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Investor Relations

SEC Filings

10-Q
GRAHAM HOLDINGS CO filed this Form 10-Q on 08/16/1994
Entire Document
 
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                                                                              6.


THE WASHINGTON POST COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1:  RESULTS OF OPERATIONS, WHEN EXAMINED ON A QUARTERLY BASIS, REFLECT THE
SEASONALITY OF ADVERTISING THAT AFFECTS THE NEWSPAPER, MAGAZINE AND
BROADCASTING OPERATIONS. ADVERTISING REVENUES IN THE SECOND AND FOURTH QUARTERS
ARE TYPICALLY HIGHER THAN FIRST AND THIRD QUARTER REVENUES.  ALL ADJUSTMENTS
REFLECTED IN THE INTERIM FINANCIAL STATEMENTS ARE OF A NORMAL RECURRING NATURE.

NOTE 2:  SUMMARIZED COMBINED (UNAUDITED) RESULTS OF OPERATIONS FOR THE SECOND
QUARTER AND YEAR-TO-DATE OF 1994 AND 1993 FOR THE COMPANY'S AFFILIATES ARE AS
FOLLOWS (IN THOUSANDS):


<TABLE>
<CAPTION>
                                                         SECOND QUARTER                     YEAR-TO-DATE     
                                                   --------------------------        --------------------------
                                                     1994             1993             1994             1993   
                                                   ---------        ---------        ---------        ---------
<S>                                                <C>              <C>              <C>              <C>
OPERATING REVENUES                                 $199,742         $166,021         $360,661         $328,322
OPERATING INCOME                                     19,111           13,685           16,670            9,556
NET INCOME (LOSS)                                     6,152            4,275             (240)             952
</TABLE>


NOTE 3:  IN APRIL 1994 THE COMPANY ACQUIRED SUBSTANTIALLY ALL OF THE ASSETS
COMPRISING THE BUSINESSES OF TELEVISION STATIONS KPRC- TV, AN NBC AFFILIATE IN
HOUSTON, TEXAS, AND KSAT-TV, AN ABC AFFILIATE IN SAN ANTONIO, TEXAS, FOR $253
MILLION IN CASH.  THE TRANSACTION WAS ACCOUNTED FOR AS A PURCHASE AND THE
RESULTS OF OPERATIONS OF THE TELEVISION STATIONS WERE INCLUDED WITH THOSE OF
THE COMPANY FOR THE PERIOD SUBSEQUENT TO THE DATE OF ACQUISITION.

           THE FOLLOWING STATEMENTS PRESENT THE COMPANY'S UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED INCOME STATEMENTS FOR THE SIX MONTHS ENDED JULY 3, 1994,
AND JULY 4, 1993, AS IF THE ACQUISITION OF THE TELEVISION STATIONS HAD OCCURRED
AT THE BEGINNING OF EACH SIX MONTH PERIOD.  AMOUNTS REFLECT AN ALLOCATION OF
THE PURCHASE PRICE TO THE ACQUIRED NET TANGIBLE ASSETS, WITH THE EXCESS BEING
AMORTIZED OVER A PERIOD OF 15 YEARS.  THE REVENUES AND RESULTS OF OPERATIONS
PRESENTED IN THE PRO FORMA INCOME STATEMENTS DO NOT NECESSARILY REFLECT THE
RESULTS OF OPERATIONS THAT WOULD ACTUALLY HAVE BEEN OBTAINED IF THE ACQUISITION
HAD OCCURRED AT THE BEGINNING OF EACH SIX MONTH PERIOD.


<TABLE>
<CAPTION>
                                                                                   PRO FORMA INCOME STATEMENTS
                                                                                    FOR THE SIX-MONTHS ENDED
                                                                                     JULY 3,           JULY 4,
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)                                              1994              1993  
                                                                                    --------          --------
<S>                                                                                  <C>              <C>
OPERATING REVENUES                                                                   $782,634         $770,564
NET INCOME
  BEFORE CUMULATIVE EFFECT OF CHANGE IN
    ACCOUNTING PRINCIPLE                                                              $69,605          $67,087
  AFTER CUMULATIVE EFFECT OF CHANGE IN
    ACCOUNTING PRINCIPLE                                                              $69,605          $78,687
EARNINGS PER SHARE
  BEFORE CUMULATIVE EFFECT OF CHANGE IN
    ACCOUNTING PRINCIPLE                                                                $5.95            $5.70
  AFTER CUMULATIVE EFFECT OF CHANGE IN
    ACCOUNTING PRINCIPLE                                                                $5.95            $6.68
</TABLE>



           IN MAY 1994 THE COMPANY ACQUIRED AN 80 PERCENT INTEREST IN MAMMOTH
MICRO PRODUCTIONS, A PRODUCER AND PUBLISHER OF MULTIMEDIA CD-ROM TITLES, FOR
$23 MILLION IN CASH.  THIS TRANSACTION WAS ACCOUNTED FOR AS A PURCHASE AND,
ACCORDINGLY THE ASSETS AND LIABILITIES HAVE BEEN RECORDED AT THEIR ESTIMATED
FAIR VALUES AT THE DATE OF ACQUISITION.  THE EXCESS OF THE COST OVER THE FAIR
VALUE OF NET ASSETS ACQUIRED IS BEING AMORTIZED OVER VARIOUS PERIODS UP TO 15
YEARS.  RESULTS OF OPERATIONS OF THE ACQUIRED BUSINESS WERE INCLUDED WITH THOSE
OF THE COMPANY FOR THE PERIOD SUBSEQUENT TO THE DATE OF ACQUISITION.


NOTE 4:  DURING THE SECOND QUARTER OF 1994 THE COMPANY REPURCHASED 224,600
SHARES OF ITS CLASS B COMMON STOCK AT A COST OF $52.3 MILLION.