Releases
The Washington Post Company Reports 2002 Fourth Quarter and Year-End Earnings
WASHINGTON, Jan. 24 -- The Washington Post Company (NYSE: WPO) today reported net income of $93.7 million ($9.83 per share) for the fourth quarter of 2002, up from $14.5 million ($1.53 per share) for the fourth quarter of 2001. Results for the fourth quarter of 2002 include a net non-operating gain from the exchange of certain cable systems (after-tax impact of $16.7 million, or $1.75 per share). The company adopted Statement of Financial Accounting Standards No. 142 (SFAS 142), "Goodwill and Other Intangible Assets," on the first day of its 2002 fiscal year. Fourth quarter 2001 results included an after-tax charge of $15.0 million, or $1.57 per share, for amortization of goodwill and other intangible assets that are no longer amortized under SFAS 142.
The company's results for the fourth quarter of 2002 also include losses on the write-down of certain investments (after-tax impact of $1.9 million, or $0.20 per share). Results for the fourth quarter of 2001 also included losses on the write-down of certain investments (after-tax impact of $4.3 million, or $0.46 per share) and a non-cash goodwill and other intangibles impairment charge recorded by one of the company's affiliates (after-tax impact of $9.0 million, or $0.94 per share).
Revenue for the fourth quarter of 2002 was $695.9 million, up 11 percent from $628.4 million in 2001. The increase in revenue is due mostly to significant revenue growth at the education, broadcast and cable divisions. Revenues at the company's newspaper publishing division also were up for the fourth quarter of 2002, while revenues were down at the magazine publishing division compared to the prior year; the advertising climate at both divisions continues to be soft. Operating income for the quarter increased 36 percent to $129.0 million, from $94.7 million in 2001, adjusted as if SFAS 142 had been adopted at the beginning of 2001. Fourth quarter operating results benefited from significant increases at the company's broadcast, education, newspaper publishing, and cable divisions. These factors were offset in part by increased depreciation expense and a reduced net pension credit.
Net income for the fiscal year ended December 29, 2002 was $204.3 million ($21.34 per share), compared with net income for the fiscal year ended December 30, 2001 of $229.6 million ($24.06 per share). The company's 2002 results include a net non-operating gain from the exchange of certain cable systems (after-tax impact of $16.7 million, or $1.75 per share), a transitional goodwill impairment loss (after-tax impact of $12.1 million, or $1.27 per share), charges from early retirement programs (after-tax impact of $11.3 million, or $1.18 per share), and a net non-operating loss from the write-down of certain of the company's investments (after-tax impact of $2.3 million, or $0.24 per share). The company's 2001 results included net non- operating gains from the sale and exchange of certain cable systems (after-tax impact of $196.5 million, or $20.69 per share), a non-cash goodwill and other intangibles impairment charge recorded by one of the company's affiliates (after-tax impact of $19.9 million, or $2.10 per share), losses from the write-down of a non-operating parcel of land and certain cost method investments to their estimated fair value (after-tax impact of $18.3 million, or $1.93 per share), and an after-tax charge of $55.0 million, or $5.79 per share, for amortization of goodwill and other intangible assets that are no longer amortized under SFAS 142.
Revenue for 2002 was $2,584.2 million, up 7 percent compared to revenue of $2,411.0 in 2001, with significant revenue growth at the education, cable, and broadcast divisions. Operating income increased 27 percent to $377.6 million, from $298.3 million in 2001, adjusted as if SFAS 142 had been adopted at the beginning of 2001. Operating results for 2002 include $19.0 million in pre- tax charges from early retirement programs. The company's year-to-date results benefited from improved operating results at the education and broadcast divisions, along with improved earnings at The Washington Post newspaper and the cable division. These factors were offset in part by increased depreciation expense, a reduced net pension credit, the early retirement program charges noted above and higher stock-based compensation expense accruals at the education division.
Excluding charges related to early retirement programs, the company's 2002 and 2001 operating income includes $64.4 million and $76.9 million of net pension credits, respectively; operating income includes $16.1 million and $17.9 million of net pension credits for the fourth quarter of 2002 and 2001, respectively. At December 30, 2001, the company modified certain assumptions surrounding the company's pension plans. Specifically, the company reduced its assumptions on discount rate from 7.5 percent to 7.0 percent and expected return on plan assets from 9.0 percent to 7.5 percent. These assumption changes result in a reduction of approximately $5.5 million in the company's net pension credit each quarter. At December 29, 2002, the company reduced its discount rate assumption to 6.75 percent.
Divisional Results
As discussed above, the company adopted SFAS 142 effective on the first day of its 2002 fiscal year. All operating income comparisons presented below are on a pro forma basis as if SFAS 142 had been adopted at the beginning of 2001. Therefore, 2001 pro forma operating results exclude amortization charges of goodwill and certain other intangible assets that are no longer amortized under SFAS 142.
Newspaper Publishing
Newspaper publishing division revenue in 2002 decreased slightly to $842.0 million, from $842.7 million in 2001; revenues totaled $223.7 million for the fourth quarter of 2002, a 6 percent increase from revenue of $211.8 million for the fourth quarter of 2001. Division operating income for 2002 totaled $109.0 million, an increase of 23 percent from pro forma operating income of $88.6 million in 2001; operating income increased 38 percent to $35.5 million in the fourth quarter of 2002, from pro forma operating income of $25.7 million in the fourth quarter of 2001. Improved operating results for 2002 reflect the benefits of cost control initiatives employed throughout the division and a 22 percent decrease in newsprint expense; these savings were partially offset by a pre-tax early retirement program charge of $2.9 million and a reduced net pension credit. Operating results for the fourth quarter of 2002 also benefited from cost control initiatives employed throughout the division, an 11 percent decrease in newsprint expense and increased revenues; these savings were partially offset by a reduced net pension credit.
Print advertising revenue at The Washington Post newspaper decreased 3 percent to $555.7 million, from $574.3 million in 2001, and increased 2 percent to $150.0 million for the fourth quarter of 2002, from $146.8 million for the fourth quarter of 2001. The decrease in print advertising revenues for 2002 is due to a continued decline in recruitment advertising revenue, with volume decreases of 32 percent, offset by higher revenue from several advertising categories, including preprints, zoned and other classified advertising. The increase in print advertising revenues for the fourth quarter of 2002 is primarily due to higher revenues from several advertising categories, including preprints and zoned advertising. This increase was partially offset by a $2.5 million decline in recruitment advertising revenue resulting from a 19 percent volume decline, and a decline in retail advertising sales and volume.
Circulation revenues at The Post were up 3.6 percent and 4.8 percent, for 2002 and the fourth quarter of 2002, respectively, due to increases in single copy newsstand and home delivery prices in 2002. Daily circulation at The Post declined 1.7 percent and Sunday circulation declined 1.2 percent in 2002. For the year ended December 29, 2002, average daily circulation at The Post totaled 760,000 and average Sunday circulation totaled 1,054,000.
Revenue generated by the company's online publishing activities, primarily washingtonpost.com, increased 18 percent to $35.9 million during the year, from $30.4 million in 2001. Online revenues increased 45 percent to $10.6 million for the fourth quarter of 2002, from $7.3 million for the fourth quarter of 2001. Local and national online advertising revenues grew 60 percent in 2002 and 79 percent for the fourth quarter of 2002. Revenue at the Jobs section of washingtonpost.com decreased 1 percent in 2002 but increased 21 percent for the fourth quarter of 2002.
Television Broadcasting
Revenue at the television broadcasting division increased 9 percent to $343.6 million in 2002, from $314.0 million in 2001, due primarily to $31.8 million in political advertising, as well as Olympics-related advertising at the company's NBC affiliates in the first quarter of 2002. Additionally, revenues in 2001 were lower due to a general softness in advertising and several days of commercial free coverage following the events of September 11. Revenue increased 14 percent in the fourth quarter of 2002 to $100.0 million, from $88.0 million in 2001, due primarily to $20.1 million in political advertising. These increases were partially offset by reduced network compensation revenues in 2002.
Operating income for 2002 increased 16 percent to $168.8 million, from pro forma operating income of $146.0 million in 2001. For the fourth quarter of 2002, operating income increased 14 percent to $53.4 million, from pro forma operating income of $46.7 million for the fourth quarter of 2001. Operating income growth for 2002 and the fourth quarter of 2002 is due to strong revenue growth, along with tight cost controls, partially offset by a reduced pension credit.
In July 2002, WJXT in Jacksonville, Florida began operations as an independent station when its network affiliation with CBS ended.
Magazine Publishing
Revenue for the magazine publishing division totaled $349.1 million for 2002, a 7 percent decrease from $374.6 million in 2001; revenue decreased 4 percent to $97.7 for the fourth quarter of 2002, from $101.4 million in the fourth quarter of 2001. Revenues for 2001 reflect a significant spike in newsstand circulation revenue at Newsweek due to regular and special editions related to the events of September 11. Advertising revenues at Newsweek were up slightly in the fourth quarter of 2002, but were down for 2002, primarily due to declines in the international division. Operating income totaled $25.7 million for 2002, a decrease of 20 percent from pro forma operating income of $32.0 million in 2001; operating income for the fourth quarter totaled $11.6 million, an increase of 1 percent from pro forma operating income of $11.5 million in the fourth quarter of 2001. Operating results for 2002 include $16.1 million in pre-tax charges in connection with early retirement programs at Newsweek. Expenses for 2001 included approximately $5.0 million in nonrecurring costs associated with regular and special editions related to September 11. Costs for 2002 have also declined due to payroll and other related cost savings from employees accepting early retirement programs offered by Newsweek, and from significant cost savings programs put into place at Newsweek's international operations.
Cable Television
Cable division revenue of $428.5 million for 2002 represents an 11 percent increase from revenues of $386.0 in 2001; revenue totaled $110.9 million for the fourth quarter of 2002, a 9 percent increase from $101.7 million from the fourth quarter of 2001. The 2002 revenue increase is principally due to rapid growth in the division's cable modem and digital service revenues. Cable division operating income increased 15 percent in 2002 to $80.9 million, from pro forma operating income of $70.6 million in 2001. For the fourth quarter of 2002, operating income increased 24 percent to $26.5 million, from pro forma operating income of $21.5 million for the fourth quarter of 2001. The increase in operating income for 2002 is due mostly to the division's revenue growth, offset by higher depreciation expense and increased programming expense.
Cable division cash flow (operating income excluding depreciation and amortization expense) totaled $169.8 million for 2002, an increase of 25 percent from $135.3 million for 2001; for the fourth quarter of 2002, cash flow increased 37 percent to $49.2 million, from $36.0 million for the fourth quarter of 2001.
The increase in depreciation expense for 2002 is primarily due to significant capital spending, primarily in 2001 and 2000, which has enabled the cable division to offer digital and broadband cable services to its subscribers; depreciation expense for 2002 also includes $5.4 million in charges for obsolete assets. The cable division began its rollout plan for these services in the third quarter of 2000. At December 31, 2002, the cable division had approximately 214,900 digital cable subscribers, representing a 30 percent penetration of the subscriber base in the markets where digital services are offered. Digital services are currently offered in markets serving 98 percent of the cable division's subscriber base. The initial rollout plan for the new digital cable services included an offer for the cable division's customers to obtain these services free for one year. At December 31, 2002, the cable division had 194,200 paying digital subscribers, compared to 31,000 at the end of 2001. Most of the benefits from these services began to show in the first quarter of 2002 and continued throughout the year, with the remaining portion of free one-year periods generally having ended by the end of 2002.
At December 31, 2002, the cable division had 718,000 basic subscribers, compared to 752,700 at the end of December 2001, with the decrease due primarily to the difficult economic environment over the past year; basic customer disconnects for non-payment of bills have increased significantly. At December 31, 2002, the cable division had 79,400 CableONE.net service subscribers, compared to 46,400 at the end of December 2001, due to a large increase in the company's cable modem deployment (offered to 93 percent of homes passed at the end of December 2002) and subscriber penetration rates. Of these subscribers, 78,100 and 32,900 were cable modem subscribers at the end of 2002 and 2001, respectively, with the remainder being dial-up subscribers.
Education
Education division revenue in 2002 increased 26 percent to $621.1 million, from $493.7 million in 2001. Kaplan reported operating income for the year of $20.5 million, compared to a pro forma operating loss of $13.1 million in 2001. Approximately one-third of the increase in Kaplan revenue and approximately $9 million of the increase in Kaplan operating income is from newly acquired businesses, primarily in the higher education division. For the fourth quarter of 2002, education division revenue increased 30 percent to $163.7 million, from $125.6 million in the fourth quarter of 2001. Kaplan reported operating income for the fourth quarter of 2002 of $8.9 million, compared to a pro forma operating loss of $3.3 million for the fourth quarter of 2001. Excluding goodwill amortization in 2001, a summary of operating results for 2002 and the fourth quarter of 2002 compared to 2001 is as follows:
Fourth Quarter YTD
-------------------------- ------------------------
(In thousands)
% %
2002 2001 Change 2002 2001 Change
-------- ------- ------- ------- -------- -------
Revenue
Supplemental
education $ 90,461 $ 78,807 +15 $371,248 $328,039 +13
Higher education 73,248 46,771 +57 249,877 165,642 +51
-------- -------- --- -------- -------- ---
$163,709 $125,578 +30 $621,125 $493,681 +26
======== ======== === ======== ======== ===
Operating income (loss)
Supplemental
education $ 10,407 $ 3,801 +174 $ 54,103 $ 27,509 +97
Higher education 9,468 6,035 +57 27,569 9,149 +201
Kaplan corporate
overhead (9,570) (6,487) (48) (26,143) (23,981) (9)
Other* (1,367) (6,619) +79 (35,017) (25,738) (36)
-------- -------- --- -------- -------- ---
$ 8,938 $ (3,270) --- $ 20,512 $(13,061) ---
======== ======== === ======== ======== ===
*Other includes charges accrued for stock-based incentive compensation and amortization of certain intangibles.
Supplemental education includes Kaplan's test preparation, professional training, and Score! businesses. The improvement in supplemental education results for 2002 is due mostly to higher enrollments and to a lesser extent, higher prices at Kaplan's traditional test preparation business (particularly the LSAT, MCAT and GRE prep courses), as well as higher revenues and operating income from Kaplan's CFA and real estate licensure preparation services. Score! also contributed to the improved results, with increased enrollment, higher prices and strong cost controls.
Higher education includes all of Kaplan's post-secondary education businesses, including the fixed-facility colleges that were formerly part of Quest Education, as well as online post-secondary and career programs (various distance learning businesses). Higher education results are showing significant growth due to student enrollment increases, high student retention rates, and as a result of several acquisitions.
Corporate overhead represents unallocated expenses of Kaplan, Inc.'s corporate office, including expenses associated with the design and development of educational software that, if successfully completed, will benefit all of Kaplan's business units. The increase in this expense category in the fourth quarter of 2002 is due to a $4.2 million charge relating to the early termination of an office lease for one of Kaplan's units.
Other expense is comprised primarily of accrued charges for stock-based incentive compensation arising from a stock option plan established for certain members of Kaplan's management and amortization of certain intangibles. Under the stock-based incentive plan, the amount of compensation expense varies directly with the estimated fair value of Kaplan's common stock and the number of options outstanding. For 2002 and 2001, the company recorded expense of $34,531,000 and $25,302,000, respectively, related to this plan. The increase in other expense for 2002 is attributable to an increase in stock-based incentive compensation, which is due to an increase in Kaplan's estimated value.
Equity in Losses of Affiliates
The company's equity in losses of affiliates for 2002 was $19.3 million, compared to losses of $68.7 million for 2001. For the fourth quarter of 2002, the company's equity in losses of affiliates totaled $2.4 million, compared to $23.0 million for the fourth quarter of 2001. The improvements were primarily due to better operating results at BrassRing LLC, which accounted for approximately $13.9 million and $1.3 million of 2002 and the fourth quarter of 2002 equity in losses of affiliates, respectively, compared to $75.1 million and $23.5 million in equity losses for the same periods of 2001. The company's affiliate investments at the end of 2002 consisted of a 49 percent interest in BrassRing LLC, a 50 percent interest in the International Herald Tribune, and a 49 percent interest in Bowater Mersey Paper Company Limited.
On January 1, 2003, the company sold its fifty percent interest in the International Herald Tribune for $65 million; the company will report a pre- tax non-operating gain of approximately $50 million in the first quarter of 2003.
Other Non-Operating Income (Expense)
The company recorded other non-operating income, net, of $28.9 million in 2002, compared to $283.7 million of non-operating income, net, for 2001. For the fourth quarter of 2002, the company recorded non-operating income, net, of $27.3 million, compared to non-operating expense, net, of $9.9 million for the fourth quarter of 2001. The 2002 non-operating income includes a pre-tax gain of $27.8 on the exchange of certain cable systems in the fourth quarter of 2002 and a gain on the sale of marketable securities; these gains were offset by write-downs recorded on certain investments. The 2001 non-operating income is comprised mostly of gains arising from the sale and exchange of certain cable systems completed in the first quarter of 2001, offset by write-downs recorded on certain investments and a parcel of non-operating land to their estimated fair value.
Net Interest Expense
The company incurred net interest expense of $33.5 million in 2002, compared to $47.5 million in 2001; net interest expense totaled $7.4 million for the fourth quarter of 2002, versus $9.3 million for the fourth quarter of 2001. At December 29, 2002, the company had $664.8 million in borrowings outstanding at an average interest rate of 4.0 percent; at December 30, 2001, the company had $933.1 million in borrowings outstanding.
Provision for Income Taxes
The effective tax rate was 38.8 percent for 2002, compared to 40.7 percent for 2001. Excluding the effect of the cable gain transactions, the company's effective rate approximated 38.7 percent for 2002 and 50.2 percent for 2001. The effective tax rate for 2002 has declined primarily because the company no longer has any permanent difference from goodwill amortization not deductible for tax purposes as a result of the adoption of SFAS 142. The company's effective tax rate has also declined due to an increase in operating earnings and a decrease in the overall state tax rate.
Cumulative Effect of Change in Accounting Principle
Earlier this year, the company completed its SFAS 142 transitional goodwill impairment test, resulting in an after-tax impairment loss of $12.1 million, or $1.27 per share, related to PostNewsweek Tech Media (part of magazine publishing segment). This loss is included in the company's 2002 results as a cumulative effect of change in accounting principle.
Earnings Per Share
The calculations of diluted earnings per share for 2002 and the fourth quarter of 2002 were based on 9,523,000 and 9,537,000 weighted average shares, respectively, compared to 9,500,000 and 9,501,000, respectively, for 2001 and the fourth quarter of 2001. The company made no significant repurchases of its stock during 2002.
Stock Options - Change in Accounting Method
Effective the first day of the company's 2002 fiscal year, the company adopted the fair-value-based method of accounting for company stock options as outlined in Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" (SFAS 123). This change in accounting method was applied prospectively to all awards granted from the beginning of the company's fiscal year 2002 and thereafter. Stock options awarded prior to fiscal 2002 will continue to be accounted for under the intrinsic value method under Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees."
In December 2002, the company awarded 11,500 stock options resulting in total stock option expense of less than $100,000 for 2002.
Forward-Looking Statements
This report contains certain forward-looking statements that are based largely on the company's current expectations. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results and achievements to differ materially from those expressed in the forward-looking statements. For more information about these forward-looking statements and related risks, please refer to the section titled "Forward-looking Statements" in Part I of the company's Annual Report on Form 10-K.
THE WASHINGTON POST COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except share and per share amounts)
Fourth Quarter
----------------------- %
2002 2001 Change
----------------------- ------
Operating revenues $695,885 $628,409 11
Operating expenses (523,062) (500,484) 5
---------- ----------
Operating income before
depreciation and amortization 172,823 127,925 35
Depreciation (43,641) (33,036) 32
Amortization (172) (21,748) (99)
---------- ----------
Operating income 129,010 73,141 76
Equity in losses of affiliates,
net (2,366) (23,023) (90)
Interest income 71 570 (88)
Interest expense (7,438) (9,914) (25)
Other income, net 27,268 (9,949) --
---------- ----------
Income before income taxes 146,545 30,825 --
Provision for income taxes (52,800) (16,300) --
---------- ----------
Net income 93,745 14,525 --
Redeemable preferred stock
dividends - - --
---------- ----------
Net income available for common
stock $93,745 $14,525 --
========== ==========
Basic earnings per share $9.86 $1.53 --
========== ==========
Diluted earnings per share $9.83 $1.53 --
========== ==========
Basic average shares outstanding 9,509,000 9,492,000
Diluted average shares outstanding 9,537,000 9,501,000
Pro forma results (1) :
Net income available for common
stock as reported $93,745 $14,525 --
Amortization of goodwill and
other intangibles, net of tax - 14,954 --
---------- ----------
Pro forma net income available for
common stock $93,745 $29,479 218
========== ==========
Basic earnings per share $9.86 $3.11 217
========== ==========
Diluted earnings per share $9.83 $3.10 217
========== ==========
(1) Fourth quarter 2001 results are adjusted as if SFAS 142 had been
adopted at the beginning of 2001.
THE WASHINGTON POST COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except share and per share amounts)
Fiscal Year
------------------------------- %
2002 2001 Change
------------------------------- -------
Operating revenues $2,584,203 $2,411,024 7
Operating expenses (2,034,050) (1,973,859) 3
------------- -------------
Operating income before
depreciation and
amortization 550,153 437,165 26
Depreciation (171,908) (138,300) 24
Amortization (655) (78,933) (99)
------------- -------------
Operating income 377,590 219,932 72
Equity in losses of
affiliates, net (19,308) (68,659) (72)
Interest income 332 2,167 (85)
Interest expense (33,819) (49,640) (32)
Other income, net 28,873 283,739 (90)
------------- -------------
Income before income taxes
and cumulative effect of
change in accounting
principle 353,668 387,539 (9)
Provision for income taxes (137,300) (157,900) (13)
------------- -------------
Income before cumulative
effect of change in
accounting principle 216,368 229,639 (6)
Cumulative effect of change
in method of accounting
for goodwill and other
intangible assets (12,100) - --
------------- -------------
Net income 204,268 229,639 (11)
Redeemable preferred
stock dividends (1,033) (1,052) (2)
------------- -------------
Net income available
for common stock $203,235 $228,587 (11)
============= =============
Basic earnings per share:
Before cumulative
effect of change in
accounting principle $22.76 $24.21 (6)
Cumulative effect of
change in accounting
principle $(1.27) $- --
Redeemable preferred
stock dividends $(0.11) $(0.11) --
------------- -------------
Net income available for
common stock $21.38 $24.10 (11)
============= =============
Diluted earnings per share:
Before cumulative effect
of change in accounting
principle $22.72 $24.17 (6)
Cumulative effect of
change in accounting
principle $(1.27) $- --
Redeemable preferred
stock dividends $(0.11) $(0.11) --
------------- -------------
Net income available
for common stock $21.34 $24.06 (11)
============= =============
Basic average shares
outstanding 9,504,000 9,486,000
Diluted average shares
outstanding 9,523,000 9,500,000
Fiscal Year
-------------------- %
2002 2001 Change
-------------------- --------
Pro forma results (1) :
Income before cumulative effect of
change in accounting principle, as
reported $216,368 $229,639 (6)
Amortization of goodwill and
other intangibles, net of tax - 54,989 --
--------- ---------
Pro forma income before cumulative
effect of change in accounting
principle 216,368 284,628 (24)
Cumulative effect of change in
method of accounting for goodwill
and other intangible assets (12,100) - --
Redeemable preferred stock
dividends (1,033) (1,052) (2)
--------- ---------
Pro forma net income available for
common stock $203,235 $283,576 (28)
========= =========
Basic earnings per share:
Before cumulative effect of change
in accounting principle $22.76 $30.00 (24)
Cumulative effect of change in
accounting principle $(1.27) $- --
Redeemable preferred stock
dividends $(0.11) $(0.11) --
--------- ---------
Net income available for common
stock $21.38 $29.89 (28)
========= =========
Diluted earnings per share
Before cumulative effect of change
in accounting principle $22.72 $29.96 (24)
Cumulative effect of change in
accounting principle $(1.27) $- --
Redeemable preferred stock
dividends $(0.11) $(0.11) --
--------- ---------
Net income available for common
stock $21.34 $29.85 (29)
========= =========
(1) 2001 results are adjusted as if SFAS 142 had been adopted at the
beginning of 2001.
THE WASHINGTON POST COMPANY
BUSINESS SEGMENT INFORMATION
(Unaudited)
(In thousands)
Fourth Quarter
----------------------- %
2002 2001 Change
---------------------------------
Operating Revenues:
Newspaper publishing $223,699 $211,756 6
Television broadcasting 99,968 87,964 14
Magazine publishing (2) 97,659 101,377 (4)
Cable television 110,850 101,734 9
Education 163,709 125,578 30
---------------------------------
$695,885 $628,409 11
---------------------------------
Operating Expenses:
Newspaper publishing $188,244 $187,993 0
Television broadcasting 46,616 44,805 4
Magazine publishing (2) 86,076 91,521 (6)
Cable television 84,317 90,615 (7)
Education 154,771 132,921 16
Corporate office 6,851 7,413 (8)
---------------------------------
$566,875 $555,268 2
---------------------------------
Operating Income:
Newspaper publishing $35,455 $23,763 49
Television broadcasting 53,352 43,159 24
Magazine publishing 11,583 9,856 18
Cable television 26,533 11,119 139
Education 8,938 (7,343) --
Corporate office (6,851) (7,413) 8
---------------------------------
$129,010 $73,141 76
---------------------------------
Depreciation:
Newspaper publishing $10,666 $9,424 13
Television broadcasting 2,765 3,141 (12)
Magazine publishing 1,042 1,057 (1)
Cable television 22,668 14,474 57
Education 6,500 4,940 32
---------------------------------
$43,641 $33,036 32
---------------------------------
Amortization:
Newspaper publishing $4 $1,979 (100)
Television broadcasting -- 3,534 --
Magazine publishing -- 1,667 --
Cable television 38 10,386 (100)
Education 130 4,182 (97)
---------------------------------
$172 $21,748 (99)
---------------------------------
Pro forma results (1):
Operating Income:
Newspaper publishing $35,455 $25,738 38
Television broadcasting 53,352 46,693 14
Magazine publishing 11,583 11,523 1
Cable television 26,533 21,466 24
Education 8,938 (3,270) --
Corporate office (6,851) (7,413) 8
---------------------------------
$129,010 $94,737 36
---------------------------------
(1) 2001 results are adjusted as if SFAS 142 had been adopted at the
beginning of 2001.
(2) 2001 magazine publishing revenue and expenses were reclassified to
conform with the current year presentation.
THE WASHINGTON POST COMPANY
BUSINESS SEGMENT INFORMATION
(Unaudited)
(In thousands)
Fiscal Year
----------------------- %
2002 2001 Change
---------------------------------
Operating Revenues:
Newspaper publishing $841,984 $842,721 0
Television broadcasting 343,552 314,010 9
Magazine publishing (2) 349,050 374,575 (7)
Cable television 428,492 386,037 11
Education 621,125 493,681 26
---------------------------------
$2,584,203 $2,411,024 7
---------------------------------
Operating Expenses:
Newspaper publishing $732,978 $757,977 (3)
Television broadcasting 174,726 182,163 (4)
Magazine publishing (2) 323,322 349,269 (7)
Cable television 347,555 353,800 (2)
Education 600,613 522,018 15
Corporate office 27,419 25,865 6
---------------------------------
$2,206,613 $2,191,092 1
---------------------------------
Operating Income:
Newspaper publishing $109,006 $84,744 29
Television broadcasting 168,826 131,847 28
Magazine publishing 25,728 25,306 2
Cable television 80,937 32,237 151
Education 20,512 (28,337) --
Corporate office (27,419) (25,865) (6)
---------------------------------
$377,590 $219,932 72
---------------------------------
Depreciation:
Newspaper publishing $42,961 $37,862 13
Television broadcasting 11,187 11,932 (6)
Magazine publishing 4,124 4,654 (11)
Cable television 88,751 64,505 38
Education 24,885 19,347 29
---------------------------------
$171,908 $138,300 24
---------------------------------
Amortization:
Newspaper publishing $15 $3,864 (100)
Television broadcasting -- 14,135 --
Magazine publishing -- 6,669 --
Cable television 155 38,553 (100)
Education 485 15,712 (97)
---------------------------------
$655 $78,933 (99)
---------------------------------
Pro forma results (1):
Operating Income:
Newspaper publishing $109,006 $88,592 23
Television broadcasting 168,826 145,982 16
Magazine publishing 25,728 31,975 (20)
Cable television 80,937 70,634 15
Education 20,512 (13,061) --
Corporate office (27,419) (25,865) (6)
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$377,590 $298,257 27
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(1) 2001 results are adjusted as if SFAS 142 had been adopted at the beginning of 2001.
(2) 2001 magazine publishing revenue and expenses were reclassified to conform with the current year presentation. SOURCE The Washington Post Company
/CONTACT: John B. Morse, Jr. of The Washington Post Company, +1-202-334-6662/