SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarterly Period Ended June 29, 2003
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 ¨.
Shares outstanding at July 28, 2003:
| Class A Common Stock |
1,722,250 Shares | |
| Class B Common Stock |
7,809,440 Shares |
THE WASHINGTON POST COMPANY
| PART I. |
FINANCIAL INFORMATION | |||
| Item 1. |
Financial Statements |
|||
| 3 | ||||
| 5 | ||||
| c. Condensed Consolidated Balance Sheets at June 29, 2003 (Unaudited) and December 29, 2002 |
6 | |||
| 7 | ||||
| e. Notes to Condensed Consolidated Financial Statements (Unaudited) |
8 | |||
| Item 2. |
Management’s Discussion and Analysis of Results of Operations and Financial Condition |
15 | ||
| Item 4. |
23 | |||
| PART II. |
OTHER INFORMATION |
|||
| Item 4. |
24 | |||
| Item 6. |
25 | |||
| 26 | ||||
2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
The Washington Post Company
Condensed Consolidated Statements of Income (Unaudited)
| Thirteen Weeks Ended |
Twenty-six Weeks Ended |
|||||||||||||||
| (In thousands, except per share amounts) |
June 29, 2003 |
June 30, 2002 |
June 29, 2003 |
June 30, 2002 |
||||||||||||
| Operating revenues |
||||||||||||||||
| Advertising |
$ | 318,927 | $ | 316,102 | $ | 598,724 | $ | 589,671 | ||||||||
| Circulation and subscriber |
176,348 | 168,614 | 348,534 | 329,755 | ||||||||||||
| Education |
195,560 | 149,695 | 373,338 | 296,776 | ||||||||||||
| Other |
16,105 | 13,292 | 26,784 | 31,823 | ||||||||||||
| 706,940 | 647,703 | 1,347,380 | 1,248,025 | |||||||||||||
| Operating costs and expenses |
||||||||||||||||
| Operating |
368,974 | 335,443 | 717,608 | 668,683 | ||||||||||||
| Selling, general and administrative |
187,493 | 160,387 | 356,663 | 337,252 | ||||||||||||
| Depreciation of property, plant and equipment |
43,212 | 41,286 | 86,607 | 82,459 | ||||||||||||
| Amortization of intangible assets |
363 | 159 | 512 | 311 | ||||||||||||
| 600,042 | 537,275 | 1,161,390 | 1,088,705 | |||||||||||||
| Income from operations |
106,898 | 110,428 | 185,990 | 159,320 | ||||||||||||
| Other income (expense) |
||||||||||||||||
| Equity in losses of affiliates |
(5,524 | ) | (9,183 | ) | (8,166 | ) | (15,689 | ) | ||||||||
| Interest income |
458 | 59 | 573 | 192 | ||||||||||||
| Interest expense |
(6,658 | ) | (8,797 | ) | (13,896 | ) | (17,664 | ) | ||||||||
| Other, net |
2,274 | (5,963 | ) | 50,409 | 491 | |||||||||||
| Income before income taxes and cumulative effect of change in accounting principle |
97,448 | 86,544 | 214,910 | 126,650 | ||||||||||||
| Provision for income taxes |
36,800 | 35,400 | 81,200 | 51,800 | ||||||||||||
| Income before cumulative effect of change in accounting principle |
60,648 | 51,144 | 133,710 | 74,850 | ||||||||||||
| Cumulative effect of change in method of accounting for goodwill and other intangible assets, net of taxes |
— | — | — | (12,100 | ) | |||||||||||
| Net income |
60,648 | 51,144 | 133,710 | 62,750 | ||||||||||||
| Redeemable preferred stock dividends |
(258 | ) | (259 | ) | (775 | ) | (784 | ) | ||||||||
| Net income available for common shares |
$ | 60,390 | $ | 50,885 | $ | 132,935 | $ | 61,966 | ||||||||
| Basic earnings per share: |
||||||||||||||||
| Before cumulative effect of change in accounting principle |
$ | 6.34 | $ | 5.35 | $ | 13.95 | $ | 7.79 | ||||||||
| Cumulative effect of change in accounting principle |
— | — | — | (1.27 | ) | |||||||||||
| Net income available for common stock |
$ | 6.34 | $ | 5.35 | $ | 13.95 | $ | 6.52 | ||||||||
3
| Diluted earnings per share: |
|||||||||||||
| Before cumulative effect of change in accounting principle |
$ | 6.32 | $ | 5.34 | $ | 13.91 | $ | 7.78 | |||||
| Cumulative effect of change in accounting principle |
— | — | — | (1.27 | ) | ||||||||
| Net income available for common stock |
$ | 6.32 | $ | 5.34 | $ | 13.91 | $ | 6.51 | |||||
| Dividends declared per common share |
$ | 1.45 | $ | 1.40 | $ | 4.35 | $ | 4.20 | |||||
| Basic average number of common shares outstanding |
9,527 | 9,503 | 9,527 | 9,501 | |||||||||
| Diluted average number of common shares outstanding |
9,555 | 9,521 | 9,554 | 9,516 |
4
The Washington Post Company
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
| Thirteen Weeks Ended |
Twenty-six Weeks Ended |
|||||||||||||||
| (In thousands) |
June 29, 2003 |
June 30, 2002 |
June 29, 2003 |
June 30, 2002 |
||||||||||||
| Net income |
$ | 60,648 | $ | 51,144 | $ | 133,710 | $ | 62,750 | ||||||||
| Other comprehensive income (loss) |
||||||||||||||||
| Foreign currency translation adjustment |
5,088 | 4,318 | 8,193 | 4,417 | ||||||||||||
| Reclassification adjustment on sale of affiliate investment |
— | — | (1,633 | ) | — | |||||||||||
| Change in unrealized gain on available-for-sale securities |
23,370 | (13,049 | ) | 1,652 | (15,430 | ) | ||||||||||
| Less: reclassification adjustment for realized (gains) losses included in net income |
— | — | 214 | (11,209 | ) | |||||||||||
| 28,458 | (8,731 | ) | 8,426 | (22,222 | ) | |||||||||||
| Income tax (expense) benefit related to other comprehensive income |
(9,114 | ) | 5,080 | (728 | ) | 10,345 | ||||||||||
| 19,344 | (3,651 | ) | 7,698 | (11,877 | ) | |||||||||||
| Comprehensive income |
$ | 79,992 | $ | 47,493 | $ | 141,408 | $ | 50,873 | ||||||||
5
The Washington Post Company
Condensed Consolidated Balance Sheets
| (In thousands) |
June 29, 2003 (unaudited) |
December 29, 2002 |
||||||
| Assets |
||||||||
| Current assets |
||||||||
| Cash and cash equivalents |
$ | 30,796 | $ | 28,771 | ||||
| Investments in marketable equity securities |
1,920 | 1,753 | ||||||
| Accounts receivable, net |
300,982 | 285,374 | ||||||
| Inventories |
31,476 | 27,629 | ||||||
| Income taxes receivable |
1,004 | — | ||||||
| Other current assets |
35,695 | 39,428 | ||||||
| 401,873 | 382,955 | |||||||
| Property, plant and equipment |
||||||||
| Buildings |
284,252 | 283,233 | ||||||
| Machinery, equipment and fixtures |
1,612,931 | 1,551,931 | ||||||
| Leasehold improvements |
94,671 | 85,720 | ||||||
| 1,991,854 | 1,920,884 | |||||||
| Less accumulated depreciation |
(1,018,458 | |||||||