charges

 

 

 ― 

 

 

 11,923 

 

Net pension expense (benefit)

 

 

9,980 

 

 

(3,236)

 

Early retirement program expense

 

 

 8,508 

 

 

 430 

 

Foreign exchange (gain) loss

 

 

 (3,179) 

 

 

 3,675 

 

Net gain on sales and disposition of businesses

 

 

 (23,759) 

 

 

 (516) 

 

Impairment write-down of a marketable equity security

 

 

 ― 

 

 

 53,793 

 

Equity in earnings of affiliates, net of distributions

 

 

 (10,577) 

 

 

 (5,381) 

 

(Benefit) provision for deferred income taxes

 

 

 (15,756) 

 

 

 17,317 

 

Net (gain) loss on sale or write-down of property, plant and equipment and other assets

 

 

 (6,215) 

 

 

 6,155 

 

Change in assets and liabilities:

 

 

 

 

 

 

 

 

(Increase) decrease in accounts receivable, net

 

 

 (11,984) 

 

 

 38,835 

 

 

Decrease (increase) in inventories

 

 

 1,690 

 

 

 (2,268) 

 

 

Decrease in accounts payable and accrued liabilities

 

 

 (24,885) 

 

 

 (88,643) 

 

 

Increase in deferred revenue

 

 

 20,070 

 

 

 1,771 

 

 

(Increase) decrease in income taxes receivable

 

 

 (35,341) 

 

 

 9,291 

 

 

Decrease (increase) in other assets and other liabilities, net

 

 

 5,460 

 

 

 (51,564) 

 

Other

 

 

 (8) 

 

 

 1,107 

 

 

Net Cash Provided by Operating Activities

 

 

 295,510 

 

 

 263,564 

 

 

 

 

 

 

 

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

 

Purchases of property, plant and equipment

 

 

 (152,391) 

 

 

 (145,622) 

 

Net proceeds from sales of businesses, property, plant and equipment and other assets

 

 

 75,106 

 

 

 28,842 

 

Purchase of marketable equity securities and other investments

 

 

 (46,324) 

 

 

 (5,260) 

 

Investments in certain businesses, net of cash acquired

 

 

 (8,971) 

 

 

 (79,223) 

 

Other

 

 

 1,477 

 

 

 (1,599) 

 

 

Net Cash Used in Investing Activities

 

 

 (131,103) 

 

 

 (202,862) 

 

 

 

 

 

 

 

 

 

Cash Flows from Financing Activities:

 

 

 

 

 

 

 

Repayment of commercial paper, net

 

 

 (109,671) 

 

 

 ― 

 

Common shares repurchased

 

 

 (97,545) 

 

 

 (179,454) 

 

Dividends paid

 

 

 (56,235) 

 

 

 (57,126) 

 

Issuance of debt

 

 

 ― 

 

 

 52,476 

 

Other

 

 

 19,561 

 

 

 (1,390) 

 

 

Net Cash Used in Financing Activities

 

 

 (243,890) 

 

 

 (185,494) 

Effect of Currency Exchange Rate Change

 

 

 4,038 

 

 

 (1,789) 

Net Decrease in Cash and Cash Equivalents

 

 

 (75,445) 

 

 

 (126,581) 

Beginning Cash and Cash Equivalents

 

 

 381,099 

 

 

 437,740 

Ending Cash and Cash Equivalents

 

$

 305,654 

 

$

 311,159 

 

 

 

 

 

 

 

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

4

 


 

 

 

THE WASHINGTON POST COMPANY

 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

1. ORGANIZATION, BASIS OF PRESENTATION AND RECENT ACCOUNTING PRONOUNCEMENTS

 

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).

 

Financial Periods – In the fourth quarter of 2011, the Company changed its fiscal quarter from a thirteen week quarter ending on the Sunday nearest the calendar quarter-end to a quarterly month end. The fiscal quarters for 2012 and 2011 ended on September 30, 2012, June 30, 2012, March 31, 2012, October 2, 2011, July 3, 2011, and April 3, 2011, respectively. Subsidiaries of the Company report on a calendar-quarter basis, with the exception of most of the newspaper publishing operations, which report on a thirteen week quarter ending on the Sunday nearest the calendar quarter-end.

 

Basis of Presentation – The accompanying condensed consolidated financial statements have been prepared in accordance with: (i) generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information; (ii) the instructions to Form 10-Q; and (iii) the guidance of Rule 10-01 of Regulation S-X under the Securities and Exchange Act of 1934, as amended, for financial statements required to be filed with the Securities and Exchange Commission (SEC). They include the assets, liabilities, results of operations and cash flows of the Company, including its domestic and foreign subsidiaries that are more than 50% owned or otherwise controlled by the Company. As permitted under such rules, certain notes and other financial information normally required by GAAP have been condensed or omitted. Management believes the accompanying condensed consolidated financial statements reflect all normal and recurring adjustments necessary for a fair presentation of the Company’s financial position, results of operations, and cash flows as of and for the periods presented herein. The Company’s results of operations for the quarterly periods ended September 30, 2012 and October 2, 2011 may not be indicative of the Company’s future results. These condensed consolidated financial statements are unaudited and should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011.

 

The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP.

 

Certain amounts in previously issued financial statements have been reclassified to conform to the current year presentation, which includes the reclassification of the results of operations of certain Kaplan and Other businesses as discontinued operations for all periods presented.

 

Use of Estimates in the Preparation of the Condensed Consolidated Financial Statements – The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and judgments that affect the amounts reported herein. 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.

 

Discontinued Operations – A business is classified as a discontinued operation when (i) the operations and cash flows of the business can be clearly distinguished and have been or will be eliminated from the Company’s ongoing operations; (ii) the business has either been disposed of or is classified as held for sale; and (iii) the Company will not have any significant continuing involvement in the operations of the business after the disposal transactions. The results of discontinued operations (as well as the gain or loss on the disposal) are aggregated and separately presented in the Company’s condensed consolidated statement of operations, net of income taxes. The assets and related liabilities are aggregated and separately presented in the Company’s condensed consolidated balance sheet.

 

 

5

 


 

 

 

Recently Adopted and Issued Accounting Pronouncements – In June 2011, the Financial Accounting Standards Board (“FASB”) issued an amended standard to increase the prominence of items reported in other comprehensive income. The amendment eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders' equity and requires that all changes in stockholders' equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In addition, the amendment requires companies to present on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statement(s) where the components of net income and the components of other comprehensive income are presented. The amendment does not affect how earnings per share is calculated or presented. This amendment is effective for interim and fiscal years beginning after December 15, 2011 and must be applied retrospectively. In December 2011, the FASB deferred the requirements related to the presentation of reclassification adjustments until further deliberations have taken place. Entities should continue to report reclassifications out of accumulated other comprehensive income consistent with the presentation requirements in effect prior to the issuance of the June 2011 amended standard. The adoption of the amendment not deferred by the FASB in the first quarter of 2012 is reflected in the Company’s Condensed Consolidated Statements of Comprehensive Income.

 

In July 2012, the FASB issued new guidance that amends the current indefinite-lived intangible assets impairment testing process. The new guidance permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of its indefinite-lived intangible assets is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative impairment test. Previous guidance required an entity to test indefinite-lived intangible assets for impairment, on at least an annual basis, by comparing the fair value of an indefinite-lived intangible asset with its carrying amount. The new guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted if an entity’s financial statements for the most recent period have not yet been issued. The Company plans to early adopt this guidance at the beginning of the fourth quarter of 2012 and the guidance will not have an effect on the Company’s condensed consolidated financial statements.

 

2. DISCONTINUED OPERATIONS

 

In August 2012, the Company completed the sale of Kidum and recorded a pre-tax gain of $3.6 million and an after-tax gain of $10.2 million related to this sale in the third quarter of 2012. On July 31, 2012, the Company disposed of its interest in Avenue100 Media Solutions, Inc. and recorded a pre-tax loss of $5.7 million related to the disposition. An income tax benefit of $44.5 million was also recorded in the third quarter of 2012 as the Company determined that Avenue100 has 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. This activity is included in Income (Loss) from Discontinued Operations, Net of Tax in the Company’s Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2012.

 

In April 2012, the Company completed the sale of Kaplan EduNeering. Under the terms of the agreement, the purchaser acquired the stock of EduNeering and received substantially all the assets and liabilities. In the second quarter of 2012, the Company recorded an after-tax gain of $18.5 million related to this sale, subject to final net working capital adjustments, which is included in Income (Loss) from Discontinued Operations, Net of Tax in the Company’s Condensed Consolidated Statement of Operations for the nine months ended September 30, 2012. In February 2012, Kaplan completed the stock sale of Kaplan Learning Technologies (KLT) and recorded an after-tax loss on the sale of $1.9 million, which is included in Income (Loss) from Discontinued Operations, Net of Tax in the Company’s Condensed Consolidated Statement of Operations for the nine months ended September 30, 2012.

 

The Company recorded $23.2 million of income tax benefits in the first quarter of 2012 in connection with the sale of its stock in EduNeering and KLT related to the excess of the outside stock tax basis over the net book value of the net assets disposed.

 

In October 2011, Kaplan completed the sale of Kaplan Compliance Solutions (KCS) and in July 2011, Kaplan completed the sale of Kaplan Virtual Education (KVE). The results of operations of Kidum, Avenue100, EduNeering, KLT, KCS and KVE, for the third quarter and first nine months of 2012 and 2011, where applicable, are included in the Company’s Condensed Consolidated Statements of Operations as Income (Loss) from Discontinued Operations, Net of Tax. All corresponding prior period operating results presented in the Company’s condensed consolidated financial statements

 

6

 


 

 

 

and the accompanying notes have been reclassified to reflect the discontinued operations presented. The Company did not reclassify its Condensed Consolidated Statements of Cash Flows or prior year Condensed Consolidated Balance Sheet to reflect the discontinued operations.

 

The summarized income (loss) from discontinued operations, net of tax, is presented below:  

 

  

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

October 2,

 

September 30,

 

October 2,

(in thousands)

 

2012 

 

2011 

 

2012 

 

2011 

Operating revenues

 

$

 4,861 

 

$

 23,956 

 

$

 35,342 

 

$

 95,219 

Operating costs and expenses

 

 

 (5,579) 

 

 

 (44,359) 

 

 

 (42,583) 

 

 

 (131,096) 

Loss from discontinued operations

 

 

 (718) 

 

 

 (20,403) 

 

 

 (7,241) 

 

 

 (35,877) 

Provision for (benefit from) income taxes

 

 

 232 

 

 

 (2,782) 

 

 

 (2,068) 

 

 

 (8,282) 

Net Loss from Discontinued Operations

 

 

 (950) 

 

 

 (17,621) 

 

 

 (5,173) 

 

 

 (27,595) 

(Loss) gain on sales and disposition of discontinued operations

 

 

 (2,174) 

 

 

 516 

 

 

 23,759 

 

 

 516 

(Benefit from) provision for income taxes on sales and disposition

 

 

 

 

 

 

 

 

 

 

 

 

 

of discontinued operations

 

 

 (52,178) 

 

 

 1,683 

 

 

 (64,591) 

 

 

 1,683 

Income (Loss) from Discontinued Operations, Net of Tax

 

$

 49,054 

 

$

 (18,788) 

 

$

 83,177 

 

$

 (28,762) 

 

The following table summarizes the 2012 quarterly operating results of the Company following the reclassification of the operations discussed above as discontinued operations:

 

 

 

 

March 31,

 

June 30,

(in thousands, except per share amounts)

 

2012 

 

2012 

Operating Revenues

 

  

  

 

  

 

 

Education

 

$

 547,280 

 

$

 552,202 

 

Advertising

 

 

 170,750 

 

 

 190,086 

 

Circulation and subscriber

 

 

 215,230 

 

 

 219,286 

 

Other

 

 

 27,939 

 

 

 33,450 

 

 

 

 

 961,199 

 

 

 995,024 

Operating Costs and Expenses

 

  

  

 

  

  

 

Operating

 

 

 463,106 

 

 

 464,615 

 

Selling, general and administrative

 

 

 411,466 

 

 

 400,676 

 

Depreciation of property, plant and equipment

 

 

 62,275 

 

 

 62,749 

 

Amortization of intangible assets

 

 

 3,873 

 

 

 4,428 

 

 

 

 

 940,720 

 

 

 932,468 

Income from Operations

 

 

 20,479 

 

 

 62,556 

 

Equity in earnings of affiliates, net

 

 

 3,888 

 

 

 3,314 

 

Interest income

 

 

 1,069 

 

 

 775 

 

Interest expense

 

 

 (9,163) 

 

 

 (8,979) 

 

Other income (expense), net

 

 

 8,588 

 

 

 (635) 

Income from Continuing Operations before Income Taxes

 

 

 24,861 

 

 

 57,031 

Provision for Income Taxes

 

 

 11,400 

 

 

 21,000 

Income from Continuing Operations

 

 

 13,461 

 

 

 36,031 

Income from Discontinued Operations, Net of Tax

 

 

 18,107 

 

 

 16,016 

Net Income

 

 

 31,568 

 

 

 52,047 

Net Income Attributable to Noncontrolling Interests

 

 

 (70) 

 

 

 (11) 

Net Income Attributable to The Washington Post Company

 

 

 31,498 

 

 

 52,036 

Redeemable Preferred Stock Dividends

 

 

 (451) 

 

 

 (222) 

Net Income Attributable to The Washington Post Company Common Stockholders

 

$

 31,047 

 

$

 51,814 

 

 

 

 

 

 

 

 

Amounts Attributable to The Washington Post Company Common Stockholders

 

 

 

 

 

 

Income from continuing operations

 

$

 12,940 

 

$

 35,798 

Income from discontinued operations, net of tax

 

 

 18,107 

 

 

 16,016 

Net income attributable to the Washington Post Company common stockholders

 

$

 31,047 

 

$

 51,814 

 

 

 

 

 

 

 

 

Per Share Information Attributable to The Washington Post Company Common Stockholders

 

 

 

 

 

 

Basic income per common share from continuing operations

 

$

 1.66 

 

$

 4.72 

Basic income per common share from discontinued operations

 

 

 2.41 

 

 

 2.12 

Basic net income per common share

 

$

 4.07 

 

$

 6.84 

  

 

 

 

 

 

 

 

Diluted income per common share from continuing operations

 

$

 1.66 

 

$

 4.72 

Diluted income per common share from discontinued operations

 

 

 2.41 

 

 

 2.12 

Diluted net income per common share

 

$

 4.07 

 

$

 6.84 

 

7

 


 

 

 

The following table summarizes the 2011 quarterly operating results of the Company following the reclassification of the operations discussed above as discontinued operations:

 

 

 

 

 

April 3,

 

July 3,

 

October 2,

 

December 31,

(in thousands, except per share amounts)

 

2011 

 

2011 

 

2011 

 

2011 

Operating Revenues

 

  

 

 

 

 

 

 

 

 

 

 

 

Education

 

$

 611,714 

 

$

 610,371 

 

$

 601,611 

 

$

 580,763 

 

Advertising

 

 

 177,385 

 

 

 193,352 

 

 

 170,552 

 

 

 213,255 

 

Circulation and subscriber

 

 

 214,523 

 

 

 216,606 

 

 

 212,145 

 

 

 213,183 

 

Other

 

 

 25,299 

 

 

 28,976 

 

 

 28,190 

 

 

 33,220 

 

 

 

 

 

 1,028,921 

 

 

 1,049,305 

 

 

 1,012,498 

 

 

 1,040,421 

Operating Costs and Expenses

 

 

 

 

 

 

 

 

 

 

  

 

 

Operating

 

 

 463,303 

 

 

 488,577 

 

 

 486,615 

 

 

 465,666 

 

Selling, general and administrative

 

 

 438,744 

 

 

 405,729 

 

 

 387,735 

 

 

 397,518 

 

Depreciation of property, plant and equipment

 

 

 61,929 

 

 

 62,615 

 

 

 61,589 

 

 

 62,932 

 

Amortization of intangible assets

 

 

 5,176 

 

 

 5,797 

 

 

 6,320 

 

 

 5,042 

 

 

 

 

 

 969,152 

 

 

 962,718 

 

 

 942,259 

 

 

 931,158 

Income from Operations

 

 

 59,769 

 

 

 86,587 

 

 

 70,239 

 

 

 109,263 

 

Equity in earnings (losses) of affiliates, net

 

 

 3,737 

 

 

 3,138 

 

 

 (1,494) 

 

 

 568 

 

Interest income

 

 

 982 

 

 

 997 

 

 

 994 

 

 

 1,174 

 

Interest expense

 

 

 (7,961) 

 

 

 (7,960) 

 

 

 (8,667) 

 

 

 (8,638) 

 

Other (expense) income, net

 

 

 (24,032) 

 

 

 (2,591) 

 

 

 (29,650) 

 

 

 1,073 

Income from Continuing Operations before Income Taxes

 

 

 32,495 

 

 

 80,171 

 

 

 31,422 

 

 

 103,440 

Provision for Income Taxes

 

 

 12,100 

 

 

 29,200 

 

 

 18,600 

 

 

 42,000 

Income from Continuing Operations

 

 

 20,395 

 

 

 50,971 

 

 

 12,822 

 

 

 61,440 

(Loss) Income from Discontinued Operations, Net of Tax

 

 

 (4,766) 

 

 

 (5,208) 

 

 

 (18,788) 

 

 

 291 

Net Income (Loss)

 

 

 15,629 

 

 

 45,763 

 

 

 (5,966) 

 

 

 61,731 

Net (Income) Loss Attributable to Noncontrolling Interests

 

 

 (14) 

 

 

 40 

 

 

 (16) 

 

 

 (17) 

Net Income (Loss) Attributable to The Washington Post Company

 

 

 15,615 

 

 

 45,803 

 

 

 (5,982) 

 

 

 61,714 

Redeemable Preferred Stock Dividends

 

 

 (461) 

 

 

 (230) 

 

 

 (226) 

 

 

 ― 

Net Income (Loss) Attributable to The Washington Post Company

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stockholders

 

$

 15,154 

 

$

 45,573 

 

$

 (6,208) 

 

$

 61,714 

Amounts Attributable to The Washington Post Company

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stockholders

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

 19,920 

 

$

 50,781 

 

$

 12,580 

 

$

 61,423 

(Loss) income from discontinued operations, net of tax

 

 

 (4,766) 

 

 

 (5,208) 

 

 

 (18,788) 

 

 

 291 

Net income (loss) attributable to the Washington Post

 

 

 

 

 

 

 

 

 

 

 

 

 

Company common stockholders

 

$

 15,154 

 

$

 45,573 

 

$

 (6,208) 

 

$

 61,714 

Per Share Information Attributable to The Washington Post

 

 

 

 

 

 

 

 

 

 

 

 

 

Company Common Stockholders

 

 

 

 

 

 

 

 

 

 

 

 

Basic income per common share from continuing operations

 

$

 2.43 

 

$

 6.40 

 

$

 1.59 

 

$

 8.00 

Basic (loss) income per common share from discontinued operations

 

 

 (0.56) 

 

 

 (0.66) 

 

 

 (2.41) 

 

 

 0.03 

Basic net income (loss) per common share

 

$

 1.87 

 

$

 5.74 

 

$

 (0.82) 

 

$

 8.03 

Diluted income per common share from continuing operations

 

$

 2.43 

 

$

 6.40 

 

$

 1.59 

 

$

 8.00 

Diluted (loss) income per common share from discontinued operations

 

 

 (0.56) 

 

 

 (0.66) 

 

 

 (2.41) 

 

 

 0.03 

Diluted net income (loss) per common share

 

$

 1.87 

 

$

 5.74 

 

$

 (0.82) 

 

$

 8.03 

 

8

 


 

 

 

 

The following table summarizes the operating results of the Company following the reclassification of operations discussed above as discontinued operations:

 

 

 

 

Fiscal Year Ended

  

 

 

December 31,

 

January 2,

(in thousands, except per share amounts)

 

2011 

 

2011 

Operating Revenues

 

  

 

 

 

 

 

Education

 

$

 2,404,459 

 

$

 2,804,840 

 

Advertising

 

 

 754,544 

 

 

 833,605 

 

Circulation and subscriber

 

 

 856,457 

 

 

 857,290 

 

Other

 

 

 115,685 

 

 

 90,682 

 

 

 

 

 4,131,145 

 

 

 4,586,417 

Operating Costs and Expenses

 

  

 

 

 

 

 

Operating

 

 

 1,904,161 

 

 

 1,850,402 

 

Selling, general and administrative

 

 

 1,629,726 

 

 

 1,869,194 

 

Depreciation of property, plant and equipment

 

 

 249,065 

 

 

 242,405 

 

Amortization of intangible assets

 

 

 22,335 

 

 

 21,552 

 

 

 

 

 3,805,287 

 

 

 3,983,553 

Income from Operations

 

 

 325,858 

 

 

 602,864 

 

Equity in earnings (losses) of affiliates, net

 

 

 5,949 

 

 

 (4,133) 

 

Interest income

 

 

 4,147 

 

 

 2,576 

 

Interest expense

 

 

 (33,226) 

 

 

 (30,503) 

 

Other (expense) income, net

 

 

 (55,200) 

 

 

 7,515 

Income from Continuing Operations Before Income Taxes

 

 

 247,528 

 

 

 578,319 

Provision for Income Taxes

 

 

 101,900 

 

 

 222,400 

Income from Continuing Operations

 

 

 145,628 

 

 

 355,919 

Loss from Discontinued Operations, Net of Tax

 

 

 (28,471) 

 

 

 (77,899) 

Net Income

 

 

 117,157 

 

 

 278,020 

Net (Income) Loss attributable to noncontrolling interests

 

 

 (7) 

 

 

 94 

Net Income Attributable to The Washington Post Company

 

 

 117,150 

 

 

 278,114 

Redeemable Preferred Stock Dividends

 

 

 (917) 

 

 

 (922) 

Net Income Attributable to The Washington Post Company Common Stockholders

 

$

 116,233 

 

$

 277,192 

Amounts Attributable to The Washington Post Company Common Stockholders

 

 

 

 

 

 

Income from continuing operations

 

$

 144,704 

 

$

 355,091 

Loss from discontinued operations, net of tax

 

 

 (28,471) 

 

 

 (77,899) 

Net income attributable to the Washington Post Company common stockholders

 

$

 116,233 

 

$

 277,192 

Per Share Information Attributable to The Washington Post Company Common

 

 

 

 

 

 

 

Stockholders

 

 

 

 

 

 

Basic income per common share from continuing operations

 

$

 18.30 

 

$

 39.78 

Basic loss per common share from discontinued operations

 

 

 (3.60) 

 

 

 (8.72) 

Basic net income per common share

 

$

 14.70 

 

$

 31.06 

Diluted income per common share from continuing operations

 

$

 18.30 

 

$

 39.76 

Diluted loss per common share from discontinued operations

 

 

 (3.60) 

 

 

 (8.72) 

Diluted net income per common share

 

$

 14.70 

 

$

 31.04 

 

9

 


 

 

 

3. INVESTMENTS

 

Investments in marketable equity securities comprised the following:

 

  

 

September 30,

 

December 31,

(in thousands)

 

2012 

 

2011 

Total cost

 

$

 213,831 

 

$

 169,271 

Net unrealized gains

 

 

 166,097 

 

 

 133,930 

Total Fair Value

 

$

 379,928 

 

$

 303,201 

 

The Company invested $45.0 million in marketable equity securities during the first nine months of 2012. There were no new investments in marketable equity securities during the first nine months of 2011. During the first nine months of 2012, proceeds from sales of marketable equity securities were $2.0 million, and net realized gains on such sales were $0.5 million. There were no sales of marketable equity securities in the first nine months of 2011.

 

As of September 30, 2012, the Company has a $14.1 million unrealized loss on its investment in Strayer Education, Inc., a publicly traded company. At September 30, 2012, the investment has been in an unrealized loss position for under three 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 ability and intent to hold the investment and concluded that the unrealized loss is not other-than-temporary as of September 30, 2012. If any impairment is considered other-than-temporary, the investment will be written down to its fair market value with a corresponding charge to the Consolidated Statement of Operations.

 

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 on the investment. The investment continued to decline and in the third quarter of 2011, the Company recorded another $23.1 million write-down on the investment. The Company’s investment in Corinthian Colleges, Inc. accounted for $17.8 million of the total fair value of the Company’s investments in marketable equity securities at September 30, 2012.

 

In the third quarter of 2011, the Company recorded a $9.2 million impairment charge on the Company’s interest in Bowater Mersey Paper Company, as a result of the challenging economic environment for newsprint producers.

 

4. ACQUISITIONS AND DISPOSITIONS

 

In the first nine months of 2012, the Company acquired three small businesses in its education division and one small business included in other businesses; the purchase price allocation mostly comprised goodwill and other intangible assets on a preliminary basis. In the first nine months of 2011, the Company acquired four businesses. These acquisitions included Kaplan’s May 2011 acquisitions of Franklyn Scholar and Carrick Education Group, leading 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. The Company did not make any acquisitions during the third quarters of 2012 or 2011. The assets and liabilities of the companies acquired have been recorded at their estimated fair values at the date of acquisition.

 

In September 2012, the Company entered into a stock purchase agreement to acquire a controlling interest in Celtic Healthcare, Inc. (Celtic), a provider of home healthcare and hospice services in the northeastern and mid-Atlantic regions. The transaction closed on November 5, 2012. The operating results of Celtic will be included in other businesses.

 

The Company divested its interested in Avenue100 Media Solutions in July 2012, which was previously reported in other businesses. Kaplan completed the sales of Kidum in August 2012, EduNeering in April 2012 and Kaplan Learning Technologies in February 2012, which were part of the Kaplan Ventures division. In October 2011, Kaplan completed the sale of Kaplan Compliance Solutions, which was part of the Kaplan Higher Education division. In July 2011, Kaplan completed the sale of Kaplan Virtual Education, which was part of Kaplan Ventures division.

 

10

 


 

 

 

 5. GOODWILL AND OTHER INTANGIBLE ASSETS

 

Amortization of intangible assets for the three months ended September 30, 2012 and October 2, 2011 was $5.1 million and $9.3 million, respectively. Amortization of intangible assets for the nine months ended September 30, 2012 and October 2, 2011 was $13.8 million and $23.5 million. Amortization of intangible assets is estimated to be approximately $5 million for the remainder of 2012, $15 million in 2013, $8 million in 2014, $5 million in 2015, $5 million in 2016, $5 million in 2017 and $4 million thereafter.

 

The changes in the carrying amount of goodwill, by segment, were as follows:

 

  

 

 

 

 

Cable

 

Newspaper

 

Television

 

Other

 

 

 

(in thousands)

Education

 

Television

 

Publishing

 

Broadcasting

 

Businesses

 

Total

Balance as of December 31, 2011

  

  

 

  

  

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

$

 1,116,615 

 

$

 85,488 

 

$

 81,183 

 

$

 203,165 

 

$

 100,152 

 

$

 1,586,603 

 

Accumulated impairment losses

 

 (8,492) 

 

 

 ― 

 

 

 (65,772) 

 

 

 ― 

 

 

 (97,342) 

 

 

 (171,606) 

 

 

 

 1,108,123 

 

 

 85,488 

 

 

 15,411 

 

 

 203,165 

 

 

 2,810 

 

 

 1,414,997 

Acquisitions

 

 7,364 

 

 

 ― 

 

 

 ― 

 

 

 ― 

 

 

 4,098 

 

 

 11,462 

Dispositions

 

 (29,000) 

 

 

 ― 

 

 

 ― 

 

 

 ― 

 

 

 ― 

 

 

 (29,000) 

Foreign currency exchange rate changes and other

 

 9,471 

 

 

 ― 

 

 

 ― 

 

 

 ― 

 

 

 ― 

 

 

 9,471 

Balance as of September 30, 2012

  

  

 

  

  

 

 

  

 

 

  

 

 

  

 

 

  

 

Goodwill

 

 1,095,958 

 

 

 85,488 

 

 

 81,183 

 

 

 203,165 

 

 

 6,908 

 

 

 1,472,702 

 

Accumulated impairment losses

 

 ― 

 

 

 ― 

 

 

 (65,772) 

 

 

 ― 

 

 

 ― 

 

 

 (65,772) 

 

 

$

 1,095,958 

 

$

 85,488 

 

$

 15,411 

 

$

 203,165 

 

$

 6,908 

 

$

 1,406,930 

 

The changes in carrying amount of goodwill at the Company’s education division were as follows:

 

  

 

Higher

 

Test

 

Kaplan

 

Kaplan

 

 

 

(in thousands)

Education

 

Preparation

 

International

 

Ventures

 

Total

 

Balance as of December 31, 2011

  

  

 

  

  

 

 

 

 

 

 

 

 

 

 

 

Goodwill

$

 409,128 

 

$

 152,187 

 

$

 515,936 

 

$

 39,364 

 

$

 1,116,615 

 

 

Accumulated impairment losses

 

 ― 

 

 

 ― 

 

 

 ― 

 

 

 (8,492) 

 

 

 (8,492) 

 

 

 

 

 409,128 

 

 

 152,187 

 

 

 515,936 

 

 

 30,872 

 

 

 1,108,123 

 

Acquisitions

 

 ― 

 

 

 ― 

 

 

 7,364 

 

 

 ― 

 

 

 7,364 

 

Dispositions

 

 ― 

 

 

 ―