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Article by DailyStocks_admin    (04-15-08 02:42 AM)

The Daily Warren Buffett Stock is WPO. Berkshire Hathaway owns 1,727,765 shares. As of Dec 31,2007, this represents 1.99 percent of portfolio.

BUSINESS OVERVIEW

The Washington Post Company (the ‚ÄúCompany‚ÄĚ) is a diversified education and media company. The Company‚Äôs Kaplan subsidiary provides a wide variety of educational services, both domestically and outside the United States. The Company‚Äôs media operations consist of newspaper publishing (principally The Washington Post ), television broadcasting (through the ownership and operation of six television broadcast stations), magazine publishing (principally Newsweek ) and the ownership and operation of cable television systems.

Information concerning the consolidated operating revenues, consolidated income from operations and identifiable assets attributable to the principal segments of the Company’s business for the last three fiscal years is contained in Note O to the Company’s Consolidated Financial Statements appearing elsewhere in this Annual Report on Form 10-K. (Revenues for each segment are shown in such Note O net of intersegment sales, which did not exceed 0.1% of consolidated operating revenues.)

The Company’s operations in geographic areas outside the United States consist primarily of Kaplan’s foreign operations and the publication of the international editions of Newsweek . During the fiscal years 2007, 2006 and 2005, these operations accounted for approximately 12%, 9% and 7%, respectively, of the Company’s consolidated revenues, and the identifiable assets attributable to foreign operations represented approximately 11%, 10% and 7% of the Company’s consolidated assets at December 30, 2007, December 31, 2006 and January 1, 2006, respectively.

Education

Kaplan, Inc., a subsidiary of the Company, provides an extensive range of educational services for children, students and professionals. Kaplan’s historical focus on test preparation has been expanded as new educational and career services businesses have been acquired or initiated. The Company divides Kaplan’s various businesses into three categories: Test Prep and Admissions; Professional; and Higher Education.

Test Prep and Admissions

Test Prep and Admissions divides its businesses into six categories: Test Prep, Professional Licensing Exam Prep, English- Language, Kaplan K12 Learning Services; Kaplan Publishing and Score!

Test Prep prepares students for a broad range of admissions examinations, including the SAT, ACT, LSAT, GMAT, MCAT and GRE, that are required for admission to college and graduate schools, including medical, business and law schools. During 2007, these courses were offered at 160 permanent centers located throughout the United States and in Canada, Puerto Rico, Mexico, London, Paris and Hong Kong. In addition, Kaplan licenses material for certain of its test preparation courses to third parties and a Kaplan affiliate, who, during 2007, offered courses at 43 locations in 14 countries outside the U.S. Test Prep also produces a college newsstand guide in conjunction with Newsweek. Test Prep includes The Kidum Group, which provides preparation courses for Israeli high school graduation and university admissions exams and also provides English-language courses at 52 permanent centers located throughout Israel. The Professional Licensing Exam Prep business prepares medical, nursing and law students for licensing examinations, including the U.S. MLE, NCLEX and, under the Kaplan PMBR name, the multistate portion of state bar exams. The English-language business, which now operates under the name Kaplan Aspect, provides English-language training, academic preparation programs and test preparation for English proficiency exams, such as the TOEFL, principally for students wishing to study and travel in English-speaking countries in North America, Europe or Australia/New Zealand. Kaplan Aspect operates 21 English-language schools located in the U.K., Ireland, Australia, New Zealand, Canada and the U.S. and is co-located in 15 of the U.S. Test Prep centers. Kaplan K12 Learning Services develops and provides a range of programs and services to schools and school districts, including offering reading and math programs to help students who are performing below grade level improve fundamental skills; preparing students for state assessment tests and the SAT and ACT; and providing curriculum consulting, professional development and assessment services to support teaching and learning. During 2007, these businesses provided courses to more than 440,000 students (including over 83,000 enrolled in online programs).

Kaplan Publishing, whose results are now included entirely within the Test Prep and Admissions Division, publishes a variety of general trade and educational books in subject areas such as test preparation, business, real estate, law, medicine and nursing. At the end of 2007, Kaplan Publishing had more than 470 books in print, including over 180 new titles published in 2007.

Test Prep and Admissions also includes the Score! Educational Centers. Score! offers computer-based learning and individualized tutoring for children from pre-K through 10th grade. In 2007, this business provided services through 155 dedicated Score! centers located throughout the United States to more than 62,000 students. In the fourth quarter of 2007, Kaplan restructured the Score! business and closed 75 Score! locations. As a result of the restructuring, Kaplan anticipates that the number of students served by the Score! business in 2008 will be significantly lower than the number served in 2007.

Professional

In the United States, Kaplan Professional offers continuing education, certification, licensing, exam preparation and professional development to corporations and to individuals seeking to advance their careers in a variety of disciplines. This division includes Kaplan Financial, a provider of continuing education and test preparation courses for financial services and insurance industry professionals; Kaplan Schweser (formerly known as The Schweser Study Program), a provider of test preparation courses for the Chartered Financial Analyst and Financial Risk Manager examinations; Kaplan CPA, which offers test preparation courses for the Certified Public Accounting Examination; Kaplan Professional Schools, a provider of courses for real estate, financial services and home inspection licensing examinations, as well as continuing education in those areas; Kaplan Professional Publishing (formerly known as Dearborn Publishing), which provides printed and online materials that help individuals satisfy state pre-licensing and continuing education requirements and prepare for state licensing examinations in the real estate, architecture, home inspection, engineering and construction industries; and Kaplan IT, which offers online test preparation courses for technical certifications in the information technology industry, as well as training, software consultancy and related products to a broad range of industries. The courses offered by these businesses are provided in various formats (including classroom-based instruction, online programs, printed study guides, in-house training and audio CDs) and at a wide range of per-course prices. During 2007, these businesses sold approximately 600,000 courses and separately priced course components to students in the United States (who in some subject areas typically purchase more than one course component offered by the Division).

In March 2007, Kaplan acquired EduNeering, which is headquartered in Princeton N.J. This business, now known as Kaplan EduNeering, is a provider of online regulatory compliance training and management systems, principally for businesses in the life sciences, healthcare, energy and food service industries. During 2007, this business provided services to approximately 600,000 users at more than 200 companies.

Internationally, Professional’s largest business in terms of revenue is Kaplan Financial Limited, formerly named FTC Kaplan Limited (“Kaplan Financial’’), a U.K.-based provider of training and test preparation services for accounting and financial services professionals. In 2007, Kaplan Financial provided courses to approximately 48,000 students. Headquartered in London, Kaplan Financial has 25 training centers around the United Kingdom, as well as operations in Hong Kong, Shanghai and Singapore.

In Hong Kong, Kaplan Financial also offers Mandarin-language training to students (principally Cantonese-speaking Chinese wishing to learn Mandarin) through Hong Kong Putonghua Vocational School (‚ÄúHKPVS‚ÄĚ) and offers test preparation courses for the Chinese Proficiency Test, which is a standardized examination that assesses Mandarin-language proficiency. HKPVS has five centers in Hong Kong and, at the end of 2007, was serving more than 9,000 students.

Asia Pacific Management Institute (‚ÄúAPMI‚ÄĚ), which is headquartered in Singapore and has a satellite location in Hong Kong, provides students with the opportunity to earn undergraduate and graduate degrees, principally in business-related subjects, offered by affiliated educational institutions in Australia, the United Kingdom and the United States. APMI also offers pre-university and diploma programs. APMI had more than 4,250 students enrolled at year-end 2007.

In 2007, Kaplan acquired a minority interest in Shanghai Kai Bo Education Investment Management Co., Ltd. (‚ÄúACE Education‚ÄĚ), an education company headquartered in Shanghai, China. In February 2008, Kaplan exercised an option to increase its investment in ACE Education to a majority interest. ACE Education provides preparatory programs for entry to U.K. universities and international-standard degree programs at campuses in several cities in China. Through a collaboration with the University of Shanghai for Science and Technology and the Northern Consortium (a university consortium comprising 11 U.K. universities), ACE Education also offers programs at the Sino-British College in Shanghai. ACE Education had approximately 1,600 students enrolled at year-end.

In 2007, Professional acquired the education business of the Financial Services Institute of Australasia (‚ÄúFINSIA‚ÄĚ), which is headquartered in Sydney, Australia. FINSIA is a provider of financial services post-graduate education in Australia, and its acquisition, along with Tribeca Learning Limited, which Kaplan acquired in 2006, allows Kaplan Financial to deliver a broad range of financial services education and professional development courses in Australia. In 2007, FINSIA and Tribeca provided courses to over 22,000 students through classroom programs and to over 70,000 students through distance-learning programs.

Higher Education

Higher Education U.S.

Kaplan’s U.S.-based Higher Education business currently consists of 70 schools in 22 states that provide classroom-based instruction and two institutions that specialize in distance education. The schools providing classroom-based instruction offer a variety of diploma, associate degree and bachelor degree programs, primarily in the fields of healthcare, business, paralegal studies, information technology, criminal justice and fashion and design. The classroom-based schools were serving more than 33,500 students at year-end 2007 (which includes the classroom-based programs of Kaplan University), with approximately 36% of such students enrolled in accredited bachelor or associate degree programs. Each of these schools has its own accreditation from one of several regional or national accrediting agencies recognized by the U.S. Department of Education.

The institutions of higher education that specialize in distance education are Kaplan University and Concord Law School. Kaplan University offers various master degree, bachelor degree, associate degree and certificate programs, principally in the fields of management, criminal justice, paralegal studies, information technology, financial planning, nursing and education. Kaplan University is accredited by the Higher Learning Commission of the North Central Association of Colleges and Schools (‚ÄúHLC‚ÄĚ). Most of Kaplan University‚Äôs programs are offered online, while others are offered in a traditional classroom format at eight campuses in Iowa and Nebraska. At year-end 2007, Kaplan University had approximately 37,000 students enrolled in online programs. Concord Law School (‚ÄúConcord‚ÄĚ), the nation‚Äôs first online law school, offers Juris Doctor and Executive Juris Doctor degrees wholly online (the Executive Juris Doctor degree program is designed for individuals who do not intend to practice law). Concord is accredited by the Accrediting Commission of the Distance Education and Training Council and has received operating approval from the California Bureau of Private Post-Secondary and Vocational Education. Concord also has complied with the registration requirements of the California Committee of Bar Examiners and, therefore, its graduates are able to apply for admission to the California Bar. In 2008, California supervision of Concord will shift to the California Committee of Bar Examiners. In the fourth quarter of 2007, Concord merged into Kaplan University, and as a result of the merger, Concord is now part of Kaplan University and, as a result, Concord is also accredited by HLC. At year-end 2007, approximately 1,200 students were enrolled at Concord.

Kaplan Virtual Education

In April 2007, Kaplan acquired Virtual Sage, an online curriculum publisher, and an online high school doing business under the name University of Miami Online High School. The combined businesses became part of what is now known as Kaplan Virtual Education (‚ÄúKVE‚ÄĚ), which offers online high school instruction and online content and curriculum development. KVE‚Äôs programs are geared toward adults wishing to earn a high school diploma, public school students seeking courses that may not be offered at their school or credit recovery, and private and home school students who need an expanded curriculum. At year-end 2007, KVE was providing courses to approximately 2,200 students.

Dublin Business School

Dublin Business School (‚ÄúDBS‚ÄĚ) is an undergraduate and graduate institution located in Dublin, Ireland. DBS offers various undergraduate and graduate degree programs in business and the liberal arts. At year-end 2007, DBS was providing courses to approximately 5,200 students.

Holborn College

Holborn College (‚ÄúHolborn‚ÄĚ) is located in London and offers various pre-university, undergraduate, post-graduate and professional programs, primarily in law and business, with its students receiving degrees from affiliated universities in the United Kingdom. Holborn offers both full-time and flexible-learning delivery options to its students. Most of Holborn‚Äôs students come from outside the United Kingdom and the European Union. At year-end 2007, Holborn was providing courses to approximately 2,100 students.

Kaplan Law School

In 2007, Kaplan began operating Kaplan Law School in London in collaboration with Nottingham Trent University’s Nottingham Law School. Kaplan Law School provides graduate diploma, legal practice and bar vocational training for U.K. university graduates wishing to progress into the U.K. legal profession.

Student Visas for Study in the U.S.

One of the ways a foreign national wishing to enter the United States to study may do so is to obtain an F-1 student visa. For many years, most of Kaplan‚Äôs Test Prep and Admissions centers in the United States have been authorized by what is now the U.S. Citizenship and Immigration Services (the ‚ÄúUSCIS‚ÄĚ) to issue certificates of eligibility to prospective students to assist them in applying for F-1 visas through a U.S. Embassy or Consulate. Under an administrative program that became effective early in 2003, educational institutions are required to report electronically to the USCIS specified enrollment, departure and other information about the F-1 students to whom they have issued certificates of eligibility. Kaplan has certified 138 of its U.S. Test Prep and Admissions centers to participate in this program, and Kaplan Aspect has 7 locations certified to participate in this program. During 2007 students holding F-1 visas accounted for approximately 3.8% of the enrollment at Kaplan‚Äôs Test Prep and Admissions centers and an insignificant number of students at Kaplan‚Äôs Higher Education programs. Kaplan Aspect is also a Designated Sponsor for the U.S. Department of State‚Äôs Summer Work & Travel Program. This cultural exchange program is designed to allow international college or university students to come to the U.S. on a J-1 visa to fill temporary, paid positions during their summer break. In 2007, Kaplan Aspect sponsored approximately 1,700 international students on a J-1 visa to participate in the exchange visitor program.

Title IV Federal Student Financial Aid Programs

Funds provided under the student financial aid programs that have been created under Title IV of the Federal Higher Education Act of 1965, as amended, historically have been responsible for a majority of the net revenues of Kaplan Higher Education. During 2007, funds received under the Title IV programs accounted for approximately $745 million, or approximately 73%, of total Kaplan Higher Education revenues. The Company estimates that funds received from students borrowing under private loan programs comprised approximately an additional 9% of its higher education revenues. Direct student payments and funds received under various state and agency grant programs accounted for most of the remainder of 2007 higher education revenues. The significant role of Title IV funding in the operations of Kaplan Higher Education is expected to continue.

Title IV programs encompass various forms of student loans, with the funds being provided either by the federal government itself or by private financial institutions with a federal guaranty protecting the institutions against the risk of default. In some cases the federal government pays part of the interest expense. Other Title IV programs offer non-repayable grants. Subsidized loans and grants are only available to students who can demonstrate financial need. During 2007, approximately 73% of the approximately $745 million of Title IV funds received by Kaplan Higher Education came from student loans and approximately 27% of such funds came from grants.

To maintain Title IV eligibility, a school must comply with extensive statutory and regulatory requirements relating to its financial aid management, educational programs, financial strength, recruiting practices and various other matters. Among other things, the school must be licensed or otherwise authorized to offer its educational programs by the appropriate governmental body in the state or states in which it is located, be accredited by an accrediting agency recognized by the U.S. Department of Education (the ‚ÄúDepartment of Education‚ÄĚ) and enter into a program participation agreement with the Department of Education.

A school may lose its eligibility to participate in Title IV programs if student defaults on the repayment of Title IV loans exceed specified default rates (referred to as ‚Äúcohort default rates‚ÄĚ). A school whose cohort default rate exceeds 40% for any single year may have its eligibility to participate in Title IV programs limited, suspended or terminated at the discretion of the Department of Education. A school whose cohort default rate equals or exceeds 25% for three consecutive years will automatically lose its Title IV eligibility for at least two years unless the school can demonstrate exceptional circumstances justifying its continued eligibility. Pursuant to another program requirement, any for-profit post-secondary institution (a category that includes all of the schools in Kaplan‚Äôs Higher Education Division) will lose its Title IV eligibility for at least one year if more than 90% of that institution‚Äôs receipts for any fiscal year are derived from Title IV programs.

As a general matter, schools participating in Title IV programs are not financially responsible for the failure of their students to repay Title IV loans. However, the Department of Education may fine a school for a failure to comply with Title IV requirements and may require a school to repay Title IV program funds if it finds that such funds have been improperly disbursed. In addition, there may be other legal theories under which a school could be subject to suit as a result of alleged irregularities in the administration of student financial aid.

Pursuant to Title IV program regulations, a school that undergoes a change in control must be reviewed and recertified by the Department of Education. Certifications obtained following a change in control are granted on a provisional basis that permits the school to continue participating in Title IV programs, but provides fewer procedural protections if the Department of Education asserts a material violation of Title IV requirements. In accordance with Department of Education regulations, a number of the schools in Kaplan’s Higher Education Division are combined into groups of two or more schools for the purpose of determining compliance with Title IV requirements. Including schools that are not combined with other schools for that purpose, the Higher Education Division has 36 Title IV reporting units; of these, 5 reporting units have been provisionally certified, while the remaining 31 are fully certified.

If the Department of Education were to find that one reporting unit in Kaplan’s Higher Education Division had failed to comply with any applicable Title IV requirement and as a result limited, suspended or terminated the Title IV eligibility of the school or schools in that reporting unit, that action normally would not affect the Title IV eligibility of the schools in other reporting units that had continued to comply with Title IV requirements. The largest Title IV reporting unit in the Higher Education Division in terms of revenue is Kaplan University, which accounted for approximately 48% of the Title IV funds received by the Division in 2007. For the most recent year for which final data are available from the Department of Education, the cohort default rate for Kaplan University was 5.95%, and the cohort default rates for the other Title IV reporting units in Kaplan’s Higher Education Division averaged 9.33%; no reporting unit had a cohort default rate of 25% or more. In 2007, Kaplan University derived less than 85% of its receipts from the Title IV programs, and other reporting units derived an average of less than 81% of their receipts from Title IV programs, with no unit deriving more than 88% of its receipts from such programs.

No proceeding by the Department of Education is currently pending to fine any Kaplan school for a failure to comply with any Title IV requirement, or to limit, suspend or terminate the Title IV eligibility of any Kaplan school. As noted previously, to remain eligible to participate in Title IV programs, a school must maintain its accreditation by an accrediting agency recognized by the Department of Education. As previously reported, in December 2006 four schools in one Title IV reporting unit received notice that their accreditor did not intend to renew the schools’ accreditation due to the failure to meet certain completion and placement requirements. Kaplan closed three of the four schools and sought and received new accreditation from a different accrediting body for the fourth school. In 2007, no Kaplan school received notice from its accreditors indicating that the school’s accreditation was being withdrawn or that the school was being issued a show cause order.

No assurance can be given that the Kaplan schools currently participating in Title IV programs will maintain their Title IV eligibility in the future or that the Department of Education might not successfully assert that one or more of such schools have previously failed to comply with Title IV requirements.

All of the Title IV financial aid programs are subject to periodic legislative review and reauthorization. In addition, while Congress historically has not limited the amount of funding available for the various Title IV student loan programs, the availability of funding for the Title IV programs that provide for the payment of grants is wholly contingent upon the outcome of the annual federal appropriations process.

Whether as a result of changes in the laws and regulations governing Title IV programs, a reduction in Title IV program funding levels or a failure of schools included in Kaplan Higher Education to maintain eligibility to participate in Title IV programs, a material reduction in the amount of Title IV financial assistance available to the students of those schools would have a significant negative impact on Kaplan’s operating results. In addition, any development that has the effect of making the terms on which Title IV financial assistance is made available materially less attractive could also adversely affect Kaplan’s operating results.

Newspaper Publishing

The Washington Post

WP Company LLC (‚ÄúWP Company‚ÄĚ), a subsidiary of the Company, publishes The Washington Post, which is a morning daily and Sunday newspaper primarily distributed by home delivery in the Washington, D.C., metropolitan area, including large portions of Maryland and northern Virginia.

The following table shows the average paid daily (including Saturday) and Sunday circulation of The Post for the 12-month periods ended September 30 in each of the last five years (October 1 in 2006), as reported by the Audit Bureau of Circulations (‚ÄúABC‚ÄĚ) for the years 2003 through 2006 and as estimated by The Post for the 12-month period ended September 30, 2007 (for which period ABC had not completed its audit as of the date of this report) from the semiannual publisher‚Äôs statements submitted to ABC for the six-month periods ended April 1, 2007 and September 30, 2007.

In The Post ’s primary circulation territory, which accounts for more than 90% of its daily and Sunday circulation and consists of Washington, D.C. and communities generally within a 50-mile radius from the city (but excluding Baltimore City and its northern and eastern suburbs), the newsstand price for the daily newspaper was increased from $0.35, which had been the price since 2002, to $0.50 effective December 31, 2007. All other rates are unchanged. The newsstand price for the Sunday newspaper has been $1.50 since 1992, while the rate charged for each four-week period for home-delivered copies of the daily and Sunday newspaper has been $14.40 since 2004, and the corresponding rate charged for Sunday-only home delivery has been $6.00 since 1991. The same rates prevailed outside The Post ’s primary circulation territory until the third quarter of 2006, when The Post raised its newsstand prices and home-delivery rates for such sales. Newsstand prices for sales outside the primary circulation territory were increased to $0.50 for the daily newspaper and $2.00 for the Sunday newspaper, while home-delivery rates for each four-week period increased to $20.00 for the daily and Sunday newspaper and $8.00 for the Sunday newspaper only.

General advertising rates were increased by an average of approximately 4.0% on January 1, 2007 and by additional amounts on January 1, 2008 that WP Company estimates will average approximately 3.5%. Rates for most categories of classified and retail advertising were increased by an average of approximately 3.2% on February 1, 2007 and by additional amounts on February 1, 2008 that WP Company estimates will average approximately 2.9%.*

WP Company also publishes The Washington Post National Weekly Edition, a tabloid that contains selected articles and features from The Washington Post edited for a national audience. The National Weekly Edition has a basic subscription price of $78 per year and is delivered by second-class mail to approximately 26,400 subscribers.

The Post has about 596 full-time editors, reporters and photographers on its staff; draws upon the news reporting facilities of the major wire services; and maintains correspondents in 17 news centers abroad and in New York City, Los Angeles, Chicago and Miami. The Post also maintains reporters in nine local news bureaus.

In 2007, The Post launched a new reader rewards program called PostPoints to strengthen subscriber loyalty. The program allows readers to earn points that can be exchanged for rewards by subscribing to The Washington Post, shopping at participating major retailers, interacting on washingtonpost.com, and other similar activities.

In late August 2007, WP Company and Bonneville International Corporation agreed to terminate an arrangement whereby WP Company provided weekday programming content, including interviews and news coverage featuring writers, editors and columnists from The Post , for distribution on two of Bonneville’s radio stations in the D.C. market (WTWP on 1500 AM and 107.7 FM). The date of the last broadcast under that arrangement was September 19, 2007.

The Post has announced plans to close its printing plant located in College Park, MD, in 2010 after moving two printing presses to its Springfield, VA, plant.

Express Publications

Express Publications Company, LLC (‚ÄúExpress Publications‚ÄĚ), another subsidiary of the Company, publishes a weekday tabloid newspaper named Express, which is distributed free of charge using hawkers and news boxes near Metro stations and in other locations in Washington, D.C. and nearby suburbs with heavy daytime sidewalk traffic. A typical edition of Express is 45 to 60 pages long and contains short news, entertainment and sports stories, as well as both classified and display advertising. Current daily circulation is approximately 184,000 copies. Express relies primarily on wire service and syndicated content and is edited by a full-time newsroom staff of 23. Advertising sales, production and certain other services for Express are provided by WP Company. The Express newsroom also produces a website, www.readexpress.com, which features entertainment and lifestyle coverage of local interest.

Washingtonpost.Newsweek Interactive

Washingtonpost.Newsweek Interactive Company, LLC (‚ÄúWPNI‚ÄĚ) develops news and information products for electronic distribution. Since 1996, this subsidiary of the Company has produced washingtonpost.com, an Internet site that currently features the full editorial text of The Washington Post and most of The Post ‚Äôs classified advertising, as well as original content created by WPNI‚Äôs staff, blogs written by Post reporters and others, interactive discussions hosted by Post reporters and outside subject experts, user-posted comments and content obtained from other sources. As measured by WPNI, this site averaged more than 232 million page views per month during 2007. The washingtonpost.com site also features extensive information about activities, groups and businesses in the Washington, D.C., area, including an arts and entertainment section and news sections focusing on politics and on technology businesses and related policy issues. This site has developed a substantial audience of users who are outside the Washington, D.C., area, and WPNI believes that approximately 85% of the unique users who access the site each month are in that category. WPNI requires most users accessing the washingtonpost.com site to register and provide their year of birth, gender, ZIP code, job title and the type of industry in which they work. The resulting information helps WPNI provide online advertisers with opportunities to target specific geographic areas and demographic groups. WPNI also offers registered users the option of receiving various e-mail newsletters that cover specific topics, including political news and analysis, personal technology and entertainment.

WPNI also produces the Newsweek website, which was launched in 1998 and contains editorial content from the print edition of Newsweek, as well as daily news updates and analysis, photo galleries, Web guides and other features. In 2005, WPNI assumed responsibility for the production of the Budget Travel magazine website and relaunched it as BudgetTravel.com. This site contains editorial content from Arthur Frommer’s Budget Travel magazine and other sources.

In 2005, WPNI purchased Slate, an online magazine that was founded by Microsoft Corporation in 1996. Slate features articles analyzing news, politics and contemporary culture and adds new material on a daily basis. Content is supplied by the magazine’s own editorial staff, as well as by independent contributors.

Since September 2006, WPNI has provided content from washingtonpost.com and the Slate and Newsweek websites specially formatted to be downloaded and displayed on Web-enabled cell phones and other personal digital devices.

In 2007, WPNI launched Sprig , an online shopping and information resource. Sprig offers smart solutions and stylish products to help consumers more easily integrate green (eco-friendly) choices and action into their lives.

In January of 2008, WPNI launched The Root , an online magazine focused on issues of importance to African Americans and others interested in black culture. The Root offers daily news and provocative commentary on politics and culture. Additionally, it offers a geneology tool designed to help users trace their family history.

WPNI holds a 16.5% equity interest in Classified Ventures LLC (‚Äė‚ÄôClassified Ventures‚ÄĚ), a company formed in 1997 to compete in the business of providing online classified advertising databases for cars, apartment rentals and residential real estate. The other owners are Tribune Company, The McClatchy Company, Gannett Co., Inc. and Belo Corp. Listings for these databases come from print and online-only sales of classified ads by the newspaper and online sales staffs of the various owners, as well as from sales made by Classified Ventures‚Äô own sales staff. The washingtonpost.com site provides links to the Classified Ventures‚Äô national car and apartment rental websites ( www.cars.com and www.apartments.com ). WPNI uses software from Classified Ventures to host washingtonpost.com‚Äôs online listing of residential real estate for sale in the greater Washington, D.C., area, and Classified Ventures consolidates the local listings of its various owners into a national residential real estate website ( www.homescape.com ).

Under an agreement signed in 2000 and amended in 2003, WPNI and several other business units of the Company have been sharing certain news material and promotional resources with NBC News and MSNBC. Among other things, under this agreement the Newsweek website is a feature on MSNBC.com , and MSNBC.com is being provided access to certain content from The Washington Post. Similarly, washingtonpost.com is being provided with access to certain MSNBC.com multimedia content. On July 1, 2007, the parties entered into a new relationship for cross-promotional marketing opportunities between the companies. The new agreement will extend through June of 2009. In addition, effective July 2007, MSNBC no longer hosts Newsweek.com , which now exists as a stand-alone site produced by WPNI.

Post‚ÄďNewsweek Media

The Company‚Äôs Post‚ÄďNewsweek Media, Inc. subsidiary publishes 2 weekly paid-circulation, 3 twice-weekly paid-circulation and 34 controlled-circulation weekly community newspapers. This subsidiary‚Äôs newspapers are divided into two groups: The Gazette Newspapers, which circulate in Montgomery, Prince George‚Äôs and Frederick Counties and in parts of Carroll County, MD; and Southern Maryland Newspapers, which circulate in southern Prince George‚Äôs County and in Charles, St. Mary‚Äôs and Calvert Counties, MD. During 2007, these newspapers had a combined average circulation of approximately 660,000 copies. This division also produces military newspapers (most of which are weekly) under agreements where editorial material is supplied by local military bases, with the exception of one independent newspaper. In 2007, the 12 military newspapers produced by this division had a combined average circulation of more than 125,000 copies.

The Gazette Newspapers have a companion website ( www.gazette.net ) that includes editorial material and classified advertising from the print newspapers. The military newspapers produced by this division are supported by a website ( www.dcmilitary.com ) that includes base guides and other features, as well as articles from the print newspapers. The Southern Maryland Newspapers ’ website (www.SoMdNews.com) also includes editorial and classified advertising from the print newspapers. Each website also contains display advertising that is sold specifically for the site.

The Gazette Newspapers and Southern Maryland Newspapers together employ approximately 168 editors, reporters and photographers.

This division also operates a commercial printing business in suburban Maryland.

COMPENSATION

The Compensation Committee (the ‚ÄúCommittee‚ÄĚ) of the Board of Directors has responsibility for establishing and continually monitoring adherence to the Company‚Äôs compensation philosophy ‚Äď a philosophy designed to attract, retain and motivate qualified and talented employees who are enthusiastic about the Company‚Äôs mission and culture. The Committee, which was chaired by George W. Wilson from January to February 2007 and thereafter by Ronald L. Olson starting in February 2007 through the present, and included Lee C. Bollinger, Barry Diller and John L. Dotson Jr., seeks to establish total compensation packages that are attractive to employees and comparable, but not dramatically different, than those offered by peer companies in the education and media industries with comparable revenue. Through regular meetings and discussions with management, the Committee ensures that the total compensation paid to all executives, including named executive officers of the Company, and all employees earning more than $200,000 ($250,000 in the case of Kaplan, Inc. (‚ÄúKaplan‚ÄĚ) employees) in salary, is fair, reasonable and based on performance goals established to increase value for shareholders by facilitating the long-term growth of the Company. The Committee considers both short- and long-term plans in determining compensation. Annual plans are used to motivate and reward management for hitting specific yearly goals. Long-term plans, typically three years in duration, are designed to reward cumulative long-term growth. All performance targets, however, even those in annual or relatively short-term plans, are designed to reward executives for making decisions that will enhance the long-term value of the Company. No targets are based on quarterly or partial-year results. Some of these plans reward with cash, and others reward with stock-based compensation. The Company has no specific formula for allocating between cash and non-cash compensation or between long-term and current compensation. Management and the Committee select the method of compensation thought most likely to lead to achievement of the goal; however, the Company has historically favored cash compensation over non-cash compensation. Management and the Committee believe that cash incentives provide more targeted awards for specific performance.

All named executive officers, except Donald E. Graham, Chairman and Chief Executive Officer, receive an annual salary and restricted stock awards every other year and participate in performance-based annual bonus plans and four-year cash-based Performance Unit Plans. Named executive officers and others occasionally receive restricted stock or stock option grants in off-cycle years as a reward for past performance and incentive for future performance. They also receive the benefits of Supplemental Executive Retirement Plans. Mr. Graham receives a salary and participates in the Performance Unit Plans and the defined benefit portion of the Supplemental Executive Retirement Plan as described below.

Compensation Committee Charter

The Board has delegated to the Committee the responsibility of overseeing the administration of the Company’s compensation plans and the preparation of all reports and documents required by the rules and regulations of the Securities and Exchange Commission. To fulfill this mission, the Committee is required to meet at least once a year. The Committee annually reviews and approves the corporate goals and objectives upon which the compensation of the Chief Executive Officer and senior management, including the named executive officers, is based. The Committee evaluates the Chief Executive Officer’s performance in light of these goals and objectives. Furthermore, the Committee reviews and makes recommendations to the Board with respect to any incentive compensation plans and equity-based plans for the Company to be adopted or submitted to shareholders for approval. The Committee reviews the Company’s succession plans, including (i) the Chairman and Chief Executive Officer’s recommendations as to a successor should he be disabled or unable to perform his duties for an extended period of time and, annually, (ii) the Company’s efforts at management development.

The Committee may request that any officer or employee of the Company, including its affiliates, or the Company’s outside counsel or an independent auditor, attend meetings of the Committee or meet with any members of, or consultants to, the Committee. The Committee has authority to retain or terminate any compensation consultant used to assist in the evaluation of director, chief executive officer or senior management compensation and has sole authority to approve the consultant’s fees and other retention terms. The Committee did not retain any such consultant for such purpose in 2007 and does not intend to do so in 2008. The Committee also has authority to obtain advice and assistance from internal or external legal, accounting or other advisors.

During 2007, the Committee met seven times. Mr. Graham, the Chief Executive Officer, and Ms. McDaniel, Vice President ‚Äď Human Resources and the secretary of the Committee (also a named executive officer), attended all Committee meetings. Mr. Jonathan Grayer, Chief Executive Officer of Kaplan, joined one meeting. Representatives of Goldman, Sachs & Co. joined another session by telephone to assist the Committee in estimating the fair value of Kaplan.

Role of Executive Officers in Compensation Decisions

The Committee makes all compensation decisions for the named executive officers of the Company except those perquisites under $200,000 that may be approved by the CEO. The Committee also approves the compensation of all employees earning annual salaries of $200,000 ($250,000 in the case of Kaplan employees) or more and bonuses of $40,000 ($75,000 in the case of Kaplan employees) or more.

Except for awards involving themselves, Mr. Graham and Ms. McDaniel recommend to the Committee the size of each component of compensation based on a discussion with the head of the division where the employee works, a review of his or her performance and a comparison of available compensation survey data for that job and geographic area. The Committee examines each of the suggested compensation actions and, in its sole discretion, modifies the awards when appropriate to better reflect the goals of the Company.

At his request, Mr. Graham has not received a raise in his annual salary in 17 years, nor has he received an annual bonus. He stopped accepting grants of restricted stock in the Company in 2004. All compensation for Ms. McDaniel is determined solely by the Chief Executive Officer and the Committee. The CEO and the Committee use the same performance-based criteria to set Ms. McDaniel’s compensation as they do for all other named executive officers and other senior staffers.

Setting Executive Compensation

To meet its objectives, the Committee asks the Chief Executive Officer and the secretary of the Committee to draft annual and long-term incentive-based cash and non-cash executive compensation plans. The Committee reviews and, in its sole discretion, modifies the formula and goals established for various awards under the plans before the plans take effect, which is no later than the end of the first quarter of the first year covered by the plan.

Through the programs described below, a significant portion of the Company’s executive compensation is linked directly to business unit and corporate performance and stock price appreciation. The Committee intends to continue the policy of linking executive compensation to corporate performance and returns to shareholders and deems it desirable that compensation paid under the Incentive Compensation Plan and the Stock Option Plan meet the requirements of Section 162(m) of the Internal Revenue Code concerning deductibility of executive compensation. However, the Committee reserves the right to put in place compensation programs that do not meet those requirements, which may result in compensation payments that are not deductible to the Company, if such programs are otherwise in the best interests of the Company.

Elements of Compensation

The compensation package offered by the Company to its executive officers consists of the following components:


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Competitive base salary;

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Short-term incentive compensation in the form of performance-based annual bonuses;

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Long-term equity-based incentive compensation in the form of restricted stock, performance units and stock options;

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Perquisites; and

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Retirement benefits.

Base Salary

The Company pays named executive officers, and other employees, base salaries to compensate them for services rendered during the fiscal year. Salaries for named executive officers are based on their responsibilities, their prior experience and their recent performance, and are benchmarked against market data provided by outside surveys. In 2007, the Committee relied on data from the Towers Perrin Survey of Compensation for Media Executives, which gathers data from media companies that provide print, magazine, broadcast and cable services similar to those provided by the Company. The Company compares its management salaries to those of companies in similar industries and with comparable revenues. Salaries are typically reviewed on a 12-month or longer cycle, except when there is a significant change in the executive’s responsibilities during a shorter period of time. Such adjustments are determined by evaluating (i) the scope of the new responsibilities, (ii) the competitive market value of that role, (iii) the performance of the individual and (iv) the performance of the Company. The average raise for the named executive officers in 2007 was 8.7% and reflected the achievement of financial and management goals desired by Mr. Graham and the Committee.

With respect to the base salary paid to Mr. Graham in 2007, the Committee took into account a comparison of base salaries paid to chief executive officers of peer education and media companies, the Company’s results in 2007 and Mr. Graham’s performance since 1979, when he became publisher of The Washington Post. The Committee noted that Mr. Graham’s base salary was, and has long been, significantly below the median of base salaries paid to chief executive officers of these peer companies, including other prominent media companies such as The New York Times Company; similarly sized media companies, including the Tribune Company; and other publicly held education companies, including Apollo Group, Inc., DeVry, Inc., Strayer Education, Inc., and Corinthian Colleges, Inc. However, at Mr. Graham’s request, the Committee left his salary at $400,000. The Committee does not give significance to Mr. Graham’s below-market salary when reviewing and establishing salaries for other named executive officers.

Performance-Based Incentive Compensation

To supplement base salaries and to reward management (including named executive officers and other employees key to the long-term success of the Company) for meeting specific individual and financial goals, the Class A shareholders of the Company adopted in December 1981 the Long-Term Incentive Compensation Plan, the predecessor plan to the Incentive Compensation Plan now in place. In 2001, the Annual Compensation Plan, originally approved by the Class A Shareholders in February 1974, was combined with the Long-Term Incentive Compensation Plan to create the Incentive Compensation Plan (the ‚ÄúPlan‚ÄĚ). The purpose of these plans was, and is, to provide greater incentives to those employees who have been or will be responsible for the Company‚Äôs future growth, profitability and continued success and to strengthen the ability of the Company to attract, motivate and retain such employees. There are at present approximately 185 employees who are participants under the Plan and receive annual bonus awards, hold restricted stock or stock option grants and/or hold grants of Performance Units. Each named executive officer, except Mr. Graham (who only participates in the Performance Units portion of the Plan), participates in each of these programs.

Annual Bonuses

The Plan calls for annual incentive compensation awards based on the Company’s and its business units’ financial performance compared to goals set immediately prior to or at the beginning of the year in which the award is to be earned. The payout upon the achievement of such goals is equal to a percentage of base salary, which is also set at the beginning of the year. Those percentages are determined on an individual basis, taking into account the responsibilities, prior experience and recent performance of the relevant employee. The percentage targets for all named executive officers, except Mr. Graham and Mr. Rosberg, were each increased by 20% in 2007 in order to eliminate the past practice of asking the Committee to increase or decrease bonus payouts based on gains or losses as a result of one-time unbudgeted events. The percentage of one named executive officer, Gerald M. Rosberg, was increased to 100% of salary at the beginning of 2006 to reflect additional responsbilities relating to strategic planning that he was asked to assume at Kaplan. No named executive officer received an actual bonus payment any higher than it would have been under the previous practice, and none received the maximum amount permitted by the plan. In 2007, the annual bonus formula for the named executive officers was based on an earnings per share target because the Committee believed that such a goal would align the interests of shareholders and the named executive officers in growing the value of the Company. Gerald M. Rosberg’s annual bonus formula also contained an achievement target tied to the performance of Kaplan, Inc. Management and the Committee believe that they have designed the targets to be challenging but achievable. Over the past several years, the Company has generally achieved it financial goals and paid out at target or above in the bonus portion of the plan, except for 2001 and 2007. In 2001, the targets were not met and no bonuses were paid based on this plan. The payouts for 2007 are specified below. Had the earnings per share been 85% or less than the target, the named executive officers, except Mr. Rosberg, would have received no bonuses. Had the earnings per share been 85% or less than the target and the Kaplan target been under 90% of the specified goal, Mr. Rosberg would have received no bonus. At target, they could have received 100% of their bonus potential. The maximum payout possible was 175% of target for 135% achievement of the earnings per share goal. In 2007, the Company achieved 99.2 % of the earnings per share goal, as adjusted to exclude certain unusual items, such as foreign exchange gains. In March 2008, Mr. Rosberg was paid 98% of his bonus target and the other named executive officers, excluding Mr. Graham, were paid between 64% and 69%.

Bonus awards under the Plan, which includes certain of the Company’s employees at all divisions, for any year may not exceed more than 10% of that year’s Incentive Profit, which is calculated as follows: First, an amount equal to 12% of Shareholder’s Equity (as defined by the Plan) is calculated, which is then subtracted from the Company’s Consolidated Profit Before Income Taxes (as defined by the Plan). The remainder is the Incentive Profit. For 2007, the maximum amount that could have been awarded under the Plan was $14.2 million; the amount actually awarded was $8.0 million to 94 executives throughout the Company, including the named executive officers.

Restricted Stock

No target stock ownership level exists for the named executive officers, but to align the interests of shareholders and management and to ensure that the full potential of an executive’s compensation package cannot be realized unless stock appreciation occurs over a number of years, the Plan also provides for grants of restricted stock in the Company. To determine the number of shares to be granted, the Committee considers on an individual basis the likely value of shares already held, the level of contribution the employee has previously made and the potential of the employee to bring additional value to the Company. The shares are vested at the end of the restriction period, usually four years, and vesting does not accelerate under their terms, except at the discretion of the Committee.

Grants are usually made in odd-numbered years. Each of the named executive officers, other than Mr. Graham, received grants of restricted stock in early 2007. Chief Financial Officer John B. Morse, Jr. had 200 shares from a grant in 2005; he received an additional grant of 200 shares in 2007. Vice President ‚Äď Planning and Development Gerald M. Rosberg had 150 shares from a grant in 2005; he received an additional 200 shares in 2007. Vice President, General Counsel and Secretary Veronica Dillon had 175 shares from a grant in 2005; she received an additional grant of 250 shares in 2007. Vice President ‚Äď Human Resources Ann L. McDaniel had 150 shares from a grant in 2005; she received an additional grant of 150 shares in 2007. In recognition of her new responsibilities as Managing Director of Newsweek, Inc., Ms. McDaniel also received an additional award of 750 shares in 2007.

Performance Units

To highlight specific long-term financial goals, the Plan provides for Performance Unit Plans. All named executive officers participate in these plans, in which performance-based goals are determined at the beginning of each four-year award cycle. The goals consider operating income, peer company performance, cash flow, earnings per share, measures of economic value added, print product circulation and/or quantitative revenue growth or profitability measurements of the Company as a whole or any business unit thereof. Management and the Committee believe that they have designed the performance-based goals to be challenging but achievable. In two of the past three award cycles, the Company exceeded its goals and paid out above target. In the 2001-2004 award cycle, the targeted performance goals were not met and the plan paid out below target. Each performance unit has a nominal value of $100. The maximum payout of performance units is $200 per unit, and the payment of a total award to any individual at the end of an award cycle may not exceed $5 million. (Currently, no named executive officer has units in any award cycle whose total is likely to be worth more than $1 million).

There were new grants of performance units to the named executive officers in 2007, and each of them also held grants from one previous cycle. The 2005-2008 plan is based on a two-pronged target. Sixty-five percent of the target depends on the Company’s operating divisions’ achievement (excluding Kaplan) against Performance Unit financial targets for the period and 35% depends on the increase in the value of Kaplan, Inc. The 2007-2010 plan is also based on a two-pronged target. Sixty-five percent of the target depends on the Company’s operating divisions’ achievement (excluding Kaplan) against Performance Unit financial targets for the period and 35% depends on achievement of cumulative operating income targets for Kaplan, Inc., for the period. These targets were selected by the Committee because they reflected the key priorities for the Company on the grant date for the applicable time periods. Mr. Graham holds 7,500 units in the 2005-2008 cycle and 9,750 units in the 2007-2010 cycle. Mr. Morse holds 5,000 units in the 2005-2008 cycle and 6,500 units in the 2007-2010 cycle. Mr. Rosberg holds 3,500 units in the 2005-2008 cycle and 6,500 units in the 2007-2010 cycle. Ms. McDaniel holds 3,500 units in the 2005-2008 cycle and 5,200 units in the 2007-2010 cycle. Ms. Dillon, who joined the Corporate office in 2007, was awarded 1,500 units in the 2005-2008 award cycle and 4,550 units in the 2007-2010 cycle. Mr. Graham has requested that he be paid out no more than $400,000 for the open cycles of the Performance Unit plan.

Stock Options

Although the Company grants stock options sparingly, the Company’s Stock Option Plan, which was reauthorized by shareholders as recently as 2003 and is separate from the Plan, provides that shares of Class B Stock can be issued upon the exercise of stock options that have been granted to key employees of the Company. The Committee grants options only when a key employee has made a significant contribution to the Company and demonstrates the ability to contribute more. The options generally vest 25% per year over four years and are exercisable for ten years from the grant date. None of the named executive officers received stock option grants in 2007. As of the end of the Company’s 2007 fiscal year, Mr. Morse held options to acquire 3,000 shares of Class B Stock (1,000 granted in 1998, 1,000 granted in 1999 and 1,000 granted in 2004). Mr. Rosberg held options to acquire 5,000 shares of Class B Stock (1,000 granted in 1998, 2,000 granted in 1999 and 2,000 granted in 2000). Ms. McDaniel held options to acquire 2,500 shares of Class B Stock (500 granted in 2001, 1,000 granted in 2003 and 1,000 granted in 2004). Given Mr. Graham’s significant ownership in the Company, the Committee has not granted any stock options to Mr. Graham.

Perquisites

The Company provides few perquisites for the named executive officers. In 2007, Mr. Morse received financial and tax advice valued at $9,116. Ms. McDaniel received financial and tax advice valued at $8,346. Ms. Dillon received financial and tax advice valued at $10,559. Ms. Dillon also received a housing allowance for Washington, DC of $66,107 because her primary residence is in New York.

Retirement Benefits

Most employees in the Company, including named executive officers, are eligible to participate in the Company’s retirement benefit programs. Benefits under these basic plans are determined on the basis of base salary only, exclusive of all bonuses, deferred compensation and other forms of remuneration. The Company also maintains 401(k) savings plans in which most employees are eligible to participate.

Corporate employees, including all named executive officers who are vested and who begin to take their pension benefit at age 65 or whose age and years of service when added together equal 90, receive an annual pension equal to 1.75% of their highest average 60-month compensation annualized up to the limits permitted by the Internal Revenue Code, minus covered compensation multiplied by the appropriate Social Security offset percentage, multiplied by the number of years of credited service under The Washington Post Company Retirement Program, with credited service limited to 30 years. An annual cash pension supplement is also provided to assist in payment of retiree medical coverage equal to $200 multiplied by the number of years of credited service under The Washington Post Company Retirement Program. An additional cash pension supplement of $3,000 per year was added in 2007 for those employees who retire prior to age 65 and who participate in the Company’s medical insurance plans. The amount of the supplement was determined by calculating the number that would make most employees whole when the Company passed on a significant increase in the amount that each retiree must pay for retiree medical insurance. The premiums are now split 50-50 between the retiree and the Company. The pre-65 supplement is discontinued when the retiree reaches age 65 and qualifies for Medicare.

The Company matches $1.30 on the dollar up to 4% on compensation permitted by the Internal Revenue Service, for all Corporate employees who participate in the 401(k) plan.

Effective January 1, 1989, the Company adopted an unfunded Supplemental Executive Retirement Plan (the ‚ÄúSERP‚ÄĚ), which was designed to retain and recruit key executives. Participants in the SERP, including named executive officers, are selected by management as employees management most wants to retain, because of their superior performance, and approved by the Committee.

To offset limitations placed on the income that can be considered in the formulas of retirement plans by the IRS, the SERP provides a ‚Äúsupplemental normal retirement benefit.‚ÄĚ This benefit is calculated under the rules of the qualified benefit retirement plan, but without reference to the IRS-imposed income limitations, and includes in the calculation earnings from annual bonuses in the case of certain key executives (including the named executive officers). In any instance in which a retiring executive‚Äôs supplemented normal retirement benefit exceeds the benefit payable by the qualified benefit plan or plans ($185,000 in 2008), the Company will pay the excess to him or her as a supplemental retirement benefit.

The SERP also provides key executives, including the named executive officers, with tax-deferred accruals of amounts proportionate to the benefits available to non-highly compensated participants in the Company’s 401(k) savings plan, to the extent that benefits exceed those under the Company’s basic plans because of the tax law limitations ($46,000 in 2008). The executive is required to defer compensation to the SERP savings plan in order to receive the applicable matching company credit each year. In 2006, Mr. Graham waived his right to maintain a separate unfunded savings plan account under the SERP.

The Company also has a Deferred Compensation Plan for senior executives (including the named executive officers) comparable to similar plans at peer companies including those in the same industries with comparable revenues. This plan provides an opportunity for participants to elect to defer the receipt of all or a portion of cash awards under the annual and/or long-term components of the Plan. Elections to defer must be filed in the year prior to the year(s) such awards are earned. Deferred amounts earn investment credits in accordance with participant elections from a choice of investment indexes. Deferred amounts will be payable at retirement or such other future date as specified by the participant at the time of election. At the end of 2007, Mr. Morse had a balance of $1,939,954 in deferred compensation; Mr. Rosberg had a balance of $2,165,868; Ms. Dillon had a balance of $25,359; and Ms. McDaniel had a balance of $599,612. Mr. Graham does not participate in the Deferred Compensation Plan.

The retirement plans are more fully described under ‚ÄúPension Benefits,‚ÄĚ beginning on page 23.

Employment Agreements and Severance Packages

Consistent with its policy, the Company has not entered into any employment agreements with or guaranteed severance packages to any of the named executive officers.

Other Benefit Plans

The plans described above are similar to those offered to all senior management throughout the divisions of The Washington Post Company. To attract, retain and motivate talented executives in the competitive education marketplace, a stock option plan was established in 1997 to provide equity incentives to Kaplan executives consistent with those available to the management of publicly traded education companies. The Kaplan Stock Option Plan (‚ÄúKSOP‚ÄĚ) is tied exclusively to increases in Kaplan‚Äôs estimated value regardless of the Company‚Äôs performance as a whole. No named executive officers participate in this plan.

Kaplan Stock Option Plan

The KSOP has served as a vehicle to attract, retain and motivate talented executives in an increasingly competitive marketplace and industry segment. Under the KSOP, options were granted to purchase common shares of Kaplan at the fair market value on the date of the grant. Additionally, Kaplan shares were granted to a senior manager of Kaplan over the past three years. The size of each grant was determined by the value of the Kaplan stock and Kaplan stock options at the time, the likely growth in that value and the importance of the individual to growing the value of the Company in the future. All options granted will expire no later than December 31, 2011, at the expiration of the KSOP. Each year, in accordance with the KSOP, the Committee sets the fair market value of Kaplan as if it were a public company. Goldman, Sachs & Co. assisted the Committee in reviewing the data and setting the value. As of December 31, 2007, two Kaplan employees held options to purchase 69,662 shares of Kaplan stock and held 6,544 Kaplan shares. An additional 1,778 Kaplan shares were issued in 2008 related to 2007 share awards. The significant majority of the options and shares are held by Kaplan CEO Jonathan Grayer.

Once an option is vested, the participant has the right to put the shares to Kaplan at the prevailing fair market value or, upon exercise, the participant may elect to receive Kaplan shares. Kaplan has the right to, and does, call shares held by individuals whose employment is terminated. Since Kaplan can be required to repurchase shares from all participants, an obligation exists that must be accrued on Kaplan‚Äôs balance sheet on an accelerated basis over the vesting period. As of December 31, 2007, the related stock compensation liability amounted to approximately $101.2 million. The liability is ‚Äúmarked to market‚ÄĚ as the estimated fair market value of Kaplan stock options changes. This method can result in some volatility throughout the year.

MANAGEMENT DISCUSSION FOR LATEST QUARTER

Results of Operations

Net income for the third quarter of 2007 was $72.5 million ($7.60 per share), compared to net income of $73.3 million ($7.60 per share) for the third quarter of last year.

Results for the third quarter of 2007 included a gain from the sale of property at the Company’s television station in Miami (after-tax impact of $5.9 million, or $0.62 per share). Results for the third quarter of 2006 included a goodwill impairment charge at PostNewsweek Tech Media, which was part of the magazine publishing segment (after-tax impact of $6.3 million, or $0.65 per share) and gains from the sales of property and marketable securities (after-tax impact of $2.8 million, or $0.29 per share).

Revenue for the third quarter of 2007 was $1,022.5 million, up 8% from $946.9 million in 2006. The increase is due mostly to significant revenue growth at the education and cable television divisions. Revenues were down at the Company’s newspaper publishing, magazine publishing and television broadcasting divisions.

Operating income was up 2% for the third quarter of 2007 to $110.5 million, from $108.6 million in 2006 due to the $9.5 million gain from the sale of property at the Company’s television station in Miami in the third quarter of 2007, and the $9.9 million goodwill impairment charge in the third quarter of 2006. The results were offset by a decline in operating income at the newspaper publishing division as a result of reduced print advertising revenues at The Washington Post newspaper and a $6.2 million increase in Kaplan stock compensation expense.

For the first nine months of 2007, net income totaled $205.7 million ($21.48 per share), compared with $228.9 million ($23.71 per share) for the same period of 2006. Results for the first nine months of 2007 included additional net income tax expense of $6.6 million ($0.70 per share) as the result of a $12.9 million ($1.36 per share) increase in taxes associated with Bowater Mersey and a tax benefit of $6.3 million ($0.66 per share) associated with recent changes in certain state income tax laws. Both of these are non-cash items in the current period, impacting the Company‚Äôs long-term net deferred income tax liabilities. Also included in the first nine months of 2007 is a significant increase in equity in earnings of affiliates primarily from a gain on the sale of land at the Company‚Äôs Bowater Mersey affiliate (after-tax impact of $6.5 million, or $0.68 per share) and a gain from the sale of property at the Company‚Äôs television station in Miami (after-tax impact of $5.9 million, or $0.62 per share). Results for the first nine months of 2006 included charges related to early retirement plan buyouts (after-tax impact of $31.7 million, or $3.30 per share), a goodwill impairment charge (after-tax impact of $6.3 million, or $0.65 per share), transition costs at Kaplan (after-tax impact of $4.8 million, or $0.50 per share) and a charge for the cumulative effect of a change in accounting for Kaplan equity awards (after-tax impact of $5.1 million, or $0.53 per share) in connection with the Company‚Äôs adoption of Statement of Financial Accounting Standards No. 123R (SFAS 123R), ‚ÄúShare-Based Payment.‚ÄĚ These items were offset by insurance recoveries from cable division losses related to Hurricane Katrina (after-tax impact of $6.4 million, or $0.67 per share) and gains from the sales of property and marketable securities (after-tax impact of $22.4 million, or $2.33 per share).

Revenue for the first nine months of 2007 was $3,054.9 million, up 7% from $2,864.2 million for the first nine months of 2006, due to increased revenues at the Company’s education and cable divisions, offset by revenue declines at the Company’s other divisions. Operating income for the first nine months of 2007 decreased to $327.7 million, from $343.6 million in the first nine months of 2006, due to weakness in advertising demand at the newspaper publishing, magazine publishing and television broadcasting divisions; a $24.1 million increase in Kaplan stock compensation expense in the first nine months of 2007; and $10.4 million in insurance recoveries recorded during the second quarter of 2006 from cable division losses related to Hurricane Katrina. These were offset by a $9.5 million gain from the sale of property at the Company’s television station in Miami in 2007, and several unusual items in 2006 including $50.9 million in pre-tax charges associated with early retirement plan buyouts; a $9.9 million goodwill impairment charge; and $6.9 million in transition costs at Kaplan.

The Company’s operating income for the third quarter and first nine months of 2007 included $5.9 million and $16.7 million of net pension credits, respectively, compared to $5.3 million and $16.7 million, respectively, for the same periods of 2006, excluding charges related to early retirement programs.

Education Division . Education division revenue totaled $514.6 million for the third quarter of 2007, a 22% increase over revenue of $420.6 million for the same period of 2006. Excluding revenue from acquired businesses, education division revenue increased 12% for the third quarter of 2007. Kaplan reported operating income of $37.6 million for the third quarter of 2007, down 2% from $38.4 million in the third quarter of 2006. For the first nine months of 2007, education division revenue totaled $1,493.9 million, a 21% increase over revenue of $1,238.8 million for the same period of 2006. Excluding revenue from acquired businesses, education division revenue increased 12% for the first nine months of 2007. Kaplan reported operating income of $109.4 million for the first nine months of 2007, a decline of 12% from $124.9 million for the first nine months of 2006.

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

Higher education includes Kaplan’s domestic and international post-secondary education businesses, including fixed-facility colleges as well as online post-secondary and career programs. Higher education revenue grew by 19% in both the third quarter and the first nine months of 2007. Enrollments increased 14% to 79,600 at September 30, 2007, compared to 69,800 at September 30, 2006, due to enrollment growth in the online programs and timing of course start dates. Higher education results for the online programs in the first nine months of 2007 benefited from increases in both price and demand for higher priced advanced programs. Results at the fixed-facility colleges also benefited from course fee increases, but as previously disclosed, were adversely affected by $2.7 million in lease termination charges in the first quarter of 2007.

Test preparation includes Kaplan’s standardized test preparation and English- language course offerings, as well as the K12 and Score! businesses. Test preparation revenue grew 33% in the third quarter of 2007 and 27% for the first nine months of 2007 largely due to the Aspect and PMBR acquisitions made in October 2006. Excluding revenue from acquired businesses, revenue grew 2% in the third quarter of 2007 and 3% in the first nine months of 2007 due to overall strength in the traditional test preparation courses, offset by declines in revenue from the K12 and Score! businesses. Operating income for test preparation increased in the third quarter of 2007 due largely to the Aspect and PMBR acquisitions, offset by continued weakness from the K12 and Score! businesses. Operating results for the first nine months of 2007 were down due to weaker results from the K12 and Score! businesses, offset by strong results at Aspect and PMBR. Score! revenue and operating results are down primarily due to a 13% enrollment decline.

Kaplan management has recently announced plans to restructure the SCORE! business. In order to implement a revised business model, 75 SCORE! centers will be closed. After closings and consolidations 80 SCORE! centers will remain open that focus on providing computer-assisted instruction and small-group tutoring. The restructuring plan includes relocating certain management and terminating certain employees from centers to be closed. The Company expects to incur approximately $16 million in expenses in the fourth quarter of 2007 related to lease obligations, severance and accelerated depreciation of fixed assets. A portion of the estimated lease obligation expenses included above may not be recognized until the first quarter of 2008. The Company completed an impairment review of Score! long lived assets and intangibles in the third quarter of 2007 and has determined that no impairment charge was necessary.

Professional includes Kaplan’s domestic and overseas professional businesses. Professional revenue grew 16% and 15% in the third quarter and first nine months of 2007 largely due to the May 2006 acquisition of Tribeca; the March 2007 acquisition of EduNeering Holdings, Inc., a Princeton, NJ-based provider of knowledge management solutions for organizations in the pharmaceutical, medical device, healthcare, energy and manufacturing sectors; and the August 2007 acquisition of the education division of Financial Services Institute of Australia. Excluding revenue from acquired businesses, Professional revenue grew 7% in the third quarter of 2007 and 6% in the first nine months of 2007. The revenue increases are a result of higher revenues at Kaplan Professional (UK) due primarily to favorable exchange rates and from growth in the Schweser CFA exam course offerings, offset by continued soft market demand for Professional’s insurance, securities, real estate book publishing and real estate course offerings. Operating income increased for the first nine months of 2007 due to the $6.9 million in transition costs at Tribeca in 2006, offset by weakness in Professional’s insurance, securities and real estate businesses. Kaplan Professional (UK) operating results are down in the third quarter and first nine months of 2007 due to increases in staffing, occupancy and business development expenses associated with the overall growth in operations.

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

Other includes charges for incentive compensation arising from equity awards under the Kaplan stock option plan, which was established for certain members of Kaplan’s management. Kaplan recorded stock compensation expense of $12.0 million and $5.9 million in the third quarter of 2007 and 2006, respectively, and $35.3 million and $11.2 million in the first nine months of 2007 and 2006, respectively, related to this plan (excluding stock compensation recorded in the first quarter of 2006 related to a change in accounting discussed below). In addition, Other includes amortization of certain intangibles, which increased due to recent Kaplan acquisitions.

Newspaper Publishing Division. Newspaper publishing division revenue totaled $210.2 million for the third quarter of 2007, a decrease of 7% from $225.6 million in the third quarter of 2006; division revenue decreased 8% to $657.2 million for the first nine months of 2007, from $714.7 million for the first nine months of 2006. Division operating income for the third quarter declined 50% to $8.8 million, from $17.7 million in the third quarter of 2006; operating income increased 21% to $41.5 million for the first nine months of 2007, compared to $34.3 million for the first nine months of 2006. The decline in operating results for the third quarter is due primarily to a decline in division revenues and a $2.3 million pre-tax gain on the sale of property in 2006, offset by a reduction in newspaper division operating expenses, including a newsprint expense decline of 22%. The increase in operating income for the first nine months of 2007 is due primarily to $47.1 million in pre-tax charges associated with early retirement plan buyouts at The Washington Post during 2006. Excluding this charge, operating income was down for the first nine months of 2007 due to a decline in division revenues, partially offset by a reduction in newspaper division operating expenses, including a 20% reduction in newsprint expense.

Print advertising revenue at The Post in the third quarter declined 13% to $113.1 million, from $129.4 million in the third quarter of 2006, and decreased 14% to $366.6 million for the first nine months of 2007, from $427.6 million in the same period of 2006. The declines are due to reductions in real estate, classified, retail and zones. Classified recruitment advertising revenue declined 27% to $12.4 million for the third quarter of 2007, from $17.0 million in the third quarter of 2006, and was down 26% to $41.3 million in the first nine months of 2007, compared to $55.6 million in the first nine months of 2006.

For the first nine months of 2007, Post daily and Sunday circulation declined 3.5% and 3.7%, respectively, compared to the same period of the prior year. For the nine months ended September 30, 2007, average daily circulation at The Post totaled 638,800 and average Sunday circulation totaled 905,300.

Revenue generated by the Company’s online publishing activities, primarily washingtonpost.com, increased 11% to $27.2 million for the third quarter of 2007, from $24.5 million for the third quarter of 2006; online revenues increased 11% to $80.5 million in the first nine months of 2007, from $72.7 million for the first nine months of 2006. Display online advertising revenues grew 15% and 16% for the third quarter and first nine months of 2007, respectively. Online classified advertising revenue on washingtonpost.com increased 12% and 9% for the third quarter and first nine months of 2007, respectively. A small portion of the Company’s online publishing revenues is included in the magazine publishing division.

Television Broadcasting Division. Revenue for the television broadcasting division decreased 5% in the third quarter of 2007 to $77.8 million, from $82.2 million in 2006; operating income for the third quarter of 2007 increased 10% to $36.0 million, from $32.9 million in 2006. The decrease in revenue is due to a $7.6 million decline in third quarter 2007 political advertising revenue. The increase in operating income is due to a $9.5 million gain on the sale of property at the Miami television station; this was offset by revenue declines and increased programming expenses.

In July 2007, the Company entered into a transaction to sell and lease back its current Miami television station facility; a $9.5 million gain was recorded as a reduction to expense in the third quarter of 2007. The Company has purchased land and is building a new Miami television station facility, which is expected to be completed in 2009.

For the first nine months of 2007, revenue decreased 4% to $246.5 million, from $257.1 million; operating income for the first nine months of 2007 declined 9% to $100.6 million, from $111.0 million in the same period of 2006. The decrease in revenue is due to $6.3 million in incremental winter Olympics-related advertising at the Company’s NBC affiliates in the first quarter of 2006 and a $9.9 million decrease in political advertising revenue. The decline in operating income is due to the revenue declines and increased programming expenses, offset by the $9.5 million gain on the sale of property at the Miami television station.

Magazine Publishing Division . Revenue for the magazine publishing division totaled $62.5 million for the third quarter of 2007, an 18% decline from $76.1 million for the third quarter of 2006; division revenue totaled $197.1 million for the first nine months of 2007, a 16% decrease from $235.1 million for the first nine months of 2006. Magazine publishing division results in the third quarter and first nine months of 2006 included revenue of $6.3 million and $19.6 million, respectively, from PostNewsweek Tech Media, which was sold in December 2006. The remainder of the revenue declines is due primarily to a 13% and 12% reduction in Newsweek advertising revenue for the third quarter and first nine months of 2007, respectively, due to fewer ad pages and lower rates at both the Newsweek domestic and international editions, offset by increases at Arthur Frommer’s Budget Travel.

Operating income totaled $7.0 million in the third quarter of 2007, an increase from $0.1 million for the third quarter of 2006. Magazine publishing division results in the third quarter of 2006 included an operating loss of $8.1 million from PostNewsweek Tech Media, largely the result of a goodwill impairment charge of $9.9 million. Excluding PostNewsweek Tech Media, operating income at the magazine publishing division was down, due primarily to advertising revenue reductions, offset by lower overall operating expenses. Operating income totaled $13.9 million for the first nine months of 2007, an increase from $10.5 million in the first nine months of 2006. Magazine publishing division results in the first nine months of 2006 included an operating loss of $7.3 million from PostNewsweek Tech Media, largely the result of a goodwill impairment charge of $9.9 million. Excluding PostNewsweek Tech Media, operating income at the magazine publishing division was down, due primarily to advertising revenue reductions, offset by lower overall operating costs and an increased pension credit.

Cable Television Division . Cable division revenue of $157.8 million for the third quarter of 2007 represents an 11% increase over 2006 third quarter revenue of $142.3 million; for the first nine months of 2007, revenue increased 10% to $461.1 million, from $418.6 million in the same period of 2006. The 2007 revenue increase is due to continued growth in the division’s cable modem and digital revenues, along with revenues from telephone services. The cable division last implemented a basic video cable service rate increase of $3 per month at most of its systems effective February 1, 2006. The Company does not plan to implement an overall basic video cable rate increase in 2007; however, in September 2007, a $3.05 monthly rate increase was implemented for a majority of high-speed data subscribers.

Cable division operating income increased to $29.8 million in the third quarter of 2007, versus $27.9 million in the third quarter of 2006; cable division operating income for the first nine months of 2007 declined to $89.9 million, from $93.2 million for the first nine months of 2006. Cable division results for the first nine months of 2006 benefited from $10.4 million in insurance recoveries from cable division losses related to Hurricane Katrina. Excluding the insurance recoveries, cable division operating income increased in the first nine months of 2007, along with improved results in the third quarter of 2007. These increases are due to the division’s revenue growth, offset by higher depreciation expense and increases in programming, telephony and technical costs.

Corporate Office. The corporate office operating expenses were $8.6 million and $27.6 million for the third quarter and first nine months of 2007, respectively, compared with $8.3 million and $30.3 million for the third quarter and first nine months of 2006, respectively. The decrease for the first nine months of 2007 is due to $3.8 million in pre-tax charges recorded in the second quarter of 2006 associated with early retirement plan buyouts at the corporate office.

In October 2007, the Company acquired the outstanding stock of CourseAdvisor Inc., a premier online lead generation provider, headquartered in Wakefield, MA. In 2006, The Washington Post Company made a small investment in CourseAdvisor. Through its search engine marketing expertise and proprietary technology platform, CourseAdvisor generates student leads for the post-secondary education market. CourseAdvisor will operate as an independent subsidiary of The Washington Post Company.

Equity in Earnings (Losses) of Affiliates . The Company’s equity in losses of affiliates for the third quarter of 2007 was $0.6 million, compared to losses of $0.6 million for the third quarter of 2006. For the first nine months of 2007, the Company’s equity in earnings of affiliates totaled $8.3 million, compared to losses of $1.4 million for the same period of 2006. In the first quarter of 2007, the equity in earnings of affiliates included a gain of $8.9 million on the sale of land at the Company’s Bowater Mersey Paper Company Limited affiliate. The Company holds a 49% interest in Bowater Mersey Paper Company.

Other Non-Operating Income (Expense). The Company recorded other non-operating income, net, of $10.1 million for the third quarter of 2007, compared to non-operating income, net, of $4.7 million for the third quarter of 2006. The third quarter 2007 non-operating income, net, included $9.2 million in foreign currency gains. The third quarter 2006 non-operating income, net, included $2.0 million in pre-tax gains related to sales of marketable securities and $2.9 million in foreign currency gains, offset by other non-operating items.

The Company recorded other non-operating income, net, of $15.3 million for the first nine months of 2007, compared to other non-operating income, net, of $38.2 million for the same period of the prior year. The 2007 non-operating income included $13.8 million in foreign currency gains. The 2006 non-operating income, net, included pre-tax gains of $33.6 million related to the sales of marketable securities and foreign currency gains of $5.8 million.

Net Interest Expense . The Company incurred net interest expense of $3.0 million and $9.1 million for the third quarter and first nine months of 2007, respectively, compared to $3.4 million and $12.0 million for the same periods of 2006. At September 30, 2007, the Company had $405.8 million in borrowings outstanding at an average interest rate of 5.5%.

Provision for Income Taxes . The effective tax rate for the third quarter of 2007 was 38.0%, compared to 32.9% for the third quarter of 2006.

The effective tax rate for the first nine months of 2007 was 39.9%, compared to 36.5% for the first nine months of 2006. As previously discussed, results for the first nine months of 2007 included an additional $12.9 million in income tax expense related to the Company’s Bowater Mersey affiliate and a $6.3 million income tax benefit related to a change in certain state income tax laws enacted in the second quarter of 2007. Both of these are non-cash items in the current period, impacting the Company’s long-term net deferred income tax liabilities. Excluding the impact of these items, the effective tax rate for the first nine months of 2007 was 38.0%.

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

Earnings Per Share. The calculation of diluted earnings per share for the third quarter and first nine months of 2007 was based on 9,508,752 and 9,531,195 weighted average shares outstanding, respectively, compared to 9,616,651 and 9,611,950, respectively, for the third quarter and first nine months of 2006. The Company repurchased 54,506 shares of its Class B common stock at a cost of $42.0 million during the first nine months of 2007.

Financial Condition: Capital Resources and Liquidity

Acquisitions and Dispositions. In the third quarter of 2007, Kaplan acquired two businesses in their professional division and one business in their higher education division, totaling $43.3 million. These acquisitions include the education division of the Financial Services Institute of Australia. In the second quarter of 2007, the Company completed four business acquisitions, primarily in the education division, totaling $29.1 million. These included Kaplan higher education division’s acquisitions of Sagemont Virtual, a leader in the growing field of online high school instruction that has been doing business as the University of Miami Online High School, and Virtual Sage, a developer of online high school courses. In the first quarter of 2007, Kaplan acquired two businesses in their professional division totaling $115.8 million. These acquisitions included EduNeering Holdings, Inc., a Princeton, N.J. based provider of knowledge management solutions for organizations in the pharmaceutical, medical device, healthcare, energy and manufacturing sectors. Also in the first quarter of 2007, the cable division acquired subscribers in the Boise, Idaho area for $4.3 million. Most of the purchase price for these acquisitions has been allocated to goodwill and other intangibles on a preliminary basis.

In July 2007, the television broadcasting division entered into a transaction to sell and lease back its current Miami television station facility; a $9.5 million gain was recorded as a reduction to expense in the third quarter. An additional $1.9 million deferred gain will be amortized over the leaseback period. The television broadcasting division has purchased land and is building a new Miami television station facility which is expected to be completed in 2009.

In October 2007, the Company acquired the outstanding stock of CourseAdvisor Inc., a premier online lead generation provider, headquartered in Wakefield, MA. In 2006, The Washington Post Company made a small investment in CourseAdvisor. Through its search engine marketing expertise and proprietary technology platform, CourseAdvisor generates student leads for the post-secondary education market. CourseAdvisor will operate as an independent subsidiary of The Washington Post Company.

Capital expenditures. During the first nine months of 2007, the Company’s capital expenditures totaled $213.7 million. The Company estimates that its capital expenditures will be in the range of $275 million to $300 million in 2007.

Liquidity. The Company‚Äôs borrowings have declined by $1.4 million, to $405.8 million at September 30, 2007, as compared to borrowings of $407.2 million at December 31, 2006 . At September 30, 2007, the Company has $330.6 million in cash and cash equivalents, compared to $348.1 million at December 31, 2006. The Company had commercial paper and money market investments of $123.0 million and $142.9 million that are classified ad ‚ÄúCash and cash equivalents‚ÄĚ in the Company‚Äôs Consolidated Balance Sheet as of September 30, 2007and December 31, 2006, respectively.

At September 30, 2007, the Company had $405.8 million in total debt outstanding, which comprised $399.6 million of 5.5 percent unsecured notes due February 15, 2009, and $6.2 million in other debt.

During the third quarter of 2007 and 2006, the Company had average borrowings outstanding of approximately $405.7 million and $417.5 million, respectively, at average annual interest rates of approximately 5.5%. During the third quarter of 2007 and 2006, the Company incurred net interest expense of $3.0 million and $3.4 million, respectively.

During the first nine months of 2007 and 2006, the Company had average borrowings outstanding of approximately $405.6 million and $422.2 million, respectively, at average annual interest rates of approximately 5.5%, respectively. During the first nine months of 2007 and 2006, the Company incurred net interest expense of $9.1 million and $12.0 million, respectively.

At September 30, 2007, the Company had a working capital deficit of $11.7 million and at December 31, 2006, the Company had working capital of $131.6 million. 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. In management’s opinion, the Company will have ample liquidity to meet its various cash needs throughout 2007.

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, 2006.

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