THE WASHINGTON POST COMPANY REPORTS 2007 AND FOURTH QUARTER EARNINGS
WASHINGTON – The Washington Post Company (NYSE: WPO) today reported net income of $288.6 million ($30.19 per share) for its fiscal year 2007 ended December 30, 2007, down from $324.5 million ($33.68 per share) for the fiscal year 2006 ended December 31, 2006. Net income for the fourth quarter of 2007 was $82.9 million ($8.71 per share), compared with $95.5 million ($9.97 per share) for the fourth quarter of 2006. The Company’s results for 2007 and 2006 include several unusual or one-time items, as described below.
Items included in the Company’s results in 2007 (and related fourth quarter activity):
• A charge of additional net income tax expense of $6.6 million ($0.70 per share), as the result of a $12.9 million increase in taxes associated with Bowater Mersey, offset by a tax benefit of $6.3 million associated with recent changes in certain state income tax laws. Both of these are non-cash items in 2007, impacting the Company’s long-term net deferred income tax liabilities;
• A $9.5 million gain from the sale of property at the Company’s television station in Miami (after-tax impact of $5.9 million, or $0.62 per share);
• Expenses of $11.2 million (after-tax impact of $6.7 million, or $0.70 per share) related to lease obligations, severance and accelerated depreciation of fixed assets in connection with Kaplan’s restructuring of the Score! business, recorded in the fourth quarter; and
• A charge of $6.0 million (after-tax impact of $3.6 million, or $0.38 per share) related to the write-off of an integrated software product under development, and severance costs in connection with Kaplan’s restructuring of the Kaplan Professional (U.S.) businesses, recorded in the fourth quarter.
Items included in the Company’s results in 2006 (and related fourth quarter activity):
• Charges of $50.9 million related to early retirement plan buyouts (after-tax impact of $31.7 million, or $3.30 per share);
• A goodwill impairment charge of $9.9 million at PostNewsweek Tech Media, which was part of the magazine publishing segment (after-tax impact of $6.3 million, or $0.65 per share); also, a $1.5 million loss on the sale of PostNewsweek Tech Media was recorded in the fourth quarter (after-tax impact of $1.0 million, or $0.10 per share);
• Transition costs and operating losses at Kaplan related to acquisitions and start-ups for 2006 totaling $11.9 million (after-tax impact of $8.0 million, or $0.83 per share); $2.8 million of these costs were incurred in the fourth quarter (after-tax impact of $1.8 million, or $0.19 per share);
• A charge for the cumulative effect of a change in accounting for Kaplan equity awards (after-tax impact of $5.1 million, or $0.53 per share) in connection with the Company’s adoption of Statement of Financial Accounting Standards No. 123R (SFAS 123R), “Share-Based Payment”;
• Insurance recoveries of $10.4 million from cable division losses related to Hurricane Katrina (after-tax impact of $6.4 million, or $0.67 per share);