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 March 31, 2013

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 May 3, 2013:

                                                    Class A Common Stock – 1,219,383 Shares

                                                    Class B Common Stock – 6,202,149 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 Months Ended March 31, 2013 and 2012                                                 

           1

 

 

 

 

b.     Condensed Consolidated Statements of Comprehensive Income (Unaudited) for the Three Months Ended March 31, 2013 and 2012

           2

 

 

 

 

c.      Condensed Consolidated Balance Sheets at March 31, 2013 (Unaudited) and December 31, 2012

           3

 

 

 

 

d.     Condensed Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended March 31, 2013 and 2012

           4

 

 

 

 

e.     Notes to Condensed Consolidated Financial Statements (Unaudited)

           5

 

 

 

Item 2.

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

         21

 

 

 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

         27

 

 

 

Item 4.

Controls and Procedures

         27

 

 

PART II. OTHER INFORMATION

 

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

         28

 

 

 

Item 6.

Exhibits

         29

 

 

Signatures

         30

 

 

 

 


 

 

 

PART I. FINANCIAL INFORMATION

 

Item  1.       Financial Statements

 

 

 

 

 

 

 

THE WASHINGTON POST COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

March 31,

(in thousands, except per share amounts)

2013 

 

2012 

Operating Revenues

 

 

 

 

 

 

Education

$

527,815 

 

$

546,685 

 

Advertising

 

163,148 

 

 

167,558 

 

Circulation and Subscriber

 

221,709 

 

 

213,677 

 

Other

 

46,433 

 

 

27,581 

 

 

 

959,105 

 

 

955,501 

Operating Costs and Expenses

 

 

 

 

 

 

Operating

 

451,981 

 

 

460,300 

 

Selling, general and administrative

 

414,556 

 

 

408,106 

 

Depreciation of property, plant and equipment

 

65,791 

 

 

61,924 

 

Amortization of intangible assets

 

3,717 

 

 

3,873 

 

 

 

936,045 

 

 

934,203 

Income from Operations

 

23,060 

 

 

21,298 

 

Equity in earnings of affiliates, net

 

3,418 

 

 

3,888 

 

Interest income

 

510 

 

 

1,069 

 

Interest expense

 

(8,960)

 

 

(9,163)

 

Other (expense) income, net

 

(4,083)

 

 

8,588 

Income from Continuing Operations Before Income Taxes

 

13,945 

 

 

25,680 

Provision for Income Taxes

 

7,300 

 

 

11,700 

Income from Continuing Operations

 

6,645 

 

 

13,980 

(Loss) Income from Discontinued Operations, Net of Tax

 

(1,386)

 

 

17,588 

Net Income

 

5,259 

 

 

31,568 

Net Income Attributable to Noncontrolling Interests

 

(97)

 

 

(70)

Net Income Attributable to The Washington Post Company

 

5,162 

 

 

31,498 

Redeemable Preferred Stock Dividends

 

(444)

 

 

(451)

Net Income Attributable to The Washington Post Company Common Stockholders

$

4,718 

 

$

31,047 

Amounts Attributable to The Washington Post Company Common Stockholders

 

 

 

 

 

Income from continuing operations

$

6,104 

 

$

13,459 

(Loss) income from discontinued operations, net of tax

 

(1,386)

 

 

17,588 

Net income attributable to The Washington Post Company common stockholders

$

4,718 

 

$

31,047 

Per Share Information Attributable to The Washington Post Company

 

 

 

 

 

 

Common Stockholders

 

 

 

 

 

Basic income per common share from continuing operations

$

0.82 

 

$

1.72 

Basic (loss) income per common share from discontinued operations

 

(0.18)

 

 

2.35 

Basic net income per common share

$

0.64 

 

$

4.07 

Basic average number of common shares outstanding

 

 7,227 

 

 

 7,514 

Diluted income per common share from continuing operations

$

0.82 

 

$

1.72 

Diluted (loss) income per common share from discontinued operations

 

(0.18)

 

 

2.35 

Diluted net income per common share

$

0.64 

 

$

4.07 

Diluted average number of common shares outstanding

 

 7,266 

 

 

 7,615 

 

 

 

 

 

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

1

 


 

 

 

THE WASHINGTON POST COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

  

 

 

 

 

 

 

 

  

 

 

 

Three Months Ended

  

 

 

 

March 31,

(in thousands)

2013 

2012 

Net Income

$

 5,259 

$

 31,568 

Other Comprehensive Income (Loss), Before Tax

  

  

 

  

 

Foreign currency translation adjustments:

 

 

 

 

 

 

Translation adjustments arising during the period

 

 (4,191) 

 

 7,823 

 

 

Adjustment for sale of a business with foreign operations

 

 ― 

 

 513 

 

 

 

 

 

 (4,191) 

 

 8,336 

 

Unrealized gains on available-for-sale securities:

 

 

 

 

 

 

Unrealized gains for the period

 

 49,078 

 

 32,315 

 

 

Reclassification adjustment for gain on available-for-sale security included in net income

 

 (551) 

 

 ― 

 

 

 

 

 

 48,527 

 

 32,315 

 

Pension and other postretirement plans:

 

 

 

 

 

 

Amortization of net prior service credit included in net income

 

 (437) 

 

 (451) 

 

 

Amortization of net actuarial loss included in net income

 

 2,317 

 

 1,657 

 

 

Settlement gain included in net income

 

 (3,471) 

 

 ― 

 

 

 

 (1,591) 

 

 1,206 

 

Cash flow hedge gain (loss)

 

 30 

 

 (35) 

Other Comprehensive Income, Before Tax

  

 42,775 

 

 41,822 

 

Income tax expense related to items of other comprehensive income

 

 (18,787) 

 

 (13,393) 

Other Comprehensive Income, Net of Tax

 

 23,988 

 

 28,429 

Comprehensive Income

 

 29,247 

 

 59,997 

 

Comprehensive income attributable to noncontrolling interests

 

 (118) 

 

 (90) 

Total Comprehensive Income Attributable to The Washington Post Company

$

 29,129 

$

 59,907 

 

 

 

 

 

 

 

 

See accompanying Notes to Consolidated Financial Statements.

 

2

 


 

 

 

THE WASHINGTON POST COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

March 31,

 

December 31,

(in thousands)

 

2013 

 

2012 

 

 

 

 

 

(Unaudited)

 

 

 

Assets

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

 300,652 

 

$

 512,431 

 

Restricted cash

 

 

 37,457 

 

 

 28,538 

 

Investments in marketable equity securities and other investments

 

 

 470,023 

 

 

 418,938 

 

Accounts receivable, net

 

 

 372,466 

 

 

 399,204 

 

Deferred income taxes

 

 

 ― 

 

 

 3,974 

 

Inventories

 

 

 3,929 

 

 

 7,985 

 

Other current assets

 

 

 91,454 

 

 

 82,692 

 

 

Total Current Assets

 

 

 1,275,981 

 

 

 1,453,762 

Property, Plant and Equipment, Net

 

 

 1,045,670 

 

 

 1,081,237 

Investments in Affiliates

 

 

 22,068 

 

 

 15,535 

Goodwill, Net

 

 

 1,309,663 

 

 

 1,317,915 

Indefinite-Lived Intangible Assets, Net

 

 

 539,728 

 

 

 539,728 

Amortized Intangible Assets, Net

 

 

 42,053 

 

 

 45,577 

Prepaid Pension Cost

 

 

 589,230 

 

 

 604,823 

Deferred Charges and Other Assets

 

 

 52,113 

 

 

 46,492 

 

 

Total Assets

 

$

 4,876,506 

 

$

 5,105,069 

 

 

 

 

 

 

 

 

Liabilities and Equity

 

  

 

 

  

 

Current Liabilities

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

 444,972 

 

$

 486,396 

 

Income taxes payable

 

 

 2,992 

 

 

 726 

 

Deferred income taxes

 

 

 15,597 

 

 

 ― 

 

Deferred revenue

 

 

 403,098 

 

 

 395,837 

 

Dividends declared

 

 

 222 

 

 

 ― 

 

Short-term borrowings

 

 

 3,169 

 

 

 243,327 

 

 

Total Current Liabilities

 

 

 870,050 

 

 

 1,126,286 

Postretirement Benefits Other Than Pensions

 

 

 60,804 

 

 

 59,949 

Accrued Compensation and Related Benefits

 

 

 214,745 

 

 

 216,280 

Other Liabilities

 

 

 107,210 

 

 

 109,774 

Deferred Income Taxes

 

 

 530,667 

 

 

 529,427 

Long-Term Debt

 

 

 453,726 

 

 

 453,384 

 

 

Total Liabilities

 

 

 2,237,202 

 

 

 2,495,100 

Redeemable Noncontrolling Interest

 

 

 12,664 

 

 

 12,655 

Redeemable Preferred Stock

 

 

 11,096 

 

 

 11,096 

Preferred Stock

 

 

 ― 

 

 

 ― 

Common Stockholders’ Equity

 

  

 

 

  

 

 

Common stock

 

 

 20,000 

 

 

 20,000 

 

Capital in excess of par value

 

 

 244,176 

 

 

 240,746 

 

Retained earnings

 

 

 4,551,493 

 

 

 4,546,775 

 

Accumulated other comprehensive income, net of tax

 

  

 

 

  

 

 

 

Cumulative foreign currency translation adjustment

 

 

 21,881 

 

 

 26,072 

 

 

Unrealized gain on available-for-sale securities

 

 

 139,669 

 

 

 110,553 

 

 

Unrealized gain on pensions and other postretirement plans

 

 

 116,214 

 

 

 117,169 

 

 

Cash flow hedge

 

 

 (922) 

 

 

 (940) 

 

Cost of Class B common stock held in treasury

 

 

 (2,477,245) 

 

 

 (2,474,347) 

 

 

Total Common Stockholders’ Equity

 

 

 2,615,266 

 

 

 2,586,028 

Noncontrolling Interests

 

 

 278 

 

 

 190 

 

 

Total Equity

 

 

 2,615,544 

 

 

 2,586,218 

 

 

 

Total Liabilities and Equity

 

$

 4,876,506 

 

$

 5,105,069 

 

 

 

 

 

 

 

 

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

3

 


 

 

 

THE WASHINGTON POST COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

  

 

 

 

March 31,

(in thousands)

 

2013 

 

2012 

Cash Flows from Operating Activities

 

 

 

 

 

 

Net Income

 

$

 5,259 

 

$

 31,568 

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

 

 

 

 

 

 

 

Depreciation of property, plant and equipment

 

 

 65,973 

 

 

63,254 

 

Amortization of intangible assets

 

 

 3,717 

 

 

 4,278 

 

Net pension expense

 

 

4,390 

 

 

2,192 

 

Multiemployer pension plan withdrawal charge

 

 

 349 

 

 

 ― 

 

Early retirement program expense

 

 

 14,258 

 

 

 1,022 

 

Foreign exchange loss (gain)

 

 

 4,614 

 

 

 (2,660) 

 

Net loss on sales of businesses

 

 

 70 

 

 

 3,082 

 

Equity in earnings of affiliates, net of distributions

 

 

 (3,408) 

 

 

 (3,691) 

 

Provision (benefit) for deferred income taxes

 

 

 1,877 

 

 

 (23,744) 

 

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

 

 

 515 

 

 

 (7,203) 

 

Change in assets and liabilities:

 

 

 

 

 

 

 

 

Decrease in accounts receivable, net

 

 

 23,020 

 

 

 36,716 

 

 

Decrease in inventories

 

 

 3,658 

 

 

 2,016 

 

 

Decrease in accounts payable and accrued liabilities

 

 

 (43,487) 

 

 

 (22,828) 

 

 

Increase in deferred revenue

 

 

 15,529 

 

 

 3,647 

 

 

Increase in income taxes payable

 

 

 2,273 

 

 

 11,019 

 

 

Increase in other assets and other liabilities, net

 

 

 (24,202) 

 

 

 (14,817) 

 

Other

 

 

 (387) 

 

 

 165 

 

 

Net Cash Provided by Operating Activities

 

 

 74,018 

 

 

 84,016 

 

 

 

 

 

 

 

 

 

Cash Flows from Investing Activities

 

 

 

 

 

 

 

Purchases of property, plant and equipment

 

 

 (36,462) 

 

 

 (44,875) 

 

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

 

 

 3,636 

 

 

 7,702 

 

Purchases of marketable equity securities and other investments

 

 

 (8,623) 

 

 

 (23,003) 

 

Investments in certain businesses, net of cash acquired

 

 

 (700) 

 

 

 (2,545) 

 

Other

 

 

 (18) 

 

 

 1,571 

 

 

Net Cash Used in Investing Activities

 

 

 (42,167) 

 

 

 (61,150) 

 

 

 

 

 

 

 

 

 

Cash Flows from Financing Activities

 

 

 

 

 

 

 

Repayment of short-term borrowing

 

 

 (240,121) 

 

 

 (109,671) 

 

Common shares repurchased

 

 

 (4,196) 

 

 

 (136) 

 

Dividends paid

 

 

 (222) 

 

 

 (18,889) 

 

Other

 

 

 3,311 

 

 

 16,459 

 

 

Net Cash Used in Financing Activities

 

 

 (241,228) 

 

 

 (112,237) 

Effect of Currency Exchange Rate Change

 

 

 (2,402) 

 

 

 3,263 

Net Decrease in Cash and Cash Equivalents

 

 

 (211,779) 

 

 

 (86,108) 

Beginning Cash and Cash Equivalents

 

 

 512,431 

 

 

 381,099 

Ending Cash and Cash Equivalents

 

$

 300,652 

 

$

 294,991 

 

 

 

 

 

 

 

 

 

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 – The Company and its subsidiaries 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 March 31, 2013 and 2012 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 year ended December 31, 2012.

 

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 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.

 

Recently Adopted and Issued Accounting PronouncementsIn February 2013, the Financial Accounting Standards Board (“FASB”) issued final guidance on the presentation of reclassifications out of other comprehensive income to net income. The amendment requires an entity to provide information about the amounts reclassified out of other comprehensive income by component. In addition, an entity is required to present, either on the face of the income statement or in a footnote, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income, only if the amount reclassified is required by GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under GAAP that provide detail about those amounts. This amendment is effective for interim and fiscal years beginning after December 15, 2012. The adoption of the amendment in the first quarter of 2013 is reflected in the Company's Notes to Condensed Consolidated Financial Statements.  

 

 

5

 


 

 

 

2. DISCONTINUED OPERATIONS

 

In March 2013, the Company completed the sale of The Herald, a daily and Sunday newspaper headquartered in Everett, WA. Under the terms of the agreement, the purchaser received most of the assets and liabilities; however, certain land and buildings and other assets and liabilities were retained by the Company. The results of operations of The Herald for the first quarter of 2013 and 2012, 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 and the accompanying notes have been reclassified to reflect the discontinued operations presented. The Company did not reclassify its Condensed Consolidated Balance Sheets or Statements of Cash Flows to reflect the 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 had no value. The income tax benefit was 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. 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. 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. 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. The results of operations of Kidum, Avenue100, EduNeering, and KLT, for the first quarter of 2012 are included in the Company’s Condensed Consolidated Statement of Operations as Income (Loss) from Discontinued Operations, Net of Tax.

 

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

 

 

 

 

Three Months Ended

 

 

 

March 31,

(in thousands)

 

2013 

 

2012 

Operating revenues

 

$

 3,461 

 

$

 23,171 

Operating costs and expenses

 

 

 (5,477) 

 

 

 (27,344) 

Loss from discontinued operations

 

 

 (2,016) 

 

 

 (4,173) 

Benefit from income taxes

 

 

 (676) 

 

 

 (23,700) 

Net (Loss) Income from Discontinued Operations

 

 

 (1,340) 

 

 

 19,527 

Loss on sale of discontinued operations

 

 

 (70) 

 

 

 (3,082) 

Benefit from income taxes on sale of discontinued operations

 

 

 (24) 

 

 

 (1,143) 

(Loss) Income from Discontinued Operations, Net of Tax

 

$

 (1,386) 

 

$

 17,588 

 

 

6

 


 

 

 

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,

 

September 30,

 

December 31,

(in thousands, except per share amounts)

 

2012 

 

2012 

 

2012 

 

2012 

Operating Revenues

 

  

 

 

 

 

 

 

 

 

 

 

 

Education

 

$

 546,685 

 

$

 551,774 

 

$

 551,696 

 

$

 546,341 

 

Advertising

 

 

 167,558 

 

 

 186,486 

 

 

 191,779 

 

 

 225,624 

 

Circulation and subscriber

 

 

 213,677 

 

 

 217,747 

 

 

 219,137 

 

 

 220,732 

 

Other

 

 

 27,581 

 

 

 33,096 

 

 

 42,582 

 

 

 53,127 

 

 

 

 

 

 955,501 

 

 

 989,103 

 

 

 1,005,194 

 

 

 1,045,824 

Operating Costs and Expenses

 

 

 

 

 

 

 

 

 

 

  

 

 

Operating

 

 

 460,300 

 

 

 461,788 

 

 

 480,731 

 

 

 463,626 

 

Selling, general and administrative

 

 

 408,106 

 

 

 397,465 

 

 

 380,214 

 

 

 397,280 

 

Depreciation of property, plant and equipment

 

 

 61,924 

 

 

 62,401 

 

 

 63,397 

 

 

 79,593 

 

Amortization of intangible assets

 

 

 3,873 

 

 

 4,428 

 

 

 5,091 

 

 

 7,610 

 

Impairment of goodwill and other long-lived assets

 

 

 ― 

 

 

 ― 

 

 

 ― 

 

 

 111,593 

 

 

 

 

 

 934,203 

 

 

 926,082 

 

 

 929,433 

 

 

 1,059,702 

Income (Loss) from Operations

 

 

 21,298 

 

 

 63,021 

 

 

 75,761 

 

 

 (13,878) 

 

Equity in earnings of affiliates, net

 

 

 3,888 

 

 

 3,314 

 

 

 4,099 

 

 

 2,785 

 

Interest income

 

 

 1,069 

 

 

 775 

 

 

 648 

 

 

 901 

 

Interest expense

 

 

 (9,163) 

 

 

 (8,979) 

 

 

 (8,738) 

 

 

 (9,064) 

 

Other income (expense), net

 

 

 8,588 

 

 

 (635) 

 

 

 4,163 

 

 

 (17,572) 

Income (Loss) from Continuing Operations before Income Taxes

 

 

 25,680 

 

 

 57,496 

 

 

 75,933 

 

 

 (36,828) 

Provision for Income Taxes

 

 

 11,700 

 

 

 21,200 

 

 

 31,100 

 

 

 8,200 

Income (Loss) from Continuing Operations

 

 

 13,980 

 

 

 36,296 

 

 

 44,833 

 

 

 (45,028) 

Income (Loss) from Discontinued Operations, Net of Tax

 

 

 17,588 

 

 

 15,751 

 

 

 49,114 

 

 

 (347) 

Net Income (Loss)

 

 

 31,568 

 

 

 52,047 

 

 

 93,947 

 

 

 (45,375) 

Net (Income) Loss Attributable to Noncontrolling Interests

 

 

 (70) 

 

 

 (11) 

 

 

 71 

 

 

 (64) 

Net Income (Loss) Attributable to The Washington Post Company

 

 

 31,498 

 

 

 52,036 

 

 

 94,018 

 

 

 (45,439) 

Redeemable Preferred Stock Dividends

 

 

 (451) 

 

 

 (222) 

 

 

 (222) 

 

 

 ― 

Net Income (Loss) Attributable to The Washington Post Company

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stockholders

 

$

 31,047 

 

$

 51,814 

 

$

 93,796 

 

$

 (45,439) 

Amounts Attributable to The Washington Post Company

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stockholders

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

 

$

 13,459 

 

$

 36,063 

 

$

 44,682 

 

$

 (45,092) 

Income (loss) from discontinued operations, net of tax

 

 

 17,588 

 

 

 15,751 

 

 

 49,114 

 

 

 (347) 

Net income (loss) attributable to the Washington Post

 

 

 

 

 

 

 

 

 

 

 

 

 

Company common stockholders

 

$

 31,047 

 

$

 51,814 

 

$

 93,796 

 

$

 (45,439) 

Per Share Information Attributable to The Washington Post

 

 

 

 

 

 

 

 

 

 

 

 

 

Company Common Stockholders

 

 

 

 

 

 

 

 

 

 

 

 

Basic income (loss) per common share from continuing operations

 

$

 1.72 

 

$

 4.76 

 

$

 6.02 

 

$

 (6.52) 

Basic income (loss) per common share from discontinued operations

 

 

 2.35 

 

 

 2.08 

 

 

 6.62 

 

 

 (0.05) 

Basic net income (loss) per common share

 

$

 4.07 

 

$

 6.84 

 

$

 12.64 

 

$

 (6.57) 

Diluted income (loss) per common share from continuing operations

 

$

 1.72 

 

$

 4.76 

 

$

 6.02 

 

$

 (6.52) 

Diluted income (loss) per common share from discontinued operations

 

 

 2.35 

 

 

 2.08 

 

 

 6.62 

 

 

 (0.05) 

Diluted net income (loss) per common share

 

$

 4.07 

 

$

 6.84 

 

$

 12.64 

 

$

 (6.57) 

 

7

 


 

 

 

 

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

 

(in thousands, except per share amounts)

 

2012 

 

2011 

Operating Revenues

 

  

 

 

 

 

 

Education

 

$

 2,196,496 

 

$

 2,404,459 

 

Advertising

 

 

 771,447 

 

 

 738,489 

 

Circulation and subscriber

 

 

 871,293 

 

 

 852,891 

 

Other

 

 

 156,386 

 

 

 113,973 

 

 

 

 

 3,995,622 

 

 

 4,109,812 

Operating Costs and Expenses

 

  

 

 

 

 

 

Operating

 

 

 1,866,445 

 

 

 1,891,888 

 

Selling, general and administrative

 

 

 1,583,065 

 

 

 1,617,641 

 

Depreciation of property, plant and equipment

 

 

 267,315 

 

 

 247,650 

 

Amortization of intangible assets

 

 

 21,002 

 

 

 22,335 

 

Impairment of goodwill and other long-lived assets

 

 

 111,593 

 

 

 ― 

 

 

 

 

 3,849,420 

 

 

 3,779,514 

Income from Operations

 

 

 146,202 

 

 

 330,298 

 

Equity in earnings of affiliates, net

 

 

 14,086 

 

 

 5,949 

 

Interest income

 

 

 3,393 

 

 

 4,147 

 

Interest expense

 

 

 (35,944) 

 

 

 (33,226) 

 

Other expense, net

 

 

 (5,456) 

 

 

 (55,200) 

Income from Continuing Operations Before Income Taxes

 

 

 122,281 

 

 

 251,968 

Provision for Income Taxes

 

 

 72,200 

 

 

 103,500 

Income from Continuing Operations

 

 

 50,081 

 

 

 148,468 

Income (Loss) from Discontinued Operations, Net of Tax

 

 

 82,106 

 

 

 (31,311) 

Net Income

 

 

 132,187 

 

 

 117,157 

Net Income Attributable to Noncontrolling Interests

 

 

 (74) 

 

 

 (7) 

Net Income Attributable to The Washington Post Company

 

 

 132,113 

 

 

 117,150 

Redeemable Preferred Stock Dividends

 

 

 (895) 

 

 

 (917) 

Net Income Attributable to The Washington Post Company Common Stockholders

 

$

 131,218 

 

$

 116,233 

Amounts Attributable to The Washington Post Company Common Stockholders

 

 

 

 

 

 

Income from continuing operations

 

$

 49,112 

 

$

 147,544 

Income (loss) from discontinued operations, net of tax

 

 

 82,106 

 

 

 (31,311) 

Net income attributable to the Washington Post Company common stockholders

 

$

 131,218 

 

$

 116,233 

Per Share Information Attributable to The Washington Post Company Common

 

 

 

 

 

 

 

Stockholders

 

 

 

 

 

 

Basic income per common share from continuing operations

 

$

 6.23 

 

$

 18.66 

Basic income (loss) per common share from discontinued operations

 

 

 11.16 

 

 

 (3.96) 

Basic net income per common share

 

$

 17.39 

 

$

 14.70 

Diluted income per common share from continuing operations

 

$

 6.23 

 

$

 18.66 

Diluted income (loss) per common share from discontinued operations

 

 

 11.16 

 

 

 (3.96) 

Diluted net income per common share

 

$

 17.39 

 

$

 14.70 

 

3. INVESTMENTS

 

Investments in marketable equity securities comprised the following:

 

 

 

As of

  

 

March 31,

 

December 31,

(in thousands)

 

2013 

 

2012 

Total cost

 

$

 194,319 

 

$

 195,832 

Net unrealized gains

 

 

 232,782 

 

 

 184,255 

Total Fair Value

 

$

 427,101 

 

$

 380,087 

 

There were no new investments in marketable equity securities during the first quarter of 2013. The Company made $30.0 million in investments in marketable equity securities during the first quarter of 2012, of which $7.7 million was settled in April 2012. During the first quarter of 2013, the proceeds from sales of marketable equity securities were $2.1 million, and net realized gains on such sales were $0.6 million. There were no sales of marketable equity securities in the first quarter of 2012.

 

8

 


 

 

 

 

As of March 31, 2013, the Company has a $3.7 million unrealized loss on its investment in Strayer Education, Inc., a publicly traded company. At March 31, 2013, 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 March 31, 2013. 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.

 

4. ACQUISITIONS AND DISPOSITIONS

 

In the first quarter of 2013, the Company acquired 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 quarter of 2012, Kaplan acquired two small businesses in its International division; the purchase price allocation mostly comprised goodwill and other intangible assets. The assets and liabilities of the companies acquired have been recorded at their estimated fair values at the date of acquisition.

 

In March 2013, the Company completed the sale of The Herald, a daily and Sunday newspaper headquartered in Everett, WA. The Herald was previously reported in the newspaper publishing segment. Kaplan completed the sale of Kaplan Learning Technologies in February 2012, which was part of the Kaplan Ventures division.

 

 5. GOODWILL AND OTHER INTANGIBLE ASSETS

 

Amortization of intangible assets for the three months ended March 31, 2013 and March 31, 2012 was $3.7 million and $3.9 million, respectively. Amortization of intangible assets is estimated to be approximately $9 million for the remainder of 2013, $9 million in 2014, $7 million in 2015, $6 million in 2016, $4 million in 2017, $4 million in 2018 and $3 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, 2012

  

  

 

  

  

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

$

 1,097,058 

 

$

 85,488 

 

$

 81,183 

 

$

 203,165 

 

$

 19,052 

 

$

 1,485,946 

 

Accumulated impairment losses

 

 (102,259) 

 

 

 ― 

 

 

 (65,772) 

 

 

 ― 

 

 

 ― 

 

 

 (168,031) 

 

 

 

 994,799 

 

 

 85,488 

 

 

 15,411 

 

 

 203,165 

 

 

 19,052 

 

 

 1,317,915 

Acquisitions

 

 ― 

 

 

 ― 

 

 

 ― 

 

 

 ― 

 

 

 627 

 

 

 627 

Foreign currency exchange rate changes

 

 (8,879) 

 

 

 ― 

 

 

 ― 

 

 

 ― 

 

 

 ― 

 

 

 (8,879) 

Balance as of March 31, 2013

  

  

 

  

  

 

 

  

 

 

  

 

 

  

 

 

  

 

Goodwill

 

 1,088,179 

 

 

 85,488 

 

 

 71,448 

 

 

 203,165 

 

 

 19,679 

 

 

 1,467,959 

 

Accumulated impairment losses

 

 (102,259) 

 

 

 ― 

 

 

 (56,037) 

 

 

 ― 

 

 

 ― 

 

 

 (158,296) 

 

 

$

 985,920 

 

$

 85,488 

 

$

 15,411 

 

$

 203,165 

 

$

 19,679 

 

$

 1,309,663 

 

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

 

  

 

Higher

 

Test

 

Kaplan

 

 

 

(in thousands)

Education

 

Preparation

 

International

 

Total

 

Balance as of December 31, 2012

  

  

 

  

  

 

 

 

 

 

 

 

 

Goodwill

$

 409,184 

 

$

 152,187 

 

$

 535,687 

 

$

 1,097,058 

 

 

Accumulated impairment losses

 

 ― 

 

 

 (102,259) 

 

 

 ― 

 

 

 (102,259) 

 

 

 

 

 409,184 

 

 

 49,928 

 

 

 535,687 

 

 

 994,799 

 

Foreign currency exchange rate changes

 

 (50) 

 

 

 ― 

 

 

 (8,829) 

 

 

 (8,879) 

 

Balance as of March 31, 2013

  

 

 

  

 

 

 

 

 

 

 

 

 

Goodwill

 

 409,134 

 

 

 152,187 

 

 

 526,858 

 

 

 1,088,179 

 

 

Accumulated impairment losses

 

 ― 

 

 

 (102,259) 

 

 

 ― 

 

 

 (102,259) 

 

 

 

$

 409,134 

 

$

 49,928 

 

$

 526,858 

 

$

 985,920 

 

 

9

 


 

 

 

 

Other intangible assets consist of the following:

 

 

 

 

 

As of March 31, 2013

 

As of December 31, 2012

 

 

 

 

Gross

 

 

 

Net

 

Gross

 

 

 

 

Net

  

 

Useful Life

 

Carrying

 

Accumulated

 

Carrying

 

Carrying

 

Accumulated

 

Carrying

(in thousands)

Range

 

Amount

 

Amortization

 

Amount

 

Amount

 

Amortization

 

Amount

Amortized Intangible Assets

 

 

  

  

 

  

  

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-compete agreements

2-5 years

 

$

 13,849 

 

$

 12,670 

 

$

 1,179 

 

$

 14,008 

 

$

 12,546 

 

$

 1,462 

 

Student and customer relationships

2-10 years

 

 

 73,457 

 

 

 42,651 

 

 

 30,806 

 

 

 73,693 

 

 

 40,787 

 

 

 32,906 

 

Databases and technology

3-5 years

 

 

 6,457 

 

 

 6,082 

 

 

 375 

 

 

 6,457 

 

 

 5,707 

 

 

 750 

 

Trade names and trademarks

2-10 years

 

 

 26,372 

 

 

 18,364 

 

 

 8,008 

 

 

 26,634 

 

 

 18,185 

 

 

 8,449 

 

Other

1-25 years

 

 

 8,872 

 

 

 7,187 

 

 

 1,685 

 

 

 8,849 

 

 

 6,839 

 

 

 2,010 

 

 

 

 

$

 129,007 

 

$

 86,954 

 

$

 42,053 

 

$

 129,641 

 

$

 84,064 

 

$

 45,577 

Indefinite-Lived Intangible Assets

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Franchise agreements

 

 

$

 496,321 

 

 

 

 

 

 

 

$

 496,321 

 

 

 

 

 

 

 

Wireless licenses

 

 

 

 22,150 

 

 

 

 

 

 

 

 

 22,150 

 

 

 

 

 

 

 

Licensure and accreditation

 

 

 

 7,371 

 

 

 

 

 

 

 

 

 7,371 

 

 

 

 

 

 

 

Other

 

 

 

 13,886 

 

 

 

 

 

 

 

 

 13,886 

 

 

 

 

 

 

 

 

 

 

$

 539,728 

 

 

 

 

 

 

 

$

 539,728 

 

 

 

 

 

 

 

6. DEBT

 

The Company’s borrowings consist of the following:

 

 

As of

 

March 31,

 

December 31,

(in thousands)

2013 

 

2012 

7.25% unsecured notes due February 1, 2019

$

 397,583 

 

$

 397,479 

USD Revolving credit borrowing

 

 ― 

 

 

 240,121 

AUD Revolving credit borrowing

 

 52,082 

 

 

 51,915 

Other indebtedness

 

 7,230 

 

 

 7,196 

Total Debt

 

 456,895 

 

 

 696,711 

Less: current portion

 

 (3,169) 

 

 

 (243,327) 

Total Long-Term Debt

$

 453,726 

 

$

 453,384 

 

The Company’s other indebtedness at March 31, 2013 and December 31, 2012 is at interest rates from 0% to 6% and matures from 2013 to 2017.

 

During the three months ended March 31, 2013 and March 31, 2012, the Company had average borrowings outstanding of approximately $516.7 million and $484.5 million, respectively, at average annual interest rates of approximately 7.0%. During the three months ended March 31, 2013 and March 31, 2012, the Company incurred net interest expense of $8.5 million and $8.1 million, respectively.

 

At March 31, 2013, the fair value of the Company’s 7.25% unsecured notes, based on quoted market prices, totaled $471.5 million, compared with the carrying amount of $397.6 million. At December 31, 2012, the fair value of the Company’s 7.25% unsecured notes, based on quoted market prices, totaled $481.4 million, compared with the carrying amount of $397.5 million. The carrying value of the Company’s other unsecured debt at March 31, 2013 approximates fair value.

 

7. FAIR VALUE MEASUREMENTS

 

Fair value measurements are determined based on the assumptions that a market participant would use in pricing an asset or liability based on a three-tiered hierarchy that draws a distinction between market participant assumptions based on (i) observable inputs, such as quoted prices in active markets (Level 1); (ii) inputs other than quoted prices in active markets that are observable either directly or indirectly (Level 2); and (iii) unobservable inputs that require the Company to use present value and other valuation techniques in the determination of fair value (Level 3). Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measure. The Company’s assessment of the significance of a particular input to the fair value measurements requires judgment and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy.

 

10

 


 

 

 

 

The Company’s financial assets and liabilities measured at fair value on a recurring basis were as follows:

 

(in thousands)

 

Level 1

 

Level 2

 

Total

As of March 31, 2013

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

Money market investments (1) 

 

$

 ― 

 

$

 190,915 

 

$

 190,915 

 

Marketable equity securities (2) 

 

 

 427,101 

 

 

 ― 

 

 

 427,101 

 

Other current investments (3) 

 

 

 14,495 

 

 

 28,427 

 

 

 42,922 

 

 

Total Financial Assets

 

$

 441,596 

 

$

 219,342 

 

$

 660,938 

  

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

Deferred compensation plan liabilities (4) 

 

$

 ― 

 

$

 60,919 

 

$

 60,919 

 

7.25% unsecured notes (5) 

 

 

 ― 

 

 

 471,528 

 

 

 471,528 

 

AUD revolving credit borrowing (5) 

 

 

 ― 

 

 

 52,082 

 

 

 52,082 

 

Interest rate swap (6) 

 

 

 ― 

 

 

 1,537 

 

 

 1,537 

 

 

Total Financial Liabilities

 

$

 ― 

 

$

 586,066 

 

$

 586,066 

 

As of December 31, 2012

 

  

  

 

  

  

 

  

  

Assets

 

 

 

 

 

 

 

 

 

 

Money market investments (1) 

 

$

 ― 

 

$

 432,670 

 

$

 432,670 

 

Marketable equity securities (2) 

 

 

 380,087 

 

 

 ― 

 

 

 380,087 

 

Other current investments (3) 

 

 

 14,134 

 

 

 24,717 

 

 

 38,851 

 

 

Total Financial Assets

 

$

 394,221 

 

$

 457,387 

 

$

 851,608 

  

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

Deferred compensation plan liabilities (4) 

 

$

 ― 

 

$

 62,297 

 

$

 62,297 

 

7.25% unsecured notes (5) 

 

 

 ― 

 

 

 481,424 

 

 

 481,424 

 

AUD revolving credit borrowing (5) 

 

 

 ― 

 

 

 51,915 

 

 

 51,915 

 

Interest rate swap (6) 

 

 

 ― 

 

 

 1,567 

 

 

 1,567 

 

 

Total Financial Liabilities

 

$

 ― 

 

$

 597,203 

 

$

 597,203 

 

 

 

 

 

 

 

 

 

 

 

 

____________

(1)       The Company’s money market investments are included in cash, cash equivalents and restricted cash.

(2)       The Company’s investments in marketable equity securities are classified as available-for-sale.

(3)       Includes U.S. Government Securities, corporate bonds, mutual funds and time deposits (with original maturities greater than 90 days, but less than one year).

(4)       Includes The Washington Post Company Deferred Compensation Plan and supplemental savings plan benefits under The Washington Post Company Supplemental Executive Retirement Plan, which are included in accrued compensation and related benefits.

(5)       See Note 6 for carrying amount of these notes and borrowing.

(6)       Included in Other liabilities. The Company utilized a market approach model using the notional amount of the interest rate swap multiplied by the observable inputs of time to maturity and market interest rates.

 

For assets that are measured using quoted prices in active markets, the total fair value is the published market price per unit multiplied by the number of units held without consideration of transaction costs. Assets and liabilities that are measured using significant other observable inputs are primarily valued by reference to quoted prices of similar assets or liabilities in active markets, adjusted for any terms specific to that asset or liability.

 

11

 


 

 

 

8. EARNINGS PER SHARE

 

The Company’s earnings per share from continuing operations (basic and diluted) are presented below:

 

 

 

 

 

Three Months Ended

  

 

 

 

March 31,

(in thousands, except per share amounts)

 

2013 

 

2012 

Income from continuing operations attributable to The Washington Post Company

  

  

  

 

 

 

 

common stockholders

 

$

 6,104 

 

$

 13,459 

Less: Amount attributable to participating securities

 

 

 (160) 

 

 

 (501) 

Basic income from continuing operations attributable to The Washington Post Company

 

 

  

 

 

  

 

common stockholders

 

$

 5,944 

 

$

 12,958 

 

 

 

 

 

 

 

 

 

Plus: Amount attributable to participating securities

  

 

 160 

 

 

 501 

Diluted income from continuing operations attributable to The Washington Post Company

 

 

  

 

 

  

 

common stockholders

 

$

 6,104 

 

$

 13,459 

 

 

 

 

 

 

 

 

 

Basic weighted average shares outstanding

 

 

 7,227 

 

 

 7,514 

Plus: Effect of dilutive shares related to stock options and restricted stock

 

 

 39 

 

 

 101 

Diluted weighted average shares outstanding

 

 

 7,266 

 

 

 7,615 

  

 

 

 

 

  

 

 

  

Income Per Share from Continuing Operations Attributable to The Washington Post Company

  

  

  

 

  

  

 

Common Stockholders:

 

 

 

 

 

 

 

 

Basic

 

$

 0.82 

 

$

 1.72 

  

 

Diluted

 

$

 0.82 

 

$

 1.72 

 

For the first quarter of 2013 and 2012, the basic earnings per share computed under the two-class method is lower than the diluted earnings per share computed under the if-converted method for participating securities, resulting in the presentation of the lower amount in diluted earnings per share. The first quarter of 2013 and 2012 diluted earnings per share amounts exclude the effects of 85,861 and 115,294 stock options outstanding, respectively, as their inclusion would be antidilutive. The first quarter of 2013 and 2012 diluted earnings per share amounts also exclude the effects of 52,200 and 7,500 restricted stock awards, respectively, as their inclusion would have been antidilutive.

 

In the first quarter of 2012, the Company declared regular dividends totaling $4.90 per share. In December 2012, the Company declared and paid an accelerated cash dividend totaling $9.80 per share, in lieu of regular quarterly dividends that the Company otherwise would have declared and paid in calendar year 2013.

 

9. PENSION AND POSTRETIREMENT PLANS

 

Defined Benefit Plans. The total cost arising from the Company’s defined benefit pension plans, including a portion included in discontinued operations, consists of the following components:

 

 

 

 

 

 

 

 

Supplemental Executive

 

 

Pension Plan

 

Retirement Plan

 

 

Three Months Ended March 31,

 

Three Months Ended March 31,

(in thousands)

 

2013 

 

2012 

 

2013 

 

2012 

Service cost

 

$

 13,365 

 

$

 9,107 

 

$

 429 

 

$

 367 

Interest cost

 

 

 14,291 

 

 

 14,591 

 

 

 1,023 

 

 

 1,060 

Expected return on assets

 

 

 (26,322) 

 

 

 (24,012) 

 

 

 ― 

 

 

 ―