The Washington Post Company Reports 2012 and Fourth Quarter Earnings

  The Washington Post Company Reports 2012 and Fourth Quarter Earnings

Business Wire

WASHINGTON -- February 22, 2013

The Washington Post Company (NYSE: WPO) today reported net income attributable
to common shares of $131.2 million ($17.39 per share) for the fiscal year
ended December 31, 2012, compared to $116.2 million ($14.70 per share) for the
fiscal year ended December 31, 2011. Net income includes $83.2 million in
income ($11.30 per share) and $28.5 million in losses ($3.60 per share) from
discontinued operations for 2012 and 2011, respectively. Income from
continuing operations attributable to common shares was $48.0 million ($6.09
per share) for 2012, compared to $144.7 million ($18.30 per share) for 2011.
As a result of the Company’s share repurchases, there were 6% fewer diluted
average shares outstanding in 2012. For the fourth quarter of 2012, the
Company reported a net loss attributable to common shares of $45.4 million
($6.57 per share), compared to net income of $61.7 million ($8.03 per share)
for the same period of 2011. Net income includes $0.3 million ($0.03 per
share) in income from discontinued operations for the fourth quarter of 2011.
The Company reported a loss from continuing operations attributable to common
shares of $45.4 million ($6.57 per share) for the fourth quarter of 2012,
compared to income from continuing operations of $61.4 million ($8.00 per
share) for the same period of 2011.

The results for 2012 and 2011 were affected by a number of significant items
as described in the following paragraphs. Excluding these items, income from
continuing operations attributable to common shares was $181.0 million ($24.39
per share) for 2012, compared to $206.5 million ($26.08 per share) for 2011.
Excluding these items, income from continuing operations attributable to
common shares was $78.8 million ($10.61 per share) for the fourth quarter of
2012, compared to $68.4 million ($8.91 per share) for the fourth quarter of
2011. (Refer to the Non-GAAP Financial Information schedule attached to this
release for additional details.)

Items included in the Company’s income from continuing operations for 2012 are
listed below, and fourth quarter activity, if any, is highlighted for each
item:

  *a fourth quarter $111.6 million noncash goodwill and other long-lived
    assets impairment charge at Kaplan Test Preparation (KTP) (after-tax
    impact of $81.9 million, or $11.33 per share);
  *$63.7 million in early retirement, severance and other restructuring
    charges at the education and newspaper publishing divisions (after-tax
    impact of $45.5 million, or $6.18 per share); $41.2 million of these
    charges were recorded in the fourth quarter (after-tax impact of $31.1
    million, or $4.31 per share);
  *a fourth quarter $18.0 million write-down of a marketable equity security
    (after-tax impact of $11.2 million, or $1.54 per share);
  *a $5.8 million gain on the sale of a cost method investment (after-tax
    impact of $3.7 million, or $0.48 per share); and
  *$3.1 million in non-operating unrealized foreign currency gains (after-tax
    impact of $2.0 million, or $0.27 per share).

Items included in the Company’s income from continuing operations for 2011 are
listed below, and fourth quarter activity, if any, is highlighted for each
item:

  *$31.3 million in severance and other restructuring charges at the
    education and newspaper publishing divisions (after-tax impact of $19.4
    million, or $2.46 per share); $11.7 million of these charges were recorded
    in the fourth quarter (after-tax impact of $7.3 million, or $0.94 per
    share);
  *a $9.2 million impairment charge at one of the Company’s affiliates
    (after-tax impact of $5.7 million, or $0.72 per share);
  *a $53.8 million write-down of a marketable equity security (after-tax
    impact of $34.6 million, or $4.34 per share); and
  *$3.3 million in non-operating unrealized foreign currency losses
    (after-tax impact of $2.1 million, or $0.26 per share); $0.4 million in
    gains were recorded in the fourth quarter (after-tax impact of $0.3
    million, or $0.03 per share).

Revenue for 2012 was $4,017.7 million, down 3% from $4,131.1 million in 2011.
Revenues were down at the education and newspaper publishing divisions,
partially offset by increases at the television broadcasting and cable
television divisions. Operating income for 2012 decreased to $144.5 million,
from $325.9 million in 2011. Operating results declined at all of the
Company’s divisions, except for the television broadcasting division.

For the fourth quarter of 2012, revenue was $1,050.1 million, up 1% from
$1,040.4 million in 2011. The Company reported an operating loss of $14.4
million in the fourth quarter of 2012, compared to operating income of $109.3
million in 2011. Revenues and operating results were down at the education and
newspaper publishing divisions, while revenues and operating income increased
at the television broadcasting and cable television divisions.

Division Results

Education

Education division revenue in 2012 totaled $2,196.5 million, a 9% decline from
$2,404.5 million in 2011. Excluding revenue from acquired businesses,
education division revenue declined 10% in 2012. For the fourth quarter of
2012, education division revenue totaled $544.4 million, a 6% decline from
$580.8 million for the same period of 2011. Excluding revenue from acquired
businesses, education division revenue declined 7% in the fourth quarter of
2012.

Kaplan reported an operating loss of $105.4 million for 2012, compared to
operating income of $96.3 million in 2011; Kaplan reported an operating loss
for the fourth quarter of 2012 of $111.9 million, compared to operating income
of $30.9 million in the fourth quarter of 2011. Kaplan’s 2012 operating
results were adversely impacted by a significant decline in Kaplan Higher
Education (KHE) results; a $111.6 million noncash goodwill and other
long-lived assets impairment charge related to KTP; and $45.2 million in
restructuring costs. These were offset by improved results at KTP and Kaplan
International.

In response to student demand levels, Kaplan has formulated and implemented
restructuring plans at its various businesses that have resulted in
significant costs in 2012 and 2011, with the objective of establishing lower
cost levels in future periods. Across all businesses, restructuring costs
totaled $45.2 million in 2012 and $28.9 million in 2011. Restructuring costs
totaled $35.9 million in the fourth quarter of 2012 and $9.3 million in the
fourth quarter of 2011. (Refer to the Education Division Information, Summary
of Restructuring Charges schedule attached to this release for additional
details.) Kaplan currently expects to incur approximately $25 million in
additional restructuring costs in 2013 at KHE and Kaplan International in
conjunction with completing these restructuring plans. Kaplan may also incur
additional restructuring charges in 2013 as the Company continues to evaluate
its cost structure.

A summary of Kaplan’s operating results by division, including and excluding
restructuring costs, for 2012 and the fourth quarter of 2012 compared to 2011,
is as follows:

                                                                                  
                 Three Months Ended                    Twelve Months Ended
                 December 31,                          December 31,
(in thousands)  2012          2011         %       2012           2011           %
                                              Change                                   Change
Revenue                                                             
Higher           $ 276,459      $ 323,532     (15  )   $ 1,149,407     $ 1,399,583     (18  )
education
Test               60,485         66,901      (10  )     284,252         303,093       (6   )
preparation
Kaplan             208,285        190,821     9          764,184         704,581       8
international
Kaplan             1,487          1,110       34         4,645           4,585         1
corporate
Intersegment      (2,287   )   (1,601  )   ―         (5,992    )   (7,383    )   ―
elimination
                 $ 544,429    $ 580,763    (6   )   $ 2,196,496   $ 2,404,459    (9   )
Operating
Income (Loss)
Restructuring
Costs Included
in Divisions
Higher           $ 10,916       $ 28,025      (61  )   $ 27,245        $ 148,915       (82  )
education
Test               (6,732   )     520         ―          (10,799   )     (28,498   )   62
preparation
Kaplan             15,733         22,771      (31  )     49,069          41,506        18
international
Kaplan             (14,474  )     (16,202 )   11         (42,617   )     (45,100   )   6
corporate
Amortization
of intangible      (6,191   )     (4,394  )   (41  )     (17,719   )     (19,417   )   9
assets
Impairment of
goodwill and
other              (111,593 )     ―           ―          (111,593  )     ―             ―
long-lived
assets
Intersegment      467         173        ―         1,046        (1,120    )   ―
elimination
                 $ (111,874 )  $ 30,893     ―        $ (105,368  )  $ 96,286       ―
Operating
Income (Loss)
Restructuring
Costs Excluded
from Divisions
Higher           $ 27,860       $ 34,137      (18  )   $ 50,640        $ 162,116       (69  )
education*
Test               (6,732   )     1,009       ―          (10,799   )     (15,959   )   32
preparation*
Kaplan             30,615         23,806      29         65,511          42,541        54
international*
Kaplan             (12,989  )   (14,507 )   10         (39,807   )   (42,930   )   7
corporate*
                   38,754         44,445      (13  )     65,545          145,768       (55  )
Restructuring      (35,906  )     (9,331  )   ―          (45,242   )     (28,945   )   (56  )
costs*
Amortization
of intangible      (3,596   )     (4,394  )   18         (15,124   )     (19,417   )   22
assets*
Impairment of
goodwill and
other              (111,593 )     ―           ―          (111,593  )     ―             ―
long-lived
assets
Intersegment      467         173        ―         1,046        (1,120    )   ―
elimination
                 $ (111,874 )  $ 30,893     ―        $ (105,368  )  $ 96,286       ―

*Non-GAAP
Measure
                                                                                            

Kaplan sold Kidum in August 2012, EduNeering in April 2012 and Kaplan Learning
Technologies in February 2012. Consequently, the education division’s
operating results exclude these businesses.

KHE includes Kaplan’s domestic postsecondary education businesses, made up of
fixed-facility colleges and online postsecondary and career programs. KHE also
includes the domestic professional training and other continuing education
businesses.

In September 2012, KHE announced a plan to consolidate its market presence at
certain of its fixed-facility campuses. Under this plan, KHE has ceased new
enrollments at nine ground campuses as it considers alternatives for these
locations, and is in the process of consolidating operations of four other
campuses into existing, nearby locations. Revenues at these campuses represent
approximately 4% of KHE’s total revenues. In the fourth quarter of 2012, KHE
also began implementing plans to consolidate facilities and reduce workforce
at its online programs. In connection with these and other plans, KHE incurred
$23.4 million in restructuring costs from accelerated depreciation, and
severance and lease obligations in 2012 ($16.9 million was recorded in the
fourth quarter).

In 2012 and the fourth quarter of 2012, KHE revenue declined 18% and 15%,
respectively, due largely to declines in average enrollments that reflect
weaker market demand over the past year. Operating income decreased 82% and
61% for 2012 and the fourth quarter of 2012, respectively. These declines were
due primarily to lower revenue, a decline in operating results from campuses
planned for closure, and significant restructuring costs noted above that
exceed similar charges in 2011. Offsetting the declines were expense
reductions associated with lower enrollments and recent restructuring efforts.

New student enrollments at Kaplan University and KHE Campuses decreased 1% in
2012. Total students at December 31, 2012 were down 12% compared to December
31, 2011, and down 11% compared to September 30, 2012, as follows:

                     
                          Students as of
                          December 31,  September 30,  December 31,
                     2012          2012           2011
Kaplan University         44,371         49,132          50,190
KHE Campuses              21,099        24,129         24,360
                          65,470        73,261         74,550
                                                         

Kaplan University students included 5,625, 6,822 and 5,799 campus-based
students as of December 31, 2012, September 30, 2012, and December 31, 2011,
respectively.

Kaplan University and KHE Campuses enrollments at December 31, 2012 and 2011,
by degree and certificate programs, are as follows:

               
                    As of December 31,
               2012      2011
Certificate         23.2  %   23.6  %
Associate’s         29.1  %     30.3  %
Bachelor’s          33.8  %     34.6  %
Master’s            13.9  %   11.5  %
                    100.0 %   100.0 %
                                      

KTP includes Kaplan’s standardized test preparation and tutoring offerings.
KTP revenue declined 6% in 2012 and 10% in the fourth quarter of 2012.
Enrollment increased 5% and 11% for the fourth quarter and fiscal year 2012,
respectively, driven by strength in pre-college, nursing and bar review
programs. Enrollment increases were offset by competitive pricing pressure and
a continued shift in demand to lower priced online test preparation offerings.
The improvement in KTP operating results in 2012 is largely as a result of
lower operating expenses due to restructuring activities in prior years,
including $12.5 million in total KTP restructuring costs recorded in 2011.
Fourth quarter 2012 results declined largely due to revenue reductions from a
slowdown in enrollment growth in the fourth quarter of 2012.

While overall results improved at KTP in 2012, Kaplan recorded a $111.6
million noncash goodwill and other long-lived assets impairment charge in
connection with KTP in the fourth quarter of 2012. This impairment charge was
determined as part of the Company’s annual goodwill and intangible assets
impairment testing based on KTP operating losses for the past three years and
a recent slowdown in enrollment growth. KTP produced positive cash flow from
operations in 2012.

Kaplan International includes English-language programs, and postsecondary
education and professional training businesses outside the United States. In
May 2011, Kaplan Australia acquired Franklyn Scholar and Carrick Education
Group, national providers of vocational training and higher education in
Australia. In June 2011, Kaplan acquired Structuralia, a provider of
e-learning for the engineering and infrastructure sector in Spain. Kaplan
International revenue increased 8% and 9% in 2012 and the fourth quarter of
2012, respectively. Excluding revenue from acquired businesses, Kaplan
International revenue increased 4% in 2012 due to enrollment growth in the
English-language and Singapore higher education programs. Excluding revenue
from acquired businesses, Kaplan International revenue increased 6% in the
fourth quarter of 2012 due to enrollment growth in the pathways and Singapore
higher education programs.

Kaplan International operating income increased in 2012 due largely to strong
results in Singapore, offset by combined losses from businesses acquired in
2011. These losses occurred primarily at certain businesses in Australia where
Kaplan has been consolidating and restructuring its businesses to optimize
operations. Restructuring costs at Kaplan International totaled $16.4 million
in 2012 ($14.9 million in the fourth quarter of 2012). These restructuring
costs were largely in Australia and included lease obligations, accelerated
depreciation and severance charges. The decline in Kaplan International
operating income in the fourth quarter of 2012 is due to these restructuring
costs.

Corporate represents unallocated expenses of Kaplan, Inc.’s corporate office
and other minor shared activities.

In the fourth quarter of 2012, $2.6 million in restructuring costs is included
in amortization of intangible assets, largely from accelerated intangible
asset amortization associated with changes to business operations in
Australia.

Cable Television

Cable television division revenue for 2012 increased 4% to $787.1 million,
from $760.2 million in 2011; revenue totaled $201.7 million for the fourth
quarter of 2012, a 6% increase from $190.8 million for the fourth quarter of
2011. The revenue results reflect continued growth of the division’s Internet
and telephone service revenues and rate increases for many subscribers in June
2012, offset by a decline in basic video subscribers.

Cable television division operating income in 2012 decreased 1% to $154.6
million, from $156.8 million in 2011; operating income for the fourth quarter
of 2012 increased 4% to $43.4 million, from $41.9 million in the fourth
quarter of 2011. The cable television division’s operating income for 2012
declined primarily due to increased programming and depreciation costs, offset
partially by increased revenues. The division’s operating income for the
fourth quarter of 2012 increased primarily due to higher revenues, offset by
increased programming and depreciation costs.

At December 31, 2012, Primary Service Units (PSUs) were down 1% from the prior
year due to a decline in basic video subscribers, offset by growth in
high-speed data and telephony subscribers. A summary of PSUs is as follows:

                   
                        As of December 31,
                   2012       2011
Basic video             593,615    621,423
High-speed data         459,235     451,082
Telephony               184,528    179,989
                        1,237,378  1,252,494
                                    

Newspaper Publishing

Newspaper publishing division revenue in 2012 declined 7% to $581.7 million,
from $622.5 million in 2011; revenue totaled $162.1 million for the fourth
quarter of 2012, a 6% decrease from $172.1 million for the fourth quarter of
2011. Print advertising revenue at The Washington Post in 2012 declined 14% to
$228.2 million, from $264.5 million in 2011, and decreased 12% to $67.5
million for the fourth quarter of 2012, from $77.1 million for the fourth
quarter of 2011. The decline is largely due to reductions in general and
retail advertising. Revenue generated by the Company’s online publishing
activities, primarily washingtonpost.com and Slate, increased 5% to $110.6
million, from $105.8 million in 2011; revenue increased 5% to $33.1 million in
the fourth quarter of 2012, versus $31.5 million for the fourth quarter of
2011. Display online advertising revenue increased 6% in 2012, and 7% for the
fourth quarter of 2012. Online classified advertising revenue decreased 1% in
2012 and 2% for the fourth quarter of 2012.

In 2012, daily circulation at The Washington Post declined 8.6%, and Sunday
circulation declined 6.2%; average daily circulation at The Washington Post
totaled 471,800 and average Sunday circulation totaled 687,200.

The newspaper publishing division reported an operating loss of $53.7 million
in 2012, compared to an operating loss of $21.2 million in 2011, after
including pension expense of $42.4 million and $25.3 million, respectively.
For the fourth quarter of 2012, the newspaper division reported operating
income of $2.6 million, compared to operating income of $6.8 million in the
fourth quarter of 2011, after including pension expense of $9.9 million and
$8.1 million, respectively. Included in pension expense for 2012 was an $8.5
million Voluntary Retirement Incentive Program (VRIP) for certain employees
and a $0.9 million fourth quarter charge at The Herald in connection with its
withdrawal from a multiemployer pension plan. Included in pension expense in
the fourth quarter of 2011 was a $2.4 million charge at The Herald in
connection with its withdrawal from a multiemployer pension plan. In addition,
voluntary severance and other early retirement expense of $9.0 million and
$4.4 million was recorded at The Washington Post in 2012 and the fourth
quarter of 2012, respectively.

The decline in operating results for 2012 and the fourth quarter of 2012 is
primarily due to the revenue reductions discussed above and the increase in
the combined early retirement, severance and multiemployer pension plan
withdrawal expense, offset partially by a decline in other operating expenses.
Newsprint expense was down 10% in 2012 and the fourth quarter of 2012 due to a
decline in newsprint consumption.

In February 2013, the Company announced that it had signed an agreement to
sell The Herald, a daily and Sunday newspaper headquartered in Everett, WA;
the transaction is expected to close in March 2013.

Television Broadcasting

Revenue for the television broadcasting division increased 25% to $399.7
million in 2012, from $319.2 million in 2011; for the fourth quarter of 2012,
revenue increased 32% to $116.2 million, from $88.3 million in 2011.
Television broadcasting division operating income for 2012 increased 64% to
$191.6 million, from $117.1 million in 2011. For the fourth quarter of 2012,
operating income increased 54% to $62.8 million, from $40.9 million in 2011.

The increase in revenue and operating income for 2012 and the fourth quarter
of 2012 reflects improved advertising demand across many product categories.
These results include a $48.1 million and $25.9 million increase in political
advertising revenue in 2012 and the fourth quarter of 2012, respectively;
$10.8 million in incremental summer Olympics-related advertising at the
Company’s NBC affiliates in the third quarter of 2012; and increased
retransmission revenues.

Other Businesses

Other businesses includes the operating results of Social Code, a marketing
solutions provider helping companies with marketing on social-media platforms;
WaPo Labs, a digital team focused on emerging technologies and new product
development; and Celtic Healthcare, Inc., a provider of home healthcare and
hospice services in the northeastern and mid-Atlantic regions that was
acquired by The Washington Post Company in November 2012.

Corporate Office

Corporate office includes the expenses of the Company’s corporate office as
well as a net pension credit.

Equity in Earnings (Losses) of Affiliates

The Company holds a 16.5% interest in Classified Ventures, LLC, and interests
in several other affiliates.

In the fourth quarter of 2012, the Company sold its 49% interest in Bowater
Mersey Paper Company for a nominal amount; no gain or loss was recorded as the
investment balance had previously been written-down to zero.

The Company’s equity in earnings of affiliates, net, for 2012 was $14.1
million, compared to $5.9 million in 2011. For the fourth quarter of 2012, the
Company’s equity in earnings of affiliates totaled $2.8 million, compared to
$0.6 million for the fourth quarter of 2011. In 2011, a $9.2 million
impairment charge was recorded on the Company’s interest in Bowater Mersey
Paper Company.

Other Non-Operating (Expense) Income

The Company recorded other non-operating expense, net, of $5.5 million in
2012, compared to other non-operating expense, net, of $55.2 million in 2011.
For the fourth quarter of 2012, the Company recorded other non-operating
expense, net, of $17.6 million, compared to other non-operating income, net,
of $1.1 million for the fourth quarter of 2011.

The 2012 non-operating expense, net, included an $18.0 million fourth quarter
write-down of a marketable equity security, offset by $6.6 million in net
gains from cost method investments, $3.1 million in unrealized foreign
currency gains and other items. The 2011 non-operating expense, net, included
a $53.8 million write-down of a marketable equity security, $3.3 million in
unrealized foreign currency losses ($0.4 million in unrealized foreign
currency gains in the fourth quarter) and other items.

During 2012, on an overall basis, the fair value of the Company’s marketable
securities appreciated by $32.5 million.

Net Interest Expense and Related Balances

The Company incurred net interest expense of $32.6 million in 2012, compared
to $29.1 million in 2011; net interest expense totaled $8.2 million for the
fourth quarter of 2012, versus $7.5 million for the fourth quarter of 2011. At
December 31, 2012, the Company had $696.7 million in borrowings outstanding at
an average interest rate of 5.1%, and cash, marketable securities and other
investments of $959.9 million. At December 31, 2011, the Company had $565.2
million in borrowings outstanding at an average interest rate of 5.7%, and
cash, marketable securities and other investments of $745.1 million.

Provision for Income Taxes

The effective tax rate for income from continuing operations in 2012 was
59.4%. This effective tax rate was adversely impacted by $12.5 million in
state and non-U.S. valuation allowances provided against deferred income tax
benefits where realization is doubtful, and $12.8 million from nondeductible
goodwill in connection with an impairment charge recorded in 2012, offset by
tax benefits from lower rates at jurisdictions outside the United States.

The effective tax rate for income from continuing operations in 2011 was
41.2%. This effective tax rate was adversely impacted by $17.8 million in
state and non-U.S. valuation allowances provided against deferred income tax
benefits where realization is doubtful, offset by tax benefits from lower
rates at jurisdictions outside the United States.

Discontinued Operations

Kaplan sold Kidum in August 2012, EduNeering in April 2012 and Kaplan Learning
Technologies in February 2012. The Company also divested its interest in
Avenue100 Media Solutions on July 31, 2012. Consequently, the Company’s income
from continuing operations excludes these businesses, which have been
reclassified to discontinued operations, net of tax.

The sale of Kaplan Learning Technologies resulted in a pre-tax loss of $3.1
million, which was recorded in the first quarter of 2012. The sale of
EduNeering resulted in a pre-tax gain of $29.5 million, which was recorded in
the second quarter of 2012. The sale of Kidum resulted in a pre-tax gain of
$3.6 million, which was recorded in the third quarter of 2012.

In connection with each of the sales of the Company’s stock in EduNeering and
Kaplan Learning Technologies, in the first quarter of 2012, the Company
recorded $23.2 million of income tax benefits related to the excess of the
outside stock tax basis over the net book value of the net assets disposed.

In connection with the disposal of Avenue100 Media Solutions, Inc., the
Company recorded a pre-tax loss of $5.7 million in the third quarter of 2012.
An income tax benefit of $44.5 million was also recorded in the third quarter
of 2012 as the Company determined that Avenue100 Media Solutions, Inc. had no
value. The income tax benefit is 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.

Earnings (Loss) Per Share

The calculation of diluted earnings (loss) per share for 2012 and the fourth
quarter of 2012 were based on 7,403,946 and 7,223,281 weighted average shares,
respectively, compared to 7,904,983 and 7,681,799 weighted average shares,
respectively, for 2011 and the fourth quarter of 2011. In 2012, the Company
repurchased 301,231 shares of its Class B common stock at a cost of $103.2
million. At December 31, 2012, there were 7,427,501 shares outstanding and the
Company had remaining authorization from the Board of Directors to purchase up
to 192,243 shares of Class B common stock.

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 OPERATIONS
(Unaudited)
                                                                   
                                      Three Months Ended
                                      December 31,                      %
(in thousands, except per share      2012           2011            Change
amounts)
Operating revenues                    $ 1,050,096     $ 1,040,421       1
Operating expenses                      (865,438  )     (863,184  )     0
Depreciation of property, plant and     (79,880   )     (62,932   )     27
equipment
Amortization of intangible assets       (7,610    )     (5,042    )     51
Impairment of goodwill and other       (111,593  )   ―              ―
long-lived assets
Operating (loss) income                 (14,425   )     109,263         ―
Equity in earnings of affiliates,       2,785           568             ―
net
Interest income                         901             1,174           (23  )
Interest expense                        (9,064    )     (8,638    )     5
Other (expense) income, net            (17,572   )   1,073          ―
(Loss) income from continuing           (37,375   )     103,440         ―
operations before income taxes
Provision for income taxes             8,000        42,000         (81  )
(Loss) income from continuing           (45,375   )     61,440          ―
operations
Income from discontinued               ―            291            ―
operations, net of tax
Net (loss) income                       (45,375   )     61,731          ―
Net income attributable to             (64       )   (17       )     ―
noncontrolling interests
Net (loss) income attributable to       (45,439   )     61,714          ―
The Washington Post Company
Redeemable preferred stock             ―            ―              ―
dividends
Net (Loss) Income Attributable to
The Washington Post Company Common    $ (45,439   )  $ 61,714         ―
Stockholders
                                                                             
Amounts Attributable to The
Washington Post Company Common
Stockholders
(Loss) income from continuing         $ (45,439   )   $ 61,423          ―
operations
Income from discontinued               ―            291            ―
operations, net of tax
Net (loss) income                     $ (45,439   )  $ 61,714         ―
                                                                             
Per Share Information Attributable
to The Washington Post Company
Common Stockholders
Basic (loss) income per common        $ (6.57     )   $ 8.00            ―
share from continuing operations
Basic income per common share from     ―            0.03           ―
discontinued operations
Basic net (loss) income per common    $ (6.57     )  $ 8.03           ―
share
Basic average number of common         7,223        7,601     
shares outstanding
                                                                             
Diluted (loss) income per common      $ (6.57     )   $ 8.00            ―
share from continuing operations
Diluted income per common share        ―            0.03           ―
from discontinued operations
Diluted net (loss) income per         $ (6.57     )  $ 8.03           ―
common share
Diluted average number of common       7,223        7,682     
shares outstanding

                                                                     
THE WASHINGTON POST COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
                                                                             
                                   Twelve Months Ended
                                    December 31,                        %
(in thousands, except per share    2012            2011             Change
amounts)
Operating revenues                  $ 4,017,653     $ 4,131,145        (3   )
Operating expenses                    (3,471,884 )     (3,533,887 )     (2   )
Depreciation of property, plant       (268,643   )     (249,065   )     8
and equipment
Amortization of intangible assets     (21,002    )     (22,335    )     (6   )
Impairment of goodwill and other     (111,593   )   ―               ―
long-lived assets
Operating income                      144,531          325,858          (56  )
Equity in earnings of affiliates,     14,086           5,949            ―
net
Interest income                       3,393            4,147            (18  )
Interest expense                      (35,944    )     (33,226    )     8
Other expense, net                   (5,456     )   (55,200    )     (90  )
Income from continuing operations     120,610          247,528          (51  )
before income taxes
Provision for income taxes           71,600        101,900         (30  )
Income from continuing operations     49,010           145,628          (66  )
Income (loss) from discontinued      83,177        (28,471    )     ―
operations, net of tax
Net income                            132,187          117,157          13
Net income attributable to           (74        )   (7         )     ―
noncontrolling interests
Net income attributable to The        132,113          117,150          13
Washington Post Company
Redeemable preferred stock           (895       )   (917       )     (2   )
dividends
Net Income Attributable to The
Washington Post Company Common      $ 131,218      $ 116,233        13
Stockholders
                                                                             
Amounts Attributable to The
Washington Post Company Common
Stockholders
Income from continuing operations   $ 48,041         $ 144,704          (67  )
Income (loss) from discontinued      83,177        (28,471    )     ―
operations, net of tax
Net income                          $ 131,218      $ 116,233         13
                                                                             
Per Share Information
Attributable to The Washington
Post Company Common Stockholders
Basic income per common share       $ 6.09           $ 18.30            (67  )
from continuing operations
Basic income (loss) per common
share from discontinued              11.30         (3.60      )     ―
operations
Basic net income per common share   $ 17.39        $ 14.70           18
Basic average number of common       7,360         7,826      
shares outstanding
                                                                             
Diluted income per common share     $ 6.09           $ 18.30            (67  )
from continuing operations
Diluted income (loss) per common
share from discontinued              11.30         (3.60      )     ―
operations
Diluted net income per common       $ 17.39        $ 14.70           18
share
Diluted average number of common     7,404         7,905      
shares outstanding

                                                                                               
THE WASHINGTON POST COMPANY
BUSINESS SEGMENT INFORMATION
(Unaudited)
                                                                                               
                Three Months Ended                     Twelve Months Ended           
                 December 31,                    %        December 31,                    %
(in thousands)  2012           2011           Change  2012           2011           Change
Operating                                                              
Revenues
Education        $ 544,429       $ 580,763       (6  )    $ 2,196,496     $ 2,404,459     (9   )
Cable              201,703         190,818       6          787,117         760,221       4
television
Newspaper          162,136         172,121       (6  )      581,686         622,532       (7   )
publishing
Television         116,192         88,253        32         399,691         319,206       25
broadcasting
Other              25,761          8,890         ―          53,540          25,507        ―
businesses
Corporate          ―               ―             ―          ―               ―             ―
office
Intersegment      (125      )   (424      )   ―         (877      )   (780      )   ―
elimination
                 $ 1,050,096   $ 1,040,421    1        $ 4,017,653   $ 4,131,145    (3   )
Operating
Expenses
Education        $ 656,303       $ 549,870       19       $ 2,301,864     $ 2,308,173     0
Cable              158,258         148,901       6          632,536         603,377       5
television
Newspaper          159,503         165,328       (4  )      635,388         643,736       (1   )
publishing
Television         53,359          47,399        13         208,049         202,117       3
broadcasting
Other              32,339          11,954        ―          76,784          34,242        ―
businesses
Corporate          4,884           8,130         (40 )      19,378          14,422        34
office
Intersegment      (125      )   (424      )   ―         (877      )   (780      )   ―
elimination
                 $ 1,064,521   $ 931,158      14       $ 3,873,122   $ 3,805,287    2
Operating
Income (Loss)
Education        $ (111,874  )   $ 30,893        ―        $ (105,368  )   $ 96,286        ―
Cable              43,445          41,917        4          154,581         156,844       (1   )
television
Newspaper          2,633           6,793         (61 )      (53,702   )     (21,204   )   ―
publishing
Television         62,833          40,854        54         191,642         117,089       64
broadcasting
Other              (6,578    )     (3,064    )   ―          (23,244   )     (8,735    )   ―
businesses
Corporate         (4,884    )   (8,130    )   40        (19,378   )   (14,422   )   (34  )
office
                 $ (14,425   )  $ 109,263      ―        $ 144,531     $ 325,858      (56  )
Depreciation
Education        $ 37,431        $ 22,100        69       $ 101,183       $ 83,735        21
Cable              32,366          31,322        3          129,107         126,302       2
television
Newspaper          6,280           6,443         (3  )      25,072          26,336        (5   )
publishing
Television         3,545           3,067         16         13,018          12,448        5
broadcasting
Other              258             ―             ―          263             ―             ―
businesses
Corporate         ―            ―            ―         ―            244          ―
office
                 $ 79,880      $ 62,932       27       $ 268,643     $ 249,065      8
Amortization
of Intangible
Assets and
Impairment of
Goodwill and
Other
Long-Lived
Assets
Education        $ 117,784       $ 4,394         ―        $ 129,312       $ 19,417        ―
Cable              52              66            (21 )      211             267           (21  )
television
Newspaper          149             182           (18 )      654             1,051         (38  )
publishing
Television         ―               ―             ―          ―               ―             ―
broadcasting
Other              1,218           400           ―          2,418           1,600         51
businesses
Corporate         ―            ―            ―         ―            ―            ―
office
                 $ 119,203     $ 5,042        ―        $ 132,595     $ 22,335       ―
Pension
Expense
(Credit)
Education        $ 3,701         $ 1,486         ―        $ 11,584        $ 6,345         83
Cable              802             454           77         2,540           1,924         32
television
Newspaper          9,882           8,057         23         42,436          25,283        68
publishing^(1)
Television         1,523           363           ―          4,970           1,669         ―
broadcasting
Other              22              4             ―          60              17            ―
businesses
Corporate         (8,982    )   (9,254    )   (3  )     (36,197   )   (36,983   )   (2   )
office
                 $ 6,948       $ 1,110        ―        $ 25,393      $ (1,745    )   ―


       Includes $0.9 million in charges for the fourth quarter and fiscal year
^(1)  2012 and $2.4 million in charges for the fourth quarter and fiscal year
       2011 related to the withdrawal from a multiemployer pension plan.

                                                                                           
THE WASHINGTON POST COMPANY
EDUCATION DIVISION INFORMATION
(Unaudited)
                                                                                           
               Three Months Ended                  Twelve Months Ended           
                December 31,                 %        December 31,                    %
(in            2012          2011         Change  2012           2011           Change
thousands)
Operating                                                          
Revenues
Higher          $ 276,459      $ 323,532     (15  )   $ 1,149,407     $ 1,399,583     (18  )
education
Test              60,485         66,901      (10  )     284,252         303,093       (6   )
preparation
Kaplan            208,285        190,821     9          764,184         704,581       8
international
Kaplan            1,487          1,110       34         4,645           4,585         1
corporate
Intersegment     (2,287   )   (1,601  )   ―         (5,992    )   (7,383    )   ―
elimination
                $ 544,429    $ 580,763    (6   )   $ 2,196,496   $ 2,404,459    (9   )
Operating
Expenses
Higher          $ 265,543      $ 295,507     (10  )   $ 1,122,162     $ 1,250,668     (10  )
education
Test              67,217         66,381      1          295,051         331,591       (11  )
preparation
Kaplan            192,552        168,050     15         715,115         663,075       8
international
Kaplan            15,961         17,312      (8   )     47,262          49,685        (5   )
corporate
Amortization
of intangible     6,191          4,394       41         17,719          19,417        (9   )
assets
Impairment of
goodwill and
other             111,593        ―           ―          111,593         ―             ―
long-lived
assets
Intersegment     (2,754   )   (1,774  )   ―         (7,038    )   (6,263    )   ―
elimination
                $ 656,303    $ 549,870    19       $ 2,301,864   $ 2,308,173    0
Operating
Income (Loss)
Higher          $ 10,916       $ 28,025      (61  )   $ 27,245        $ 148,915       (82  )
education
Test              (6,732   )     520         ―          (10,799   )     (28,498   )   62
preparation
Kaplan            15,733         22,771      (31  )     49,069          41,506        18
international
Kaplan            (14,474  )     (16,202 )   11         (42,617   )     (45,100   )   6
corporate
Amortization
of intangible     (6,191   )     (4,394  )   (41  )     (17,719   )     (19,417   )   9
assets
Impairment of
goodwill and
other             (111,593 )     ―           ―          (111,593  )     ―             ―
long-lived
assets
Intersegment     467         173        ―         1,046        (1,120    )   ―
elimination
                $ (111,874 )  $ 30,893     ―        $ (105,368  )  $ 96,286       ―
Depreciation:
Higher          $ 22,916       $ 13,416      71       $ 58,514        $ 48,379        21
education
Test              5,410          3,799       42         19,718          15,489        27
preparation
Kaplan            8,660          4,350       99         21,173          16,953        25
international
Kaplan           445         535        (17  )    1,778        2,914        (39  )
corporate
                $ 37,431     $ 22,100     69       $ 101,183     $ 83,735       21
Pension
Expense
(Credit):
Higher          $ 2,535        $ 1,046       ―        $ 7,943         $ 4,249         87
education
Test              626            322         94         2,007           1,288         56
preparation
Kaplan            93             (58     )   ―          241             167           44
international
Kaplan           447         176        ―         1,393        641          ―
corporate
                $ 3,701      $ 1,486      ―        $ 11,584      $ 6,345        83


THE WASHINGTON POST COMPANY
EDUCATION DIVISION INFORMATION
SUMMARY OF RESTRUCTURING CHARGES
(Unaudited)
                                                                             
                                            Lease
                             Accelerated    Obligation   Accelerated
(in            Severance   Depreciation  Losses      Amortization  Other      Total
thousands)
Three Months
Ended
December 31,
2012
Higher          $ 3,211      $   12,291     $  1,420     $   ―          $ 22        $ 16,944
education
Test              ―              ―             ―             ―            ―           ―
preparation
Kaplan            1,172          4,294         8,374         ―            1,042       14,882
international
Kaplan
corporate and
amortization     1,485       ―          ―          2,595     ―        4,080
of intangible
assets
                $ 5,868    $   16,585   $  9,794   $   2,595    $ 1,064   $ 35,906
                                                                                      
Three Months
Ended
December 31,
2011
Higher          $ 4,048      $   1,219      $  676       $   ―          $ 169       $ 6,112
education
Test              439            50            ―             ―            ―           489
preparation
Kaplan            1,035          ―             ―             ―            ―           1,035
international
Kaplan
corporate and
amortization     1,695       ―          ―          ―         ―        1,695
of intangible
assets
                $ 7,217    $   1,269    $  676     $   ―        $ 169     $ 9,331
                                                                                      
Twelve Months
Ended
December 31,
2012
Higher          $ 8,807      $   12,936     $  1,420     $   ―          $ 232       $ 23,395
education
Test              ―              ―             ―             ―            ―           ―
preparation
Kaplan            2,732          4,294         8,374         ―            1,042       16,442
international
Kaplan
corporate and
amortization     2,810       ―          ―          2,595     ―        5,405
of intangible
assets
                $ 14,349   $   17,230   $  9,794   $   2,595    $ 1,274   $ 45,242
                                                                                      
Twelve Months
Ended
December 31,
2011
Higher          $ 11,101     $   1,219      $  676       $   ―          $ 205       $ 13,201
education
Test              2,899          2,746         6,894         ―            ―           12,539
preparation
Kaplan            1,035          ―             ―             ―            ―           1,035
international
Kaplan
corporate and
amortization     2,170       ―          ―          ―         ―        2,170
of intangible
assets
                $ 17,205   $   3,965    $  7,570   $   ―        $ 205     $ 28,945

NON-GAAP FINANCIAL INFORMATION
THE WASHINGTON POST COMPANY
(Unaudited)

In addition to the results reported in accordance with accounting principles
generally accepted in the United States (GAAP) included in this press release,
the Company has provided information regarding income from continuing
operations excluding certain items described below reconciled to the most
directly comparable GAAP measures. Management believes that these non-GAAP
measures, when read in conjunction with the Company’s GAAP financials, provide
useful information to investors by offering:

  *the ability to make meaningful period-to-period comparisons of the
    Company’s ongoing results;
  *the ability to identify trends in the Company’s underlying business; and
  *a better understanding of how management plans and measures the Company’s
    underlying business.

Income from continuing operations excluding certain items should not be
considered substitutes or alternatives to computations calculated in
accordance with and required by GAAP. These non-GAAP financial measures should
be read only in conjunction with financial information presented on a GAAP
basis.

The following table reconciles the non-GAAP financial measures to the most
directly comparable GAAP measures:

                                                    
                              Three Months Ended         Twelve Months Ended
                              December 31,             December 31,
(in thousands, except per   2012        2011       2012        2011
share amounts)
Amounts Attributable to
The Washington Post                                               
Company Common
Stockholders
(loss) income from
continuing operations, as   $ (45,439 )  $ 61,423   $ 48,041    $ 144,704
reported
Adjustments:
Goodwill and other
long-lived assets             81,875        ―            81,875        ―
impairment charge
Early retirement and          31,126        7,263        45,510        19,415
restructuring charges
Marketable equity             11,159        ―            11,159        34,643
securities write-down
Gain on sale of a cost        ―             ―            (3,657  )     ―
method investment
Foreign currency (gain)       29            (261   )     (1,968  )     2,062
loss
Investment in affiliates     ―          ―         ―          5,703
impairment charge
Income from continuing
operations, adjusted        $ 78,750    $ 68,425   $ 180,960   $ 206,527
(non-GAAP)
                                                                       
Per Share Information
Attributable to The
Washington Post Company
Common Stockholders
Diluted (loss) income per
common share from           $ (6.57   )  $ 8.00     $ 6.09      $ 18.30
continuing operations, as
reported
Adjustments:
Goodwill and other
long-lived assets             11.33         ―            11.33         ―
impairment charge
Early retirement and          4.31          0.94         6.18          2.46
restructuring charges
Marketable equity             1.54          ―            1.54          4.34
securities write-down
Gain on sale of a cost        ―             ―            (0.48   )     ―
method investment
Foreign currency (gain)       ―             (0.03  )     (0.27   )     0.26
loss
Investment in affiliates     ―          ―         ―          0.72
impairment charge
Diluted income per common
share from continuing       $ 10.61     $ 8.91     $ 24.39     $ 26.08
operations, adjusted
(non-GAAP)
                                                                       
The adjusted diluted per share amounts may not compute due to rounding.

Contact:

The Washington Post Company
Hal S. Jones, 202-334-6645
 
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