The Washington Post Company Reports Second Quarter Earnings

Business Wire, August 1, 2008

A summary of newspaper division operating results for the second quarter and the first six months of 2008 compared to 2007 is as follows:

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Print advertising revenue at The Post in the second quarter of 2008 declined 22% to $99.8 million, from $128.4 million in the second quarter of 2007, and decreased 17% to $211.4 million for the first six months of 2008, from $253.6 million in the same period of 2007. The decreases are primarily the result of a large decline in classified advertising revenue, along with significant reductions in retail and general.

For the first six months of 2008, Post daily and Sunday circulation declined 2.6% and 3.7%, respectively, compared to the same periods of the prior year. For the six months ended June 29, 2008, average daily circulation at The Post totaled 631,900 and average Sunday circulation totaled 881,400.

As previously announced, The Post will close its College Park, MD, printing plant in 2010. The Post has recently determined that only one of the four presses at its College Park, MD, printing plant will be moved to The Post's Springfield, VA, plant. The Company reassessed the useful life of the other three presses and recorded accelerated depreciation beginning in June 2008; $1.2 million in accelerated deprecation was recorded in the second quarter of 2008, and the Company estimates that $7.3 million in accelerated depreciation will be recorded in the second half of 2008.

Revenue generated by the Company's online publishing activities, primarily washingtonpost.com, increased 4% to $29.3 million for the second quarter of 2008, from $28.2 million for the second quarter of 2007; online revenues increased 6% to $56.4 million in the first six months of 2008, from $53.2 million for the first six months of 2007. Display online advertising revenue grew 11% and 14% for the second quarter and first six months of 2008, respectively. Online classified advertising revenue on washingtonpost.com declined 1% in the second quarter of 2008, and was up slightly for the first six months of 2008. A small portion of the Company's online publishing revenues is included in the magazine publishing division.

Television Broadcasting

Revenue for the television broadcasting division decreased 6% in the second quarter of 2008 to $82.8 million, from $87.9 million in 2007; operating income for the second quarter of 2008 declined 16% to $29.7 million, from $35.2 million in 2007. For the first six months of 2008, revenue decreased 5% to $160.5 million, from $168.7 million in 2007; operating income for the first six months of 2008 declined 13% to $56.3 million, from $64.6 million in 2007. The decreases in revenue and operating income are primarily due to soft advertising demand overall, offset by an increase of $0.5 million and $3.3 million in political advertising revenue for the second quarter and first six months of 2008, respectively.

In July 2008, the Company announced an agreement with NBC Universal to acquire WTVJ, the NBC-owned and operated television station in Miami, FL. The Company will continue to operate WTVJ as an NBC affiliate. The purchase is expected to be completed by the end of 2008. The acquisition is subject to approval by the Federal Communications Commission. The Company also owns and operates WPLG, the ABC affiliate in Miami, FL.