SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

~~QUARTERLY REPORT PURSUANT TO SECTION~~

Quarterly Report Pursuant to Section 13 ORor 15(d) OF
~~THE SECURITIES EXCHANGE ACT OF~~

of the Securities Exchange Act of 1934

For the Quarterly Period Ended ~~September 29, 2002~~March 30, 2003

Commission File Number 1-6714

THE WASHINGTON POST COMPANY

(Exact name of registrant as specified in its charter)

Delaware

53-0182885

~~Delaware~~

~~53-0182885~~

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

~~incorporation or organization)~~ 1150 15th Street, N.W. Washington, D.C.		~~Identification No.)~~ 20071
(Address of principal executive offices)		(Zip Code)

~~1150 15th Street, N.W. Washington, D.C. 20071~~
~~(Address of principal executive offices) (Zip Code)~~(202) 334-6000

(Registrant’s telephone number, including area ~~code:~~
~~(202) 334-6000~~code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yesx

~~Yes~~ X . ~~No____.~~No

¨.

Shares outstanding at ~~November 6, 2002:~~

May 8, 2003:


Class A Common Stock	1,722,250	Shares

Class B Common Stock	~~7,786,603~~	7,804,370 Shares

THE WASHINGTON POST COMPANY

Index to Form 10-Q


					PART I. FINANCIAL INFORMATION
~~PART I.~~
Item 1.	~~FINANCIAL INFORMATION~~	Financial Statements

~~Item 1.~~	~~Financial Statements~~

	a.Condensed Consolidated Statements of Income (Unaudited) for the Thirteen Weeks Ended March 30, 2003 and ~~Thirty-nine Weeks~~ ~~Ended September 29,~~March 31, 2002 ~~and September 30, 2001~~		3

	b.Condensed Consolidated Statements of Comprehensive Income (Unaudited) for the Thirteen ~~and Thirty-nine~~ Weeks Ended ~~September 29,~~March 30, 2003 and March 31, 2002 ~~and September 30,~~ ~~2001~~		4

	c.Condensed Consolidated Balance Sheets at ~~September 29,~~ ~~2002~~March 30, 2003 (Unaudited) and December ~~30, 2001~~29, 2002		5

	d.Condensed Consolidated Statements of Cash Flows (Unaudited) for the ~~Thirty-nine~~Thirteen Weeks Ended ~~September 29,~~ March 30, 2003 and March 31, 2002 ~~and September 30, 2001~~		6

	e.Notes to Condensed Consolidated Financial Statements (Unaudited)		7

Item 2.	~~Management's~~ Management’s Discussion and Analysis of Results of Operations and Financial Condition		14	12

Item 4.	Controls and Procedures		21	17

PART II.		OTHER INFORMATION

Item 6.	Exhibits and Reports on Form 8-K		22	18

Signatures		19

Certifications					23

~~Certifications~~					24	20

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

The Washington Post Company

Condensed Consolidated Statements of Income (Unaudited)

Thirteen Weeks Ended Thirty-nine Weeks Ended

September 29, September 30, September 29, September 30,
(In thousands, except per share amounts) 2002 2001 2002 2001

Operating revenues
Advertising $ 292,523 $ 277,425 $ 882,183 $ 888,281
Circulation and subscriber 171,535 174,716 501,382 483,469
Education 160,454 127,159 457,148 367,680
Other 15,781 13,007 47,605 43,185

640,293 592,307 1,888,318 1,782,615

Operating costs and expenses
Operating 342,411 345,567 1,011,093 1,029,097
Selling, general and administrative 162,642 144,954 499,895 444,278
Depreciation of property, plant and equipment 45,808 34,765 128,267 105,264
Amortization of goodwill and other intangibles 172 20,068 483 57,185

551,033 545,354 1,639,738 1,635,824

Income from operations 89,260 46,953 248,580 146,791
Other income (expense)
Equity in losses of affiliates (1,254 ) (26,535 ) (16,943 ) (45,636 )
Interest income 69 226 261 1,597
Interest expense (8,717 ) (11,861 ) (26,381 ) (39,726 )
Other, net 1,115 (4,365 ) 1,606 293,688

Income before income taxes and cumulative effect of change in accounting principle 80,473 4,418 207,123 356,714
Provision for income taxes 32,700 2,850 84,500 141,600

Income before cumulative effect of change in accounting principle 47,773 1,568 122,623 215,114
Cumulative effect in method of accounting for goodwill and other intangible assets, net of taxes — — (12,100 ) —

Net income 47,773 1,568 110,523 215,114
Redeemable preferred stock dividends (249 ) (263 ) (1,033 ) (1,052 )

Net income available for common shares $ 47,524 $ 1,305 $ 109,490 $ 214,062

Basic earnings per common share:
Before cumulative effect of change in accounting principle $ 5.03 $ 0.17 $ 12.90 $ 22.68
Cumulative effect of change in accounting principle — — (1.27 ) —
Redeemable preferred stock dividends (0.03 ) (0.03 ) (0.11 ) (0.11 )

Net income available for common stock $ 5.00 $ 0.14 $ 11.52 $ 22.57

Diluted earnings per share:
Before cumulative effect of change in accounting principle $ 5.02 $ 0.17 $ 12.88 $ 22.64
Cumulative effect of change in accounting principle — — (1.27 ) —
Redeemable preferred stock dividends (0.03 ) (0.03 ) (0.11 ) (0.11 )

Net income available for common stock $ 4.99 $ 0.14 $ 11.50 $ 22.53

Dividends declared per common share $ 1.40 $ 1.40 $ 5.60 $ 5.60

Basic average number of common shares outstanding 9,506 9,489 9,502 9,484
Diluted average number of common shares outstanding 9,523 9,502 9,518 9,500

(In thousands, except per share amounts)	March 30, 2003			March 31, 2002
Operating revenues
Advertising	$	279,796		$	273,564
Circulation and subscriber		172,036			161,298
Education		177,778			146,929
Other		10,830			18,531

		640,440			600,322

Operating costs and expenses
Operating		348,634			333,239
Selling, general and administrative		169,170			176,866
Depreciation of property, plant and equipment		43,395			41,173
Amortization of intangible assets		149			152

		561,348			551,430

Income from operations		79,092			48,892

Other income (expense)
Equity in losses of affiliates		(2,642	)		(6,506	)
Interest income		114			133
Interest expense		(7,237	)		(8,867	)
Other, net		48,135			6,454

Income before income taxes and cumulative effect of change in accounting principle		117,462			40,106
Provision for income taxes		44,400			16,400

Income before cumulative effect of change in accounting principle		73,062			23,706
Cumulative effect of change in method of accounting for goodwill and other intangible assets, net of taxes		—			(12,100	)

Net income		73,062			11,606
Redeemable preferred stock dividends		(517	)		(525	)

Net income available for common shares	$	72,545		$	11,081

Basic earnings per common share:
Before cumulative effect of change in accounting principle	$	7.62		$	2.44
Cumulative effect of change in accounting principle		—			(1.27	)

Net income available for common stock	$	7.62		$	1.17

Diluted earnings per share:
Before cumulative effect of change in accounting principle	$	7.59		$	2.43
Cumulative effect of change in accounting principle		—			(1.27	)

Net income available for common stock.	$	7.59		$	1.16

Dividends declared per common share	$	2.90		$	2.80

Basic average number of common shares outstanding		9,526			9,498

Diluted average number of common shares outstanding		9,553			9,512

The Washington Post Company

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

Thirteen Weeks Ended Thirty-nine Weeks Ended

September 29, September 30, September 29, September 30,
(In thousands) 2002 2001 2002 2001

Net income $ 47,773 $ 1,568 $ 110,523 $ 215,114

Other comprehensive income (loss)
Foreign currency translation adjustment (1,906 ) (423 ) 2,511 (3,799 )
Change in unrealized gain on available-for-sale securities 20,427 (3,439 ) 4,997 (2,067 )
Less: reclassification adjustment for realized (gains) losses included in net income — 24 (11,209 ) 3,238

18,521 (3,838 ) (3,701 ) (2,628 )
Income tax (expense) benefit related to other comprehensive income (7,961 ) 1,333 2,383 (513 )

10,560 (2,505 ) (1,318 ) (3,141 )

Comprehensive income (loss) $ 58,333 $ (937 ) $ 109,205 $ 211,973

(In thousands)	March 30, 2003			March 31, 2002
Net income	$	73,062		$	11,606

Other comprehensive income (loss)
Foreign currency translation adjustment		3,105			99
Less: reclassification adjustment on sale of affiliate investment		(1,633	)		—
Change in unrealized gain on available-for-sale securities		(21,718	)		(2,381	)
Less: reclassification adjustment for realized losses (gains) included in net income		214			(11,209	)

		(20,032	)		(13,491	)
Income tax benefit related to other comprehensive income		8,387			5,265

		(11,645	)		(8,226	)

Comprehensive income	$	61,417		$	3,380

The Washington Post Company

Condensed Consolidated Balance Sheets

September 29, December 30,
2002 2001
(In thousands)

(unaudited)
Assets
Current assets
Cash and cash equivalents $ 35,280 $ 31,480
Investments in marketable equity securities 4,597 16,366
Accounts receivable, net 291,098 279,328
Federal and state income taxes receivable — 10,253
Inventories 36,208 19,042
Other current assets 39,744 40,388

406,927 396,857
Property, plant and equipment
Buildings 270,511 267,658
Machinery, equipment and fixtures 1,539,683 1,422,228
Leasehold improvements 82,214 79,108

1,892,408 1,768,994
Less accumulated depreciation (915,389 ) (794,596 )

977,019 974,398
Land 34,733 34,733
Construction in progress 85,413 89,080

1,097,165 1,098,211
Investments in marketable equity securities 218,921 219,039
Investments in affiliates 74,124 80,936
Goodwill, net 771,053 754,554
Indefinite lived intangible assets, net 453,306 450,759
Other intangible assets, net 2,095 1,448
Prepaid pension cost 476,679 447,688
Deferred charges and other assets 76,504 109,606

$ 3,576,774 $ 3,559,098

Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable and accrued liabilities $ 330,840 $ 253,346
Deferred revenue 138,827 130,744
Dividends declared 13,550 —
Federal and state income taxes payable 5,126 —
Short-term borrowings 362,714 50,000

851,057 434,090
Postretirement benefits other than pensions 134,867 130,824
Other liabilities 198,536 192,540
Deferred income taxes 231,179 221,949
Long-term debt 405,267 883,078

1,820,906 1,862,481
Redeemable preferred stock 12,916 13,132

Preferred stock — —

Common shareholders’ equity
Common stock 20,000 20,000
Capital in excess of par value 146,080 142,814
Retained earnings 3,085,882 3,029,595
Accumulated other comprehensive income(loss)
Cumulative foreign currency translation adjustment (7,167 ) (9,678 )
Unrealized gain on available-for-sale securities 20,452 24,281
Cost of Class B common stock held in treasury (1,522,295 ) (1,523,527 )

1,742,952 1,683,485

$ 3,576,774 $ 3,559,098

	March 30, 2003			December 29, 2002
(In thousands)	(unaudited)
Assets
Current assets
Cash and cash equivalents	$	36,311		$	28,771
Investments in marketable equity securities		1,431			1,753
Accounts receivable, net		278,511			285,374
Inventories		29,972			27,629
Other current assets		41,771			39,428

		387,996			382,955
Property, plant and equipment
Buildings		283,318			283,233
Machinery, equipment and fixtures		1,596,044			1,551,931
Leasehold improvements		92,597			85,720

		1,971,959			1,920,884
Less accumulated depreciation		(973,288	)		(926,385	)

		998,671			994,499
Land		34,530			34,530
Construction in progress		47,779			65,371

		1,080,980			1,094,400
Investments in marketable equity securities		193,384			214,780
Investments in affiliates		63,142			70,703
Goodwill, net		856,274			770,861
Indefinite-lived intangible assets, net		482,419			482,419
Amortized intangible assets, net		2,004			2,153
Prepaid pension cost		507,126			493,786
Deferred charges and other assets		79,843			71,837

	$	3,653,168		$	3,583,894

Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable and accrued liabilities	$	315,411		$	336,582
Deferred revenue		156,417			135,419
Dividends declared		13,912			—
Federal and state income taxes payable		32,769			4,853
Short-term borrowings		217,436			259,258

		735,945			736,112
Postretirement benefits other than pensions		137,440			136,393
Other liabilities		197,466			194,480
Deferred income taxes		256,347			261,153
Long-term debt		431,029			405,547

		1,758,227			1,733,685
Redeemable preferred stock		12,916			12,916

Preferred stock		—			—

Common shareholders’ equity
Common stock		20,000			20,000
Capital in excess of par value		157,976			149,090
Retained earnings		3,224,798			3,179,607
Accumulated other comprehensive income(loss)
Cumulative foreign currency translation adjustment		(6,039	)		(7,511	)
Unrealized gain on available-for-sale securities		4,796			17,913
Cost of Class B common stock held in treasury		(1,519,506	)		(1,521,806	)

		1,882,025			1,837,293

	$	3,653,168		$	3,583,894

The Washington Post Company

Condensed Consolidated Statements of Cash Flows (Unaudited)

Thirty-nine Weeks Ended

September 29, September 30,
2002 2001

(In thousands)

Cash flows from operating activities:
Net income $ 110,523 $ 215,114
Adjustments to reconcile net income to net cash provided by operating activities:
Cumulative effect of change in method of accounting for goodwill and other intangibles 12,100 —
Depreciation of property, plant and equipment 128,267 105,264
Amortization of goodwill and other intangibles 483 57,185
Net pension benefit (48,280 ) (59,053 )
Early retirement program expense 19,001 —
Gain from disposition of businesses — (321,091 )
Gain on sale of marketable securities (13,209 ) 354
Cost method and other investment write-downs 18,194 22,850
Equity in losses of affiliates, net of distributions 16,943 45,636
Provision for deferred income taxes 18,514 84,207
Change in assets and liabilities:
(Increase) decrease in accounts receivable, net (8,242 ) 1,208
Increase in inventories (17,166 ) (8,607 )
Increase in accounts payable and accrued liabilities 68,508 30,307
Decrease in income taxes receivable 10,253 12,370
Increase in income taxes payable 5,126 2,477
Decrease in other assets and other liabilities, net 24,642 50,972
Other (1,931 ) (5,100 )

Net cash provided by operating activities 343,726 234,093

Cash flows from investing activities:
Purchases of property, plant and equipment (116,882 ) (167,500 )
Investments in certain businesses (26,673 ) (104,356 )
Proceeds from the sale of business — 61,921
Proceeds from sale of marketable securities 19,701 145
Investment in affiliates (7,610 ) (32,787 )
Other 706 770

Net cash used in investing activities (130,758 ) (241,807 )

Cash flows from financing activities:
Net (repayment) issuance of commercial paper (172,693 ) 48,037
Dividends paid (40,686 ) (40,616 )
Common shares repurchased (786 ) (445 )
Proceeds from exercise of stock options 4,997 4,241

Net cash (used in) provided by financing activities (209,168 ) 11,217

Net increase in cash and cash equivalents 3,800 3,503
Beginning cash and cash equivalents 31,480 20,345

Ending cash and cash equivalents $ 35,280 $ 23,848

	Thirteen Weeks Ended
(In thousands)	March 30, 2003			March 31, 2002
Cash flows from operating activities:
Net income	$	73,062		$	11,606
Adjustments to reconcile net income to net cash provided by operating activities:
Cumulative effect of change in accounting principle		—			12,100
Depreciation of property, plant and equipment		43,395			41,173
Amortization of intangible assets		149			152
Net pension credit		(13,425	)		(16,082	)
Early retirement program expense		—			10,313
Gain from sale of affiliate		(49,762	)		—
Gain on sale of marketable securities		—			(13,209	)
Cost method and other investment write-downs		1,112			10,050
Equity in losses of affiliates, net of distributions		2,642			6,506
Provision for deferred income taxes		3,827			2,986
Change in assets and liabilities:
Decrease in accounts receivable, net		16,991			33,342
Increase in inventories		(2,342	)		(2,064	)
(Decrease) increase in accounts payable and accrued liabilities		(28,588	)		15,766
Increase (decrease) in deferred revenue		11,880			(1,876	)
Decrease in income taxes receivable		—			10,253
Increase in income taxes payable		27,916			578
Increase (decrease) in other assets and other liabilities, net		3,356			(5,561	)
Other		(37	)		136

Net cash provided by operating activities		90,176			116,169

Cash flows from investing activities:
Purchases of property, plant and equipment		(28,086	)		(37,310	)
Investments in certain businesses		(57,537	)		(16,907	)
Proceeds from the sale of affiliate		65,000			—
Proceeds from sale of marketable securities		—			19,701
Investment in affiliates		(5,977	)		(7,610	)
Other		378			249

Net cash used in investing activities		(26,222	)		(41,877	)

Cash flows from financing activities:
Net repayment of commercial paper		(41,882	)		(69,084	)
Dividends paid		(13,959	)		(13,559	)
Proceeds from exercise of stock options		380			2,394
Other		(953	)		—

Net cash used in financing activities		(56,414	)		(80,249	)

Net increase (decrease) in cash and cash equivalents		7,540			(5,957	)
Beginning cash and cash equivalents		28,771			31,480

Ending cash and cash equivalents	$	36,311		$	25,523

The Washington Post Company

Notes to Condensed Consolidated Financial Statements (Unaudited)

Results of operations, when examined on a quarterly basis, reflect the seasonality of advertising that affects the newspaper, magazine and broadcasting operations. Advertising revenues in the second and fourth quarters are typically higher than first and third quarter revenues. All adjustments reflected in the interim financial statements are of a normal recurring nature. ~~Certain 2001 amounts have been reclassified to conform with current year presentation.~~

The Company generally reports on a 13 week fiscal quarter ending on the Sunday nearest the calendar quarter-end. With the exception of the newspaper publishing operations, subsidiaries of the Company report on a calendar-quarter basis.

Note 1: Acquisitions ~~Exchanges~~ and Dispositions.

In March 2003, Kaplan completed its acquisition of the stock of FTC Holdings Limited (FTC), for £55.3 million ($87.4 million). Headquartered in London, FTC is a leader in test preparation services for accountants and financial services professionals, with 18 training centers in the United Kingdom and a growing presence in Asia, including operations in Hong Kong and Singapore. The acquisition was financed through cash and debt with $26.5 million remaining to be paid, primarily to employees of the business (included in long-term debt at March 30, 2003). Most of the purchase price has been allocated to goodwill, on a preliminary basis.

On January 1, 2003, the Company sold its 50 percent interest in the International Herald Tribune for $65 million and the Company recorded an after-tax non-operating gain of $32.3 million in the first quarter of 2003.

In the first ~~nine months~~quarter of 2002, Kaplan acquired several businesses in their higher education and test preparation divisions, totaling $37.9 million, with most of the aggregate purchase price allocated to goodwill. Approximately $9.1 million remains to be paid on these acquisitions, of which $2.1 million has been classified in current liabilities and $7.0 million as long-term debt at September 29, 2002.$23.2 million.

During the first nine months of 2001, the Company spent approximately $104.4 million on business acquisitions and exchanges, which principally included the purchase of Southern Maryland Newspapers, a division of Chesapeake Publishing Corporation, and amounts paid as part of a cable system exchange with AT&T Broadband. Kaplan also acquired two businesses that are part of their professional division.

The gain resulting from the cable system sale and exchange transactions, which is included in “Other income, net” in the Condensed Consolidated Statements of Income, increased net income for the first nine months of 2001 by $196.5 million, or $20.69 per share. For income tax purposes, the cable system sale and exchange transactions qualified as like-kind exchanges, and therefore, a large portion of these transactions did not result in a current tax liability.

Note 2: Investments.

Investments in marketable equity securities at ~~September~~March 30, 2003 and December 29, 2002 ~~and December 30, 2001~~ consist of the following (in thousands):

September 29, December 30,
2002 2001

Total cost $ 189,986 $ 195,661
Gross unrealized gains 33,532 39,744

Total fair value $ 223,518 $ 235,405

	March 30, 2003		December 29, 2002
Total cost	$	186,955	$	187,169
Gross unrealized gains		7,860		29,364

Total fair value	$	194,815	$	216,533

There were no sales of marketable equity securities in the first quarter of 2003. During the first quarter of 2002, the Company sold its shares of Ticketmaster, resulting in a pre-tax gain of $13.2 million. There were no sales of marketable equity securities in the second or third quarters of 2002. During the first nine months of 2001, proceeds from sales of marketable equity securities were $0.1 million. Gross realized losses on such sales were $0.4 million.

At ~~September~~March 30, 2003 and December 29, 2002, ~~and December 30, 2001,~~ the carrying value of the Company’s cost method investments was ~~$12.2~~$8.6 million and ~~$29.6~~$9.5 million, respectively. There were no investments in companies constituting cost method investments during the first ~~nine~~three months of 2003 or 2002. ~~During the third quarter and the first nine months of 2001, the Company invested 4.0 million and $11.7 million, respectively, in companies constituting cost method investments.~~

The Company recorded charges of ~~$1.5~~$1.1 million and ~~$18.2~~$10.1 million during the ~~third~~first quarter of 2003 and ~~first nine months of~~ 2002, respectively, to write-down certain of its investments to estimated fair ~~value; for the same periods of 2001, the Company recorded charges of $8.6 million and $25.9 million, respectively.~~value.

Note 3: Borrowings.

At ~~September 29, 2002,~~March 30, 2003, the Company had ~~$768.0~~$648.5 million in total debt outstanding, which ~~was~~ comprised ~~of $362.7~~$217.4 million of commercial paper borrowings, ~~$398.3~~$398.5 million of 5.5 percent unsecured notes due February 15, 2009, and ~~$7.0~~$32.6 million in other debt. During the third quarter, the Company replaced its revolving credit facility agreements with a five year $350 million revolving credit facility, which expires in August 2007 and 364 day $350 million revolving credity facility, which expires in August 2003. Refer to Exhibits 4.6 and 4.7 for the Company’s new revolving credit facilities.

During the ~~third~~first quarter of ~~2002~~2003 and ~~2001~~2002 the Company had average borrowings outstanding of approximately ~~$773.4~~$601.6 million and ~~$995.9~~$888.3 million, respectively, at average annual interest rates of approximately ~~3.8~~4.2 percent and ~~4.5~~3.5 percent, respectively. During the ~~third~~first quarter of ~~2002~~2003 and ~~2001,~~2002, the Company incurred net interest expense on borrowings of ~~$8.6~~$7.1 million and ~~$11.6~~$8.7 million, respectively.

During the first nine months of 2002 and 2001 the Company had average borrowings outstanding of approximately $830.8 million and $973.4 million, respectively, at average annual interest rates of approximately 3.6 percent and 5.1 percent, respectively. During the first nine months of 2002 and 2001, the Company incurred net interest expense on borrowings of $26.1 million and $38.1 million, respectively.

Note 4: Business Segments.

The following table summarizes financial information related to each of the Company’s business segments. The ~~2002~~2003 and ~~2001~~2002 asset information is as of ~~September~~March 30, 2003 and December 29, 2002, ~~and December 30, 2001,~~ respectively.

~~Third~~First Quarter Period

(in thousands)

Newspaper Television Magazine Cable Corporate
Publishing Broadcasting Publishing Television Education Office Consolidated

2002

Operating revenues $ 202,445 $ 82,074 $ 87,487 $ 107,647 $ 160,640 $ — $ 640,293
Income (loss) from operations $ 18,197 $ 38,464 $ 12,450 $ 16,597 $ 11,500 $ (7,948 ) $ 89,260
Equity in losses of affiliates (1,254 )
Interest expense, net (8,648 )
Other expense, net 1,115

Income before income taxes $ 80,473

Depreciation expense $ 10,672 $ 2,873 $ 1,010 $ 24,866 $ 6,387 $ — $ 45,808
Amortization expense $ 3 $ — $ — $ 39 $ 130 $ — $ 172
Net pension credit (expense) $ 5,454 $ 1,182 $ 9,979 $ (203 ) $ (296 ) $ — $ 16,116
Identifiable assets $ 699,681 $ 410,801 $ 474,312 $ 1,122,103 $ 550,442 $ 21,793 $ 3,279,132
Investments in marketable equity securities 223,518
Investments in affiliates 74,124

Total assets $ 3,576,774

Newspaper Television Magazine Cable Corporate
Publishing Broadcasting Publishing Television Education Office Consolidated

2001

Operating revenues $ 199,946 $ 68,191 $ 98,337 $ 98,674 $ 127,159 $ — $ 592,307
Income (loss) from operations $ 11,574 $ 22,329 $ 9,430 $ 8,037 $ 760 $ (5,177 ) $ 46,953
Pro forma income (loss) from
operations ⁽¹⁾
$ 12,261 $ 25,863 $ 11,097 $ 18,227 $ 4,598 $ (5,177 ) $ 66,869
Equity in losses of affiliates (26,535 )
Interest expense, net (11,635 )
Other expense, net (4,365 )

Income before income taxes $ 4,418

Depreciation expense $ 8,911 $ 2,933 $ 1,160 $ 16,886 $ 4,875 $ — $ 34,765
Amortization expense $ 691 $ 3,534 $ 1,667 $ 10,229 $ 3,947 $ — $ 20,068
Net pension credit (expense) $ 6,808 $ 1,565 $ 11,246 $ (152 ) $ (170 ) $ — $ 19,297
Identifiable assets $ 703,947 $ 419,246 $ 486,804 $ 1,117,426 $ 472,988 $ 42,346 $ 3,242,757
Investments in marketable equity securities 235,405
Investments in affiliates 80,936

Total assets $ 3,559,098


⁽¹⁾		~~Third quarter 2001 results, adjusted as if SFAS 142 had been adopted at the beginning of 2001 — refer to Note 5 for additional information~~

	Newspaper Publishing		Television Broadcasting		Magazine Publishing		Cable Television			Education			Corporate Office			Consolidated
2003
Operating revenues	$	204,040	$	70,752	$	77,502	$	110,368		$	177,778		$	—		$	640,440
Income (loss) from operations	$	21,358	$	26,347	$	837	$	20,762		$	15,927		$	(6,139	)	$	79,092
Equity in losses of affiliates																	(2,642	)
Interest expense, net																	(7,123	)
Other, net																	48,135

Income before income taxes																$	117,462

Depreciation expense	$	11,297	$	2,746	$	952	$	22,713		$	5,687		$	—		$	43,395
Amortization expense	$	4	$	—	$	—	$	38		$	107		$	—		$	149
Net pension credit (expense)	$	3,957	$	1,065	$	8,998	$	(243	)	$	(352	)	$	—		$	13,425
Identifiable assets	$	706,539	$	407,619	$	488,573	$	1,136,798		$	647,244		$	8,438		$	3,395,211
Investments in marketable equity securities																	194,815
Investments in affiliates																	63,142

Total assets																$	3,653,168

	Newspaper Publishing		Television Broadcasting		Magazine Publishing			Cable Television			Education			Corporate Office			Consolidated
2002
Operating revenues	$	200,772	$	75,418	$	75,018		$	102,033		$	147,081		$	—		$	600,322
Income (loss) from operations	$	17,543	$	33,551	$	(11,578	)	$	16,042		$	(550	)	$	(6,116	)	$	48,892
Equity in losses of affiliates																		(6,506	)
Interest expense, net																		(8,734	)
Other, net																		6,454

Income before income taxes																	$	40,106

Depreciation expense	$	10,879	$	2,765	$	1,050		$	20,479		$	6,000		$	—		$	41,173
Amortization expense	$	4	$	—	$	—		$	39		$	109		$	—		$	152
Net pension credit (expense)	$	5,491	$	1,220	$	9,895		$	(226	)	$	(298	)	$	—		$	16,082
Identifiable assets	$	690,197	$	413,663	$	488,562		$	1,142,995		$	542,251		$	18,990		$	3,296,658
Investments in marketable equity securities																		216,533
Investments in affiliates																		70,703

Total assets																	$	3,583,894

~~10.~~

~~Nine Month Period~~
~~(in thousands)~~

Newspaper Television Magazine Cable Corporate
Publishing Broadcasting Publishing Television Education Office Consolidated

2002

Operating revenues $ 618,284 $ 243,584 $ 251,391 $ 317,643 $ 457,416 — $ 1,888,318
Income (loss) from operations $ 73,551 $ 115,474 $ 14,144 $ 54,405 $ 11,574 $ (20,568 ) $ 248,580
Equity in losses of affiliates (16,943 )
Interest expense, net (26,120 )
Other expense, net 1,606

Income before income taxes $ 207,123

Depreciation expense $ 32,295 $ 8,422 $ 3,082 $ 66,083 $ 18,385 $ — $ 128,267
Amortization expense $ 11 $ — $ — $ 117 $ 355 $ — $ 483
Net pension credit (expense) $ 16,437 $ 3,622 $ 29,768 $ (654 ) $ (893 ) $ — $ 48,280

Newspaper Television Magazine Cable Corporate
Publishing Broadcasting Publishing Television Education Office Consolidated

2001

Operating revenues $ 630,965 $ 226,046 $ 273,198 $ 284,303 $ 368,103 $ — $ 1,782,615
Income (loss) from operations $ 60,981 $ 88,688 $ 15,450 $ 21,118 $ (20,994 ) $ (18,452 ) $ 146,791
Pro forma income (loss) from operations⁽¹⁾
$ 62,854 $ 99,289 $ 20,452 $ 49,168 $ (9,791 ) $ (18,452 ) $ 203,520
Equity in losses of affiliates (45,636 )
Interest expense, net (38,129 )
Other expense, net 293,688

Income before income taxes $ 356,714

Depreciation expense $ 28,438 $ 8,791 $ 3,597 $ 50,031 $ 14,407 $ — $ 105,264
Amortization expense $ 1,885 $ 10,601 $ 5,002 $ 28,167 $ 11,530 $ — $ 57,185
Net pension credit (expense) $ 21,054 $ 4,891 $ 34,078 $ (458 ) $ (512 ) $ — $ 59,053


⁽¹⁾		~~Fiscal year 2001 results, adjusted as if SFAS 142 had been adopted at the beginning of 2001 — refer to Note 5 for additional information~~

~~11.~~

Newspaper publishing includes the publication of newspapers in the Washington, D.C. area (The Washington Post, theGazettecommunity newspapers, and Southern Maryland newspapers) and Everett, Washington (The Everett Herald). This business division also includes newsprint warehousing, recycling operations and the Company’s electronic media publishing business (primarily washingtonpost.com).

Television broadcasting operations are conducted through six VHF, television stations serving the Detroit, Houston, Miami, San Antonio, Orlando and Jacksonville television markets. ~~Each of the~~All stations isare network-affiliated ~~except~~(except for ~~Jacksonville, which became an independent station on July 15, 2002, when its network affiliation agreement with CBS expired.~~WJXT in Jacksonville).

The magazine publishing division consists of the publication of a weekly news magazine, Newsweek, which has one domestic and three international editions, the publication of Arthur Frommer’s Budget Travel, and the publication of business periodicals for the computer services industry and the Washington-area technology community.

Cable television operations consist of cable systems offering basic cable, digital cable, pay television, cable modem and other services to approximately ~~721,000~~719,000 subscribers in ~~midwestern,~~mid-western, western, and southern states.

Education products and ~~career~~ services are provided through the Company’s wholly-owned subsidiary Kaplan, Inc. Kaplan’s businesses include supplemental education services, which is made up of test preparation and admissions, providing test preparation services for college and graduate school entrance exams; Kaplan Professional, providing education and career services to business people and other professionals; and Score!, offering ~~multi-media~~multimedia learning and private tutoring to children and educational resources to parents. Kaplan’s businesses also include higher education services, which includes all of Kaplan’s post-secondary education businesses, including the fixed facility colleges that were formerly part of Quest Education, which offers bachelor’s degrees, associate’s degrees and diploma programs primarily in the fields of healthcare, business and information technology; and online post-secondary and career programs (various distance-learning businesses, including kaplancollege.com).

Corporate office includes the expenses of the Company’s corporate office.

Note 5: ~~New Accounting Pronouncement.~~Goodwill and Other Intangible Assets.

~~The Company adopted~~

In accordance with Statement of Financial Accounting Standards No. ~~142 (SFAS~~142(SFAS 142), “Goodwill and Other Intangible ~~Assets” effective on~~Assets,” the Company has reviewed its goodwill and other intangible assets and classified them in three categories (goodwill, indefinite-lived intangible assets, and amortized intangible assets). The Company’s intangible assets with an indefinite life are from franchise agreements at its cable division. Amortized intangible assets are primarily non-compete agreements, with amortization periods up to five years. The Company’s amortized intangible assets decreased in the first ~~day~~quarter of ~~its 2002 fiscal year. As~~2003 as a result of ~~the adoption~~$149,000 of ~~SFAS 142, the Company ceased most of the periodic charges previously recorded from the~~ amortization ofexpense.

The Company’s goodwill and other ~~intangibles.~~intangible assets as of March 30, 2003 and December 29, 2002 were as follows (in thousands):

10.

	Gross		Accumulated Amortization		Net
2003
Goodwill	$	1,154,676	$	298,402	$	856,274
Indefinite-lived intangible assets		646,225		163,806		482,419
Amortized intangible assets		3,525		1,521		2,004

	$	1,804,426	$	463,729	$	1,340,697

2002
Goodwill	$	1,069,263	$	298,402	$	770,861
Indefinite-lived intangible assets		646,225		163,806		482,419
Amortized intangible assets		3,525		1,372		2,153

	$	1,719,013	$	463,580	$	1,255,433

Activity related to the Company’s goodwill during the quarter ended March 30, 2003 was as follows (in thousands):

	Newspaper Publishing			Television Broadcasting		Magazine Publishing		Cable Television		Education		Total
Goodwill, net
Beginning of year	$	72,738		$	203,165	$	69,556	$	85,666	$	339,736	$	770,861
Acquisitions											86,874		86,874
Disposition		(1,461	)		—		—		—		—		(1,461	)

End of Quarter	$	71,277		$	203,165	$	69,556	$	85,666	$	426,610	$	856,274

There was no activity related to the Company’s indefinite-lived intangible assets during the first quarter of 2003.

As required under SFAS 142, ~~earlier this year,~~ the Company completed its transitional impairment review of indefinite-lived intangible assets and ~~goodwill.~~goodwill in 2002. The expected future cash flows for ~~one~~PostNewsweek Tech Media (part of the ~~business units in the Company’s~~ magazine ~~segment,~~publishing segment), on a discounted basis, did not support the net carrying value of the related goodwill. Accordingly, an after-tax goodwill impairment loss of $12.1 million, or $1.27 per share was recorded. The loss is included in the Company’s ~~year-to-date~~2002 first quarter results ~~for the nine months ended September 29, 2002~~ as a cumulative effect of change in accounting principle.

On a pro forma basis, the Company’s operating income would have been $66.9 million in the third quarter of 2001, if SFAS 142 had been adopted at the beginning of fiscal 2001, compared to $89.3 for the third quarter of 2002. On a pro forma basis, the Company’s operating income would have been $203.5 million in the first nine months of 2001, if SFAS 142 had been adopted at the beginning of fiscal 2001, compared to $248.6 million for the first nine months of 2002.

~~12.~~

~~Other pro forma results for the third quarter of 2002, compared to 2001, adjusted as if SFAS 142 had been adopted at the beginning of 2001, are as follows:~~

Third Quarter

2002 2001

Net income available for common stock as reported $ 47,524 $ 1,305
Amortization of goodwill and other intangibles, net of tax — 13,948

Pro forma net income available for common stock $ 47,524 $ 15,253

Basic earnings per share $ 5.00 $ 1.61

Diluted earnings per share $ 4.99 $ 1.61

~~Other pro forma results for the first nine months of 2002, compared to 2001, adjusted as if SFAS 142 had been adopted at the beginning of 2001, are as follows:~~

Year-to-Date

2002 2001

Income before cumulative effect of change in accounting principle, as reported $ 122,623 $ 215,114
Amortization of goodwill and other intangibles, net of tax — 40,035

Pro forma income before cumulative effect of change in accounting principle 122,623 255,149
Cumulative effect of change in method of accounting for goodwill and other intangible assets, net of tax (12,100 ) —
Redeemable preferred stock dividends (1,033 ) (1,052 )

Pro forma net income available for common stock $ 109,490 $ 254,097

Basic earnings per share:
Before cumulative effect of change in accounting principle $ 12.90 $ 26.90
Cumulative effect of change in accounting principle (1.27 ) —
Redeemable preferred stock dividends (0.11 ) (0.11 )

Net income available for common stock $ 11.52 $ 26.79

Diluted earnings per share:
Before cumulative effect of change in accounting principle $ 12.88 $ 26.86
Cumulative effect of change in accounting principle (1.27 ) —
Redeemable preferred stock dividends (0.11 ) (0.11 )

Net income available for common stock $ 11.50 $ 26.75

~~13.~~

In accordance with SFAS 142, the Company has reviewed its goodwill and other intangible assets and reported them on the consolidated balance sheet in three categories (goodwill, indefinite-lived intangible assets, and other intangible assets). The Company’s intangible assets with an indefinite life are from franchise agreements at its cable division. Other intangible assets are primarily non-compete agreements, with amortization periods up to five years. At September 29, 2002, goodwill, indefinite lived intangible assets and other intangible assets were net of accumulated amortization of $298.4 million, $163.8 million and $1.2 million, respectively. At December 30, 2001, goodwill, indefinite lived intangible assets and other intangible assets were net of accumulated amortization of $279.4 million, $163.8 million and $0.7 million, respectively.

Note 6: Change in Accounting Method —– Stock Options

Effective the first day of the Company’s 2002 fiscal year, the Company ~~has~~ adopted the fair-value-based method of accounting for ~~company~~Company stock options as outlined in Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation” (SFAS 123). This change in accounting method ~~will be~~was applied prospectively to all awards granted from the beginning of the Company’s fiscal year 2002 and thereafter. Stock options awarded prior to fiscal 2002 ~~will continue to be~~are accounted for under the intrinsic value method under Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees.”

~~No stock options~~ The following table presents what the Company’s results would have been ~~awarded~~had the fair values of options granted after 1995, but prior to 2002, been recognized as compensation expense in ~~fiscal year~~the first quarter of 2003 and 2002 through the end of the third quarter; therefore, this change in accounting method has had no impact on the Company’s reported results of operations in 2002. The impact on the Company’s overall 2002 operating results is not expected to be material.(in thousands except per share amounts).

	2003		2002
Company stock-based compensation expense included in net income (pre-tax)	$	142	$	—

Net income available for common shares, as reported	$	72,545	$	11,081
Stock-based compensation expense not included in net income (after-tax)		790		904

Pro forma net income available for common shares	$	71,755	$	10,177

Basic earnings per share, as reported	$	7.62	$	1.17
Pro forma basic earnings per share	$	7.53	$	1.07
Diluted earnings per share, as reported	$	7.59	$	1.16
Pro forma diluted earnings per share	$	7.51	$	1.07

11.

~~14.~~

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

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

Revenues and expenses in the first and third quarters are customarily lower than those in the second and fourth quarters because of significant seasonal fluctuations in advertising volume.

As discussed above, the Company adopted SFAS 142 effective on the first day of its 2002 fiscal year. All operating income comparisons presented below are on a pro forma basis as if SFAS 142 had been adopted at the beginning of 2001. Therefore, 2001 pro forma operating results exclude amortization charges of goodwill and certain other intangible assets that are no longer amortized under SFAS 142.

Results of Operations

Net income for the ~~third~~first quarter of ~~2002~~2003 was ~~$47.8~~$73.1 million ($~~4.99~~7.59 per share), up from net income of ~~$1.6~~$11.6 million ($~~0.14~~1.16 per share) in the ~~third~~first quarter of last year.

Results for the ~~third~~first quarter of ~~2002~~2003 include ~~early retirement program charges ($3.6~~an after-tax non-operating gain from the sale of the Company’s 50 percent interest in the International Herald Tribune (after-tax impact of $32.3 million, or ~~$0.38 per share) and losses on the write-down of certain investments $0.8 million, or $0.09~~$3.38 per share). Results for the ~~third~~first quarter of ~~2001 include losses on the write-down~~2002 included a transitional goodwill impairment loss (after-tax impact of ~~certain investments ($13.4~~$12.1 million, or ~~$1.41~~$1.27 per share), a charge arising from an early retirement program at Newsweek (after-tax impact of $6.1 million, or $0.64 per share), and a ~~charge~~net non-operating gain primarily from the sale of ~~$13.9~~marketable securities (after-tax impact of $3.8 million, or ~~$1.47~~$0.40 per ~~share, for amortization of goodwill and certain other intangible assets that are no longer amortized under SFAS 142.~~share).

Revenue for the ~~third~~first quarter of ~~2002~~2003 was ~~$640.3~~$640.4 million, up 87 percent from ~~$592.3~~$600.3 million in ~~2001.~~2002. The increase in revenue is due mostly to significant revenue growth at the education ~~broadcast~~ and cable divisions. ~~Revenues at~~Although advertising revenues have suffered due to the ~~company’s~~war in Iraq, the magazine and newspaper ~~publishing division were up slightly for the third quarter of 2002, while~~divisions showed modest revenue growth; revenues were down at the magazine publishing division compared to the prior year; the advertising climate at both divisions continues to be soft. In addition, Newsweek newsstand sales were significantly higher in the third quarter of 2001, following the events of September 11.broadcast division.

Operating income for the quarter increased 3362 percent to ~~$89.3~~$79.1 million, from ~~$66.9~~$48.9 million in ~~2001, adjusted as if SFAS 142 had been adopted at~~2002. Operating results for 2002 included a $10.3 million pre-tax charge from the ~~beginning of 2001. Excluding the $6.0 million in pre-tax charges from~~Newsweek early retirement ~~programs, operating income for the third quarter of 2002 was $95.3 million, an increase of 42 percent. Third quarter 2002 operating~~program. The Company’s results benefited from significant increases at the company’s broadcast, education and newspaper publishing divisions. These factors were offset in part by increased depreciation expense, a reduced net pension credit, early retirement program charges and higher stock-based compensation expense accruals at the education division.

For the first nine months of 2002, net income totaled $110.5 million ($11.50 per share), compared with net income of $215.1 million ($22.53 per share) for the same period of 2001. Results for the first nine months of 2002 include a transitional goodwill impairment loss ($12.1 million, or $1.27 per share), charges from early retirement programs ($11.3 million, or $1.18 per share), and a net non-operating loss from the write-down of certain of the company’s investments ($0.3 million, or $0.04 per share). Results for the first nine months of 2001 include net non-operating gains, principally from the sale and exchange of certain cable systems ($171.3 million, or $18.03 per share), and a charge of $40.0 million, or $4.21 per share, for amortization of goodwill and other intangible assets that are no longer amortized under SFAS 142.

~~15.~~

Revenue for the first nine months of 2002 was $1,888.3 million, up 6 percent over revenue of $1,782.6 million for the first nine months of 2001. Operating income increased 22 percent to $248.6 million, from $203.5 million in 2001, adjusted as if SFAS 142 had been adopted at the beginning of 2001. Excluding the $19.0 million in pre-tax charges from early retirement programs, operating income for the first nine months of 2002 was $267.6 million, an increase of 31 percent. The company’s year-to-date results benefited fromsignificantly improved operating results at the education, cable and ~~broadcast divisions, along with improved earnings at The Washington Post~~ newspaper ~~and the cable division.~~divisions. These factors were offset by a reduction in ~~part by~~advertising demand late in the quarter and certain incremental costs due to the war in Iraq, a reduction in operating income at the broadcast division, increased depreciation expense, and a reduced net pension ~~credit, early retirement program charges and higher stock-based compensation expense accruals at the education division.~~credit.

~~Excluding charges related to early retirement programs, the company’s~~

The Company’s operating income for the ~~third~~first quarter ~~and first nine months~~ of ~~2002~~2003 includes ~~$16.1 million and $48.3~~$13.4 million of net pension credits, ~~respectively,~~ compared to ~~$19.3~~$16.1 million ~~and $59.1 million for~~in the ~~same periods~~first quarter of ~~2001.~~2002. At December ~~30, 2001,~~29, 2002, the ~~company modified certain assumptions surrounding the company’s pension plans. Specifically, the company~~Company reduced its ~~assumptions~~assumption on discount rate from ~~7.5~~7.0 percent to ~~7.0 percent and expected return on plan assets from 9.0 percent~~6.75 percent. Due to ~~7.5 percent. These assumption changes result in a~~the reduction ~~of approximately $5.5 million~~ in the ~~company’s~~discount rate and lower than expected investment returns in 2002, the net pension credit ~~each quarter. Management expects the 2002 annual net pension credit~~for 2003 is expected to ~~approximate $64~~be down by about $10 million compared to ~~$76.9 million in 2001,~~2002, excluding charges related to early retirement programs.

Newspaper Publishing ~~Division.~~Division. Newspaper publishing division revenue totaled ~~$202.4~~$204.0 million for the ~~third~~first quarter of ~~2002,~~2003, a 12 percent increase from revenue of ~~$199.9~~$200.8 million in the ~~third~~first quarter of ~~2001; division revenue decreased 2 percent to $618.3 million for the first nine months of 2002, from $631.0 million for the first nine months of 2001.~~2002. Division operating income ~~for the third quarter~~ increased 4822 percent to ~~$18.2~~$21.4 million, from ~~pro forma~~$17.5 million in 2002. The increase in division operating income ~~of $12.3 million~~is primarily attributable to increases in the third quarter of 2001; operating income increased 17 percent to $73.6 million for the first nine months of 2002, compared to pro forma operating income of $62.9 million for the first nine months of 2001. Improved operating results for the third quarter of 2002 reflect the benefits of cost control initiatives employed throughout the divisionprint and ~~a 26~~online advertising revenue, combined with an 11 percent decrease in newsprint expense; these savings were partially offset by a pre-tax early retirement program charge of $2.9 million and a reduced pension credit. Operating results for the first nine months of 2002 also benefited from cost control initiatives employed throughout the division, and a 25 percent decrease in newsprint expense; these savings were partially offset by a decrease in print advertising revenues, the early retirement charge discussed above and a reduced pension credit.expense at The Post.

Print advertising revenue at The Washington Post newspaper ~~in the third quarter decreased 2 percent~~increased slightly to ~~$130.4~~$132.5 million, from ~~$132.9~~$131.5 million in ~~2001,~~2002, due to increases in preprint and ~~decreased 5 percent to $405.7 million for the first nine months of 2002, from $427.6 million for the first nine months of 2001. The~~zone advertising revenue, which more than offset a decrease in ~~print~~classified advertising ~~revenues for the third quarter of 2002 is~~revenue from volume declines. Recruitment advertising revenue was down $2.3 million due to a ~~continued decline in recruitment advertising revenue, with~~17 percent volume ~~decreases of 22 percent~~decline. Advertising demand was down late in the ~~third~~ quarter offset by higher revenue from several advertising categories, including preprints and other classified advertising. The decrease in print advertising revenues for the first nine months of 2002 is primarily due to ~~a $26.1 million decline~~the war in recruitment advertising revenue, resulting from a 35 percent volume decline, and a decline in retail advertising sales and volume. These declines are partially offset by higher revenues from several advertising categories, including preprints and other classified advertising.Iraq.

For the first ~~nine months~~quarter of ~~2002,~~2003, Post daily and Sunday circulation ~~each~~ declined ~~about 1~~1.9 percent and 1.1 percent, respectively, compared to the ~~same period~~first quarter of 2002. For

12.

the ~~prior year. For the nine~~three months ended ~~September 29, 2002,~~March 30, 2003, average daily circulation at The Post totaled ~~749,000~~757,000 and average Sunday circulation totaled ~~1,054,000.~~1,052,000.

~~16.~~

~~Revenue~~Revenues generated by the ~~company’s~~Company’s online publishing activities, primarily washingtonpost.com, ~~totaled $9.1 million for the third quarter of 2002, versus $7.7 million for 2001; online revenue totaled $25.3~~increased 27 percent to $9.5 million for the first ~~nine months~~quarter of ~~2002,~~2003, versus ~~$23.1~~$7.5 million for ~~2001.~~2002. Local and national online advertising revenues grew 5178 percent ~~and 50 percent for the third quarter and first nine months of 2002, respectively. Revenue~~in 2003, while revenue at the Jobs section of washingtonpost.com increased ~~11 percent in the third quarter of 2002 but was down 6 percent for the first nine months of 2002.~~17 percent.

Television Broadcasting Division.Revenue for the ~~television broadcasting~~broadcast division ~~increased 20~~decreased 6 percent in the ~~third~~first quarter of ~~2002~~2003 to ~~$82.1~~$70.8 million, from ~~$68.2~~$75.4 million in ~~2001, primarily~~2002, due to ~~approximately $9.0 million of political advertising. Additionally, third quarter revenues~~significant Olympics related advertising at the Company’s NBC affiliates in ~~2001 were lower due to~~2002 and several days of ~~commercial free~~commercial-free coverage ~~following~~in connection with the ~~events of September 11. Revenues~~war in Iraq. Operating income for the ~~third~~first quarter ~~were higher at all~~ of ~~the company’s stations, including~~2003 decreased 21 percent to $26.3 million, from $33.6 million in 2002.

In July 2002, WJXT in Jacksonville, Florida ~~which~~ began operations as an independent station ~~in July 2002~~ when its network affiliation with CBS ended. For the first nine months of 2002, revenue increased 8 percent to $243.6 million, from $226.0 million in 2001, due to an increase in national advertising, including political, and Olympics-related advertising at the company’s NBC affiliates in the first quarter of 2002. These increases were partially offset by reduced network compensation revenues in both the third quarter and first nine months of 2002.

Operating income for the third quarter and first nine months of 2002 increased 49 percent and 16 percent to $38.5 million and $115.5 million, respectively, from pro forma operating income of $25.9 million and $99.3 million for the third quarter and first nine months of 2001, respectively. Operating income growth for the third quarter and first nine months of 2002 is due to revenue growth and tight cost controls, partially offset by a reduced pension credit.

Magazine Publishing Division.Revenue for the magazine publishing division totaled ~~$87.5 million for the third quarter of 2002, an 11 percent decrease from $98.3 million for the third quarter of 2001; division revenue totaled $251.4~~$77.5 million for the first ~~nine months~~quarter of ~~2002, an 8~~2003, a 3 percent ~~decline~~increase from ~~$273.2~~$75.0 million for the first ~~nine months~~quarter of ~~2001. The revenue declines for the third quarter and first nine months of 2002 are~~2002. This increase was primarily due to ~~a significant spike~~an 18 percent increase in ~~newsstand circulation~~advertising revenue at Newsweek, as a result of increased ad pages at both the domestic and international editions, as well as an additional issue of the magazine in the ~~third~~first quarter of ~~2001~~2003 versus the first quarter of 2002. This revenue increase was partially offset by reduced advertising demand late in the quarter due to ~~regular~~the Iraq war, and ~~special editions related to the events of September 11. Advertising revenues~~a decline in revenue at ~~Newsweek were up slightly~~PostNewsweek Tech Media, whose primary trade show is in the ~~third~~second quarter of ~~2002, but were down~~2003, versus the first quarter in 2002.

Magazine division operating income totaled $0.8 million, compared to a loss of $11.6 million for the first ~~nine months of 2002, primarily due to declines in the international division. Operating income totaled $12.5 million for the third~~ quarter of ~~2002,~~2002. The improvement in operating results is primarily attributable to a ~~12 percent increase from pro forma operating income of $11.1~~$10.3 million ~~in the third quarter of 2001. Excluding the $3.1 million pre-tax~~ charge in connection with an early retirement program at Newsweek ~~operating income~~in the first quarter of 2002.

During the second quarter of 2003, Newsweek has experienced a reduction in advertising demand and increased ~~40 percent to $15.6 million. Third quarter 2001 operating results included approximately $5.0 million in nonrecurring~~ costs ~~associated with regular and special editions related to September 11; 2002 costs have also declined~~ due to payroll and other related cost savings from employees accepting early retirement programs offered by Newsweek, and from significant cost savings programs put into place at Newsweek’s international operations.

~~Operating income totaled $14.1 million for~~ the ~~first nine months of 2002, down from pro forma operating income of $20.5 million for the first nine months of 2001. Excluding the $16.1 million~~Iraq war, along with a reduction in ~~pre-tax charges in connection with early retirement programs~~travel-related advertising demand at Newsweek ~~operating income increased 48 percent~~International due to ~~$30.2 million, primarily as a result of~~ the ~~decline in operating expenses noted above.~~SARS epidemic.

~~17.~~

Cable Television Division.Cable division revenue of ~~$107.6~~$110.4 million for the ~~third~~first quarter of ~~2002~~2003 represents ~~a 9~~an 8 percent increase over ~~2001 third~~2002 first quarter revenue of ~~$98.7 million; for the first nine months of 2002, revenue increased 12 percent to $317.6 million, from $284.3 million in 2001.~~$102.0 million. The ~~2002~~2003 revenue increase is ~~principally~~ due to ~~rapid~~continued growth in the division’s cable modem and digital service revenues, offset by lower pay revenues.

Cable division cash flow (operating income excluding depreciation and amortization expense) totaled $41.5 million for the third quarter of 2002, an increase of 18 percent from $35.2 million for the third quarter of 2001; for the first nine months of 2002, cash flow increased 21 percent to $120.6 million, from $99.3 million in 2001.

Cable division operating income ~~for~~increased 29 percent to $20.8 million in the ~~third~~first quarter of ~~2002 decreased 9 percent to $16.6 million, from pro forma operating income of $18.2~~2003, versus $16.0 million in ~~2001. Although revenues increased for the quarter, depreciation expense was up 47 percent, including a $3.5 million charge for obsolete assets. Operating income increased 11 percent for~~ the first ~~nine months~~quarter of ~~2002 to $54.4 million from pro forma operating income of $49.2 million for the first nine months of 2001.~~2002. The increase in operating income is due mostly to the division’s revenue growth, offset by higher depreciation expense and increased programming expense.

The increase in depreciation expense is due to ~~the charge discussed above, as well as~~ significant capital spending ~~primarily~~ in ~~2001 and 2000, which~~recent years that has enabled the cable division to offer digital and broadband cable services to its subscribers. The cable division began its rollout plan for these services in the third quarter of 2000. At ~~September 29, 2002,~~March 31, 2003, the cable division had approximately ~~218,600~~210,500 digital cable subscribers, representing a 3130 percent penetration of the subscriber base in the markets where digital services are offered. Digital services are ~~currently~~ offered in markets serving 9799 percent of the cable division’s subscriber base. The initial rollout plan for the new digital cable services included an offer for the cable division’s customers to obtain these services free for one year. At ~~September 29, 2002,~~the end of March 2003, the cable division had ~~142,900~~about 205,300 paying digital subscribers. The benefits from these services began to show in the first quarter of 2002 and are expected to continue throughout the year, with the remaining portion of free one-year periods generally ending later in 2002.

At ~~September 29, 2002,~~March 31, 2003, the cable division had ~~721,000~~719,300 basic subscribers, ~~compared to 753,000~~lower than 751,700 basic subscribers at the end of ~~September 2001, with~~March 2002 but up slightly from 718,000 basic subscribers at the ~~decrease due primarily to the difficult economic environment over the past year; basic customer disconnects for non-payment~~end of ~~bills have increased significantly.~~December 2002. At ~~September 29, 2002,~~March 31, 2003, the cable division had ~~69,300~~95,800 CableONE.net service subscribers, compared to ~~35,800~~53,100 at the end

13.

of ~~September 2001,~~March 2002, due to a large increase in the ~~company’s~~Company’s cable modem deployment (offered to 9597 percent of homes passed at the end of ~~September 2002)~~March 2003) and ~~subscriber penetration~~take-up rates. ~~Of these subscribers, 65,900~~

At March 31, 2003, Revenue Generating Units (RGUs), representing the sum of basic, digital and ~~22,600 were~~high-speed data customers, as defined by the NCTA Standard Reporting Categories, totaled 1,020,500, compared to 870,000 as of March 31, 2002. The increase is due to increased paying digital cable ~~modem subscribers at~~and high-speed data customers.

Below are details of Cable division capital expenditures for the ~~end of the third~~first quarter of 2003 and 2002, ~~and 2001, respectively, with the remainder being dial-up subscribers.~~

~~On November 1, 2002, the Company completed a cable system exchange transaction with Time Warner Cable which consisted of the exchange~~as defined by the Company of its cable system in Akron, Ohio serving about 15,500 subscribers, and approximately $5 million to Time Warner Cable, for cable systems serving about 20,300 subscribers in Kansas. The company will report a non-cash, non-operating gain on this transaction in the fourth quarter, which will reflect the step-up of assets exchanged to their fair market value, in accordance with generally accepted accounting principles.NCTA Standard Reporting Categories (in millions):

	2003		2002
Customer Premise Equipment	$	2.6	$	14.5
Commercial		0.1		0.1
Scaleable Infrastructure		1.2		0.7
Line Extensions		3.1		1.8
Upgrade/Rebuild		8.1		4.9
Support Capital		1.8		2.1

Total	$	16.9	$	24.1

~~18.~~

Education Division.Education division revenue totaled ~~$160.6~~$177.8 million for the ~~third~~first quarter of ~~2002,~~2003, a 2621 percent increase over revenue of ~~$127.2~~$147.1 million for the same period of ~~2001.~~2002. Kaplan reported operating income for the ~~third~~first quarter of ~~$11.5~~2003 of $15.9 million, compared to a pro forma operating income of $4.6 million for the third quarter of 2001. Excluding charges for stock options held by Kaplan management, Kaplan operating earnings were $18.2 million for the third quarter of 2002, compared to $8.1 million for the third quarter of 2001. For the first nine months of 2002, education division revenue totaled $457.4 million, a 24 percent increase over revenue of $368.1 million for the same period of 2001. Kaplan reported operating income of $11.6 million for the first nine months of 2002, compared to a pro formaan operating loss of ~~$9.8~~$0.6 million ~~for~~in the first ~~nine months~~quarter of ~~2001. Excluding charges for stock options held by~~2002. Approximately 20 percent of the increase in Kaplan ~~management, Kaplan operating earnings were $44.9 million for~~revenue is from acquired businesses, primarily in the ~~first nine months of 2002, compared to operating earnings of $9.0 million for the first nine months of 2001. Excluding goodwill amortization in 2001, a~~higher education division. A summary of first quarter operating results ~~for the third quarter and first nine months of 2002 compared to 2001~~ is as follows:

Third Quarter Year-to-date

(In thousands)
2002 2001 % Change 2002 2001 % Change

Revenue

Supplemental education $ 97,414 $ 86,533 +13 $ 280,787 $ 249,232 +13
Higher education 63,226 40,626 +56 176,629 118,871 +49

$ 160,640 $ 127,159 +26 $ 457,416 $ 368,103 +24

Operating income (loss)

Supplemental education $ 19,505 $ 11,755 +66 $ 43,696 $ 23,708 +84
Higher education 4,150 1,695 +145 18,101 3,114 +481
Kaplan corporate overhead (5,356 ) (5,214 ) (3 ) (16,574 ) (17,494 ) +5
Other* (6,799 ) (3,638 ) (87 ) (33,649 ) (19,119 ) (76 )

$ 11,500 $ 4,598 150 $ 11,574 $ (9,791 ) —

	First Quarter
(in thousands)	2003			2002			% Change
Revenue
Supplemental education	$	98,182		$	90,750		8
Higher education		79,596			56,331		41

	$	177,778		$	147,081		21

Operating income (loss)
Supplemental education	$	18,552		$	13,204		41
Higher education		14,922			8,886		68
Kaplan corporate overhead		(7,440	)		(5,902	)	(26	)
Other*		(10,107	)		(16,738	)	40

	$	15,927		$	(550	)	—

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

Supplemental education includes Kaplan’s test preparation, professional training, and Score! businesses. The improvement in supplemental education results for the ~~third~~first quarter ~~and first nine months~~ of ~~2002~~2003 is due mostly to ~~higher enrollments and to a lesser extent higher prices~~increased enrollment at Kaplan’s traditional test preparation business, ~~(particularly the LSAT, MCAT and GRE prep courses),~~ as well as ~~higher revenues and profits from Kaplan’s CFA and~~a significant increase in the professional real estate ~~exam preparation services.~~courses. Score! also contributed to the improved results, with increased enrollment ~~higher prices~~from existing sites and ~~strong~~two new centers compared to last year, combined with tight cost controls.

Higher education includes all of Kaplan’s post-secondary education businesses, including ~~the~~ fixed-facility colleges ~~that were formerly part of Quest Education,~~ as well as online post-secondary and career programs (various ~~distance learning~~distance-learning businesses). Higher education results are showing significant growth due to student enrollment increases, high student retention rates, and ~~as a result of~~ several acquisitions.

Corporate overhead represents unallocated expenses of Kaplan, Inc.’s corporate office, including expenses associated with the design and development of educational software that, if successfully completed, will benefit all of Kaplan’s business units. ~~The decrease in this expense category in 2002 is due to decreased spending for these development initiatives.~~

14.

Other expense is comprised ~~primarily~~ of accrued charges for stock-based incentive compensation arising from a stock option plan established for certain members of Kaplan’s management and amortization of certain intangibles. Under the stock-based incentive plan, the amount of compensation expense varies directly with the estimated fair value of Kaplan’s common stock and the number of options outstanding. For the first quarter of 2003 and 2002, the Company recorded expense of $10.0 million and $16.6 million, respectively, related to this plan. The ~~increase~~Company prepares estimates of the Kaplan stock option expense and related accrual balance on a quarterly basis. The trend in ~~other~~Kaplan stock option expense in 2002 ($10.0 million, $6.7 million and $1.2 million for the second, third and fourth quarters of 2002, respectively) is ~~attributable~~not indicative of the expected expense to be recorded for the remainder of 2003.

On March 31, 2003, Kaplan completed its acquisition of the stock of FTC Holdings Limited (FTC) for £55.3 million ($87.4 million), financed through cash and debt. Headquartered in London, FTC is a leader in test preparation services for accountants and financial services professionals, with 18 training centers in the United Kingdom and a growing presence in Asia, including operations in Hong Kong and Singapore.

In May 2003, Kaplan announced it had entered into an ~~increase~~agreement for its higher education division to acquire Heritage College, a career-oriented postsecondary school providing training in ~~stock-based incentive compensation, which~~the fields of allied health, paralegal, travel and information technology. The acquisition is ~~due to an increase in Kaplan’s estimated value.~~contingent upon regulatory approvals.

~~19.~~

Equity in Losses of Affiliates.The ~~company’s~~Company’s equity in losses of affiliates for the ~~third~~first quarter of ~~2002~~2003 was ~~$1.3~~$2.6 million, compared to losses of ~~$26.5~~$6.5 million for the ~~third~~first quarter of ~~2001. For the first nine months~~2002. The Company’s affiliate investments consist of 2002, the company’s equity in losses of affiliates totaled $16.9 million, compared to losses of $45.6 million for the same period of 2001. The improvements were primarily due to better operating results at BrassRing LLC, which accounted for approximately $2.0 million and $12.7 million of the 2002 third quarter and first nine month equity in losses of affiliates, respectively, compared to $29.1 million and $51.6 million in equity losses for the same periods of 2001. In addition to itsa 49 percent interest in BrassRing LLC ~~the company’s affiliate investments include a 50 percent interest in the International Herald Tribune,~~ and a 49 percent interest in Bowater Mersey Paper Company Limited. The reduction in first quarter 2003 affiliate losses is primarily attributable to improved operating results at BrassRing.

~~In October 2002,~~

On January 1, 2003, the Company ~~signed a letter of intent to sell~~sold its ~~fifty~~50 percent ~~share~~interest in the International Herald Tribune ~~to The New York Times Company. The closing is expected to occur after a definitive agreement is reached~~for $65 million and ~~all regulatory approvals have been obtained, which will likely be~~the Company recorded an after-tax non-operating gain of $32.3 million in ~~late 2002 or early~~the first quarter of 2003. ~~The Company expects to report a gain on the transaction upon closing.~~

Non-Operating Items.The ~~company~~Company recorded other non-operating income, net, of $1.1 million for the third quarter of 2002, compared to $4.4 million of non-operating expense, net, in the third quarter of 2001. The 2002 and 2001 non-operating income (expense) includes non-operating gains and charges for the write-down of certain investments to their estimated fair value.

~~The company recorded non-operating income, net, of $1.6~~$48.1 million for the first ~~nine months~~quarter of ~~2002,~~2003, compared to non-operating income, net, of ~~$293.7~~$6.5 million for the ~~same period~~first quarter of 2002. The 2003 non-operating income is comprised mostly of a $49.8 million pre-tax gain from the sale of the ~~prior year.~~Company’s 50 percent interest in the International Herald Tribune. The 2002 non-operating income ~~net, includes~~is comprised mostly of a gain onfrom the sale of marketable securities, offset by write-downs recorded on certain investments. The 2001 non-operating income is comprised mostly of gains arising from the sale and exchange of certain cable systems completed in the first quarter of 2001, offset by write-downs recorded on certain investments and a parcel of non-operating land to their estimated fair value.

Net Interest ~~Expense.~~Expense. The ~~company~~Company incurred net interest expense of ~~$8.6~~$7.1 million for the ~~third~~first quarter of ~~2002,~~2003, compared to ~~$11.6~~$8.7 million for the same period of ~~2001; net interest expense totaled $26.1 million for~~the prior year. The reduction is due to lower average borrowings in the first ~~nine months~~quarter of ~~2002,~~2003 versus ~~$38.1 million in 2001.~~the same period of the prior year. At ~~September 29, 2002,~~March 30, 2003, the ~~company~~Company had ~~$768.0~~$648.5 million in borrowings outstanding at an average interest rate of ~~3.8~~4.0 percent.

Provision for Income Taxes.The effective tax rate for the ~~third~~first quarter of ~~2002~~2003 was ~~40.6~~37.8 percent, compared to ~~64.5~~40.9 percent for the same period of ~~2001, and 40.8 percent versus 39.7 percent for~~2002. The 2003 rate benefited from a lower effective tax rate applicable to the ~~2002 and 2001 nine month periods, respectively.~~one-time gain arising from the sale of the Company’s interest in the International Herald Tribune. Excluding the effect of the ~~cable~~International Herald Tribune gain, ~~transactions,~~ the ~~company’s~~Company’s effective tax rate approximated ~~47.8~~39.8 percent for the first ~~nine months~~quarter of ~~2001.~~2003. The effective tax rate for ~~2002~~2003 has declined ~~because the company no longer has any permanent difference from goodwill amortization not deductible for tax purposes as a result of the adoption of SFAS 142.~~due to an increase in operating earnings.

Cumulative Effect of Change in Accounting Principle.~~Earlier this year,~~In 2002, the ~~company~~Company completed its ~~SFAS 142~~ transitional goodwill impairment test required under Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets” (SFAS 142), resulting in an after-tax impairment loss ~~related to its magazine division~~ of $12.1 million, or $1.27 per ~~share.~~share, related to PostNewsweek Tech Media (part of magazine publishing segment). This loss is included in the ~~company’s year-to-date~~Company’s 2002 results ~~for the nine months ended September 29, 2002~~ as a cumulative effect of change in accounting principle.

15.

~~20.~~

Earnings Per Share.The calculation of diluted earnings per share for the ~~third~~first quarter ~~and first nine months~~ of ~~2002~~2003 was based on ~~9,523,000 and 9,518,000~~9,553,000 weighted average shares outstanding, ~~respectively,~~ compared to ~~9,502,000 and 9,500,000, respectively,~~9,512,000 for the ~~third~~first quarter ~~and first nine months~~ of ~~2001.~~2002. The ~~company~~Company made no ~~significant~~ repurchases of its stock during the first ~~nine months~~quarter of 2003.

Stock Options – Change in Accounting Method. Effective the first day of the Company’s 2002 fiscal year, the Company adopted the fair-value-based method of accounting for Company stock options as outlined in Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation” (SFAS 123). This change in accounting method was applied prospectively to all awards granted from the beginning of the Company’s fiscal year 2002 and thereafter. Stock options awarded prior to fiscal 2002 are accounted for under the intrinsic value method under Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees.”

The Company recorded $142,000 in Company stock option expense for the first quarter of 2003; there was no Company stock option expense in the first quarter of 2002.

Financial Condition: Capital Resources and Liquidity

Acquisitions.In On March 31, 2003, Kaplan completed its acquisition of the ~~first nine months~~stock of ~~2002, Kaplan acquired several businesses~~FTC Holdings Limited (FTC), for £55.3 million ($87.4 million). Headquartered in ~~their higher education and~~London, FTC is a leader in test preparation ~~divisions, totaling approximately $37.9 million. About $9.5~~services for accountants and financial services professionals, with 18 training centers in the United Kingdom and a growing presence in Asia, including operations in Hong Kong and Singapore. The acquisition was financed through cash and debt with $26.5 million ~~remains~~remaining to be paid, ~~on these acquisitions,~~primarily to employees of ~~which $2.1 million has been classified~~the business (included in ~~current liabilities and $7.4 million as~~ long-term debt at ~~September 29, 2002.~~March 30, 2003).

Capital expenditures.During the first ~~nine months~~quarter of ~~2002,~~2003, the Company’s capital expenditures totaled ~~$116.9~~$28.1 million. The Company anticipates it will spend ~~approximately $170.0~~$170 – 180 million throughout ~~2002~~2003 for property and equipment.

Liquidity.Throughout the first ~~nine~~three months of ~~2002,~~2003, the Company’s borrowings, net of repayments, decreased by ~~$165.1~~$16.3 million, with the decrease primarily due to cash flows from ~~operations.~~operations and proceeds from the sale of the International Herald Tribune, offset in part by borrowings for the purchase of FTC by Kaplan.

At ~~September 29, 2002,~~March 30, 2003, the Company had ~~$768.0~~$648.5 million in total debt outstanding, which was comprised of ~~$362.7~~$217.4 million of commercial paper borrowings, ~~$398.3~~$398.5 million of 5.5 percent unsecured notes due February 15, 2009, and ~~$7.0~~$32.6 million in other debt. During the third quarter, the Company replaced its revolving credit facility agreements with a five year $350 million revolving credit facility, which expires in August 2007 and 364 day $350 million revolving credit facility, which expires in August 2003. In May 2002, Moody’s downgraded the Company’s long-term debt ratings to A1 from Aa3 and affirmed the Company’s short-term debt rating at P-1.

During the first ~~nine months~~quarter of ~~2002~~2003 and ~~2001~~2002 the Company had average borrowings outstanding of approximately ~~$830.8~~$601.6 million and ~~$973.4~~$888.3 million, respectively, at average annual interest rates of approximately ~~3.6~~4.2 percent and ~~5.1~~3.5 percent, respectively. During the first ~~nine months~~quarter of ~~2002~~2003 and ~~2001,~~2002, the Company incurred net interest expense on borrowings of ~~$26.1~~$7.1 million and ~~$38.1~~$8.7 million, respectively.

The Company expects to fund its estimated capital needs primarily through internally generated funds, and to a lesser extent, commercial paper borrowings. In management’s opinion, the Company will have ample liquidity to meet its various cash needs throughout ~~2002.~~

~~Change in Accounting Method – Stock Options~~

Effective the first day of the Company’s 2002 fiscal year, the Company has adopted the fair-value-based method of accounting for company stock options as outlined in Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation” (SFAS 123). This change in accounting method will be applied prospectively to all awards granted from the beginning of the Company’s fiscal year 2002 and thereafter. Stock options awarded prior to fiscal 2002 will continue to be accounted for under the intrinsic value method under Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees.”

No stock options have been awarded in fiscal year 2002 through the end of the third quarter; therefore, this change in accounting method has had no impact on the Company’s reported results of operations in 2002. The impact on the Company’s overall 2002 operating results is not expected to be material.2003.

Forward-Looking Statements

~~21.~~

The accounting treatment for the Company’s Kaplan stock option plan is not impacted by this change in accounting method, as the expense related to the Kaplan stock option plan has been and will continue to be recorded in the Company’s results of operations.

~~Forward–Looking Statements~~

This report contains certain forward-looking statements that are based largely on the Company’s current expectations. Forward-looking statements are subject to various risks and uncertainties that could cause actual results or events to differ materially from those anticipated in such statements. For more information about these forward-looking statements and related risks, please refer to the section titled “Forward-Looking Statements” in Part I of the Company’s Annual Report on Form 10-K for the fiscal year ended December ~~30, 2001.~~29, 2002.

16.

Item 4. Controls and Procedures

A review and evaluation was performed by the Company’s management, at the direction of the Company’s ~~Chairman and~~ Chief Executive Officer (the Company’s principal executive officer) and Vice President-Finance ~~Chief Financial Officer~~ (the Company’s principal ~~finance and accounting~~financial officer), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) as of a date within 90 days prior to the filing of this quarterly report. Based on that review and evaluation, the Company’s ~~Chairman and~~ Chief Executive Officer and Vice President-Finance ~~Chief Financial Officer~~ have concluded that the Company’s disclosure controls and procedures, as designed and implemented, are effective in ensuring that all material information required to be ~~included~~disclosed in ~~our periodic SEC~~the reports ~~has~~that the Company files or submits under the Exchange Act have been made known to them in a timely fashion. There have been no significant changes in the Company’s internal controls or in other factors that could significantly affect the Company’s internal controls subsequent to the date of ~~their~~such evaluation.

17.

~~22.~~

PART II – OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K.


(a)		The following documents are filed as exhibits to this report:

Exhibit Number		Description
~~Exhibit~~ 3.1
~~Number~~		~~Description~~

~~3.1~~		Certificate of Incorporation of the Company as amended through May 12, 1998, and the Certificate of Designation for the Company’s Series A Preferred Stock filed January 22, 1996 (incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1995).

3.2		By-Laws of the Company as amended through ~~March~~May 8, ~~2001 (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000).~~ 2003.

4.1		Form of the Company’s 5.50% Notes due February 15, 2009, issued under the Indenture dated as of February 17, 1999, between the Company and The First National Bank of Chicago, as Trustee (incorporated by reference to Exhibit 4.2 to the Company’s Annual Report on Form 10-K for the fiscal year ended January 3, 1999).

4.2		Indenture dated as of February 17, 1999, between the Company and The First National Bank of Chicago, as Trustee (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10-K for the fiscal year ended January 3, 1999).

4.3		364-Day Credit Agreement dated as of August 14, 2002, among the Company, Citibank, N.A., Wachovia Bank, National Association, SunTrust Bank, JPMorgan Chase Bank, Bank One, N.A., The Bank of New York and Riggs ~~Bank.~~ Bank (incorporated by reference to Exhibit 4.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 29, 2002).

4.4		5-Year Credit Agreement dated as of August 14, 2002, among the Company, Citibank, N.A., Wachovia Bank, National Association, SunTrust Bank, JPMorgan Chase Bank, Bank One, N.A., The Bank of New York and Riggs ~~Bank.~~ Bank (incorporated by reference to Exhibit 4.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 29, 2002).

11		Calculation of Earnings per Share of Common Stock.

99.1		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

99.2		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


(b)		No reports on Form 8-K were filed during the period covered by this report.

18.

SIGNATURES

~~23.~~

~~SIGNATURES~~

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

			THE WASHINGTON POST COMPANY (Registrant)

Date:	May 12, 2003	~~THE WASHINGTON POST COMPANY~~
	~~(Registrant)~~

~~Date:~~ ~~November 12, 2002~~	/s/ ~~Donald~~DONALD E. ~~Graham~~
	GRAHAM
				Donald E. Graham Chairman & Chief Executive Officer (Principal Executive Officer)



Date:~~November 12, 2002~~	~~/s/ John B. Morse, Jr.~~ May 12, 2003
		/s/ JOHN B. MORSE, JR.
			John B. Morse, Jr., Vice President-Finance (Principal Financial Officer)

19.

~~24.~~

CERTIFICATION PURSUANT TO

RULES 13A-14 AND 15D-14 OF THE SECURITIES EXCHANGE ACT OF 1934

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Donald E. Graham, Chief Executive Officer (principal executive officer) of ~~the~~The Washington Post Company (the “Registrant”), certify that:

1. I have reviewed this quarterly report on Form 10-Q of ~~The Washington Post Company (the “registrant”);~~the Registrant;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the ~~registrant~~Registrant as of, and for, the periods presented in this quarterly report;

4. The ~~registrant’s~~Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the ~~registrant~~Registrant and we have:

	(a)		designed such disclosure controls and procedures to ensure that material information relating to the ~~registrant,~~Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

	(b)		evaluated the effectiveness of the ~~registrant’s~~Registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

(c)

presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The ~~registrant’s~~Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the ~~registrant’s~~Registrant’s auditors and the audit committee of ~~registrant’s~~Registrant’s board of directors (or persons performing the equivalent ~~function)~~functions):

	(a)		all significant deficiencies in the design or operation of internal controls which could adversely affect the ~~registrant’s~~Registrant’s ability to record, process, summarize and report financial data and have identified for the ~~registrant’s~~Registrant’s auditors any material weaknesses in internal controls; and

(b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the ~~registrant’s~~Registrant’s internal controls; and

6. The ~~registrant’s~~Registrant’s other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

~~/s/ Donald E. Graham~~
~~Donald E. Graham~~
~~Chairman and Chief Executive Officer~~
~~November 12, 2002~~

/s/ DONALD E. GRAHAM

Donald E. Graham

Chief Executive Officer

May 12, 2003

20.

~~25.~~

CERTIFICATION PURSUANT TO

RULES 13A-14 AND 15D-14 OF THE SECURITIES EXCHANGE ACT OF 1934

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John B. Morse, Jr., Vice President-Finance ~~Chief Financial Officer~~(principal financial officer) of ~~the~~The Washington Post Company (the “Registrant”), certify that:

1. I have reviewed this quarterly report on Form 10-Q of ~~The Washington Post Company (the “registrant”);~~the Registrant;

	(a)		designed such disclosure controls and procedures to ensure that material information relating to the ~~registrant,~~Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

	(b)		evaluated the effectiveness of the ~~registrant’s~~Registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

(c)

presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

	(a)		all significant deficiencies in the design or operation of internal controls which could adversely affect the ~~registrant’s~~Registrant’s ability to record, process, summarize and report financial data and have identified for the ~~registrant’s~~Registrant’s auditors any material weaknesses in internal controls; and

(b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the ~~registrant’s~~Registrant’s internal controls; and

~~/s/ John B. Morse, Jr.~~
~~John B. Morse, Jr.~~
~~Vice President-Finance,~~
~~Chief Financial Officer~~
~~November 12, 2002~~

/s/ JOHN B. MORSE, JR.

John B. Morse, Jr.

Vice President-Finance

May 12, 2003

21.


		Thirteen Weeks Ended						Thirty-nine Weeks Ended

		September 29,			September 30,			September 29,			September 30,
(In thousands, except per share amounts)		2002			2001			2002			2001

Operating revenues
	Advertising	$	292,523		$	277,425		$	882,183		$	888,281
	Circulation and subscriber		171,535			174,716			501,382			483,469
	Education		160,454			127,159			457,148			367,680
	Other		15,781			13,007			47,605			43,185

			640,293			592,307			1,888,318			1,782,615

Operating costs and expenses
	Operating		342,411			345,567			1,011,093			1,029,097
	Selling, general and administrative		162,642			144,954			499,895			444,278
	Depreciation of property, plant and equipment		45,808			34,765			128,267			105,264
	Amortization of goodwill and other intangibles		172			20,068			483			57,185

			551,033			545,354			1,639,738			1,635,824

Income from operations			89,260			46,953			248,580			146,791
Other income (expense)
	Equity in losses of affiliates		(1,254	)		(26,535	)		(16,943	)		(45,636	)
	Interest income		69			226			261			1,597
	Interest expense		(8,717	)		(11,861	)		(26,381	)		(39,726	)
	Other, net		1,115			(4,365	)		1,606			293,688

Income before income taxes and cumulative effect of change in accounting principle			80,473			4,418			207,123			356,714
Provision for income taxes			32,700			2,850			84,500			141,600

Income before cumulative effect of change in accounting principle			47,773			1,568			122,623			215,114
Cumulative effect in method of accounting for goodwill and other intangible assets, net of taxes			—			—			(12,100	)		—

Net income			47,773			1,568			110,523			215,114
Redeemable preferred stock dividends			(249	)		(263	)		(1,033	)		(1,052	)

Net income available for common shares		$	47,524		$	1,305		$	109,490		$	214,062

Basic earnings per common share:
	Before cumulative effect of change in accounting principle	$	5.03		$	0.17		$	12.90		$	22.68
	Cumulative effect of change in accounting principle		—			—			(1.27	)		—
	Redeemable preferred stock dividends		(0.03	)		(0.03	)		(0.11	)		(0.11	)

	Net income available for common stock	$	5.00		$	0.14		$	11.52		$	22.57

Diluted earnings per share:
	Before cumulative effect of change in accounting principle	$	5.02		$	0.17		$	12.88		$	22.64
	Cumulative effect of change in accounting principle		—			—			(1.27	)		—
	Redeemable preferred stock dividends		(0.03	)		(0.03	)		(0.11	)		(0.11	)

	Net income available for common stock	$	4.99		$	0.14		$	11.50		$	22.53

Dividends declared per common share		$	1.40		$	1.40		$	5.60		$	5.60

Basic average number of common shares outstanding			9,506			9,489			9,502			9,484
Diluted average number of common shares outstanding			9,523			9,502			9,518			9,500


			September 29,			December 30,
			2002			2001
(In thousands)
			(unaudited)
Assets
Current assets
	Cash and cash equivalents		$	35,280		$	31,480
	Investments in marketable equity securities			4,597			16,366
	Accounts receivable, net			291,098			279,328
	Federal and state income taxes receivable			—			10,253
	Inventories			36,208			19,042
	Other current assets			39,744			40,388

				406,927			396,857
Property, plant and equipment
	Buildings			270,511			267,658
	Machinery, equipment and fixtures			1,539,683			1,422,228
	Leasehold improvements			82,214			79,108

				1,892,408			1,768,994
	Less accumulated depreciation			(915,389	)		(794,596	)

				977,019			974,398
	Land			34,733			34,733
	Construction in progress			85,413			89,080

				1,097,165			1,098,211
Investments in marketable equity securities				218,921			219,039
Investments in affiliates				74,124			80,936
Goodwill, net				771,053			754,554
Indefinite lived intangible assets, net				453,306			450,759
Other intangible assets, net				2,095			1,448
Prepaid pension cost				476,679			447,688
Deferred charges and other assets				76,504			109,606

			$	3,576,774		$	3,559,098

Liabilities and Shareholders’ Equity
Current liabilities
	Accounts payable and accrued liabilities		$	330,840		$	253,346
	Deferred revenue			138,827			130,744
	Dividends declared			13,550			—
	Federal and state income taxes payable			5,126			—
	Short-term borrowings			362,714			50,000

				851,057			434,090
Postretirement benefits other than pensions				134,867			130,824
Other liabilities				198,536			192,540
Deferred income taxes				231,179			221,949
Long-term debt				405,267			883,078

				1,820,906			1,862,481
Redeemable preferred stock				12,916			13,132

Preferred stock				—			—

Common shareholders’ equity
	Common stock			20,000			20,000
	Capital in excess of par value			146,080			142,814
	Retained earnings			3,085,882			3,029,595
	Accumulated other comprehensive income(loss)
		Cumulative foreign currency translation adjustment		(7,167	)		(9,678	)
		Unrealized gain on available-for-sale securities		20,452			24,281
	Cost of Class B common stock held in treasury			(1,522,295	)		(1,523,527	)

				1,742,952			1,683,485

			$	3,576,774		$	3,559,098


	Newspaper		Television		Magazine		Cable						Corporate
	Publishing		Broadcasting		Publishing		Television			Education			Office			Consolidated

2002
Operating revenues	$	202,445	$	82,074	$	87,487	$	107,647		$	160,640		$	—		$	640,293
Income (loss) from operations	$	18,197	$	38,464	$	12,450	$	16,597		$	11,500		$	(7,948	)	$	89,260
Equity in losses of affiliates																	(1,254	)
Interest expense, net																	(8,648	)
Other expense, net																	1,115

Income before income taxes																$	80,473

Depreciation expense	$	10,672	$	2,873	$	1,010	$	24,866		$	6,387		$	—		$	45,808
Amortization expense	$	3	$	—	$	—	$	39		$	130		$	—		$	172
Net pension credit (expense)	$	5,454	$	1,182	$	9,979	$	(203	)	$	(296	)	$	—		$	16,116
Identifiable assets	$	699,681	$	410,801	$	474,312	$	1,122,103		$	550,442		$	21,793		$	3,279,132
Investments in marketable equity securities																	223,518
Investments in affiliates																	74,124

Total assets																$	3,576,774


		Third Quarter

		2002		2001

Net income available for common stock as reported		$	47,524	$	1,305
	Amortization of goodwill and other intangibles, net of tax		—		13,948

Pro forma net income available for common stock		$	47,524	$	15,253

Basic earnings per share		$	5.00	$	1.61

Diluted earnings per share		$	4.99	$	1.61


			Year-to-Date

			2002			2001

Income before cumulative effect of change in accounting principle, as reported			$	122,623		$	215,114
		Amortization of goodwill and other intangibles, net of tax		—			40,035

Pro forma income before cumulative effect of change in accounting principle				122,623			255,149
Cumulative effect of change in method of accounting for goodwill and other intangible assets, net of tax				(12,100	)		—
Redeemable preferred stock dividends				(1,033	)		(1,052	)

Pro forma net income available for common stock			$	109,490		$	254,097

Basic earnings per share:
	Before cumulative effect of change in accounting principle		$	12.90		$	26.90
	Cumulative effect of change in accounting principle			(1.27	)		—
	Redeemable preferred stock dividends			(0.11	)		(0.11	)

	Net income available for common stock		$	11.52		$	26.79

Diluted earnings per share:
	Before cumulative effect of change in accounting principle		$	12.88		$	26.86
	Cumulative effect of change in accounting principle			(1.27	)		—
	Redeemable preferred stock dividends			(0.11	)		(0.11	)

	Net income available for common stock		$	11.50		$	26.75