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The Washington Post Company Reports Second Quarter Earnings

WASHINGTON--(BUSINESS WIRE)--Aug. 3, 2007--The Washington Post Company (NYSE:WPO) today reported net income of $68.8 million ($7.19 per share) for its second quarter ended July 1, 2007, compared to net income of $78.7 million ($8.17 per share) for the second quarter of last year.

Results for the second quarter of 2007 included additional net income tax expense of $9.2 million ($0.97 per share) as the result of a $15.5 million ($1.63 per share) increase in taxes associated with Bowater Mersey Paper Company Limited, the Company's 49%-owned affiliate based in Canada, and a tax benefit of $6.3 million ($0.66 per share) associated with recent changes in certain state income tax laws. Both of these are non-cash items in the current period, impacting the Company's long-term net deferred income tax liabilities.

Results for the second quarter of 2006 included charges related to early retirement plan buyouts at The Washington Post newspaper and the corporate office (after-tax impact of $31.4 million, or $3.27 per share) that were largely funded from the assets in the Company's pension plans. Results for the second quarter of 2006 also included transition costs from Kaplan acquisitions (after-tax impact of $4.8 million, or $0.50 per share), offset by insurance recoveries from cable division losses related to Hurricane Katrina (after-tax impact of $6.4 million, or $0.67 per share) and non-operating gains from the sales of marketable securities (after-tax impact of $19.6 million, or $2.04 per share).

Revenue for the second quarter of 2007 was $1,046.8 million, up 8% from $969.0 million in the second quarter of 2006. The increase is due mostly to significant revenue growth at the education division, as well as an increase at the cable television division. Revenues were down at the Company's newspaper publishing, magazine publishing and television broadcasting divisions.

Operating income increased in the second quarter of 2007 to $125.3 million, from $97.2 million in the second quarter of 2006, due largely to certain unusual items in the second quarter of 2006 including charges of $50.6 million associated with early retirement plan buyouts and charges of $6.9 million associated with transition costs at Kaplan. These were offset by a $9.6 million increase in Kaplan stock compensation expense in the second quarter of 2007 and $10.4 million in insurance recoveries recorded during the second quarter of 2006 from cable division losses related to Hurricane Katrina.

For the first six months of 2007, net income totaled $133.2 million ($13.89 per share), compared with $155.6 million ($16.12 per share) for the same period of 2006. Results for the first six months of 2007 included additional net income tax expense of $6.6 million ($0.70 per share) as the result of a $12.9 million ($1.36 per share) increase in taxes associated with Bowater Mersey and a tax benefit of $6.3 million ($0.66 per share) associated with recent changes in certain state income tax laws. Both of these are non-cash items in the current period, impacting the Company's long-term net deferred income tax liabilities. Also included in the first six months of 2007 is a significant increase in equity in earnings of affiliates primarily from a gain on the sale of land at the Company's Bowater Mersey affiliate (after-tax impact of $6.5 million, or $0.68 per share). Results for the first half of 2006 included charges related to early retirement plan buyouts (after-tax impact of $31.4 million, or $3.27 per share); transition costs at Kaplan (after-tax impact of $4.8 million, or $0.50 per share); and 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." These items were offset by insurance recoveries from cable division losses related to Hurricane Katrina (after-tax impact of $6.4 million, or $0.67 per share) and non-operating gains from the sales of marketable securities (after-tax impact of $19.6 million, or $2.04 per share).

Revenue for the first half of 2007 was $2,032.4 million, up 6% from $1,917.3 million in the first half of 2006, due to increased revenues at the Company's education and cable divisions, offset by revenue declines at the Company's other divisions. Operating income for the first half of 2007 decreased to $217.3 million, from $235.0 million in the first half of 2006, due to declines at the television broadcasting and magazine publishing divisions; a $17.9 million increase in Kaplan stock compensation expense in the first half of 2007; and $10.4 million in insurance recoveries recorded during the second quarter of 2006 from cable division losses related to Hurricane Katrina. These were offset by several unusual items in 2006 including $50.6 million in pre-tax charges associated with early retirement plan buyouts and $6.9 million in transition costs at Kaplan.

The Company's operating income for the second quarter and first six months of 2007 included $5.8 million and $10.8 million of net pension credits, respectively, compared to $5.7 million and $11.4 million, respectively, for the same periods of 2006, excluding charges related to early retirement programs.

Divisional Results

Education

Education division revenue totaled $503.5 million for the second quarter of 2007, a 23% increase over revenue of $409.2 million for the same period of 2006. Excluding revenue from acquired businesses, education division revenue increased 14% for the second quarter of 2007. Kaplan reported operating income for the second quarter of 2007 of $37.5 million, up 11% from $33.9 million in the second quarter of 2006. For the first six months of 2007, education division revenue totaled $979.3 million, a 20% increase over revenue of $818.2 million for the same period of 2006. Excluding revenue from acquired businesses, education division revenue increased 12% for the first six months of 2007. Kaplan reported operating income of $71.9 million for the first six months of 2007, a decline of 17% from $86.5 million for the first six months of 2006.

In the second quarter of 2006, Kaplan acquired Tribeca Learning Limited, a leading provider of education to the Australian financial services sector, and incurred $6.9 million in transition costs, which are included in the Professional education results. A summary of Kaplan's operating results for the second quarter and the first six months of 2007 compared to 2006 is as follows:


                       Second Quarter                  YTD
                 -------------------------- --------------------------
(In thousands)                         %                          %
                   2007      2006    Change   2007      2006    Change
                 --------- --------- ------ --------- --------- ------
Revenue
--------
  Higher
   education     $229,991  $191,855    20   $461,715  $390,200    18
  Test
   preparation    148,519   113,465    31    282,798   223,284    27
  Professional    124,977   103,924    20    234,755   204,694    15
                 --------- --------- ------ --------- --------- ------
                 $503,487  $409,244    23   $979,268  $818,178    20
                 ========= ========= ====== ========= ========= ======
Operating income
 (loss)
----------------
  Higher
   education     $ 25,217  $ 22,197    14   $ 58,214  $ 51,505    13
  Test
   preparation     25,961    23,923     9     40,592    46,055   (12)

  Professional
   Operating
    income,
    excluding
    transition
    costs          13,211    10,187*   30     22,291    24,291*   (8)
  Transition
   costs                -    (6,871)    -          -    (6,871)    -
                 --------- --------- ------ --------- --------- ------
                   13,211     3,316     -     22,291    17,420    28

  Kaplan
   corporate
   overhead        (9,870)  (11,232)   12    (19,699)  (21,342)    8
  Other**         (16,971)   (4,316)    -    (29,507)   (7,105)    -
                 --------- --------- ------ --------- --------- ------
                 $ 37,548  $ 33,888    11   $ 71,891  $ 86,533   (17)
                 ========= ========= ====== ========= ========= ======

*Non-GAAP measure
**Other includes charges accrued for stock-based incentive
 compensation and amortization of certain intangibles.

Higher education includes all of Kaplan's post-secondary education businesses in the United States, including fixed-facility colleges as well as online post-secondary and career programs. Higher education revenue grew by 20% in the second quarter of 2007 and 18% in the first half of 2007. Enrollments increased 6% to 66,700 at June 30, 2007, compared to 62,700 at June 30, 2006, due to enrollment growth in the online programs. Higher education results for the online programs in the first half of 2007 benefited from increases in both price and demand for higher priced advanced programs. Results at the fixed-facility colleges also benefited from course fee increases, but as previously disclosed, were adversely affected by $2.7 million in lease termination charges in the first quarter of 2007.

Test preparation includes Kaplan's standardized test preparation and English- language course offerings, as well as the K12 and Score! businesses. Test preparation revenue grew 31% in the second quarter of 2007 and 27% for the first six months of 2007 largely due to the Aspect and PMBR acquisitions made in October 2006. Excluding revenue from acquired businesses, revenue grew 7% in the second quarter of 2007 and 5% in the first six months of 2007 due to overall strength in the traditional test preparation courses, offset by declines in revenue from the K12 and Score! businesses. Operating income for test preparation increased in the second quarter of 2007 due largely to the Aspect and PMBR acquisitions, as well as growth in the traditional test preparation courses, offset by continued weakness from the K12 and Score! businesses. Operating results for the first half of 2007 were down due to weaker results from the K12 and Score! businesses. The K12 results in 2006 included approximately $3.0 million in revenue and operating income related to services provided in prior periods, but for which revenue was not recognized until 2006 when the underlying contracts governing the work were finalized. Score! revenue and operating results are down primarily due to an 11% enrollment decline.

Professional includes Kaplan's domestic and overseas professional businesses and certain other education businesses outside the United States. Professional revenue grew 20% and 15% in the second quarter and first six months of 2007 largely due to the May 2006 acquisition of Tribeca and the March 2007 acquisition of EduNeering Holdings, Inc., a Princeton, NJ-based provider of knowledge management solutions for organizations in the pharmaceutical, medical device, healthcare, energy and manufacturing sectors. Excluding revenue from acquired businesses, Professional revenue grew 11% in the second quarter of 2007 and 6% in the first six months of 2007. The revenue increases are a result of higher revenues at FTC Kaplan Limited (FTC) due primarily to favorable exchange rates and from growth in the Schweser CFA exam course offerings, offset by continued soft market demand for Professional's real estate book publishing and real estate course offerings. Operating income increased largely due to the $6.9 million in transition costs in 2006, offset by weakness in Professional's real estate businesses. FTC operating results are up in the second quarter of 2007, but have declined for the first six months of 2007 due to increases in staffing, occupancy and business development expenses associated with the overall growth in FTC operations.

Corporate overhead represents unallocated expenses of Kaplan, Inc.'s corporate office.

Other includes charges for incentive compensation arising from equity awards under the Kaplan stock option plan, which was established for certain members of Kaplan's management. Kaplan recorded stock compensation expense of $13.0 million and $3.4 million in the second quarter of 2007 and 2006, respectively, and $23.2 million and $5.3 million in the first six months of 2007 and 2006, respectively, related to this plan (excluding stock compensation recorded in the first quarter of 2006 related to a change in accounting discussed below). In addition, Other includes amortization of certain intangibles, which increased due to recent Kaplan acquisitions.

Newspaper Publishing

Newspaper publishing division revenue totaled $227.9 million for the second quarter of 2007, a decrease of 7% from $245.6 million in the second quarter of 2006; division revenue decreased 9% to $447.1 million for the first six months of 2007, from $489.0 million for the first six months of 2006. The newspaper division reported operating income of $17.8 million in the second quarter of 2007, compared to an operating loss of $15.4 million for the second quarter of 2006; operating income increased to $32.7 million for the first six months of 2007, compared to $16.7 million for the first six months of 2006. The increase in operating results is due primarily to $46.8 million in pre-tax charges recorded in the second quarter of 2006 associated with early retirement plan buyouts at The Washington Post. Excluding this charge, operating income was down for the second quarter and the first six months of 2007 due to a decline in division revenues, partially offset by a reduction in newspaper division operating expenses, including newsprint expense declines of 22% and 19% for the second quarter and first six months of 2007, respectively.

A summary of newspaper division operating results for the second quarter and the first six months of 2007 compared to 2006 is as follows:


                     Second Quarter                    YTD
               --------------------------- ---------------------------
(In thousands)                        %                           %
                 2007       2006    Change   2007       2006    Change
               --------- ---------- ------ --------- ---------- ------

Operating
 revenues      $227,901  $245,566     (7)  $447,055  $489,038     (9)

Operating
 expenses,
 excluding
 early
 retirement
 program
 expense       (210,143) (214,182)*   (2)  (414,371) (425,617)*   (3)
               --------- ---------- ------ --------- ---------- ------
                 17,758    31,834*   (44)    32,684    63,421*   (48)
Early
 retirement
 program
 expense              -   (46,757)     -          -   (46,757)     -
               --------- ---------- ------ --------- ---------- ------
Operating
 income (loss) $ 17,758  $(15,373)     -   $ 32,684  $ 16,664     96
               ========= ========== ====== ========= ========== ======

*Non-GAAP measure

Print advertising revenue at The Post in the second quarter declined 13% to $128.4 million, from $148.3 million in the second quarter of 2006, and decreased 15% to $253.6 million for the first six months of 2007, from $298.1 million in the same period of 2006. The declines are due to reductions in real estate, which was a strong category in the first six months of 2006, along with declines in classified, retail and zones. Classified recruitment advertising revenue declined 22% to $13.2 million for the second quarter of 2007, from $16.8 million in the second quarter of 2006, and was down 25% to $28.9 million in the first half of 2007, compared to $38.6 million in the first half of 2006.

For the first six months of 2007, Post daily and Sunday circulation both declined 2.9% compared to the same period of the prior year. For the six months ended July 1, 2007, average daily circulation at The Post totaled 652,200 and average Sunday circulation totaled 920,000.

Revenue generated by the Company's online publishing activities, primarily washingtonpost.com, increased 11% to $28.2 million for the second quarter of 2007, from $25.3 million for the second quarter of 2006; online revenues increased 11% to $53.2 million in the first six months of 2007, from $48.2 million for the first six months of 2006. Display online advertising revenues grew 13% and 16% for the second quarter and first six months of 2007, respectively. Online classified advertising revenue on washingtonpost.com increased 11% and 8% for the second quarter and first six months of 2007, respectively. A small portion of the Company's online publishing revenues is included in the magazine publishing division.

Television Broadcasting

Revenue for the television broadcasting division decreased 1% in the second quarter of 2007 to $87.9 million, from $89.0 million in 2006; operating income for the second quarter of 2007 declined 13% to $35.2 million, from $40.6 million in 2006. The decrease in revenue and operating income is due to a $1.5 million decline in second quarter 2007 political advertising revenue and increased programming expenses.

For the first six months of 2007, revenue decreased 4% to $168.7 million, from $174.9 million in 2006; operating income for the first six months of 2007 declined 17% to $64.6 million, from $78.1 million. The decrease in revenue and operating income is due to $6.3 million in incremental winter Olympics-related advertising at the Company's NBC affiliates in the first quarter of 2006, a $2.3 million decrease in political advertising revenue and increased programming expenses.

Magazine Publishing

Revenue for the magazine publishing division totaled $73.4 million for the second quarter of 2007, a 13% decline from $84.2 million for the second quarter of 2006; division revenue totaled $134.7 million for the first six months of 2007, a 15% decrease from $159.0 million for the first six months of 2006. Magazine publishing division results in the second quarter and first six months of 2006 included revenue of $5.6 million and $13.3 million, respectively, from PostNewsweek Tech Media, which was sold in December 2006. The remainder of the revenue declines is due primarily to a 6% and 9% reduction in advertising revenue for the second quarter and first six months of 2007, respectively, due to fewer ad pages and lower rates at both the Newsweek domestic and international editions, offset by increases at Arthur Frommer's Budget Travel.

Operating income totaled $12.9 million in the second quarter of 2007, an increase from $11.2 million for the second quarter of 2006. Magazine publishing division results in the second quarter of 2006 included an operating loss of $0.5 million from PostNewsweek Tech Media. The remainder of the increase in operating income is due to a reduction in subscription and magazine paper costs and an increased pension credit, offset by advertising revenue reductions. Operating income totaled $6.9 million for the first six months of 2007, a decline from $10.3 million in the first six months of 2006. Magazine publishing division results in the first six months of 2006 included operating income of $0.8 million from PostNewsweek Tech Media. The remainder of the decline is due primarily to advertising revenue reductions, offset by lower overall operating costs and an increased pension credit.

Cable Television

Cable division revenue of $154.4 million for the second quarter of 2007 represents a 9% increase over 2006 second quarter revenue of $141.1 million; for the first six months of 2007, revenue increased 10% to $303.4 million, from $276.3 million in the same period of 2006. The 2007 revenue increase is due to continued growth in the division's cable modem and digital revenues, along with revenues from telephone services. The cable division implemented a $3 monthly rate increase for basic video cable service at most of its systems effective February 1, 2006. The Company does not plan to implement an overall basic video cable rate increase in 2007.

Cable division operating income declined to $32.1 million in the second quarter of 2007, versus $39.9 million in the second quarter of 2006; cable division operating income for the first six months of 2007 declined to $60.1 million, from $65.3 million for the first six months of 2006. The cable division results in the second quarter of 2006 benefited from $10.4 million in insurance recoveries from cable division losses related to Hurricane Katrina. Excluding the insurance recoveries, cable division operating income increased in the second quarter and first six months of 2007 due to the division's revenue growth, offset by higher depreciation expense and increases in technical and telephony costs.

At June 30, 2007, Revenue Generating Units (RGUs) grew 9% due to continued growth in high-speed data subscribers and increases in the basic video and digital video subscriber categories. The cable division began offering telephone service on a very limited basis in the second quarter of 2006; as of June 30, 2007, telephone service is being offered in all or part of systems representing 82% of homes passed. A summary of RGUs is as follows:


Cable Television Division Subscribers    June 30, 2007   June 30, 2006
-------------------------------------    -------------   -------------

      Basic                                    696,673         686,002
      Digital                                  220,557         211,158
      High-speed data                          316,357         261,262
      Telephony                                 23,990             185
                                         -------------   -------------
        Total                                1,257,577       1,158,607
                                         =============   =============

Corporate Office

The corporate office operating expenses decreased to $10.3 million and $19.0 million for the second quarter and first six months of 2007, respectively, from $13.0 million and $22.0 million for the second quarter and first six months of 2006, respectively. The decrease is due to $3.8 million in pre-tax charges recorded in the second quarter of 2006 associated with early retirement plan buyouts at the corporate office.

Equity in Earnings (Losses) of Affiliates

The Company's equity in losses of affiliates for the second quarter of 2007 was $0.1 million, compared to losses of $0.6 million for the second quarter of 2006. For the first six months of 2007, the Company's equity in earnings of affiliates totaled $8.9 million, compared to losses of $0.7 million for the same period of 2006. In the first quarter of 2007, the equity in earnings of affiliates included a gain of $8.9 million on the sale of land at the Company's Bowater Mersey Paper Company Limited affiliate. The Company holds a 49% interest in Bowater Mersey Paper Company.

Other Non-Operating Income (Expense)

The Company recorded other non-operating income, net, of $4.3 million for the second quarter of 2007, compared to non-operating income, net, of $33.7 million in the second quarter of 2006. The second quarter 2007 non-operating income, net, includes $3.8 million in foreign currency gains. The second quarter 2006 non-operating income, net, includes $31.6 million in pre-tax gains related to sales of marketable securities and $2.3 million in foreign currency gains.

The Company recorded other non-operating income, net, of $5.1 million for the first six months of 2007, compared to other non-operating income, net, of $33.5 million for the same period of the prior year. The 2007 non-operating income includes $4.6 million in foreign currency gains. The 2006 non-operating income includes pre-tax gains of $31.6 million related to sales of marketable securities and foreign currency gains of $2.9 million.

Net Interest Expense

The Company incurred net interest expense of $3.5 million and $6.1 million for the second quarter and first six months of 2007, respectively, compared to $3.9 million and $8.6 million for the same periods of 2006. At July 1, 2007, the Company had $405.6 million in borrowings outstanding at an average interest rate of 5.5%.

Provision for Income Taxes

The effective tax rate for the second quarter of 2007 was 45.4%, compared to 38.0% for the second quarter of 2006. As previously discussed, results for the second quarter of 2007 included an additional $15.5 million in income tax expense related to Bowater Mersey, the Company's 49%-owned affiliate based in Canada. The Company previously recorded deferred income taxes on the equity in earnings (losses) of Bowater Mersey based on the 5% dividend withholding rate provided in the tax treaty between the U.S. and Canada. In the second quarter of 2007, the Company obtained additional information related to Bowater Mersey's Canadian tax position and determined that deferred income taxes on the equity in earnings (losses) of this investment should be recorded at a 35% tax rate. $12.9 million of the expense relates to 2006 and prior years; $2.6 million of the expense relates to the first quarter of 2007. The Company concluded that these charges are not material to the Company's financial position or results of operations for 2007 and prior years, based on its consideration of quantitative and qualitative factors. Also included in the second quarter of 2007 is a $6.3 million income tax benefit related to a change in certain state income tax laws enacted in the second quarter of 2007. Both of these are non-cash items in the current period, impacting the Company's long-term net deferred income tax liabilities. Excluding the impact of these items, the effective tax rate for the second quarter of 2007 was 38.0%.

The effective tax rate for the first six months of 2007 was 40.8%, compared to 38.0% for the first six months of 2006. As previously discussed, results for the first six months of 2007 included an additional $12.9 million in income tax expense related to the Company's Bowater Mersey affiliate and a $6.3 million income tax benefit related to a change in certain state income tax laws enacted in the second quarter of 2007. Excluding the impact of these items, the effective tax rate for the first six months of 2007 was 38.0%.

Cumulative Effect of Change in Accounting Principle

In the first quarter of 2006, the Company adopted SFAS 123R, which requires companies to record the cost of employee services in exchange for stock options based on the grant-date fair value of the awards. SFAS 123R did not have any impact on the Company's results of operations for Company stock options as the Company adopted the fair-value-based method of accounting for Company stock options in 2002. However, the adoption of SFAS 123R required the Company to change its accounting for Kaplan equity awards from the intrinsic value method to the fair-value-based method of accounting. As a result, in the first quarter of 2006, the Company reported a $5.1 million after-tax charge for the cumulative effect of change in accounting for Kaplan equity awards ($8.2 million in pre-tax Kaplan stock compensation expense).

Earnings Per Share

The calculation of diluted earnings per share for the second quarter and first six months of 2007 was based on 9,536,132 and 9,542,040 weighted average shares outstanding, respectively, compared to 9,613,269 and 9,609,735, respectively, for the second quarter and first six months of 2006. The Company repurchased 20,506 shares of its Class B common stock at a cost of $15.6 million during the first half of 2007.

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)



                                           Second Quarter
                                      -------------------------   %
                                          2007         2006     Change
                                      ------------------------- ------

Operating revenues                    $ 1,046,773  $   969,041     8
Operating expenses                       (863,139)    (820,946)    5
Depreciation                              (54,060)     (49,512)    9
Amortization of intangibles                (4,314)      (1,378)   --
                                      ------------ ------------
Operating income                          125,260       97,205    29
Equity in losses of affiliates, net          (135)        (562)  (76)
Interest income                             2,705        2,539     7
Interest expense                           (6,159)      (6,439)   (4)
Other income, net                           4,345       33,701   (87)
                                      ------------ ------------
Income before income taxes                126,016      126,444     0
Provision for income taxes                (57,200)     (47,700)   20
                                      ------------ ------------
Net income                                 68,816       78,744   (13)
Redeemable preferred stock dividends         (230)        (245)   (6)
                                      ------------ ------------
Net income available for common stock $    68,586  $    78,499   (13)
                                      ============ ============
Basic earnings per share              $      7.22  $      8.20   (12)
                                      ============ ============
Diluted earnings per share            $      7.19  $      8.17   (12)
                                      ============ ============

Basic average shares outstanding        9,501,817    9,575,020
Diluted average shares outstanding      9,536,132    9,613,269


                     THE WASHINGTON POST COMPANY
                  CONSOLIDATED STATEMENTS OF INCOME
----------------------------------------------------------------------
                             (Unaudited)
          (In thousands, except share and per share amounts)

                                            Year-to-Date
                                      -------------------------
                                                                  %
                                          2007         2006     Change
                                      ------------------------- ------

Operating revenues                    $ 2,032,381  $ 1,917,321      6
Operating expenses                     (1,700,571)  (1,581,053)     8
Depreciation                             (107,509)     (98,537)     9
Amortization of intangibles                (7,046)      (2,767)    --
                                      ------------ ------------
Operating income                          217,255      234,964     (8)
Equity in earnings (losses) of
 affiliates, net                            8,948         (741)    --
Interest income                             5,981        4,142     44
Interest expense                          (12,084)     (12,698)    (5)
Other income, net                           5,146       33,526    (85)
                                      ------------ ------------
Income before income taxes and
 cumulative effect of change in
 accounting principle                     225,246      259,193    (13)
Provision for income taxes                (92,000)     (98,500)    (7)
                                      ------------ ------------
Income before cumulative effect of
 change in accounting principle           133,246      160,693    (17)
Cumulative effect of change in method
 of accounting for share-based
 payments, net of taxes                         -       (5,075)    --
                                      ------------ ------------
Net income                                133,246      155,618    (14)
Redeemable preferred stock dividends         (715)        (736)    (3)
                                      ------------ ------------
Net income available for common stock $   132,531  $   154,882    (14)
                                      ============ ============

Basic earnings per share:
  Before cumulative effect of change
   in accounting principle            $     13.94  $     16.71    (17)
  Cumulative effect of change in
   accounting principle                         -        (0.53)    --
                                      ------------ ------------
  Net income available for common
   stock                              $     13.94  $     16.18    (14)
                                      ============ ============

Diluted earnings per share:
  Before cumulative effect of change
   in accounting principle            $     13.89  $     16.65    (17)
  Cumulative effect of change in
   accounting principle                         -        (0.53)    --
                                      ------------ ------------
  Net income available for common
   stock                              $     13.89  $     16.12    (14)
                                      ============ ============

Basic average shares outstanding        9,507,564    9,572,639
Diluted average shares outstanding      9,542,040    9,609,735


                     THE WASHINGTON POST COMPANY
                     BUSINESS SEGMENT INFORMATION
----------------------------------------------------------------------
                             (Unaudited)
                            (In thousands)


                  Second Quarter               Year-to-Date
               --------------------  %    ----------------------  %
                  2007      2006   Change    2007       2006    Change
               -------------------------- ----------------------------
Operating
 Revenues:
  Education    $  503,487 $409,244   23   $  979,268 $  818,178   20
  Newspaper
   publishing     227,901  245,566   (7)     447,055    489,038   (9)
  Television
   broadcasting    87,863   88,970   (1)     168,697    174,884   (4)
  Magazine
   publishing      73,418   84,166  (13)     134,661    158,951  (15)
  Cable
   television     154,421  141,095    9      303,396    276,270   10
  Intersegment
   elimination       (317)      --   --         (696)        --   --
               -------------------------- ----------------------------
               $1,046,773 $969,041    8   $2,032,381 $1,917,321    6
               -------------------------- ----------------------------

Operating
 Expenses:
  Education    $  465,939 $375,356   24   $  907,377 $  731,645   24
  Newspaper
   publishing     210,143  260,939  (19)     414,371    472,374  (12)
  Television
   broadcasting    52,660   48,379    9      104,083     96,743    8
  Magazine
   publishing      60,504   72,952  (17)     127,730    148,605  (14)
  Cable
   television     122,324  101,214   21      243,280    210,962   15
  Corporate
   office          10,260   12,996  (21)      18,981     22,028  (14)
  Intersegment
   elimination       (317)      --   --         (696)        --   --
               -------------------------- ----------------------------
               $  921,513 $871,836    6   $1,815,126 $1,682,357    8
               -------------------------- ----------------------------

Operating
 Income (Loss):
  Education    $   37,548 $ 33,888   11   $   71,891 $   86,533  (17)
  Newspaper
   publishing      17,758  (15,373)  --       32,684     16,664   96
  Television
   broadcasting    35,203   40,591  (13)      64,614     78,141  (17)
  Magazine
   publishing      12,914   11,214   15        6,931     10,346  (33)
  Cable
   television      32,097   39,881  (20)      60,116     65,308   (8)
  Corporate
   office         (10,260) (12,996)  21      (18,981)   (22,028)  14
               -------------------------- ----------------------------
               $  125,260 $ 97,205   29   $  217,255 $  234,964   (8)
               -------------------------- ----------------------------


Depreciation:
  Education    $   14,299 $ 11,577   24   $   28,352 $   23,610   20
  Newspaper
   publishing       9,566    8,898    8       18,810     17,756    6
  Television
   broadcasting     2,374    2,476   (4)       4,732      4,901   (3)
  Magazine
   publishing         568      635  (11)       1,109      1,276  (13)
  Cable
   television      26,888   25,561    5       53,776     50,425    7
  Corporate
   office             365      365    0          730        569   28
               -------------------------- ----------------------------
               $   54,060 $ 49,512    9   $  107,509 $   98,537    9
               -------------------------- ----------------------------

Amortization of
 intangibles:
  Education    $    4,020 $    914   --   $    6,288 $    1,839   --
  Newspaper
   publishing         292      292    0          584        584    0
  Television
   broadcasting        --       --   --           --         --   --
  Magazine
   publishing          --       --   --           --         --   --
  Cable
   television           2      172  (99)         174        344  (49)
               -------------------------- ----------------------------
               $    4,314 $  1,378   --   $    7,046 $    2,767   --
               -------------------------- ----------------------------

Pension Credit
 (Expense):
  Education    $     (906)$   (648)  40   $   (1,748)$   (1,318)  33
  Newspaper
   publishing      (2,601) (48,671) (95)      (5,200)   (50,578) (90)
  Television
   broadcasting       306      303    1          612        630   (3)
  Magazine
   publishing       9,285    8,317   12       17,774     16,633    7
  Cable
   television        (320)    (378) (15)        (639)      (756) (15)
  Corporate
   office              --   (2,900)  --           --     (2,900)  --
               -------------------------- ----------------------------
               $    5,764 $(43,977)  --   $   10,799 $  (38,289)  --
               -------------------------- ----------------------------

CONTACT: The Washington Post Company
John B. Morse, Jr., 202-334-6662

SOURCE: The Washington Post Company