Releases
The Washington Post Company Reports Third Quarter Earnings
WASHINGTON, Oct 18, 2002 -- The Washington Post Company (NYSE: WPO) today reported net income of $47.8 million ($4.99 per share) for its third quarter ended September 29, 2002, up from net income of $1.6 million ($0.14 per share) for the third quarter of last year.
Results for the third quarter of 2002 include early retirement program charges ($3.6 million, or $0.38 per share) and losses on the write-down of certain investments ($0.8 million, or $0.09 per share). Results for the third quarter of 2001 include losses on the write-down of certain investments ($13.4 million, or $1.41 per share) and a charge of $13.9 million, or $1.47 per share, for amortization of goodwill and certain other intangible assets that are no longer amortized under Statement of Financial Accounting Standards No. 142 (SFAS 142), "Goodwill and Other Intangible Assets." The company adopted SFAS 142 effective on the first day of its 2002 fiscal year. Excluding these items, net income for the third quarter of 2002 totaled $52.2 million, or $5.46 per share, compared to net income of $28.9 million, or $3.02 per share, for the third quarter of 2001.
Revenue for the third quarter of 2002 was $640.3 million, up 8 percent from $592.3 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 were up slightly for the third 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. In addition, Newsweek newsstand sales were significantly higher in the third quarter of 2001, following the events of September 11.
Operating income for the quarter increased 33 percent to $89.3 million, from $66.9 million in 2001, adjusted as if SFAS 142 had been adopted at the beginning of 2001. Excluding the $6.0 million in pre-tax charges from early retirement programs, operating income for the third quarter of 2002 was $95.3 million, an increase of 42 percent. Third quarter 2002 operating results benefited from significant increases at the company's broadcast, education and newspaper publishing divisions. These factors were offset in part by increased depreciation expense, a reduced net pension credit, early retirement program charges and higher stock-based compensation expense accruals at the education division.
For the first nine months of 2002, net income totaled $110.5 million ($11.50 per share), compared with net income of $215.1 million ($22.53 per share) for the same period of 2001. Results for the first nine months of 2002 include a transitional goodwill impairment loss ($12.1 million, or $1.27 per share), charges from early retirement programs ($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 ($0.3 million, or $0.04 per share). Results for the first nine months of 2001 include net non-operating gains, principally from the sale and exchange of certain cable systems ($171.3 million, or $18.03 per share), and a charge of $40.0 million, or $4.21 per share, for amortization of goodwill and other intangible assets that are no longer amortized under SFAS 142. Excluding these items, net income for the first nine months of 2002 totaled $134.2 million, or $13.99 per share, compared to net income of $83.8 million, or $8.71 per share, for the first nine months of 2001.
Revenue for the first nine months of 2002 was $1,888.3 million, up 6 percent over revenue of $1,782.6 million for the first nine months of 2001. Operating income increased 22 percent to $248.6 million, from $203.5 million in 2001, adjusted as if SFAS 142 had been adopted at the beginning of 2001. Excluding the $19.0 million in pre-tax charges from early retirement programs, operating income for the first nine months of 2002 was $267.6 million, an increase of 31 percent. 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, early retirement program charges and higher stock-based compensation expense accruals at the education division.
Excluding charges related to early retirement programs, the company's operating income for the third quarter and first nine months of 2002 includes $16.1 million and $48.3 million of net pension credits, respectively, compared to $19.3 million and $59.1 million for the same periods of 2001. 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. Management expects the 2002 annual net pension credit to approximate $64 million, compared to $76.9 million in 2001, excluding charges related to early retirement programs.
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 totaled $202.4 million for the third quarter of 2002, a 1 percent increase from revenue of $199.9 million in the third quarter of 2001; division revenue decreased 2 percent to $618.3 million for the first nine months of 2002, from $631.0 million for the first nine months of 2001. Division operating income for the third quarter increased 48 percent to $18.2 million, from pro forma operating income of $12.3 million in the third quarter of 2001; operating income increased 17 percent to $73.6 million for the first nine months of 2002, compared to pro forma operating income of $62.9 million for the first nine months of 2001. Improved operating results for the third quarter of 2002 reflect the benefits of cost control initiatives employed throughout the division and a 26 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 pension credit. Operating results for the first nine months of 2002 also benefited from cost control initiatives employed throughout the division, and a 25 percent decrease in newsprint expense; these savings were partially offset by a decrease in print advertising revenues, the early retirement charge discussed above and a reduced pension credit.
Print advertising revenue at The Washington Post newspaper in the third quarter decreased 2 percent to $130.4 million, from $132.9 million in 2001, and decreased 5 percent to $405.7 million for the first nine months of 2002, from $427.6 million for the first nine months of 2001. The decrease in print advertising revenues for the third quarter of 2002 is due to a continued decline in recruitment advertising revenue, with volume decreases of 22 percent in the third quarter, offset by higher revenue from several advertising categories, including preprints and other classified advertising. The decrease in print advertising revenues for the first nine months of 2002 is primarily due to a $26.1 million decline in recruitment advertising revenue, resulting from a 35 percent volume decline, and a decline in retail advertising sales and volume. These declines are partially offset by higher revenues from several advertising categories, including preprints and other classified advertising.
For the first nine months of 2002, Post daily and Sunday circulation each declined about 1 percent compared to the same period of the prior year. For the nine months ended September 29, 2002, average daily circulation at The Post totaled 749,000 and average Sunday circulation totaled 1,054,000.
Revenue generated by the company's online publishing activities, primarily washingtonpost.com, totaled $9.1 million for the third quarter of 2002, versus $7.7 million for 2001; online revenue totaled $25.3 million for the first nine months of 2002, versus $23.1 million for 2001. Local and national online advertising revenues grew 51 percent and 50 percent for the third quarter and first nine months of 2002, respectively. Revenue at the Jobs section of washingtonpost.com increased 11 percent in the third quarter of 2002 but was down 6 percent for the first nine months of 2002.
Television Broadcasting
Revenue for the television broadcasting division increased 20 percent in the third quarter of 2002 to $82.1 million, from $68.2 million in 2001, primarily due to approximately $9.0 million of political advertising. Additionally, third quarter revenues in 2001 were lower due to several days of commercial free coverage following the events of September 11. Revenues for the third quarter were higher at all of the company's stations, including WJXT in Jacksonville, Florida, which began operations as an independent station in July 2002 when its network affiliation with CBS ended. For the first nine months of 2002, revenue increased 8 percent to $243.6 million, from $226.0 million in 2001, due to an increase in national advertising, including political, and Olympics-related advertising at the company's NBC affiliates in the first quarter of 2002. These increases were partially offset by reduced network compensation revenues in both the third quarter and first nine months of 2002.
Operating income for the third quarter and first nine months of 2002 increased 49 percent and 16 percent to $38.5 million and $115.5 million, respectively, from pro forma operating income of $25.9 million and $99.3 million for the third quarter and first nine months of 2001, respectively. Operating income growth for the third quarter and first nine months of 2002 is due to revenue growth and tight cost controls, partially offset by a reduced pension credit.
Magazine Publishing
Revenue for the magazine publishing division totaled $87.5 million for the third quarter of 2002, an 11 percent decrease from $98.3 million for the third quarter of 2001; division revenue totaled $251.4 million for the first nine months of 2002, an 8 percent decline from $273.2 million for the first nine months of 2001. The revenue declines for the third quarter and first nine months of 2002 are primarily due to a significant spike in newsstand circulation revenue at Newsweek in the third quarter of 2001 due to regular and special editions related to the events of September 11. Advertising revenues at Newsweek were up slightly in the third quarter of 2002, but were down for the first nine months of 2002, primarily due to declines in the international division. Operating income totaled $12.5 million for the third quarter of 2002, a 12 percent increase from pro forma operating income of $11.1 million in the third quarter of 2001. Excluding the $3.1 million pre- tax charge in connection with an early retirement program at Newsweek, operating income increased 40 percent to $15.6 million. Third quarter 2001 operating results included approximately $5.0 million in nonrecurring costs associated with regular and special editions related to September 11; 2002 costs 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.
Operating income totaled $14.1 million for the first nine months of 2002, down from pro forma operating income of $20.5 million for the first nine months of 2001. Excluding the $16.1 million in pre-tax charges in connection with early retirement programs at Newsweek, operating income increased 48 percent to $30.2 million, primarily as a result of the decline in operating expenses noted above.
Cable Television
Cable division revenue of $107.6 million for the third quarter of 2002 represents a 9 percent increase over 2001 third quarter revenue of $98.7 million; for the first nine months of 2002, revenue increased 12 percent to $317.6 million, from $284.3 million in 2001. The 2002 revenue increase is principally due to rapid growth in the division's cable modem and digital service revenues.
Cable division cash flow (operating income excluding depreciation and amortization expense) totaled $41.5 million for the third quarter of 2002, an increase of 18 percent from $35.2 million for the third quarter of 2001; for the first nine months of 2002, cash flow increased 21 percent to $120.6 million, from $99.3 million in 2001. Cable division operating income for the third quarter of 2002 decreased 9 percent to $16.6 million, from pro forma operating income of $18.2 million in 2001. Although revenues increased for the quarter, depreciation expense was up 47 percent, including a $3.5 million charge for obsolete assets. Operating income increased 11 percent for the first nine months of 2002 to $54.4 million from pro forma operating income of $49.2 million for the first nine months of 2001. The increase in operating income is due mostly to the division's revenue growth, offset by higher depreciation expense and increased programming expense.
The increase in depreciation expense is due to the charge discussed above, as well as significant capital spending, primarily in 2001 and 2000, which has enabled the cable division to offer digital and broadband cable services to its subscribers. The cable division began its rollout plan for these services in the third quarter of 2000. At September 29, 2002, the cable division had approximately 218,600 digital cable subscribers, representing a 31 percent penetration of the subscriber base in the markets where digital services are offered. Digital services are currently offered in markets serving 97 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 September 29, 2002, the cable division had 142,900 paying digital subscribers. The benefits from these services began to show in the first quarter of 2002 and are expected to continue throughout the year, with the remaining portion of free one-year periods generally ending later in 2002.
At September 29, 2002, the cable division had 721,000 basic subscribers, compared to 753,000 at the end of September 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 September 29, 2002, the cable division had 69,300 CableONE.net service subscribers, compared to 35,800 at the end of September 2001, due to a large increase in the company's cable modem deployment (offered to 95 percent of homes passed at the end of September 2002) and subscriber penetration rates. Of these subscribers, 65,900 and 22,600 were cable modem subscribers at the end of the third quarter of 2002 and 2001, respectively, with the remainder being dial-up subscribers.
Education
Education division revenue totaled $160.6 million for the third quarter of 2002, a 26 percent increase over revenue of $127.2 million for the same period of 2001. Kaplan reported operating income for the third quarter of $11.5 million, compared to a pro forma operating income of $4.6 million for the third quarter of 2001. Excluding charges for stock options held by Kaplan management, Kaplan operating earnings were $18.2 million for the third quarter of 2002, compared to $8.1 million for the third quarter of 2001. For the first nine months of 2002, education division revenue totaled $457.4 million, a 24 percent increase over revenue of $368.1 million for the same period of 2001. Kaplan reported operating income of $11.6 million for the first nine months of 2002, compared to a pro forma operating loss of $9.8 million for the first nine months of 2001. Excluding charges for stock options held by Kaplan management, Kaplan operating earnings were $44.9 million for the first nine months of 2002, compared to operating earnings of $9.0 million for the first nine months of 2001. Excluding goodwill amortization in 2001, a summary of operating results for the third quarter and first nine months of 2002 compared to 2001 is as follows:
Third Quarter YTD
-------------------------- -------------------------
(In thousands)
2002 2001 % Change 2002 2001 % Change
-------- -------- -------- ------- ------- --------
Revenue
Supplemental
education $ 97,414 $ 86,533 +13 $280,787 $249,232 +13
Higher education 63,226 40,626 +56 176,629 118,871 +49
-------- -------- ----- -------- -------- ---
$160,640 $127,159 +26 $457,416 $368,103 +24
======== ======== ===== ======== ======== ===
Operating income (loss)
Supplemental
education $ 19,505 $ 11,755 +66 $ 43,696 $ 23,708 +84
Higher education 4,150 1,695 +145 18,101 3,114 +481
Kaplan corporate
overhead (5,356) (5,214) (3) (16,574) (17,494) +5
Other* (6,799) (3,638) (87) (33,649) (19,119) (76)
-------- -------- ----- -------- -------- ---
$ 11,500 $ 4,598 150 $ 11,574 $ (9,791) ---
======== ======== ===== ======== ======== ===
* 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 the third quarter and first nine months of 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 profits from Kaplan's CFA and real estate exam
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 decrease in this expense category in 2002 is due to decreased spending for these development initiatives.
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. 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 the third quarter of 2002 was $1.3 million, compared to losses of $26.5 million for the third quarter of 2001. For the first nine months of 2002, the company's equity in losses of affiliates totaled $16.9 million, compared to losses of $45.6 million for the same period of 2001. The improvements were primarily due to better operating results at BrassRing LLC, which accounted for approximately $2.0 million and $12.7 million of the 2002 third quarter and first nine month equity in losses of affiliates, respectively, compared to $29.1 million and $51.6 million in equity losses for the same periods of 2001. In addition to its 49 percent interest in BrassRing LLC, the company's affiliate investments include a 50 percent interest in the International Herald Tribune, and a 49 percent interest in Bowater Mersey Paper Company Limited.
Other Non-Operating Income (Expense)
The company recorded other non-operating income, net, of $1.1 million for the third quarter of 2002, compared to $4.4 million of non-operating expense, net, in the third quarter of 2001. The 2002 and 2001 non-operating income (expense) includes non-operating gains and charges for the write-down of certain investments to their estimated fair value.
The company recorded non-operating income, net, of $1.6 million for the first nine months of 2002, compared to non-operating income, net, of $293.7 million for the same period of the prior year. The 2002 non-operating income, net, includes a gain on the sale of marketable securities, 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 $8.6 million for the third quarter of 2002, compared to $11.6 million for the same period of 2001; net interest expense totaled $26.1 million for the first nine months of 2002, versus $38.1 million in 2001. At September 29, 2002, the company had $768.0 million in borrowings outstanding at an average interest rate of 3.8 percent.
Provision for Income Taxes
The effective tax rate for the third quarter of 2002 was 40.6 percent, compared to 64.5 percent for the same period of 2001, and 40.8 percent versus 39.7 percent for the 2002 and 2001 nine month periods, respectively. Excluding the effect of the cable gain transactions, the company's effective tax rate approximated 47.8 percent for the first nine months of 2001. The effective tax rate for 2002 has declined 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.
Cumulative Effect of Change in Accounting Principle
Earlier this year, the company completed its SFAS 142 transitional goodwill impairment test, resulting in an impairment loss related to its magazine division of $12.1 million, or $1.27 per share. This loss is included in the company's year-to-date results for the nine months ended September 29, 2002 as a cumulative effect of change in accounting principle.
Earnings Per Share
The calculation of diluted earnings per share for the third quarter and first nine months of 2002 was based on 9,523,000 and 9,518,000 weighted average shares outstanding, respectively, compared to 9,502,000 and 9,500,000, respectively, for the third quarter and first nine months of 2001. The company made no significant repurchases of its stock during the first nine months of 2002.
Stock Options -- Change in Accounting Method
Effective the first day of the company's 2002 fiscal year, the company has 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 will be 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."
No stock options have been awarded in fiscal year 2002 through the end of the third quarter; therefore, this change in accounting method has had no impact on the company's reported results of operations in 2002. The impact on the company's overall 2002 operating results is not expected to be material.
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)
Third Quarter
----------------------- %
2002 2001 Change
----------------------- ------
Operating revenues $640,293 $592,307 8
Operating expenses (505,053) (490,521) 3
--------- ---------
Operating income before
depreciation and amortization 135,240 101,786 33
Depreciation (45,808) (34,765) 32
Amortization (172) (20,068) (99)
--------- ---------
Operating income 89,260 46,953 90
Equity in losses of affiliates, net (1,254) (26,535) (95)
Interest income 69 226 (69)
Interest expense (8,717) (11,861) (27)
Other income, net 1,115 (4,365) --
--------- ---------
Income before income taxes 80,473 4,418 --
Provision for income taxes (32,700) (2,850) --
--------- ---------
Net income 47,773 1,568 --
Redeemable preferred stock
dividends (249) (263) (5)
--------- ---------
Net income available for common
stock $47,524 $1,305 --
========= =========
Basic earnings per share $5.00 $0.14 --
========= =========
Diluted earnings per share $4.99 $0.14 --
========= =========
Basic average shares outstanding 9,506,000 9,489,000
Diluted average shares outstanding 9,523,000 9,502,000
Pro forma results (1):
Net income available for common
stock as reported $47,524 $1,305 --
Amortization of goodwill and
other intangibles, net of tax - 13,948 --
--------- ---------
Pro forma net income available for
common stock $47,524 $15,253 212
========= =========
Basic earnings per share $5.00 $1.61 211
========= =========
Diluted earnings per share $4.99 $1.61 210
========= =========
(1) Third 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)
Year-to-Date
------------------------------- %
2002 2001 Change
------------------------------- ----------
Operating revenues $1,888,318 $1,782,615 6
Operating expenses (1,510,988) (1,473,375) 3
------------- -------------
Operating income
before depreciation
and amortization 377,330 309,240 22
Depreciation (128,267) (105,264) 22
Amortization (483) (57,185) (99)
------------- -------------
Operating income 248,580 146,791 69
Equity in losses of
affiliates, net (16,943) (45,636) (63)
Interest income 261 1,597 (84)
Interest expense (26,381) (39,726) (34)
Other income, net 1,606 293,688 (99)
------------- -------------
Income before income
taxes and cumulative
effect of change in
accounting
principle 207,123 356,714 (42)
Provision for income
taxes (84,500) (141,600) (40)
------------- -------------
Income before
cumulative effect of
change in accounting
principle 122,623 215,114 (43)
Cumulative effect of
change in method of
accounting for
goodwill and other
intangible assets (12,100) - --
------------- -------------
Net income 110,523 215,114 (49)
Redeemable preferred
stock dividends (1,033) (1,052) (2)
------------- -------------
Net income available
for common stock $109,490 $214,062 (49)
============= =============
Basic earnings per
share:
Before cumulative
effect of change
in accounting
principle $12.90 $22.68 (43)
Cumulative effect
of change in
accounting
principle $(1.27) $ - --
Redeemable
preferred stock
dividends $(0.11) $(0.11) --
------------- -------------
Net income
available for
common stock $11.52 $22.57 (49)
============= =============
Diluted earnings per
share:
Before cumulative
effect of change
in accounting
principle $12.88 $22.64 (43)
Cumulative effect
of change in
accounting
principle $(1.27) $ - --
Redeemable
preferred stock
dividends $(0.11) $(0.11) --
------------- -------------
Net income
available for
common stock $11.50 $22.53 (49)
============= =============
Basic average shares
outstanding 9,502,000 9,484,000
Diluted average shares
outstanding 9,518,000 9,500,000
Year-to-Date
------------------------- %
2002 2001 Change
------------------------- ---------
Pro forma results (1):
Income before cumulative effect of
change in accounting principle,
as reported $122,623 $215,114 (43)
Amortization of goodwill and
other intangibles, net of tax - 40,035 --
------------ ------------
Pro forma income before cumulative
effect of change in accounting
principle 122,623 255,149 (52)
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 $109,490 $254,097 (57)
============ ============
Basic earnings per share:
Before cumulative effect of
change in accounting principle $12.90 $26.90 (52)
Cumulative effect of change in
accounting principle $(1.27) $ - --
Redeemable preferred stock
dividends $(0.11) $(0.11) --
------------ ------------
Net income available for common
stock $11.52 $26.79 (57)
============ ===========
Diluted earnings per share
Before cumulative effect of
change in accounting principle $12.88 $26.86 (52)
Cumulative effect of change in
accounting principle $(1.27) $ - --
Redeemable preferred stock
dividends $(0.11) $(0.11) --
------------ ------------
Net income available for common
stock $11.50 $26.75 (57)
============ ============
(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)
Third Quarter
----------------------- %
2002 2001 Change
---------------------------------
Operating Revenues:
Newspaper publishing $202,445 $199,946 1
Television broadcasting 82,074 68,191 20
Magazine publishing (2) 87,487 98,337 (11)
Cable television 107,647 98,674 9
Education 160,640 127,159 26
---------------------------------
$640,293 $592,307 8
---------------------------------
Operating Expenses:
Newspaper publishing $184,248 $188,372 (2)
Television broadcasting 43,610 45,862 (5)
Magazine publishing (2) 75,037 88,907 (16)
Cable television 91,050 90,637 0
Education 149,140 126,399 18
Corporate office 7,948 5,177 54
---------------------------------
$551,033 $545,354 1
---------------------------------
Operating Income:
Newspaper publishing $18,197 $11,574 57
Television broadcasting 38,464 22,329 72
Magazine publishing 12,450 9,430 32
Cable television 16,597 8,037 107
Education 11,500 760 --
Corporate office (7,948) (5,177) (54)
---------------------------------
$89,260 $46,953 90
---------------------------------
Depreciation:
Newspaper publishing $10,672 $8,911 20
Television broadcasting 2,873 2,933 (2)
Magazine publishing 1,010 1,160 (13)
Cable television 24,866 16,886 47
Education 6,387 4,875 31
---------------------------------
$45,808 $34,765 32
---------------------------------
Amortization:
Newspaper publishing $3 $691 (100)
Television broadcasting -- 3,534 --
Magazine publishing -- 1,667 --
Cable television 39 10,229 (100)
Education 130 3,947 (97)
---------------------------------
$172 $20,068 (99)
---------------------------------
Pro forma results (1):
Operating Income:
Newspaper publishing $18,197 $12,261 48
Television broadcasting 38,464 25,863 49
Magazine publishing 12,450 11,097 12
Cable television 16,597 18,227 (9)
Education 11,500 4,598 150
Corporate office (7,948) (5,177) (54)
---------------------------------
$89,260 $66,869 33
---------------------------------
(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)
Year-to-Date
----------------------- %
2002 2001 Change
----------------------------------
Operating Revenues:
Newspaper publishing $618,284 $630,965 (2)
Television broadcasting 243,584 226,046 8
Magazine publishing (2) 251,391 273,198 (8)
Cable television 317,643 284,303 12
Education 457,416 368,103 24
---------------------------------
$1,888,318 $1,782,615 6
---------------------------------
Operating Expenses:
Newspaper publishing $544,733 $569,984 (4)
Television broadcasting 128,110 137,358 (7)
Magazine publishing (2) 237,247 257,748 (8)
Cable television 263,238 263,185 0
Education 445,842 389,097 15
Corporate office 20,568 18,452 11
---------------------------------
$1,639,738 $1,635,824 0
---------------------------------
Operating Income:
Newspaper publishing $73,551 $60,981 21
Television broadcasting 115,474 88,688 30
Magazine publishing 14,144 15,450 (8)
Cable television 54,405 21,118 158
Education 11,574 (20,994) --
Corporate office (20,568) (18,452) (11)
---------------------------------
$248,580 $146,791 69
---------------------------------
Depreciation:
Newspaper publishing $32,295 $28,438 14
Television broadcasting 8,422 8,791 (4)
Magazine publishing 3,082 3,597 (14)
Cable television 66,083 50,031 32
Education 18,385 14,407 28
---------------------------------
$128,267 $105,264 22
---------------------------------
Amortization:
Newspaper publishing $11 $1,885 (99)
Television broadcasting -- 10,601 --
Magazine publishing -- 5,002 --
Cable television 117 28,167 (100)
Education 355 11,530 (97)
---------------------------------
$483 $57,185 (99)
---------------------------------
Pro forma results (1):
Operating Income:
Newspaper publishing $73,551 $62,854 17
Television broadcasting 115,474 99,289 16
Magazine publishing 14,144 20,452 (31)
Cable television 54,405 49,168 11
Education 11,574 (9,791) --
Corporate office (20,568) (18,452) (11)
---------------------------------
$248,580 $203,520 22
---------------------------------
(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