Shareholders Day
November 15, 2002
Following are transcripts of the presentations made at The Washington Post Company's Shareholders Day on November 15, 2002. The transcripts have been edited and contain clarifications.
The presentations at this Shareholders Day meeting contain certain forward-looking statements that are based largely on the Company's current expectations. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results and achievements to differ materially from those expressed in the forward-looking statements. For more information about these forward-looking statements and related risks, please link to Risk Factors under Shareholder Information on this website and refer to the section titled "Forward-looking Statements" in Part I of the Company's Annual Report on Form 10-K.
QUESTIONS AND ANSWERS
by
MR. GRAHAM and MR. FRANK
MR. GRAHAM: With the advent of Internet technology, how will The Washington Post continue to diversify its portfolio, aside from investments in such companies as Kaplan, cable divisions and other print media? Where do you anticipate the company to be in five years from today and what will it look like?
An honest answer to that is I have no idea.
The acquisition strategy for The Washington Post Company is not driven by concepts; it's driven by comparing proposed acquisitions across our different businesses, and seeing which ones offer the most advantageous returns to Post Company shareholders.
We have, for some years, been most successful making acquisitions in the education field, and that's because for some years before that, we were most successful making acquisitions in cable, and before that in broadcast TV, but the prices in each of those businesses went up. It's not out of the question the prices in those businesses could go down, and it's not out of the question acquisitions in education could suddenly, for some extraneous reason, start going up.
We look at the acquisitions offered to us, and we try to see which offer the best returns for Post Company shareholders. We also look at opportunities to expand into different businesses than the ones we're in now. That's a complex answer, and that isn't the answer most companies would offer, but it is the truthful answer about The Washington Post Company. I do expect the company to grow. We make more money in the course of the year than we normally have to spend on capital expenditures, dividends, etc., and so we do look for acquisitions. Obviously, if no acquisitions arise, we also have the alternative of paying down debt.
Alan: How is WJXT doing over the last year or two relative to competition? You gave a comparison since leaving CBS. What's the long-term situation? How's the station been performing over the last two or three years compared to its normal lofty standing in that market?
MR. FRANK: This station has been a dominant station in the market. It's a very interesting market because Gannett owns the NBC and ABC station in the market, and now Clear Channel owns the Fox affiliate, and the CBS affiliate, and the Fox affiliate also has the UPN affiliation, so between those two companies, they have five networks between them, and of course Clear Channel also owns a number of radio stations in the market, a significant number, and the billboards.
So there's a lot of competition against us, but WJXT is regarded as one of the great stations in the country and had been performing at a very high level and is continuing to perform at a very high level.
MR. GRAHAM: If Channel 4 is so great, why not make all of the stations independent?
MR. FRANK: Our first preference is to continue with our network partners, and where we can, that's what we'll negotiate. We have done 10-year deals, long-term 10-year deals, with NBC for WDIV and KPRC, and we're very pleased with those agreements, and so that's where we are in that stand.
MR. GRAHAM: Has the current environment created better valuations and opportunities to acquire broadcast properties?
MR. FRANK: We're hopeful. It hasn't yet. Prices haven't come down yet, but we're hopeful.
MR. GRAHAM: Yes, we're having a good year, and so is everybody else in
broadcasting. And when we got our last opportunity to purchase KSAT and
KPRC in 1991, it was because broadcast stations had had three lousy years
in a row. People were beginning to doubt the future of broadcast stations,
and we really didn't, and not just those stations, but prices generally
came down for a rather brief period. Then, the Rupert Murdoch-Perlman
transaction took place, and prices took off, and we were very, very fortunate
to acquire those wonderful stations when we did.
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