Business Segments

12 Months Ended

Dec. 31, 2011

Business Segments [Abstract]

Business Segments [Text Block]

18. BUSINESS SEGMENTS

Basis of Presentation.The Company's organizational structure is based on a number of factors that management uses to evaluate, view and run its business operations, which include, but are not limited to, customers, the nature of products and services and use of resources. The business segments disclosed in the Consolidated Financial Statements are based on this organizational structure and information reviewed by the Company's management to evaluate the business segment results.The Company has eight reportable segments: KHE, KTP, Kaplan International, Kaplan Ventures, cable television, newspaper publishing, television broadcasting and other businesses.

The Company evaluates segment performance based on operating income before amortization of intangible assets. The accounting policies at the segments are the same as described in Note 2. In computing income from operations by segment, the effects of equity in earnings (losses) of affiliates, interest income, interest expense, other non-operating income and expense items and income taxes are not included.Intersegment sales are not material.

Identifiable assets by segment are those assets used in the Company's operations in each business segment. Investments in marketable equity securities are discussed in Note 4.

Education. Education products and services are provided by Kaplan, Inc. KHE includes Kaplan's postsecondary education businesses, made up of fixed-facility colleges as well as online postsecondary and career programs. KTP includes Kaplan's standardized test preparation and tutoring offerings, as well as the professional domestic training business, and other businesses. Kaplan International includes professional training and postsecondary education businesses outside the United States, as well as English-language programs. Kaplan Ventures is made up of a number of businesses in various states of development that are managed separately from the other education businesses.

In the first quarter of 2011, Kaplan made several changes to its operating and reporting structure. Kaplan's domestic professional training business was moved from KTP to KHE and Kaplan Continuing Education moved from Kaplan Ventures to KHE.These businesses were integrated with Kaplan University to become part of the Kaplan University School of Professional and ContinuingEducation. Also, Kaplan sold KCS in October 2011, KVE in July 2011, and Education Connection in April 2010; therefore the education division's operating results exclude these businesses. Segment operating results of the education division for fiscal years ended 2011, 2010 and 2009 have been restated to reflect these changes. Kaplan Ventures sold one small business in February 2012 and is exploring other alternatives with respect to the remaining Kaplan Ventures businesses, including possible sales.

In light of recent revenue declines and other business challenges, Kaplan has formulated and implemented restructuring plans at its various businesses that have resulted in significant costs in the past three years, with the objective of establishing lower cost levels in future periods. Across all Kaplan businesses, severance and restructuring costs of $29.2 million, $27.5 million and $33.2million were recorded in 2011, 2010 and 2009, respectively.

Restructuring and severance related expenses of $13.2 million and $9.3 million were recorded in 2011 and 2010, respectively, at KHE associated with workforce reductions.

In the first quarter of 2010, the Company discontinued certain offerings of the K12 business; $7.8 million in severance and other closure costs were recorded in the first half of 2010 in connection with this plan. In the fourth quarter of 2010, KTP began implementing a plan to reorganize its business consistent with the migration of students to Kaplan's online and hybrid test preparation offerings, reducing the number of leased test preparation centers; $10.4 million in costs were incurred, mostly comprised of charges related to early lease termination and property, plant and equipment write-downs. In 2011, implementation of the plan was completed and $12.5 million in additional restructuring and severance costs were incurred.

In March 2009, the Company approved a plan to close its Score tutoring centers. The Company recorded charges of $24.9 million in asset write-downs, lease terminations, severance and accelerated depreciation of fixed assets in the first half of 2009. In addition, restructuring-related expenses of $8.3 million were recorded in 2009 at Kaplan's professional domestic training business (part of KHE).

Cable Television. Cable television operations consist of cable systems offering video, Internet, phone and other services to subscribers in midwestern, western and southern states. The principal source of revenue is monthly subscription fees charged for services.

Newspaper Publishing.Newspaper publishing includes the publication of newspapers in the Washington, DC, area and Everett, WA; newsprint warehousing; and the Company's digital media publishing businesses (primarily washingtonpost.com and Slate). Revenues from newspaper publishing operations are derived from advertising and, to a lesser extent, from circulation.

Television Broadcasting. Television broadcasting operations are conducted through six VHF television stations serving the Detroit, Houston, Miami, San Antonio, Orlando and Jacksonville television markets. All stations are network-affiliated (except for WJXT in Jacksonville), with revenues derived primarily from sales of advertising time.

Other Businesses. Other businesses include the operating results of Avenue100 Media Solutions and other small businesses.

Corporate Office. Corporate office includes the expenses of the Company's corporate office and the pension credit previously reported in the magazine publishing division.Newsweek employees were participants in The Washington Post Company Retirement Plan, and the Company had historically been allocated a net pension credit for segment reporting purposes. Since the associated pension assets and liabilities were retained by the Company, the associated credit has been excluded from the reclassification of Newsweek results to discontinued operations. Pension cost arising from early retirement programs at Newsweek, however, is included in discontinued operations.

Geographical Information. The Company's non-U.S. revenues in 2011, 2010 and 2009 totaled approximately $628 million, $540 million and $505 million, respectively, from Kaplan's operations outside the U.S. The Company's long-lived assets in non-U.S. countries (excluding goodwill and other intangible assets), totaled approximately $74 million at December 31, 2011, and $57 million at January 2, 2011.

Company information broken down by operating segment and education division:

		Fiscal Year Ended
(in thousands)		2011		2010		2009
Operating Revenues
	Education	$	2,465,048	$	2,862,279	$	2,576,162
	Cable television		760,221		759,884		750,409
	Newspaper publishing		648,039		680,373		679,282
	Television broadcasting		319,206		342,164		272,651
	Other businesses		26,135		46,395		53,921
	Corporate office		-		-		-
	Intersegment elimination		(3,816)		(7,054)		(6,385)
		$	4,214,833	$	4,684,041	$	4,326,040
Income (loss) from operations
	Education	$	89,434	$	346,733	$	227,281
	Cable television		156,844		163,945		169,051
	Newspaper publishing		(18,200)		(9,826)		(163,549)
	Television broadcasting		117,089		121,348		70,506
	Other businesses		(34,787)		(34,966)		(61)
	Corporate office		(14,422)		(24,572)		(12,829)
		$	295,958	$	562,662	$	290,399
Equity in earnings (losses) of affiliates, net			5,949		(4,133)		(29,421)
Interest expense, net			(29,079)		(27,927)		(28,968)
Other (expense) income, net			(55,200)		7,515		13,197
Income from continuing operations before income taxes		$	217,628	$	538,117	$	245,207
Depreciation of property, plant and equipment
	Education	$	87,718	$	77,306	$	80,403
	Cable television		126,302		124,834		124,207
	Newspaper publishing		26,336		30,341		72,870
	Television broadcasting		12,448		12,720		12,299
	Other businesses		325		270		151
	Corporate office		244		1,159		679
		$	253,373	$	246,630	$	290,609
Amortization of intangible assets
	Education	$	21,167	$	21,406	$	21,191
	Cable television		267		327		310
	Newspaper publishing		1,051		1,223		1,010
	Television broadcasting		-		-		-
	Other businesses		5,874		3,786		3,099
	Corporate office		-		-		-
		$	28,359	$	26,742	$	25,610
Impairment of goodwill and other intangible assets
	Education	$	-	$	-	$	8,492
	Cable television		-		-		-
	Newspaper publishing		-		-		-
	Television broadcasting		-		-		-
	Other businesses		11,923		27,477		-
	Corporate office		-		-		-
		$	11,923	$	27,477	$	8,492
Net pension credit (expense)
	Education	$	(6,345)	$	(5,707)	$	(5,414)
	Cable television		(1,924)		(1,919)		(1,851)
	Newspaper publishing(1)		(25,300)		(42,287)		(75,925)
	Television broadcasting		(1,669)		(1,113)		(418)
	Other businesses		(68)		(65)		(82)
	Corporate office		36,983		34,599		33,836
		$	1,677	$	(16,492)	$	(49,854)
Capital expenditures
	Education	$	54,633	$	113,780	$	104,282
	Cable television		143,225		109,579		84,027
	Newspaper publishing		11,405		10,590		18,856
	Television broadcasting		6,415		6,675		13,559
	Other businesses		163		463		926
	Corporate office		-		-		-
		$	215,841	$	241,087	$	221,650
Identifiable assets
	Education	$	2,176,240	$	2,197,277	$	2,188,328
	Cable television		1,145,596		1,141,427		1,164,209
	Newspaper publishing		118,253		206,305		207,234
	Television broadcasting		421,764		436,289		433,705
	Other businesses		11,190		30,038		54,418
	Corporate office		823,641		774,484		729,706
		$	4,696,684	$	4,785,820	$	4,777,600
Investments in marketable equity securities			303,201		340,910		353,884
Investments in affiliates			17,101		31,637		54,722
Total Assets		$	5,016,986	$	5,158,367	$	5,186,206
(1) Includes a $2.4 million and $20.4 million charge in 2011 and 2010, respectively, related to the withdrawal from a multiemployer pension plan.

The Company's education division comprises the following operating segments:

		Fiscal Year Ended
(in thousands)		2011		2010		2009
Operating Revenues
	Higher education	$	1,399,582	$	1,905,038	$	1,653,276
	Test preparation(1)		303,093		314,879		336,788
	Kaplan international		690,225		585,924		537,238
	Kaplan ventures		74,946		59,296		57,210
	Kaplan corporate and other		4,585		5,537		2,436
	Intersegment elimination		(7,383)		(8,395)		(10,786)
		$	2,465,048	$	2,862,279	$	2,576,162
Income (loss) from operations
	Higher education	$	148,915	$	406,880	$	284,357
	Test preparation(1)		(28,498)		(32,583)		(18,029)
	Kaplan international		46,498		56,152		53,772
	Kaplan ventures		(10,093)		(17,490)		(9,286)
	Kaplan corporate and other		(66,268)		(65,992)		(83,843)
	Intersegment elimination		(1,120)		(234)		310
		$	89,434	$	346,733	$	227,281
Depreciation of property, plant and equipment
	Higher education	$	48,379	$	42,412	$	42,813
	Test preparation		15,489		14,095		17,941
	Kaplan international		16,747		12,839		11,438
	Kaplan ventures		4,189		4,109		3,911
	Kaplan corporate and other		2,914		3,851		4,300
		$	87,718	$	77,306	$	80,403
Amortization of intangible assets		$	21,167	$	21,406	$	21,191
Impairment of goodwill and other long-lived assets		$	-	$	-	$	8,492
Kaplan stock-based incentive compensation (credit) expense		$	(1,290)	$	(1,179)	$	933
Capital Expenditures
	Higher education	$	19,735	$	58,660	$	69,131
	Test preparation		17,266		32,798		15,900
	Kaplan international		16,304		14,163		13,900
	Kaplan ventures		2,762		3,050		3,710
	Kaplan corporate and other		(1,434)		5,109		1,641
		$	54,633	$	113,780	$	104,282
Identifiable assets
	Higher education	$	936,029	$	1,043,503	$	1,018,256
	Test preparation		334,343		290,368		285,673
	Kaplan international		809,267		675,127		671,250
	Kaplan ventures		89,043		93,359		58,421
	Kaplan corporate and other		7,558		94,920		154,728
		$	2,176,240	$	2,197,277	$	2,188,328

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• Test Preparation amounts include revenues of $8.6 million and operating losses of $36.8 million from Score for the fiscal year ended 2009.