Graham Holdings Co - Quarter Report: 2013 September (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended September 30, 2013

¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number 1-6714

THE WASHINGTON POST COMPANY

(Exact name of registrant as specified in its charter)


Delaware	53-0182885
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1150 15th Street, N.W. Washington, D.C.	20071
(Address of principal executive offices)	(Zip Code)

(202) 334-6000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x. No ¨.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x. No ¨.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” accelerated filer” and “small reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨. No x.

Shares outstanding at November 1, 2013:

Class A Common Stock – 1,169,073 Shares

Class B Common Stock – 6,214,516 Shares

THE WASHINGTON POST COMPANY

Index to Form 10-Q


PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements

	a. Condensed Consolidated Statements of Operations (Unaudited) for the Three and Nine Months Ended September 30, 2013 and 2012	1

	b. Condensed Consolidated Statements of Comprehensive Income (Unaudited) for the Three and Nine Months Ended September 30, 2013 and 2012	2

	c. Condensed Consolidated Balance Sheets at September 30, 2013 (Unaudited) and December 31, 2012	3

	d. Condensed Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended September 30, 2013 and 2012	4

	e. Notes to Condensed Consolidated Financial Statements (Unaudited)	5

Item 2.	Management’s Discussion and Analysis of Results of Operations and Financial Condition	25

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	32

Item 4.	Controls and Procedures	32

PART II. OTHER INFORMATION

Item 6.	Exhibits	33

Signatures		34

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

THE WASHINGTON POST COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
(In thousands, except per share amounts)		2013		2012		2013		2012
Operating Revenues
	Education	$	546,452	$	551,696	$	1,622,497	$	1,650,155
	Advertising		84,444		105,855		264,108		283,104
	Subscriber and circulation		190,302		185,326		569,365		545,987
	Other		81,281		34,760		172,945		80,433
			902,479		877,637		2,628,915		2,559,679
Operating Costs and Expenses
	Operating		430,889		407,364		1,213,369		1,176,637
	Selling, general and administrative		331,247		314,359		992,294		997,254
	Depreciation of property, plant and equipment		55,633		57,588		173,344		170,347
	Amortization of intangible assets		2,837		5,090		9,867		13,336
			820,606		784,401		2,388,874		2,357,574
Income from Operations			81,873		93,236		240,041		202,105
	Equity in earnings of affiliates, net		5,892		4,099		13,178		11,301
	Interest income		642		648		1,674		2,492
	Interest expense		(9,221)		(8,738)		(27,229)		(26,880)
	Other income (expense), net		8,110		4,163		(8,831)		12,116
Income from Continuing Operations Before Income Taxes			87,296		93,408		218,833		201,134
Provision for Income Taxes			31,000		37,000		83,300		78,100
Income from Continuing Operations			56,296		56,408		135,533		123,034
(Loss) Income from Discontinued Operations, Net of Tax			(25,872)		37,539		(54,716)		54,528
Net Income			30,424		93,947		80,817		177,562
Net (Income) Loss Attributable to Noncontrolling Interests			(75)		71		(425)		(10)
Net Income Attributable to The Washington Post Company			30,349		94,018		80,392		177,552
Redeemable Preferred Stock Dividends			(205)		(222)		(855)		(895)
Net Income Attributable to The Washington Post
	Company Common Stockholders	$	30,144	$	93,796	$	79,537	$	176,657
Amounts Attributable to The Washington Post Company
	Common Stockholders
Income from continuing operations		$	56,016	$	56,257	$	134,253	$	122,129
(Loss) income from discontinued operations, net of tax			(25,872)		37,539		(54,716)		54,528
Net income attributable to The Washington Post Company
	common stockholders	$	30,144	$	93,796	$	79,537	$	176,657
Per Share Information Attributable to The Washington
	Post Company Common Stockholders
Basic income per common share from continuing operations		$	7.55	$	7.58	$	18.09	$	16.17
Basic (loss) income per common share from discontinued operations			(3.48)		5.06		(7.37)		7.22
Basic net income per common share		$	4.07	$	12.64	$	10.72	$	23.39
Basic average number of common shares outstanding			7,231		7,272		7,229		7,405
Diluted income per common share from continuing operations		$	7.53	$	7.58	$	18.07	$	16.17
Diluted (loss) income per common share from discontinued operations			(3.48)		5.06		(7.37)		7.22
Diluted net income per common share		$	4.05	$	12.64	$	10.70	$	23.39
Diluted average number of common shares outstanding			7,337		7,376		7,316		7,508

See accompanying Notes to Condensed Consolidated Financial Statements.

THE WASHINGTON POST COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

Three Months Ended

Nine Months Ended

September 30,

(In thousands)

2013

2012

2013

2012

Net Income

30,424

93,947

80,817

177,562

Other Comprehensive Income (Loss), Before Tax

Foreign currency translation adjustments:

Translation adjustments arising during the period

5,639

5,321

(2,061)

4,233

Adjustment for sales of businesses with foreign operations

―

(1,409)

―

(888)

5,639

3,912

(2,061)

3,345

Unrealized gains (losses) on available-for-sale securities:

Unrealized gains (losses) for the period

938

(5,966)

81,439

32,939

Reclassification adjustment for gain on available-for-sale securities

included in net income

―

(884)

(772)

938

(5,966)

80,555

32,167

Pension and other postretirement plans:

Amortization of net prior service credit included in net income

(384)

(469)

(1,205)

(1,390)

Amortization of net actuarial loss included in net income

2,004

2,592

6,325

6,839

Settlement gain included in net income

―

(3,471)

―

1,620

2,123

1,649

5,449

Cash flow hedge gain (loss)

217

259

(1,160)

Other Comprehensive Income, Before Tax

8,212

286

80,402

39,801

Income tax (expense) benefit related to items of other comprehensive income

(1,028)

1,451

(32,985)

(14,580)

Other Comprehensive Income, Net of Tax

7,184

1,737

47,417

25,221

Comprehensive Income

37,608

95,684

128,234

202,783

Comprehensive (income) loss attributable to noncontrolling interests

(75)

(447)

(31)

Total Comprehensive Income Attributable to The Washington

Post Company

37,533

95,760

127,787

202,752

See accompanying Notes to Consolidated Financial Statements.

THE WASHINGTON POST COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS

				September 30,		December 31,
(in thousands)				2013		2012
				(Unaudited)
Assets
Current Assets
	Cash and cash equivalents			$	440,810	$	512,431
	Restricted cash				47,205		28,538
	Investments in marketable equity securities and other investments				497,662		418,938
	Accounts receivable, net				375,223		399,204
	Deferred income taxes				―		3,974
	Inventories				2,484		7,985
	Other current assets				76,936		82,692
	Current assets of discontinued operations (includes $849 in cash)				70,360		―
		Total Current Assets			1,510,680		1,453,762
Property, Plant and Equipment, Net					910,636		1,081,237
Investments in Affiliates					32,997		15,535
Goodwill, Net					1,293,482		1,317,915
Indefinite-Lived Intangible Assets, Net					541,478		539,728
Amortized Intangible Assets, Net					43,542		45,577
Prepaid Pension Cost					529,165		604,823
Deferred Charges and Other Assets					49,161		46,492
Noncurrent Assets of Discontinued Operations					184,740		―
		Total Assets		$	5,095,881	$	5,105,069

Liabilities and Equity
Current Liabilities
	Accounts payable and accrued liabilities			$	478,827	$	486,396
	Income taxes payable				22,341		726
	Deferred income taxes				29,669		―
	Deferred revenue				402,074		395,837
	Dividends declared				206		―
	Short-term borrowings				3,022		243,327
	Current liabilities of discontinued operations				57,823		―
		Total Current Liabilities			993,962		1,126,286
Postretirement Benefits Other Than Pensions					36,301		59,949
Accrued Compensation and Related Benefits					215,649		216,280
Other Liabilities					86,021		109,774
Deferred Income Taxes					521,489		529,427
Long-Term Debt					448,067		453,384
Noncurrent Liabilities of Discontinued Operations					45,732		―
		Total Liabilities			2,347,221		2,495,100
Redeemable Noncontrolling Interest					5,982		12,655
Redeemable Preferred Stock					10,665		11,096
Preferred Stock					―		―
Common Stockholders’ Equity
	Common stock				20,000		20,000
	Capital in excess of par value				261,751		240,746
	Retained earnings				4,626,311		4,546,775
	Accumulated other comprehensive income, net of tax
		Cumulative foreign currency translation adjustment			24,011		26,072
		Unrealized gain on available-for-sale securities			158,886		110,553
		Unrealized gain on pensions and other postretirement plans			118,159		117,169
		Cash flow hedge			(785)		(940)
	Cost of Class B common stock held in treasury				(2,476,613)		(2,474,347)
		Total Common Stockholders’ Equity			2,731,720		2,586,028
Noncontrolling Interests					293		190
		Total Equity			2,732,013		2,586,218
			Total Liabilities and Equity	$	5,095,881	$	5,105,069

See accompanying Notes to Condensed Consolidated Financial Statements.

THE WASHINGTON POST COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

			Nine Months Ended
			September 30,
(in thousands)			2013		2012
Cash Flows from Operating Activities
Net Income			$	80,817	$	177,562
Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation of property, plant and equipment			191,388		190,111
	Amortization of intangible assets			9,867		13,833
	Net pension expense			11,425		9,980
	Early retirement program expense			22,700		8,508
	Stock-based compensation expense			34,429		10,570
	Foreign exchange loss (gain)			9,350		(3,179)
	Net loss (gain) on sales and disposition of businesses			70		(23,759)
	Net gain on sales or write-downs of marketable equity securities and cost method investments			(714)		(7,237)
	Equity in earnings of affiliates, net of distributions			(13,168)		(10,577)
	Benefit for deferred income taxes			(8,802)		(15,756)
	Net loss on sale or write-down of property, plant and equipment and other assets			1,476		545
		Increase in accounts receivable, net		(32,717)		(11,984)
		Decrease in inventories		1,138		1,690
		Increase (decrease) in accounts payable and accrued liabilities		8,587		(24,885)
		Increase in deferred revenue		31,885		20,070
		Increase (decrease) in income taxes payable		21,884		(35,341)
		Increase in other assets and other liabilities, net		(23,329)		(7,315)
	Other			1,340		2,674
		Net Cash Provided by Operating Activities		347,626		295,510

Cash Flows from Investing Activities
	Purchases of property, plant and equipment			(143,298)		(152,391)
	Investments in certain businesses, net of cash acquired			(19,927)		(8,971)
	Purchases of marketable equity securities and other investments			(12,029)		(46,324)
	Net proceeds from sales of businesses, property, plant and equipment and other assets			5,800		75,106
	Other			(3)		1,477
		Net Cash Used in Investing Activities		(169,457)		(131,103)

Cash Flows from Financing Activities
	Repayment of short-term borrowing			(240,121)		(109,671)
	Common shares repurchased			(4,196)		(97,545)
	Purchase of shares from a noncontrolling interest			(3,115)		―
	Dividends paid			(649)		(56,235)
	Other			536		19,561
		Net Cash Used in Financing Activities		(247,545)		(243,890)
Effect of Currency Exchange Rate Change				(1,396)		4,038
Net Decrease in Cash and Cash Equivalents				(70,772)		(75,445)
Beginning Cash and Cash Equivalents				512,431		381,099
Ending Cash and Cash Equivalents			$	441,659	$	305,654

See accompanying Notes to Condensed Consolidated Financial Statements.

THE WASHINGTON POST COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. ORGANIZATION, BASIS OF PRESENTATION AND RECENT ACCOUNTING PRONOUNCEMENTS

The Washington Post Company, Inc. (the Company) is a diversified education and media company. The Company’s Kaplan subsidiary provides a wide variety of educational services, both domestically and outside the United States. The Company’s media operations consist of the ownership and operation of cable television systems and television broadcasting (through the ownership and operation of six television broadcast stations).

The Company announced on August 5, 2013 that it had entered into an agreement to sell The Washington Post, and some other newspaper publishing entities. On October 1, 2013, the Company completed such sale. The operating results of The Washington Post and publishing businesses sold have been presented in (loss) income from discontinued operations, net of tax, for all periods presented.

Financial Periods – The Company and its subsidiaries report on a calendar-quarter basis.

Basis of Presentation – The accompanying condensed consolidated financial statements have been prepared in accordance with: (i) generally accepted accounting principles in the United States of America (GAAP) for interim financial information; (ii) the instructions to Form 10-Q; and (iii) the guidance of Rule 10-01 of Regulation S-X under the Securities and Exchange Act of 1934, as amended, for financial statements required to be filed with the Securities and Exchange Commission (SEC). They include the assets, liabilities, results of operations and cash flows of the Company, including its domestic and foreign subsidiaries that are more than 50% owned or otherwise controlled by the Company. As permitted under such rules, certain notes and other financial information normally required by GAAP have been condensed or omitted. Management believes the accompanying condensed consolidated financial statements reflect all normal and recurring adjustments necessary for a fair presentation of the Company’s financial position, results of operations, and cash flows as of and for the periods presented herein. The Company’s results of operations for the three and nine months ended September 30, 2013 and 2012 may not be indicative of the Company’s future results. These condensed consolidated financial statements are unaudited and should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP.

Certain amounts in previously issued financial statements have been reclassified to conform to the current year presentation, which includes the reclassification of the results of operations of certain businesses as discontinued operations for all periods presented.

Use of Estimates in the Preparation of the Condensed Consolidated Financial Statements – The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and judgments that affect the amounts reported herein. Management bases its estimates and assumptions on historical experience and on various other factors that are believed to be reasonable under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in those estimates.

Assets Held for Sale – An asset or business is classified as held for sale when (i) management commits to a plan to sell the asset or business; (ii) the asset or business is available for immediate sale in its present condition; (iii) the asset or business is actively marketed for sale at a reasonable price; (iv) the sale is expected to be completed within one year; and (v) it is unlikely significant changes to the plan will be made or that the plan will be withdrawn. The assets and related liabilities are aggregated and reported separately in the Company’s condensed consolidated balance sheet.

Recently Adopted and Issued Accounting Pronouncements – In February 2013, the Financial Accounting Standards Board (FASB) issued final guidance on the presentation of reclassifications out of other comprehensive income to net income. The amendment requires an entity to provide information about the amounts reclassified out of other comprehensive income by component. In addition, an entity is required to present, either on the face of the income statement or in a footnote, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income, only if the amount reclassified is required by GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under GAAP to be reclassified in their

entirety to net income, an entity is required to cross-reference to other disclosures required under GAAP that provide detail about those amounts. This amendment is effective for interim and fiscal years beginning after December 15, 2012. The adoption of the amendment in the first quarter of 2013 is reflected in the Company's Notes to Condensed Consolidated Financial Statements.

2. DISCONTINUED OPERATIONS

On August 5, 2013, after approval by the Company’s Board of Directors on the same day, the Company announced that it had entered into a binding letter agreement (the Letter Agreement) with Nash Holdings LLC, a Delaware limited liability company (the Purchaser), and Explore Holdings LLC, a Washington limited liability company, as guarantor (the Guarantor), to sell all the issued and outstanding equity securities of each of WP Company LLC, Express Publications Company, LLC, El Tiempo Latino, LLC, Robinson Terminal Warehouse, LLC, Greater Washington Publishing, LLC and Post-Newsweek Media, LLC (the Publishing Subsidiaries). The Publishing Subsidiaries together conducted most of the Company’s publishing businesses, including publishing The Washington Post, Express, The Gazette Newspapers, Southern Maryland Newspapers, Fairfax County Times and El Tiempo Latino and related websites, and operating Washington Post Live and Washington Post News Media Services and the Company’s commercial printing and distribution business and paper handling and storage business (collectively, the Publishing Business), subject to satisfying certain conditions.

On October 1, 2013, the Company entered into a Purchase Agreement and completed the sale. Under the terms of the Purchase Agreement, the Purchaser acquired all the issued and outstanding equity securities of each of the entities that comprise the Publishing Subsidiaries for $250 million, subject to customary adjustment for cash, debt and working capital of the Publishing Subsidiaries at closing. The Purchaser also acquired all other assets of the Company primarily related to the Publishing Business, including all of the Company’s rights in the name “The Washington Post”. The Company will change its corporate name within 60 days of the October 1 closing. The Company retained its interest in Classified Ventures, LLC, Slate magazine, TheRoot.com and Foreign Policy, as well as the WaPo Labs and SocialCode business and certain real estate, including the headquarters building in downtown Washington, DC and certain land and property in Alexandria, VA. The liabilities under the Retirement Plan for The Washington Post Companies relating to the active employees of the Publishing Business will be transferred to the Purchaser, along with pension assets that have a value equal to the projected benefit obligation in respect of these active employees plus an additional $50 million. The results of operations of Publishing Subsidiaries for the three and nine months ended September 30, 2013 and 2012, are included in the Company’s Condensed Consolidated Statements of Operations as Income (Loss) from Discontinued Operations, Net of Tax.

The Company will not record the gain or the net proceeds on the sale until the fourth quarter of 2013; however, the Company recognized $28.4 million (after-tax impact of $18.3 million) in expenses related to the sale that are included in discontinued operations in the third quarter of 2013. These costs include the net impact of accelerated vesting provisions and forfeitures of restricted stock awards and stock options that were made in contemplation of the sale, and certain other transaction-related expenses. Also included in discontinued operations is $22.7 million (after-tax basis of $14.5 million) in early retirement program expense for the first nine months of 2013 and $7.5 million (after-tax basis of $4.6 million) and $8.5 million (after-tax basis of $5.3 million) for the third quarter and first nine months of 2012, respectively. The historical pension and postretirement benefits expense for retirees has been excluded from the reclassification of the Publishing Subsidiaries’ results to discontinued operations, since the associated assets and liabilities will be retained by the Company. Although the Company has retained ownership of certain real estate assets, including the headquarters building in downtown Washington, DC, related operating costs are included in the reclassification of the Publishing Subsidiaries’ results to discontinued operations since the Purchase Agreement includes a lease to the buyer for the real estate assets that provides for recovery of operating costs by the Company.

All corresponding prior period operating results presented in the Company’s Condensed Consolidated Financial Statements and the accompanying notes have been reclassified to reflect the discontinued operations presented. The assets and liabilities of the Publishing Subsidiaries have been classified on the Company’s condensed consolidated balance sheet as assets and liabilities of discontinued operations as of September 30, 2013. The Company did not reclassify its Statements of Cash Flows or prior Condensed Consolidated Balance Sheets to reflect the discontinued operations.

The carrying amounts of the major classes of assets and liabilities of the Publishing Subsidiaries included in discontinued operations at September 30, 2013 are as follows:

		September 30,
(in thousands)		2013
Cash and cash equivalents		$	849
Accounts receivable, net			60,369
Inventories			3,965
Other current assets			5,177
	Current Assets of Discontinued Operations	$	70,360
Property, plant and equipment, net		$	116,639
Goodwill, net			13,602
Prepaid pension cost			50,000
Deferred charges and other assets			4,499
	Noncurrent Assets of Discontinued Operations	$	184,740
Accounts payable and accrued liabilities		$	35,616
Deferred revenue			22,207
	Current Liabilities of Discontinued Operations	$	57,823
Postretirement benefits other than pensions		$	24,999
Accrued compensation and related benefits			8,998
Other liabilities			11,735
	Noncurrent Liabilities of Discontinued Operations	$	45,732

In March 2013, the Company completed the sale of The Herald, a daily and Sunday newspaper headquartered in Everett, WA. Under the terms of the agreement, the purchaser received most of the assets and liabilities; however, certain land and buildings and other assets and liabilities were retained by the Company. The results of operations of The Herald for the three and nine months ended September 30, 2013 and 2012, are included in the Company’s Condensed Consolidated Statements of Operations as Income (Loss) from Discontinued Operations, Net of Tax.

In August 2012, the Company completed the sale of Kidum and recorded a pre-tax gain of $3.6 million and an after-tax gain of $10.2 million related to this sale in the third quarter of 2012. On July 31, 2012, the Company disposed of its interest in Avenue100 Media Solutions, Inc. and recorded a pre-tax loss of $5.7 million related to the disposition. An income tax benefit of $44.5 million was also recorded in the third quarter of 2012 as the Company determined that Avenue100 had no value. The income tax benefit was 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. In April 2012, the Company completed the sale of Kaplan EduNeering. Under the terms of the agreement, the purchaser acquired the stock of EduNeering and received substantially all the assets and liabilities. In the second quarter of 2012, the Company recorded an after-tax gain of $18.5 million related to this sale. In February 2012, Kaplan completed the stock sale of Kaplan Learning Technologies (KLT) and recorded an after-tax loss on the sale of $1.9 million. The Company recorded $23.2 million of income tax benefits in the first quarter of 2012 in connection with the sale of its stock in EduNeering and KLT related to the excess of the outside stock tax basis over the net book value of the net assets disposed. The results of operations of Kidum, Avenue100, EduNeering, and KLT, for the three and nine months ended September 30, 2012 are included in the Company’s Condensed Consolidated Statement of Operations as Income (Loss) from Discontinued Operations, Net of Tax.

The summarized income (loss) from discontinued operations, net of tax, is presented below:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands)	2013		2012		2013		2012
Operating revenues	$	124,725	$	137,668	$	382,705	$	441,308
Operating costs and expenses		(165,380)		(155,701)		(467,434)		(491,698)
Loss from discontinued operations		(40,655)		(18,033)		(84,729)		(50,390)
Benefit from income taxes		(14,783)		(5,568)		(30,059)		(16,568)
Net Loss from Discontinued Operations		(25,872)		(12,465)		(54,670)		(33,822)
(Loss) gain on sales of discontinued operations		―		(2,174)		(70)		23,759
Benefit from income taxes on sales of discontinued operations		―		(52,178)		(24)		(64,591)
(Loss) Income from Discontinued Operations, Net of Tax	$	(25,872)	$	37,539	$	(54,716)	$	54,528

The following table summarizes the 2013 quarterly operating results of the Company following the reclassification of the operations discussed above as discontinued operations:

		March 31,		June 30,
(in thousands, except per share amounts)		2013		2013
Operating Revenues
	Education	$	527,815	$	548,230
	Advertising		82,994		96,670
	Subscriber and circulation		186,790		192,273
	Other		39,241		52,423
			836,840		889,596
Operating Costs and Expenses
	Operating		381,965		400,515
	Selling, general and administrative		337,865		323,182
	Depreciation of property, plant and equipment		59,895		57,816
	Amortization of intangible assets		3,717		3,313
			783,442		784,826
Income from Operations			53,398		104,770
	Equity in earnings of affiliates, net		3,418		3,868
	Interest income		510		522
	Interest expense		(8,960)		(9,048)
	Other expense, net		(4,083)		(12,858)
Income from Continuing Operations before Income Taxes			44,283		87,254
Provision for Income Taxes			17,800		34,500
Income from Continuing Operations			26,483		52,754
Loss from Discontinued Operations, Net of Tax			(21,224)		(7,620)
Net Income			5,259		45,134
Net Income Attributable to Noncontrolling Interests			(97)		(253)
Net Income Attributable to The Washington Post Company			5,162		44,881
Redeemable Preferred Stock Dividends			(444)		(206)
Net Income Attributable to The Washington Post Company Common Stockholders		$	4,718	$	44,675
Amounts Attributable to The Washington Post Company Common Stockholders
Income from continuing operations		$	25,942	$	52,295
Loss from discontinued operations, net of tax			(21,224)		(7,620)
Net income attributable to the Washington Post Company common stockholders		$	4,718	$	44,675
Per Share Information Attributable to The Washington Post Company Common Stockholders
Basic income per common share from continuing operations		$	3.50	$	7.05
Basic loss per common share from discontinued operations			(2.86)		(1.03)
Basic net income per common share		$	0.64	$	6.02
Diluted income per common share from continuing operations		$	3.50	$	7.05
Diluted loss per common share from discontinued operations			(2.86)		(1.03)
Diluted net income per common share		$	0.64	$	6.02

The following table summarizes the 2012 quarterly operating results of the Company following the reclassification of the operations discussed above as discontinued operations:

		March 31,		June 30,		September 30,		December 31,
(in thousands, except per share amounts)		2012		2012		2012		2012
Operating Revenues
	Education	$	546,685	$	551,774	$	551,696	$	546,341
	Advertising		82,600		94,649		105,855		117,696
	Subscriber and circulation		178,022		182,639		185,326		186,383
	Other		20,305		25,368		34,760		45,471
			827,612		854,430		877,637		895,891
Operating Costs and Expenses
	Operating		382,106		387,167		407,364		389,620
	Selling, general and administrative		347,841		335,054		314,359		336,262
	Depreciation of property, plant and equipment		56,165		56,594		57,588		73,731
	Amortization of intangible assets		3,839		4,407		5,090		7,610
	Impairment of goodwill and other long-lived assets		―		―		―		111,593
			789,951		783,222		784,401		918,816
Income (Loss) from Operations			37,661		71,208		93,236		(22,925)
	Equity in earnings of affiliates, net		3,888		3,314		4,099		2,785
	Interest income		1,069		775		648		901
	Interest expense		(9,163)		(8,979)		(8,738)		(9,064)
	Other income (expense), net		8,588		(635)		4,163		(17,572)
Income (Loss) from Continuing Operations before Income Taxes			42,043		65,683		93,408		(45,875)
Provision for Income Taxes			17,200		23,900		37,000		5,100
Income (Loss) from Continuing Operations			24,843		41,783		56,408		(50,975)
Income from Discontinued Operations, Net of Tax			6,725		10,264		37,539		5,600
Net Income (Loss)			31,568		52,047		93,947		(45,375)
Net (Income) Loss Attributable to Noncontrolling Interests			(70)		(11)		71		(64)
Net Income (Loss) Attributable to The Washington Post Company			31,498		52,036		94,018		(45,439)
Redeemable Preferred Stock Dividends			(451)		(222)		(222)		―
Net Income (Loss) Attributable to The Washington Post Company
	Common Stockholders	$	31,047	$	51,814	$	93,796	$	(45,439)
Amounts Attributable to The Washington Post Company
	Common Stockholders
Income (loss) from continuing operations		$	24,322	$	41,550	$	56,257	$	(51,039)
Income from discontinued operations, net of tax			6,725		10,264		37,539		5,600
Net income (loss) attributable to the Washington Post
	Company common stockholders	$	31,047	$	51,814	$	93,796	$	(45,439)
Per Share Information Attributable to The Washington Post
	Company Common Stockholders
Basic income (loss) per common share from continuing operations		$	3.17	$	5.48	$	7.58	$	(7.35)
Basic income per common share from discontinued operations			0.90		1.36		5.06		0.78
Basic net income (loss) per common share		$	4.07	$	6.84	$	12.64	$	(6.57)
Diluted income (loss) per common share from continuing operations		$	3.17	$	5.48	$	7.58	$	(7.35)
Diluted income per common share from discontinued operations			0.90		1.36		5.06		0.78
Diluted net income (loss) per common share		$	4.07	$	6.84	$	12.64	$	(6.57)

The following table summarizes the annual operating results of the Company following the reclassification of operations discussed above as discontinued operations:

(in thousands, except per share amounts)		2012		2011
Operating Revenues
	Education	$	2,196,496	$	2,404,459
	Advertising		400,800		327,877
	Subscriber and circulation		732,370		710,253
	Other		125,904		83,408
			3,455,570		3,525,997
Operating Costs and Expenses
	Operating		1,566,257		1,562,615
	Selling, general and administrative		1,333,516		1,383,660
	Depreciation of property, plant and equipment		244,078		223,403
	Amortization of intangible assets		20,946		22,201
	Impairment of goodwill and other long-lived assets		111,593		―
			3,276,390		3,191,879
Income from Operations			179,180		334,118
	Equity in earnings of affiliates, net		14,086		5,949
	Interest income		3,393		4,147
	Interest expense		(35,944)		(33,226)
	Other expense, net		(5,456)		(55,200)
Income from Continuing Operations Before Income Taxes			155,259		255,788
Provision for Income Taxes			83,200		104,400
Income from Continuing Operations			72,059		151,388
Income (Loss) from Discontinued Operations, Net of Tax			60,128		(34,231)
Net Income			132,187		117,157
Net Income Attributable to Noncontrolling Interests			(74)		(7)
Net Income Attributable to The Washington Post Company			132,113		117,150
Redeemable Preferred Stock Dividends			(895)		(917)
Net Income Attributable to The Washington Post Company Common Stockholders		$	131,218	$	116,233
Amounts Attributable to The Washington Post Company Common Stockholders
Income from continuing operations		$	71,090	$	150,464
Income (loss) from discontinued operations, net of tax			60,128		(34,231)
Net income attributable to the Washington Post Company common stockholders		$	131,218	$	116,233
Per Share Information Attributable to The Washington Post Company Common
	Stockholders
Basic income per common share from continuing operations		$	9.22	$	19.03
Basic income (loss) per common share from discontinued operations			8.17		(4.33)
Basic net income per common share		$	17.39	$	14.70
Diluted income per common share from continuing operations		$	9.22	$	19.03
Diluted income (loss) per common share from discontinued operations			8.17		(4.33)
Diluted net income per common share		$	17.39	$	14.70

3. INVESTMENTS

Investments in marketable equity securities comprised the following:

	As of
	September 30,		December 31,
(in thousands)	2013		2012
Total cost	$	193,159	$	195,832
Net unrealized gains		264,810		184,255
Total Fair Value	$	457,969	$	380,087

There were no new investments in marketable equity securities during the first nine months of 2013. The Company invested $45.0 million in marketable equity securities during the first nine months of 2012. During the first nine months of 2013 and 2012, the proceeds from sales of marketable equity securities were $3.6 million and $2.0 million, respectively, and net realized gains on such sales were $0.9 million and $0.5 million, respectively.

As of September 30, 2013, the Company has a $7.0 million unrealized loss on its investment in Strayer Education, Inc., a publicly traded company. At September 30, 2013, the investment has been in an unrealized loss position for under six months. The Company evaluated this investment for other-than-temporary impairment based on various factors, including the duration and severity of the unrealized loss, the reason for the decline in value and the potential recovery period, and the ability and intent to hold the investment and concluded that the unrealized loss is not other-than-temporary as of September 30, 2013. If any impairment is considered other-than-temporary, the investment will be written down to its fair market value with a corresponding charge to the Consolidated Statement of Operations.

4. ACQUISITIONS AND DISPOSITIONS

Acquisitions. In the first nine months of 2013, the Company acquired five small businesses included in other businesses and in its education division; the purchase price allocation mostly comprised goodwill and other intangible assets on a preliminary basis. In the first nine months of 2012, the Company acquired four small businesses included in its education division and in other businesses; the purchase price allocation mostly comprised goodwill and other intangible assets. The assets and liabilities of the companies acquired have been recorded at their estimated fair values at the date of acquisition.

On August 1, 2013, the Company completed its acquisition of Forney Corporation, a global supplier of products and systems that control and monitor combustion processes in electric utility and industrial applications. The operating results of Forney are included in other businesses.

In the second quarter of 2013, Kaplan purchased the remaining 15% noncontrolling interest in Kaplan China; this additional interest was accounted for as an equity transaction.

In September 2012, the Company entered into a stock purchase agreement to acquire a controlling interest in Celtic Healthcare, Inc. (Celtic), a provider of home healthcare and hospice services in the northeastern and mid-Atlantic regions. The transaction closed on November 5, 2012. The operating results of Celtic are included in other businesses.

Dispositions. On August 5, 2013, the Company announced that it had entered into an agreement to sell its Publishing Subsidiaries that together conducted most of the Company’s publishing business and related services, including publishing The Washington Post, Express, The Gazette Newspapers, Southern Maryland Newspapers, Fairfax County Times and El Tiempo Latino and related websites. Slate magazine, TheRoot.com and Foreign Policy are not part of the transaction and will remain with The Washington Post Company, as will the WaPo Labs and SocialCode businesses, the Company’s interest in Classified Ventures and certain real estate assets, including the headquarters building in downtown Washington, DC. On October 1, 2013, the Company completed the sale.

In March 2013, the Company completed the sale of The Herald, a daily and Sunday newspaper headquartered in Everett, WA. The Herald was previously reported in the newspaper publishing division.

The Company divested its interested in Avenue100 Media Solutions in July 2012, which was previously reported in other businesses. Kaplan completed the sales of Kidum in August 2012, EduNeering in April 2012 and Kaplan Learning Technologies in February 2012, which were part of the Kaplan Ventures division.

Consequently, the Company’s income from continuing operations excludes these sold businesses, which have been reclassified to discontinued operations, net of tax (see Note 2).

5. GOODWILL AND OTHER INTANGIBLE ASSETS

Amortization of intangible assets for the three months ended September 30, 2013 and 2012 was $2.8 million and $5.1 million, respectively. Amortization of intangible assets for the nine months ended September 30, 2013 and 2012 was $9.9 million and $13.3 million, respectively. Amortization of intangible assets is estimated to be approximately $4 million for the remainder of 2013, $11 million in 2014, $9 million in 2015, $8 million in 2016, $5 million in 2017, $4 million in 2018 and $3 million thereafter.

The changes in the carrying amount of goodwill, by segment, were as follows:

Cable

Newspaper

Television

Other

(in thousands)

Education

Television

Publishing

Broadcasting

Businesses

Total

Balance as of December 31, 2012

Goodwill

1,097,058

85,488

81,183

203,165

19,052

1,485,946

Accumulated impairment losses

(102,259)

―

(65,772)

―

(168,031)

994,799

85,488

15,411

203,165

19,052

1,317,915

Reallocation, net

―

(1,809)

―

1,809

―

Acquisitions

―

7,924

Reclassification to discontinued operations

―

(13,602)

―

(13,602)

Foreign currency exchange rate changes

(18,755)

―

(18,755)

Balance as of September 30, 2013

Goodwill

1,078,303

85,488

―

203,165

34,867

1,401,823

Accumulated impairment losses

(102,259)

―

(6,082)

(108,341)

976,044

85,488

―

203,165

28,785

1,293,482

The changes in carrying amount of goodwill at the Company’s education division were as follows:

Higher

Test

Kaplan

(in thousands)

Education

Preparation

International

Total

Balance as of December 31, 2012

Goodwill

409,184

152,187

535,687

1,097,058

Accumulated impairment losses

―

(102,259)

―

(102,259)

409,184

49,928

535,687

994,799

Foreign currency exchange rate changes

(79)

―

(18,676)

(18,755)

Balance as of September 30, 2013

Goodwill

409,105

152,187

517,011

1,078,303

Accumulated impairment losses

―

(102,259)

―

(102,259)

409,105

49,928

517,011

976,044

Other intangible assets consist of the following:

As of September 30, 2013

As of December 31, 2012

Gross

Net

Gross

Net

Useful Life

Carrying

Accumulated

Carrying

Carrying

Accumulated

Carrying

(in thousands)

Range

Amount

Amortization

Amount

Amount

Amortization

Amount

Amortized Intangible Assets

Non-compete agreements

2-5 years

14,054

13,038

1,016

14,008

12,546

1,462

Student and customer relationships

2-10 years

70,918

42,141

28,777

73,693

40,787

32,906

Databases and technology

3-5 years

10,539

6,457

4,082

6,457

5,707

750

Trade names and trademarks

2-10 years

26,100

19,124

6,976

26,634

18,185

8,449

Other

1-25 years

9,828

7,137

2,691

8,849

6,839

2,010

131,439

87,897

43,542

129,641

84,064

45,577

Indefinite-Lived Intangible Assets

Franchise agreements

496,321

496,321

Wireless licenses

22,150

22,150

Licensure and accreditation

7,371

7,371

Other

15,636

13,886

541,478

539,728

6. DEBT

The Company’s borrowings consist of the following:

	As of
	September 30,		December 31,
(in thousands)	2013		2012
7.25% unsecured notes due February 1, 2019	$	397,790	$	397,479
USD Revolving credit borrowing		―		240,121
AUD Revolving credit borrowing		46,589		51,915
Other indebtedness		6,710		7,196
Total Debt		451,089		696,711
Less: current portion		(3,022)		(243,327)
Total Long-Term Debt	$	448,067	$	453,384

The Company’s other indebtedness at September 30, 2013 and December 31, 2012 is at interest rates from 0% to 6% and matures from 2013 to 2017.

During the three months ended September 30, 2013 and 2012, the Company had average borrowings outstanding of approximately $449.8 million and $456.3 million, respectively, at average annual interest rates of approximately 7.0%. During the three months ended September 30, 2013 and 2012, the Company incurred net interest expense of $8.6 million and $8.1 million, respectively.

During the nine months ended September 30, 2013 and 2012, the Company had average borrowings outstanding of approximately $477.5 million and $467.3 million, respectively, at average annual interest rates of approximately 7.0%. During the nine months ended September 30, 2013 and 2012, the Company incurred net interest expense of $25.6 million and $24.4 million, respectively.

At September 30, 2013, the fair value of the Company’s 7.25% unsecured notes, based on quoted market prices, totaled $475.1 million, compared with the carrying amount of $397.8 million. At December 31, 2012, the fair value of the Company’s 7.25% unsecured notes, based on quoted market prices, totaled $481.4 million, compared with the carrying amount of $397.5 million. The carrying value of the Company’s other unsecured debt at September 30, 2013 approximates fair value.

7. FAIR VALUE MEASUREMENTS

Fair value measurements are determined based on the assumptions that a market participant would use in pricing an asset or liability based on a three-tiered hierarchy that draws a distinction between market participant assumptions based on (i) observable inputs, such as quoted prices in active markets (Level 1); (ii) inputs other than quoted prices in active markets that are observable either directly or indirectly (Level 2); and (iii) unobservable inputs that require the Company to use present value and other valuation techniques in the determination of fair value (Level 3). Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measure. The Company’s assessment of the significance of a particular input to the fair value measurements requires judgment and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy.

The Company’s financial assets and liabilities measured at fair value on a recurring basis were as follows:

(in thousands)			Level 1		Level 2		Total
As of September 30, 2013
Assets
	Money market investments (1)		$	―	$	296,914	$	296,914
	Marketable equity securities (3)			457,969		―		457,969
	Other current investments (4)			16,413		23,281		39,694
		Total Financial Assets	$	474,382	$	320,195	$	794,577

Liabilities
	Deferred compensation plan liabilities (5)		$	―	$	63,685	$	63,685
	7.25% unsecured notes (6)			―		475,144		475,144
	AUD revolving credit borrowing (6)			―		46,589		46,589
	Interest rate swap (7)			―		1,308		1,308
		Total Financial Liabilities	$	―	$	586,726	$	586,726

As of December 31, 2012
Assets
	Money market investments (2)		$	―	$	432,670	$	432,670
	Marketable equity securities (3)			380,087		―		380,087
	Other current investments (4)			14,134		24,717		38,851
		Total Financial Assets	$	394,221	$	457,387	$	851,608

Liabilities
	Deferred compensation plan liabilities (5)		$	―	$	62,297	$	62,297
	7.25% unsecured notes (6)			―		481,424		481,424
	AUD revolving credit borrowing (6)			―		51,915		51,915
	Interest rate swap (7)			―		1,567		1,567
		Total Financial Liabilities	$	―	$	597,203	$	597,203

____________

(1) The Company’s money market investments are included in cash and cash equivalents.

(2) The Company’s money market investments are included in cash, cash equivalents and restricted cash.

(3) The Company’s investments in marketable equity securities are classified as available-for-sale.

(4) Includes U.S. Government Securities, corporate bonds, mutual funds and time deposits (with original maturities greater than 90 days, but less than one year).

(5) Includes The Washington Post Company Deferred Compensation Plan and supplemental savings plan benefits under The Washington Post Company Supplemental Executive Retirement Plan, which are included in accrued compensation and related benefits.

(6) See Note 6 for carrying amount of these notes and borrowing.

(7) Included in Other liabilities. The Company utilized a market approach model using the notional amount of the interest rate swap multiplied by the observable inputs of time to maturity and market interest rates.

For assets that are measured using quoted prices in active markets, the total fair value is the published market price per unit multiplied by the number of units held without consideration of transaction costs. Assets and liabilities that are measured using significant other observable inputs are primarily valued by reference to quoted prices of similar assets or liabilities in active markets, adjusted for any terms specific to that asset or liability.

8. EARNINGS PER SHARE

The Company’s earnings per share from continuing operations (basic and diluted) are presented below:

			Three Months Ended				Nine Months Ended
			September 30,				September 30,
(in thousands, except per share amounts)			2013		2012		2013		2012
Income from continuing operations attributable to The
	Washington Post Company common stockholders		$	56,016	$	56,257	$	134,253	$	122,129
Less: Amount attributable to participating securities				(1,444)		(1,117)		(3,462)		(2,398)
Basic income from continuing operations attributable to
	The Washington Post Company common stockholders		$	54,572	$	55,140	$	130,791	$	119,731

Plus: Amount attributable to participating securities				1,444		1,117		3,462		2,398
Diluted income from continuing operations attributable to
	The Washington Post Company common stockholders		$	56,016	$	56,257	$	134,253	$	122,129

Basic weighted average shares outstanding				7,231		7,272		7,229		7,405
Plus: Effect of dilutive shares
	Stock options			15		―		8		―
	Restricted stock			91		104		79		103
Diluted weighted average shares outstanding				7,337		7,376		7,316		7,508

Income Per Share from Continuing Operations Attributable
	to The Washington Post Company Common Stockholders:
		Basic	$	7.55	$	7.58	$	18.09	$	16.17
		Diluted	$	7.53	$	7.58	$	18.07	$	16.17

For the three and nine months ended September 30, 2013 and 2012, the basic earnings per share computed under the two-class method is lower than the diluted earnings per share computed under the treasury stock method for participating securities, resulting in the presentation of the lower amount in diluted earnings per share. The diluted earnings per share amounts for the three and nine months ended September 30, 2013 exclude the effects of 13,000 and 63,000 stock options outstanding, respectively, as their inclusion would have been antidilutive. The diluted earnings per share amounts for the three and nine months ended September 30, 2013 exclude the effects of 8,800 restricted stock awards, as their inclusion would have been antidilutive. The diluted earnings per share amounts for the three and nine months ended September 30, 2012 exclude the effects of 123,494 and 111,994 stock options outstanding, respectively, as their inclusion would have been antidilutive. The diluted earnings per share amounts for the three and nine months ended September 30, 2012 exclude the effects of 51,500 restricted stock awards, as their inclusion would have been antidilutive.

In the three and nine months ended September 30, 2012, the Company declared regular dividends totaling $2.45 and $9.80 per share, respectively. In December 2012, the Company declared and paid an accelerated cash dividend totaling $9.80 per share, in lieu of regular quarterly dividends that the Company otherwise would have declared and paid in calendar year 2013.

9. PENSION AND POSTRETIREMENT PLANS

Defined Benefit Plans. The total cost arising from the Company’s defined benefit pension plans, including a portion included in discontinued operations, consists of the following components:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands)	2013		2012		2013		2012
Service cost	$	12,713	$	10,876	$	38,788	$	28,684
Interest cost		14,242		14,828		42,776		44,248
Expected return on assets		(26,817)		(23,779)		(78,606)		(72,301)
Amortization of prior service cost		908		919		2,726		2,775
Recognized actuarial loss		1,797		2,502		5,741		6,574
Net Periodic Cost		2,843		5,346		11,425		9,980
Early retirement programs expense		―		7,486		22,700		8,508
Total Cost	$	2,843	$	12,832	$	34,125	$	18,488

The total cost above includes $5.6 million and $42.2 million in costs associated with the Publishing Subsidiaries that are included in discontinued operations for the three and nine months ended September 30, 2013, respectively. For the three and nine months ended September 30, 2012, the costs associated with the Publishing Subsidiaries were $13.9 million and $26.3 million, respectively.

The Company announced a Voluntary Retirement Incentive Program in February 2013, which was offered to certain employees of the Washington Post newspaper. The total early retirement program expense for this program for the nine months ended September 30, 2013 was $20.4 million. Of this amount, $12.0 million was recorded in the first quarter of 2013 and $8.4 million was recorded in the second quarter of 2013. In addition, the Washington Post newspaper recorded $2.3 million in special separation benefits for a group of employees in the first quarter of 2013. The early retirement program expense and special separation benefits for these programs are being funded from the assets of the Company’s pension plan and are included in discontinued operations, net of tax, in 2013.

In the third quarter of 2012, the Company offered a Voluntary Retirement Incentive Program to certain employees of The Washington Post newspaper and recorded early retirement program expense of $7.5 million. In the first quarter of 2012, the Company offered a Voluntary Retirement Incentive Program to certain employees of Post-Newsweek Media and recorded early retirement program expense of $1.0 million. The early retirement program expense for these programs was funded from the assets of the Company’s pension plan and are included in discontinued operations, net of tax, in 2012.

The total cost arising from the Company’s Supplemental Executive Retirement Plan (SERP), including a portion included in discontinued operations, consists of the following components:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands)	2013		2012		2013		2012
Service cost	$	429	$	367	$	1,288	$	1,100
Interest cost		1,023		1,060		3,069		3,181
Amortization of prior service cost		14		14		41		41
Recognized actuarial loss		711		458		2,133		1,375
Total Cost	$	2,177	$	1,899	$	6,531	$	5,697

The total cost above includes $0.2 million and $0.6 million in costs associated with the Publishing Subsidiaries that are included in discontinued operations for the three and nine months ended September 30, 2013, respectively. For the three and nine months ended September 30, 2012, the costs associated with the Publishing Subsidiaries were $0.2 million and $0.5 million, respectively.

Defined Benefit Plan Assets. The Company’s defined benefit pension obligations are funded by a portfolio made up of a relatively small number of stocks and high-quality fixed-income securities that are held by a third-party trustee. The assets of the Company’s pension plan were allocated as follows:

	As of
	September 30,			December 31,
	2013			2012
U.S. equities		60	%		64	%
U.S. fixed income		12	%		13	%
International equities		28	%		23	%
		100	%		100	%

Essentially all of the assets are actively managed by two investment companies. The goal of the investment managers is to produce moderate long-term growth in the value of these assets, while protecting them against large decreases in value. Both of these managers may invest in a combination of equity and fixed-income securities and cash. The managers are not permitted to invest in securities of the Company or in alternative investments. The investment managers cannot invest more than 20% of the assets at the time of purchase in the stock of Berkshire Hathaway or more than 10% of the assets in the securities of any other single issuer, except for obligations of the U.S. Government, without receiving prior approval by the Plan administrator. As of September 30, 2013, the managers can invest no more than 24% of the assets in international stocks at the time the investment is made, and no less than 10% of the assets could be invested in fixed-income securities. None of the assets is managed internally by the Company.

In determining the expected rate of return on plan assets, the Company considers the relative weighting of plan assets, the historical performance of total plan assets and individual asset classes and economic and other indicators of future performance. In addition, the Company may consult with and consider the input of financial and other professionals in developing appropriate return benchmarks.

The Company evaluated its defined benefit pension plan asset portfolio for the existence of significant concentrations (defined as greater than 10% of plan assets) of credit risk as of September 30, 2013. Types of concentrations that were evaluated include, but are not limited to, investment concentrations in a single entity, type of industry, foreign country and individual fund. At September 30, 2013 and December 31, 2012, the pension plan held common stock in one investment

that exceeded 10% of total plan assets. This investment was valued at $389.3 million and $223.1 million at September 30, 2013 and December 31, 2012, respectively, or approximately 16% and 11%, respectively, of total plan assets. Assets also included $228.6 million and $179.9 million of Berkshire Hathaway common stock at September 30, 2013 and December 31, 2012, respectively. At September 30, 2013 and December 31, 2012, the pension plan held investments in one foreign country that exceeded 10% of total plan assets. These investments were valued at $406.4 million and $240.4 million at September 30, 2013 and December 31, 2012, respectively, or approximately 16% and 12%, respectively, of total plan assets.

Other Postretirement Plans. The total benefit arising from the Company’s other postretirement plans, including a portion included in discontinued operations, consists of the following components:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands)	2013		2012		2013		2012
Service cost	$	728	$	778	$	2,183	$	2,335
Interest cost		508		684		1,525		2,052
Amortization of prior service credit		(1,306)		(1,402)		(3,972)		(4,206)
Recognized actuarial gain		(504)		(370)		(1,549)		(1,110)
Net Periodic Benefit		(574)		(310)		(1,813)		(929)
Settlement gain		―		―		(3,471)		―
Total Periodic Benefit	$	(574)	$	(310)	$	(5,284)	$	(929)

The total benefit above includes $1.5 million and $2.8 million in benefits associated with the Publishing Subsidiaries that are included in discontinued operations for the three and nine months ended September 30, 2013, respectively. For the three and nine months ended September 30, 2012, the benefit associated with the Publishing Subsidiaries was $0.6 million and $1.8 million, respectively.

As part of the sale of The Herald, changes were made with respect to its postretirement medical plan, resulting in a $3.5 million settlement gain that is included in discontinued operations, net of tax, for the first quarter of 2013.

Disposition of Publishing Business. In connection with the October 1, 2013 sale of the Publishing Business, the liabilities under the Retirement Plan for The Washington Post Companies relating to the active employees of the Publishing Business will be transferred to the Purchaser, along with pension assets that have a value equal to the projected benefit obligation in respect of these active employees plus an additional $50 million. In the fourth quarter of 2013, the Company will recognize net curtailment and settlement gains (losses) related to this transfer as well as a remeasurement of each of the Company’s pension and postretirement benefit plans. Additionally, the Company excluded the historical pension and postretirement benefits expense for retirees from the reclassification of the Publishing Subsidiaries’ results to discontinued operations, since the associated assets and liabilities will be retained by the Company.

10. OTHER NON-OPERATING INCOME (EXPENSE)

A summary of non-operating income (expense) is as follows:

		Three Months Ended				Nine Months Ended
		September 30,		September 30,		September 30,		September 30,
(in thousands)		2013		2012		2013		2012
Foreign currency gain (loss), net		$	7,886	$	3,111	$	(9,350)	$	3,179
(Loss) gain on sales of marketable equity securities			―		(28)		879		477
Gain (loss) on sales or write-downs of cost method investments, net			18		(112)		(160)		6,760
Other, net			206		1,192		(200)		1,700
	Total Other Non-Operating Income (Expense)	$	8,110	$	4,163	$	(8,831)	$	12,116

11. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The other comprehensive income (loss) consists of the following components:

		Three Months Ended September 30,
		2013							2012
		Before-Tax		Income		After-Tax		Before-Tax		Income		After-Tax
(in thousands)		Amount		Tax		Amount		Amount		Tax		Amount
Foreign currency translation adjustments:
	Translation adjustments arising during the period	$	5,639	$	―	$	5,639	$	5,321	$	―	$	5,321
	Adjustment for sales of businesses with foreign operations		―		―		―		(1,409)		―		(1,409)
			5,639		―		5,639		3,912		―		3,912
Unrealized gains (losses) on available-for-sale securities:
	Unrealized gains (losses) for the period		938		(375)		563		(5,966)		2,387		(3,579)
			938		(375)		563		(5,966)		2,387		(3,579)
Pension and other postretirement plans:
	Amortization of net prior service credit included in net income		(384)		154		(230)		(469)		187		(282)
	Amortization of net actuarial loss included in net income		2,004		(801)		1,203		2,592		(1,036)		1,556
			1,620		(647)		973		2,123		(849)		1,274
Cash flow hedge:
	Gain for the period		15		(6)		9		217		(87)		130
Other Comprehensive Income		$	8,212	$	(1,028)	$	7,184	$	286	$	1,451	$	1,737

Nine Months Ended September 30,

2013

2012

Before-Tax

Income

After-Tax

Before-Tax

Income

After-Tax

(in thousands)

Amount

Tax

Amount

Amount

Tax

Amount

Foreign currency translation adjustments:

Translation adjustments arising during the period

(2,061)

―

(2,061)

4,233

―

4,233

Adjustment for sales of businesses with foreign operations

―

(888)

―

(888)

(2,061)

―

(2,061)

3,345

―

3,345

Unrealized gains on available-for-sale securities:

Unrealized gains for the period

81,439

(32,575)

48,864

32,939

(13,175)

19,764

Reclassification adjustment for gain on available-for-sale

securities included in net income

(884)

353

(531)

(772)

309

(463)

80,555

(32,222)

48,333

32,167

(12,866)

19,301

Pension and other postretirement plans:

Amortization of net prior service credit included in net income

(1,205)

482

(723)

(1,390)

556

(834)

Amortization of net actuarial loss included in net income

6,325

(2,529)

3,796

6,839

(2,735)

4,104

Settlement gain included in net income

(3,471)

1,388

(2,083)

―

1,649

(659)

990

5,449

(2,179)

3,270

Cash flow hedge:

Gain (loss) for the period

259

(104)

155

(1,160)

465

(695)

Other Comprehensive Income

80,402

(32,985)

47,417

39,801

(14,580)

25,221

The accumulated balances related to each component of other comprehensive income (loss) are as follows:

Cumulative

Unrealized Gain

Foreign

on Pensions

Accumulated

Currency

Unrealized Gain

and Other

Other

Translation

on Available-for-

Postretirement

Cash Flow

Comprehensive

(in thousands, net of taxes)

Adjustment

Sale Securities

Plans

Hedge

Income

Balance as of December 31, 2012

26,072

110,553

117,169

(940)

252,854

Other comprehensive income (loss) before

reclassifications

(2,061)

48,864

―

(198)

46,605

Net amount reclassified from accumulated

other comprehensive income

―

(531)

990

353

812

Net other comprehensive income (loss)

(2,061)

48,333

990

155

47,417

Balance as of September 30, 2013

24,011

158,886

118,159

(785)

300,271

The amounts and line items of reclassifications out of Accumulated Other Comprehensive Income are as follows:

Amount Reclassified from Accumulated Other Comprehensive Income

Three Months Ended

Nine Months Ended

Affected Line Item in the

September 30,

Condensed Consolidated

(in thousands)

2013

2012

2013

2012

Statement of Operations

Foreign Currency Translation Adjustments:

Adjustment for sales of businesses with foreign operations

―

(1,409)

―

(888)

(Loss) Income from Discontinued

Operations, Net of Tax

Unrealized Gains on Available-for-sale Securities:

Realized gains for the period

―

(884)

(772)

Other income (expense), net

―

353

309

Provision for Income Taxes

―

(531)

(463)

Net of Tax

Pension and Other Postretirement Plans:

Amortization of net prior service credit

(384)

(469)

(1,205)

(1,390)

(1)

Amortization of net actuarial loss

2,004

2,592

6,325

6,839

(1)

Settlement gain

―

(3,471)

―

(1)

1,620

2,123

1,649

5,449

Before tax

(647)

(849)

(659)

(2,179)

Provision for Income Taxes

973

1,274

990

3,270

Net of Tax

Cash Flow Hedge

205

132

588

167

Interest expense

(82)

(53)

(235)

(67)

Provision for Income Taxes

123

353

100

Net of Tax

Total reclassification for the period

1,096

(56)

812

2,019

Net of Tax

____________

(1) These accumulated other comprehensive income components are included in the computation of net periodic pension and postretirement plan cost (see Note 9).

12. CONTINGENCIES

Litigation and Legal Matters. The Company and its subsidiaries are involved in various legal proceedings that arise in the ordinary course of its business. Although the outcomes of the legal claims and proceedings against the Company cannot be predicted with certainty, based on currently available information, management believes that there are no existing claims or proceedings that are likely to have a material effect on the Company's business, financial condition, results of operations or cash flows. Also, based on currently available information, management is of the opinion that the exposure to future material losses from existing legal proceedings is not reasonably possible, or that future material losses in excess of the amounts accrued are not reasonably possible.

DOE Program Reviews. The U.S. Department of Education (DOE) undertakes program reviews at Title IV participating institutions. Currently, there are four open and/or pending program reviews (including Kaplan University and Broomall, PA.) The Company is awaiting the DOE’s final report on the program review at KHE’s Broomall, PA, location. In May 2012, the DOE issued a preliminary report on its 2009 onsite program review at Kaplan University containing several findings that required Kaplan University to conduct additional, detailed file reviews and submit additional data. In January 2013, Kaplan submitted a response to the DOE’s data request and is awaiting a final report on this review. The Company does not expect the final program review reports to have a material impact on KHE; however, the results of these and the other open reviews and their impact on Kaplan’s operations are uncertain.

The 90/10 Rule. Under regulations referred to as the 90/10 rule, a KHE OPEID unit would lose its eligibility to participate in Title IV programs for a period of at least two fiscal years if it derives more than 90% of its receipts from Title IV programs, as calculated on a cash basis in accordance with the Higher Education Act and applicable DOE regulations, in each of two consecutive fiscal years, commencing with the unit’s first fiscal year that ends after August 14, 2008. Any OPEID unit with Title IV receipts exceeding 90% for a single fiscal year ending after August 14, 2008, will be placed on provisional certification and may be subject to other enforcement measures. KHE is taking various measures to reduce the percentage of its receipts attributable to Title IV funds, including modifying student payment options; emphasizing direct-pay and employer-paid education programs; encouraging students to carefully evaluate the amount of their Title IV borrowing; eliminating some programs; cash-matching; and developing and offering additional non-Title IV-eligible certificate preparation, professional development and continuing education programs. Some of the other programs may currently be offered by other Kaplan businesses. Based on currently available information, management does not believe that any of the Kaplan OPEID units will have a 90/10 ratio over 90% in 2013. Kaplan continues taking steps to address compliance with the 90/10 rule; however, there can be no guarantee that these measures will be adequate to prevent the 90/10 rule calculations at some or all of the schools from exceeding 90% in the future.

Accreditation. In March 2011, Kaplan University’s institutional accreditor, the Higher Learning Commission of the North Central Association of Colleges and Schools (HLC), sent a request to Kaplan University asking for documents and a report detailing Kaplan University’s admissions practices and describing Kaplan University’s compliance with HLC Care Components and policies. Kaplan University complied with this request on April 29, 2011. Kaplan University provided additional information to the HLC in response to a follow-up request received on January 19, 2012. On June 19, 2013, the HLC notified Kaplan University of their intention to conduct a focused evaluation regarding these matters and that is expected to take place in early 2014. At this time the Company cannot predict how the HLC will follow-up or what impact their additional inquires may have on Kaplan University.

13. BUSINESS SEGMENTS

The Company has six reportable segments: Kaplan Higher Education, Kaplan Test Preparation, Kaplan International, cable television, television broadcasting and other businesses.

Education. Kaplan’s Colloquy business moved from Kaplan International to Kaplan Corporate effective January 1, 2013. Segment operating results of the education division have been restated to reflect this change.

For the first nine months of 2012, Kaplan International results benefitted from a favorable $3.9 million out of period expense adjustment related to certain items recorded in 2011 and 2010. With respect to this out of period expense adjustment, the Company has concluded that it was not material to the Company’s financial position or results of operations for 2012, 2011 and 2010 and the related interim periods, based on its consideration of quantitative and qualitative factors.

Newspaper Publishing. Due to the sale of the Publishing Subsidiaries on October 1, 2013, the newspaper publishing segment is no longer included as a separate segment as its results have been reclassified to discontinued operations, net of tax, for all periods presented In March 2013, the Company completed the sale of The Herald, a daily and Sunday newspaper headquartered in Everett, WA. As a result, The Herald results are included in discontinued operations, net of tax, for all periods presented.

Other Businesses. The Slate Group and the FP Group have been moved to Other Businesses since the newspaper publishing segment is no longer a separate segment. The results for these entities are included in Other Businesses for all periods presented. In August 2013, the Company acquired Forney, a global supplier of products and systems that control and monitor combustion processes in electric utility and industrial applications, which is also included in Other Businesses.

The following table summarizes the 2013 quarterly financial information related to each of the Company’s business segments:

		March 31,		June 30,		September 30,
(in thousands)		2013		2013		2013
Operating Revenues
	Education	$	527,815	$	548,230	$	546,452
	Cable television		200,138		204,550		202,381
	Television broadcasting		85,270		99,320		87,063
	Other businesses		23,814		37,572		66,632
	Corporate office		―		―		―
	Intersegment elimination		(197)		(76)		(49)
		$	836,840	$	889,596	$	902,479
Income (Loss) From Operations
	Education	$	(4,056)	$	23,726	$	17,035
	Cable television		36,613		44,710		39,715
	Television broadcasting		35,362		47,704		36,304
	Other businesses		(8,542)		(5,968)		(5,046)
	Corporate office		(5,979)		(5,402)		(6,135)
		$	53,398	$	104,770	$	81,873
Equity in Earnings of Affiliates, Net			3,418		3,868		5,892
Interest Expense, Net			(8,450)		(8,526)		(8,579)
Other Income (Expense), Net			(4,083)		(12,858)		8,110
Income from Continuing Operations Before Income Taxes		$	44,283	$	87,254	$	87,296
Depreciation of Property, Plant and Equipment
	Education	$	22,588	$	20,064	$	18,978
	Cable television		33,733		33,964		32,946
	Television broadcasting		3,145		3,151		3,109
	Other businesses		429		577		555
	Corporate office		―		60		45
		$	59,895	$	57,816	$	55,633
Amortization of Intangible Assets
	Education	$	2,518	$	2,363	$	2,287
	Cable television		50		57		61
	Television broadcasting		―		―		―
	Other businesses		1,149		893		489
	Corporate office		―		―		―
		$	3,717	$	3,313	$	2,837
Net Pension (Credit) Expense
	Education	$	4,106	$	4,231	$	4,169
	Cable television		882		913		973
	Television broadcasting		1,288		1,213		1,251
	Other businesses		116		134		173
	Corporate office		(9,121)		(9,129)		(9,299)
		$	(2,729)	$	(2,638)	$	(2,733)

The following table summarizes the 2012 quarterly financial information related to each of the Company’s business segments:

		March 31,		June 30,		September 30,		December 31,
(in thousands)		2012		2012		2012		2012
Operating Revenues
	Education	$	546,685	$	551,774	$	551,696	$	546,341
	Cable television		190,210		195,579		199,625		201,703
	Television broadcasting		81,497		95,591		106,411		116,192
	Other businesses		9,329		11,666		20,187		31,655
	Corporate office		―		―		―		―
	Intersegment elimination		(109)		(180)		(282)		―
		$	827,612	$	854,430	$	877,637	$	895,891
Income (Loss) From Operations
	Education	$	(11,915)	$	3,728	$	14,693	$	(111,874)
	Cable television		32,777		38,446		39,913		43,445
	Television broadcasting		30,999		43,728		54,082		62,833
	Other businesses		(6,746)		(9,005)		(7,324)		(9,935)
	Corporate office		(7,454)		(5,689)		(8,128)		(7,394)
		$	37,661	$	71,208	$	93,236	$	(22,925)
Equity in Earnings of Affiliates, Net			3,888		3,314		4,099		2,785
Interest Expense, Net			(8,094)		(8,204)		(8,090)		(8,163)
Other Income (Expense), Net			8,588		(635)		4,163		(17,572)
Income (Loss) from Continuing Operations Before Income Taxes		$	42,043	$	65,683	$	93,408	$	(45,875)
Depreciation of Property, Plant and Equipment
	Education	$	20,717	$	21,011	$	22,024	$	37,431
	Cable television		32,197		32,234		32,310		32,366
	Television broadcasting		3,125		3,222		3,126		3,545
	Other businesses		126		127		128		389
	Corporate office		―		―		―		―
		$	56,165	$	56,594	$	57,588	$	73,731
Amortization of Intangible Assets and
	Impairment of Goodwill and Other Long-Lived Assets
	Education	$	3,236	$	3,803	$	4,489	$	117,784
	Cable television		54		53		52		52
	Television broadcasting		―		―		―		―
	Other businesses		549		551		549		1,367
	Corporate office		―		―		―		―
		$	3,839	$	4,407	$	5,090	$	119,203
Net Pension (Credit) Expense
	Education	$	2,392	$	1,969	$	3,522	$	3,701
	Cable television		530		514		694		802
	Television broadcasting		960		1,055		1,432		1,523
	Other businesses		36		33		45		55
	Corporate office		(7,393)		(6,939)		(6,827)		(6,712)
		$	(3,475)	$	(3,368)	$	(1,134)	$	(631)

The following table summarizes financial information related to each of the Company’s business segments:

		Nine Months Ended				Fiscal Year Ended
		September 30,				December 31,
(in thousands)		2013		2012		2012		2011
Operating Revenues
	Education	$	1,622,497	$	1,650,155	$	2,196,496	$	2,404,459
	Cable television		607,069		585,414		787,117		760,221
	Television broadcasting		271,653		283,499		399,691		319,206
	Other businesses		128,018		41,182		72,837		42,891
	Corporate office		―		―		―		―
	Intersegment elimination		(322)		(571)		(571)		(780)
		$	2,628,915	$	2,559,679	$	3,455,570	$	3,525,997
Income (Loss) from Operations
	Education	$	36,705	$	6,506	$	(105,368)	$	96,286
	Cable television		121,038		111,136		154,581		156,844
	Television broadcasting		119,370		128,809		191,642		117,089
	Other businesses		(19,556)		(23,075)		(33,010)		(16,771)
	Corporate office		(17,516)		(21,271)		(28,665)		(19,330)
		$	240,041	$	202,105	$	179,180	$	334,118
Equity in Earnings of Affiliates, Net			13,178		11,301		14,086		5,949
Interest Expense, Net			(25,555)		(24,388)		(32,551)		(29,079)
Other (Expense) Income, Net			(8,831)		12,116		(5,456)		(55,200)
Income from Continuing Operations Before Income Taxes		$	218,833	$	201,134	$	155,259	$	255,788
Depreciation of Property, Plant and Equipment
	Education	$	61,630	$	63,752	$	101,183	$	83,735
	Cable television		100,643		96,741		129,107		126,302
	Television broadcasting		9,405		9,473		13,018		12,448
	Other businesses		1,561		381		770		674
	Corporate office		105		―		―		244
		$	173,344	$	170,347	$	244,078	$	223,403
Amortization of Intangible Assets and
	Impairment of Goodwill and Other Intangible Assets
	Education	$	7,168	$	11,528	$	129,312	$	19,417
	Cable television		168		159		211		267
	Television broadcasting		―		―		―		―
	Other businesses		2,531		1,649		3,016		2,517
	Corporate office		―		―		―		―
		$	9,867	$	13,336	$	132,539	$	22,201
Net Pension (Credit) Expense
	Education	$	12,506	$	7,883	$	11,584	$	6,345
	Cable television		2,768		1,738		2,540		1,924
	Television broadcasting		3,752		3,447		4,970		1,669
	Other businesses		423		114		169		132
	Corporate office		(27,549)		(21,159)		(27,871)		(33,289)
		$	(8,100)	$	(7,977)	$	(8,608)	$	(23,219)

Asset information for the Company’s business segments are as follows:


			As of
		September 30,		December 31,
(in thousands)		2013		2012
Identifiable Assets
	Education	$	1,739,301	$	1,988,015
	Cable television		1,189,084		1,187,603
	Television broadcasting		371,726		374,075
	Other businesses		137,068		88,393
	Corporate office		383,471		466,538
		$	3,820,650	$	4,104,624
Investments in Marketable Equity Securities			457,969		380,087
Investments in Affiliates			32,997		15,535
Prepaid Pension Cost			529,165		604,823
Assets of Discontinued Operations			255,100		―
Total Assets		$	5,095,881	$	5,105,069

The Company’s education division comprises the following operating segments:

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
(in thousands)		2013		2012		2013		2012
Operating Revenues
	Higher education	$	266,061	$	273,703	$	811,013	$	872,948
	Test preparation		77,431		81,151		232,064		223,767
	Kaplan international		201,305		194,158		574,086		546,862
	Kaplan corporate and other		2,223		3,809		6,496		10,283
	Intersegment elimination		(568)		(1,125)		(1,162)		(3,705)
		$	546,452	$	551,696	$	1,622,497	$	1,650,155
Income (Loss) from Operations
	Higher education	$	14,719	$	1,510	$	42,354	$	16,329
	Test preparation		3,820		3,446		7,306		(4,067)
	Kaplan international		12,020		20,365		24,907		34,293
	Kaplan corporate and other		(13,680)		(10,852)		(38,243)		(40,628)
	Intersegment elimination		156		224		381		579
		$	17,035	$	14,693	$	36,705	$	6,506
Depreciation of Property, Plant and Equipment
	Higher education	$	9,739	$	12,168	$	33,919	$	35,598
	Test preparation		5,034		5,544		14,658		14,308
	Kaplan international		3,903		3,841		12,015		12,490
	Kaplan corporate and other		302		471		1,038		1,356
		$	18,978	$	22,024	$	61,630	$	63,752
Amortization of Intangible Assets		$	2,287	$	4,489	$	7,168	$	11,528
Pension Expense
	Higher education	$	3,201	$	2,234	$	8,815	$	5,408
	Test preparation		731		554		2,012		1,381
	Kaplan international		99		112		273		113
	Kaplan corporate and other		138		622		1,406		981
		$	4,169	$	3,522	$	12,506	$	7,883

Identifiable assets for the Company’s education division consist of the following:

		As of
		September 30,		December 31,
(in thousands)		2013		2012
Identifiable assets
	Higher education	$	643,342	$	949,260
	Test preparation		182,450		197,672
	Kaplan international		878,123		818,613
	Kaplan corporate and other		35,386		22,470
		$	1,739,301	$	1,988,015

Item 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition

This analysis should be read in conjunction with the condensed consolidated financial statements and the notes thereto.

Results of Operations

The Company reported income from continuing operations attributable to common shares of $56.0 million ($7.53 per share) for the third quarter of 2013, compared to $56.3 million ($7.58 per share) for the third quarter of 2012. Net income attributable to common shares was $30.1 million ($4.05 per share) for the third quarter ended September 30, 2013, compared to $93.8 million ($12.64 per share) for the third quarter of last year. Net income includes $25.9 million ($3.48 per share) in losses and $37.5 million ($5.06 per share) in income from discontinued operations for the third quarter of 2013 and 2012, respectively.

On October 1, 2013, the Company completed the sale of most of its newspaper publishing businesses, including The Washington Post. Consequently, the Company's income from continuing operations for the third quarter and year-to-date periods excludes these sold businesses, which have been reclassified to discontinued operations for all periods presented.

Items included in the Company’s income from continuing operations for the third quarter of 2013:

§ $4.0 million in severance and restructuring charges at the education division (after-tax impact of $3.1 million, or $0.42 per share); and

§ $7.9 million in non-operating unrealized foreign currency gains (after-tax impact of $5.0 million, or $0.69 per share).

Items included in the Company’s income from continuing operations for the third quarter of 2012:

§ $4.3 million in severance and restructuring charges at the education division (after-tax impact of $2.7 million, or $0.37 per share); and

§ $3.1 million in non-operating unrealized foreign currency gains (after-tax impact of $1.9 million, or $0.26 per share).

Revenue for the third quarter of 2013 was $902.5 million, up 3% from $877.6 million in the third quarter of 2012. The Company reported operating income of $81.9 million in the third quarter of 2013, compared to operating income of $93.2 million in the third quarter of 2012. Revenues increased at the cable television division and in other businesses, offset by declines at the television broadcasting and education divisions. Operating results declined at the television broadcasting division and declined very slightly at the cable television division, offset by improved results at the education division.

For the first nine months of 2013, the Company reported income from continuing operations attributable to common shares of $134.3 million ($18.07 per share), compared to $122.1 million ($16.17 per share) for the first nine months of 2012. Net income attributable to common shares was $79.5 million ($10.70 per share) for the first nine months of 2013, compared to $176.7 million ($23.39 per share) for the same period of 2012. Net income includes $54.7 million ($7.37 per share) in losses and $54.5 million ($7.22 per share) in income from discontinued operations for the first nine months of 2013 and 2012, respectively (refer to “Discontinued Operations” discussion below). As a result of the Company’s share repurchases, there were 3% fewer diluted average shares outstanding in the first nine months of 2013.

Items included in the Company’s income from continuing operations for the first nine months of 2013:

§ $18.3 million in severance and restructuring charges at the education division (after-tax impact of $13.1 million, or $1.79 per share); and

§ $9.4 million in non-operating unrealized foreign currency losses (after-tax impact of $6.0 million, or $0.83 per share).

Items included in the Company’s income from continuing operations for the first nine months of 2012:

§ $9.3 million in severance and restructuring charges at the education division (after-tax impact of $5.8 million, or $0.78 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

§ $3.2 million in non-operating unrealized foreign currency gains (after-tax impact of $2.0 million, or $0.27 per share).

Revenue for the first nine months of 2013 was $2,628.9 million, up 3% from $2,559.7 million in the first nine months of 2012. Revenues increased at the cable television division and in other businesses, offset by declines at the television broadcasting and education divisions. The Company reported operating income of $240.0 million for the first nine months of 2013, compared to $202.1 million for the first nine months of 2012. Operating results improved at the education and cable television divisions, offset by a decline at the television broadcasting division.

Division Results

Education

Education division revenue totaled $546.5 million for the third quarter of 2013, a 1% decline from revenue of $551.7 million for the third quarter of 2012. Kaplan reported third quarter 2013 operating income of $17.0 million, compared to $14.7 million in the third quarter of 2012.

For the first nine months of 2013, education division revenue totaled $1,622.5 million, a 2% decline from revenue of $1,650.2 million for the same period of 2012. Kaplan reported operating income of $36.7 million for the first nine months of 2013, compared to operating income of $6.5 million for the first nine months of 2012.

In response to student demand levels, Kaplan has formulated and implemented restructuring plans at its various businesses, with the objective of establishing lower cost levels in future periods. Across all businesses, restructuring costs totaled $4.0 million and $18.3 million in the third quarter and first nine months of 2013, respectively, compared to $4.3 million and $9.3 million in the third quarter and first nine months of 2012, respectively. In conjunction with completing these restructuring plans at Kaplan Higher Education (KHE) and Kaplan International, Kaplan currently plans to incur approximately $5.0 million in additional restructuring costs for the remainder of 2013. Kaplan may also incur additional restructuring charges in 2013 as Kaplan management continues to evaluate its cost structure.

A summary of Kaplan’s operating results for the third quarter and the first nine months of 2013 compared to 2012 is as follows:


		Three Months Ended September 30,					Nine Months Ended September 30,
(in thousands)		2013		2012		% Change	2013		2012		% Change
Revenue
	Higher education	$	266,061	$	273,703	(3)	$	811,013	$	872,948	(7)
	Test preparation		77,431		81,151	(5)		232,064		223,767	4
	Kaplan international		201,305		194,158	4		574,086		546,862	5
	Kaplan corporate and other		2,223		3,809	(42)		6,496		10,283	(37)
	Intersegment elimination		(568)		(1,125)	―		(1,162)		(3,705)	―
		$	546,452	$	551,696	(1)	$	1,622,497	$	1,650,155	(2)
Operating Income (Loss)
	Higher education	$	14,719	$	1,510	―	$	42,354	$	16,329	―
	Test preparation		3,820		3,446	11		7,306		(4,067)	―
	Kaplan international		12,020		20,365	(41)		24,907		34,293	(27)
	Kaplan corporate and other		(13,680)		(10,852)	(26)		(38,243)		(40,628)	6
	Intersegment elimination		156		224	―		381		579	―
		$	17,035	$	14,693	16	$	36,705	$	6,506	―

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 2012, KHE began implementing plans to close or merge 13 ground campuses, consolidate other facilities and reduce its workforce. In connection with these and other plans, KHE incurred $2.5 million and $14.1 million in total restructuring costs in the third quarter and first nine months of 2013, respectively, compared to $2.7 million and $6.5 million in severance and restructuring costs for the third quarter and first nine months of 2012, respectively. For the third quarter of 2013, these costs included accelerated depreciation ($0.8 million), severance ($1.6 million) and lease obligation losses ($0.1 million). For the first nine months of 2013, these costs included accelerated depreciation ($5.8 million), severance ($3.0 million), lease obligation losses ($4.4 million) and other items ($0.9 million). In the first nine months of 2013, ten KHE campuses were closed. For the third quarter and first nine months of 2012, restructuring costs were mostly severance, but also included $0.6 million in accelerated depreciation.

In the third quarter and first nine months of 2013, higher education revenue declined 3% and 7%, respectively, due largely to declines in average enrollments that reflect weaker market demand over the past year and the impact of campuses in the process of closing.

KHE operating income increased significantly in the third quarter and first nine months of 2013, due largely to expense reductions associated with lower enrollments and recent restructuring efforts.

New student enrollments at KHE declined 7% and 1% in the third quarter and first nine months of 2013, respectively. New student enrollments were down due to the impact of closed campuses and those planned for closure that are no longer recruiting students, offset by the positive impact of trial period modifications and process improvements.

Total students at September 30, 2013, were down 11% compared to September 30, 2012, but increased 5% compared to June 30, 2013. Excluding campuses closed or planned for closure, total students at September 30, 2013, were down 7% compared to September 30, 2012, but up 5% compared to June 30, 2013. A summary of student enrollments is as follows:

	Students as of
	September 30,	June 30,	September 30,
	2013	2013	2012
Kaplan University	46,340	43,601	49,132
Other Campuses	18,818	18,591	24,129
	65,158	62,192	73,261

	Students as of
	September 30,	June 30,	September 30,
(excluding campuses closing)	2013	2013	2012
Kaplan University	46,340	43,601	49,132
Other Campuses	18,619	18,181	21,066
	64,959	61,782	70,198

Kaplan University and Other Campuses’ enrollments at September 30, 2013 and 2012, by degree and certificate programs, are as follows:

	As of September 30,
	2013		2012
Certificate	21.3	%	23.6	%
Associate’s	30.8	%	30.7	%
Bachelor’s	32.6	%	32.7	%
Master’s	15.3	%	13.0	%
	100.0	%	100.0	%

Kaplan Test Preparation (KTP) includes Kaplan’s standardized test preparation programs. KTP revenue declined 5% for the third quarter of 2013, but increased 4% for the first nine months of 2013. Enrollment declined 8% and 2% for the third quarter and first nine months of 2013, respectively, due to declines in graduate programs, offset by growth in nursing and bar review programs. KTP operating results improved in the first nine months of 2013 due largely to increased revenues.

Kaplan International includes English-language programs and postsecondary education and professional training businesses outside the United States. Kaplan International revenue increased 4% and 5% in the third quarter and first nine months of 2013, respectively, due to enrollment growth in the pathways, English-language and Singapore higher education programs. Kaplan International operating income declined in the third quarter of 2013 due to reduced earnings in professional training, and increased investment to support growth in English-language and Singapore higher education programs. For the first nine months of 2013, operating income declined due to reduced earnings in professional training, and increased investment to support growth in English-language programs, offset by better results in Singapore. The results in Australia included restructuring costs of $1.5 million and $4.1 million for the third quarter and first nine months of 2013, respectively, compared to $1.0 million in the third quarter and first nine months of 2012. In the third quarter and first nine months of 2012, respectively, Kaplan International results benefited from a $2.0 million and $3.9 million favorable adjustment to certain items recorded in prior periods.

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

Cable Television

Cable television division revenue increased 1% in the third quarter of 2013 to $202.4 million, from $199.6 million for the third quarter of 2012; for the first nine months of 2013, revenue increased 4% to $607.1 million, from $585.4 million in the same period of 2012. The revenue increase for the first nine months of 2013 is due to recent rate increases for many subscribers, growth in commercial sales and a reduction in promotional discounts. The increase was partially offset by a decline in basic video subscribers, as the cable division focuses its efforts on churn reduction and retention of its high-value subscribers.

Cable television division operating income declined slightly in the third quarter of 2013 to $39.7 million, from $39.9 million in the third quarter of 2012; for the first nine months of 2013, operating income increased 9% to $121.0 million, from $111.1 million for the first nine months of 2012. The division’s operating income improved in the first nine months of 2013 due to increased revenues, partially offset by higher programming and depreciation costs.

At September 30, 2013, Primary Service Units (PSUs) were down 3% from the prior year due to a decline in basic video subscribers. PSUs include about 6,400 subscribers who receive free basic cable service, primarily local governments, schools and other organizations as required by various franchise agreements. A summary of PSUs is as follows:

	As of September 30,
	2013	2012
Basic video	561,119	605,057
High-speed data	469,296	462,808
Telephony	182,643	185,647
	1,213,058	1,253,512

Below are details of Cable division capital expenditures as defined by the NCTA Standard Reporting Categories:

	Nine Months Ended
	September 30,
(in thousands)	2013		2012
Customer Premise Equipment	$	26,496	$	35,863
Commercial		3,613		3,387
Scaleable Infrastructure		13,062		17,557
Line Extensions		4,248		4,010
Upgrade/Rebuild		23,014		10,646
Support Capital		35,494		30,799
	$	105,927	$	102,262

Television Broadcasting

Revenue at the television broadcasting division declined 18% to $87.1 million in the third quarter of 2013, from $106.4 million in the same period of 2012; operating income for the third quarter of 2013 was down 33% to $36.3 million, from $54.1 million in the same period of 2012. For the first nine months of 2013, revenue declined 4% to $271.7 million, from $283.5 million in the same period of 2012; operating income for the first nine months of 2013 was down 7% to $119.4 million, from $128.8 million in the same period of 2012.

The decline in revenue and operating income is due to a $15.9 million and $24.1 million decrease in political advertising revenue in the third quarter and first nine months of 2013, respectively, and $10.8 million in incremental summer Olympics-related advertising at the Company’s NBC affiliates in the third quarter of 2012. The decline in revenue and operating income was partially offset by incremental advertising revenue from the NBA finals broadcast at the division’s ABC affiliates in Miami and San Antonio, 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; Celtic Healthcare, a provider of home health care and hospice services in the northeastern and mid-Atlantic regions, acquired by the Company in November 2012; Forney, a global supplier of products and systems that control and monitor combustion processes in electric utility and industrial applications, acquired by the Company in August 2013; and WaPo Labs, a digital team focused on emerging technologies and new product development. Also included are the Slate Group and the FP Group, previously included as part of the Company’s newspaper publishing division.

The revenue increase in other businesses for the first nine months of 2013 is primarily due to growth at Social Code and Slate, and revenue from the Company’s recently acquired Celtic Healthcare and Forney businesses.

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.

The Company’s equity in earnings of affiliates, net, was $5.9 million for the third quarter of 2013, compared to $4.1 million for the third quarter of 2012. For the first nine months of 2013, the Company’s equity in earnings of affiliates, net, totaled $13.2 million, compared to $11.3 million for the same period of 2012.

Other Non-Operating Income (Expense)

The Company recorded other non-operating income, net, of $8.1 million for the third quarter of 2013, compared to $4.2 million for the third quarter of 2012. The third quarter 2013 non-operating income, net, included $7.9 million in unrealized foreign currency gains and other items. The third quarter 2012 non-operating income, net, included $3.1 million in unrealized foreign currency gains and other items.

The Company recorded non-operating expense, net, of $8.8 million for the first nine months of 2013, compared to other non-operating income, net, of $12.1 million for the same period of the prior year. The 2013 non-operating expense, net, included $9.4 million in unrealized foreign currency losses, offset by other items. The 2012 non-operating income, net, included a net $6.8 million gain on sales or write-downs of cost method investments, $3.2 million in unrealized foreign currency gains and other items.

A summary of non-operating income (expense) is as follows:

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
(in thousands)		2013		2012		2013		2012
Foreign currency gain (loss), net		$	7,886	$	3,111	$	(9,350)	$	3,179
(Loss) gain on sales of marketable equity securities			―		(28)		879		477
Gain (loss) on sales or write-downs of cost method investments, net			18		(112)		(160)		6,760
Other, net			206		1,192		(200)		1,700
	Total Other Non-Operating Income (Expense)	$	8,110	$	4,163	$	(8,831)	$	12,116

Net Interest Expense

The Company incurred net interest expense of $8.6 million and $25.6 million for the third quarter and first nine months of 2013, respectively, compared to $8.1 million and $24.4 million for the same periods of 2012. At September 30, 2013, the Company had $451.1 million in borrowings outstanding, at an average interest rate of 7.0%.

Provision for Income Taxes

The effective tax rate for income from continuing operations for the first nine months of 2013 was 38.1%, compared to 38.8% for the first nine months of 2012.

Discontinued Operations

On August 5, 2013, the Company announced that it had entered into an agreement to sell its Publishing Subsidiaries that together conducted most of the Company’s publishing businesses and related services, including publishing The Washington Post, Express, The Gazette Newspapers, Southern Maryland Newspapers, Fairfax County Times and El Tiempo Latino and related websites. Slate magazine, TheRoot.com and Foreign Policy are not part of the transaction and remain with The Washington Post Company, as do the WaPo Labs and SocialCode businesses, the Company’s interest in Classified Ventures and certain real estate assets, including the headquarters building in downtown Washington, DC. On October 1, 2013, the Company completed the sale. Consequently, the Company’s income from continuing operations excludes these sold businesses, which have been reclassified to discontinued operations, net of tax, for all periods presented.

The Purchaser acquired all the issued and outstanding equity securities of the Publishing Subsidiaries for $250 million, subject to customary adjustments for cash, debt and working capital at closing. The Company will not record the gain on the sale until the fourth quarter of 2013; however, the Company recognized $28.4 million (after-tax impact of $18.3 million) in expenses related to the sale that are included in discontinued operations in the third quarter of 2013. These costs include the net impact of accelerated vesting provisions and forfeitures of restricted stock awards and stock options that were made in contemplation of the sale, and certain other transaction-related expenses. Also included in discontinued operations is $22.7 million (after-tax basis of $14.5 million) in early retirement program expense for the first nine months of 2013, and $7.5 million (after-tax basis of $4.6 million) and $8.5 million (after-tax basis of $5.3 million) for the third quarter and first nine months of 2012, respectively.

In March 2013, the Company sold The Herald. Kaplan sold Kidum in August 2012, EduNeering in April 2012 and Kaplan Learning Technologies (KLT) in February 2012. The Company divested its interest in Avenue100 Media Solutions in July 2012. Consequently, the Company’s income from continuing operations also excludes the operating results and related net gains on disposition of these businesses, which have been reclassified to discontinued operations, net of tax.

Earnings (Loss) Per Share

The calculation of diluted earnings per share for the third quarter and first nine months of 2013 was based on 7,336,752 and 7,315,971 weighted average shares outstanding, respectively, compared to 7,376,255 and 7,507,946, respectively, for the third quarter and first nine months of 2012. At September 30, 2013, there were 7,423,913 shares outstanding and the Company had remaining authorization from the Board of Directors to purchase up to 180,993 shares of Class B common stock.

Financial Condition: Capital Resources and Liquidity

Acquisitions and Dispositions

In the second quarter of 2013, Kaplan purchased the remaining 15% noncontrolling interest in Kaplan China; this additional interest was accounted for as an equity transaction.

Dispositions. On August 5, 2013, after approval by the Company’s Board of Directors on the same day, the Company announced that it had entered into a binding letter agreement (the Letter Agreement) with Nash Holdings LLC, a Delaware limited liability company (the Purchaser), and Explore Holdings LLC, a Washington limited liability company, as guarantor (the Guarantor), to sell all the issued and outstanding equity securities of each of WP Company LLC, Express Publications Company, LLC, El Tiempo Latino, LLC, Robinson Terminal Warehouse, LLC, Greater Washington Publishing, LLC and Post-Newsweek Media, LLC (the Publishing Subsidiaries). The Publishing Subsidiaries together conducted most of the Company’s publishing businesses, including publishing The Washington Post, Express, The Gazette Newspapers, Southern Maryland Newspapers, Fairfax County Times and El Tiempo Latino and related websites, and operating Washington Post Live and Washington Post News Media Services and the Company’s commercial printing and distribution business and paper handling and storage business (collectively, the Publishing Business), subject to satisfying certain conditions.

of the Publishing Subsidiaries at closing. The Purchaser also acquired all other assets of the Company primarily related to the Publishing Business, including all of the Company’s rights in the name “The Washington Post”. The Company will change its corporate name within 60 days of the October 1 closing. The Company retained its interest in Classified Ventures, LLC, Slate magazine, TheRoot.com and Foreign Policy, as well as the WaPo Labs and SocialCode business and certain real estate, including the headquarters building in downtown Washington, DC and certain land and property in Alexandria, VA. The liabilities under the Retirement Plan for The Washington Post Companies relating to the active employees of the Publishing Business will be transferred to the Purchaser, along with pension assets that have a value equal to the projected benefit obligation in respect of these active employees plus an additional $50 million. The results of operations of Publishing Subsidiaries for the three and nine months ended September 30, 2013 and 2012, are included in the Company’s Condensed Consolidated Statements of Operations as Income (Loss) from Discontinued Operations, Net of Tax.

In October 2013, of the total restricted shares where vesting was accelerated, the Company purchased 21,774 shares from former employees for $13.5 million.

In March 2013, the Company completed the sale of The Herald, a daily and Sunday newspaper headquartered in Everett, WA. The Herald was previously reported in the newspaper publishing division.

Capital Expenditures

During the first nine months of 2013, the Company’s capital expenditures totaled $143.3 million. The Company estimates that its capital expenditures will be in the range of $190 million to $215 million in 2013.

Liquidity

The Company’s borrowings decreased by $245.6 million, to $451.1 million at September 30, 2013, as compared to borrowings of $696.7 million at December 31, 2012. At September 30, 2013, the Company had $441.7 million in cash and cash equivalents, compared to $512.4 million at December 31, 2012. The Company had money market investments of $296.9 million and $432.7 million that are classified as cash, cash equivalents and restricted cash in the Company’s condensed consolidated Balance Sheets as of September 30, 2013 and December 31, 2012, respectively.

The Company’s total debt outstanding of $451.1 million at September 30, 2013 included $397.8 million of 7.25% unsecured notes due February 1, 2019, $46.6 million of AUD 50M borrowing and $6.7 million in other debt.

In June 2011, the Company entered into a credit agreement (the Credit Agreement) providing for a U.S. $450 million, AUD 50 million four year revolving credit facility (the Facility), with each of the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent (JP Morgan), and J.P. Morgan Australia Limited, as Australian Sub-Agent. The Facility will expire on June 17, 2015, unless the Company and the banks agree to extend the term.

On September 6, 2013, Standard and Poor’s affirmed the “BBB” long-term corporate debt rating, but changed the outlook from Negative to Stable. In addition, S&P upgraded the Company’s short-term corporate debt rating from “A-3” to “A-2”. The Company’s current credit ratings are as follows:

			Standard
	Moody’s		& Poor’s
Long-term		Baa1		BBB
Short-term		Prime-2		A-2

During the third quarter of 2013 and 2012, the Company had average borrowings outstanding of approximately $449.8 million and $456.3 million, respectively, at average annual interest rates of approximately 7.0%. During the third quarter of 2013 and 2012, the Company incurred net interest expense of $8.6 million and $8.1 million, respectively.

At September 30, 2013 and December 31, 2012, the Company had working capital of $516.7 million and $327.5 million, respectively. The Company maintains working capital levels consistent with its underlying business requirements and consistently generates cash from operations in excess of required interest or principal payments. The Company expects to fund its estimated capital needs primarily through existing cash balances and internally generated funds and to a lesser extent borrowings supported by our Credit Agreement. In management’s opinion, the Company will have sufficient liquidity to meet its various cash needs throughout 2013.

There were no significant changes to the Company’s contractual obligations or other commercial commitments from those disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

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.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

The Company is exposed to market risk in the normal course of its business due primarily to its ownership of marketable equity securities, which are subject to equity price risk; to its borrowing and cash-management activities, which are subject to interest rate risk; and to its foreign business operations, which are subject to foreign exchange rate risk. The Company’s market risk disclosures set forth in its 2012 Annual Report filed on Form 10-K have not otherwise changed significantly.

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

An evaluation was performed by the Company’s management, with the participation of the Company’s Chief Executive Officer (the Company’s principal executive officer) and the Company’s Senior Vice President-Finance (the Company’s principal financial officer), of the effectiveness of the Company’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), as of September 30, 2013. Based on that evaluation, the Company’s Chief Executive Officer and Senior Vice President-Finance have concluded that the Company’s disclosure controls and procedures, as designed and implemented, are effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms and is accumulated and communicated to management, including the Chief Executive Officer and Senior Vice President-Finance, in a manner that allows timely decisions regarding required disclosure.

(b) Changes in Internal Control Over Financial Reporting

There has been no change in the Company’s internal control over financial reporting during the quarter ended September 30, 2013 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 6. Exhibits.


Exhibit Number	Description

3.1	Restated Certificate of Incorporation of the Company dated November 13, 2003 (incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2003).

3.2	Certificate of Designation for the Company’s Series A Preferred Stock dated September 22, 2003 (incorporated by reference to Exhibit 3.2 to Amendment No. 1 to the Company’s Current Report on Form 8-K dated September 22, 2003).

3.3	By-Laws of the Company as amended and restated through November 8, 2007 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated November 14, 2007).

4.1	Second Supplemental Indenture dated January 30, 2009, between the Company and The Bank of New York Mellon Trust Company, N.A., as successor to The First National Bank of Chicago, as Trustee (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated January 30, 2009).

4.2	Four Year Credit Agreement, dated as of June 17, 2011, among the Company, JPMorgan Chase Bank, N.A., J.P. Morgan Australia Limited, Wells Fargo Bank, N.A., The Royal Bank of Scotland PLC, HSBC Bank USA, National Association, The Bank of New York Mellon, PNC Bank, National Association, Bank of America, N.A., Citibank, N.A. and The Northern Trust Company (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated June 17, 2011).

31.1	Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer.

31.2	Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer.

32	Section 1350 Certification of the Chief Executive Officer and the Chief Financial Officer.

101	The following financial information from The Washington Post Company Quarterly Report on Form 10-Q for the period ended September 30, 2013, formatted in Extensible Business Reporting Language (XBRL): (i) Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2013 and 2012, (ii) Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2013 and 2012, (iii) Condensed Consolidated Balance Sheets as of September 30, 2013 and December 31, 2012, (iv) Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2013 and 2012, and (v) Notes to Condensed Consolidated Financial Statements. Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed “furnished” and not “filed” or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, are deemed “furnished” and not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise are not subject to liability under these sections.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		THE WASHINGTON POST COMPANY
		(Registrant)

Date: November 5, 2013		/s/ Donald E. Graham
		Donald E. Graham, Chairman & Chief Executive Officer (Principal Executive Officer)

Date: November 5, 2013		/s/ Hal S. Jones
		Hal S. Jones, Senior Vice President-Finance (Principal Financial Officer)