##### Table of Contents



---

---

SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549



---

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED
DECEMBER 31, 2006

Commission file number 1-6714

The Washington Post Company(Exact name of registrant as specified in its charter)

|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 53-0182885                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                               |  |                                     
|1150 15th St.,
N.W., Washington, D.C.                          |  | 20071                               
|(Address of principal executive offices)                       |  | (Zip Code)                          

Registrants Telephone Number, Including Area Code: (202) 334-6000

Securities Registered Pursuant to Section 12(b) of the Act:

|                                |  |                        
|------------------------------- |  | -----------------------
|                                |  | Name of each exchange  
|Title of each class             |  | on which registered    
|                                |  |                        
|Class B Common Stock, Par Value |  | New York Stock Exchange
|$1.00 Per Share                 |  |                        

Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes þ No o

Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (the Act).
Yes o No þ

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrants knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. þ

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, or a non-accelerated
filer. See the definitions of  accelerated filer and large
accelerated filer in Rule 12b-2 of the Act. (Check
one): 
 Large accelerated
filer þ           Accelerated
filer o          Non-accelerated
filer o

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

Aggregate market value of the Companys voting stock held by non-affiliates on
June 30, 2006, based on the closing price for the Companys Class B Common
Stock on the New York Stock Exchange on such date: approximately
$4,300,000,000.

Shares of common stock outstanding at
February 23, 2007:

Class A Common Stock  1,722,250 shares
Class B Common Stock  7,823,203 shares

Documents partially incorporated by reference:

Definitive Proxy Statement for the
Companys 2007 Annual Meeting of Stockholders
(incorporated in Part III to the extent provided in Items 10, 11, 12,
13 and 14 hereof).



---

---



---



##### 










THE WASHINGTON POST COMPANY 2006
FORM 10-K


|                                                                                                                                                              |  |                                                                                                                          |                              |  |    |    |  |  |  | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------ | ---------------------------- |  | -- | -- |  |  |  | 
|                                                                                                                                                              |  | Page                                                                                                                     |                             
|                                                                                                                                                              |  | PART I                                                                                                                   |                              |  |   
|Item 1.                                                                                                                                                       |  | Business                                                                                                                 |                              |  | 1  |   
|                                                                                                                                                              |  |                                                                                                                          | Education                    |  |    | 1  | 
|                                                                                                                                                              |  |                                                                                                                          | Newspaper Publishing         |  |    | 5  | 
|                                                                                                                                                              |  |                                                                                                                          | Television Broadcasting      |  |    | 8  | 
|                                                                                                                                                              |  |                                                                                                                          | Magazine Publishing          |  |    | 12 | 
|                                                                                                                                                              |  |                                                                                                                          | Cable Television Operations  |  |    | 13 | 
|                                                                                                                                                              |  |                                                                                                                          | Other Activities             |  |    | 18 | 
|                                                                                                                                                              |  |                                                                                                                          | Production and Raw Materials |  |    | 18 | 
|                                                                                                                                                              |  |                                                                                                                          | Competition                  |  |    | 19 | 
|                                                                                                                                                              |  |                                                                                                                          | Executive Officers           |  |    | 22 | 
|                                                                                                                                                              |  |                                                                                                                          | Employees                    |  |    | 23 | 
|                                                                                                                                                              |  |                                                                                                                          | Forward-Looking Statements   |  |    | 24 | 
|                                                                                                                                                              |  |                                                                                                                          | Available Information        |  |    | 24 | 
|Item 1A.                                                                                                                                                      |  | Risk Factors                                                                                                             |                              |  | 24 |   
|Item 1B.                                                                                                                                                      |  | Unresolved Staff Comments                                                                                                |                              |  | 26 |   
|Item 2.                                                                                                                                                       |  | Properties                                                                                                               |                              |  | 26 |   
|Item 3.                                                                                                                                                       |  | Legal Proceedings                                                                                                        |                              |  | 27 |   
|Item 4.                                                                                                                                                       |  | Submission of Matters to a Vote of Security
    Holders                                                                  |                              |  | 27 |   
|                                                                                                                                                             
|PART II                                                                                                                                                      
|Item 5.                                                                                                                                                       |  | Market for the Registrants Common
    Equity, Related Stockholder Matters and Issuer Purchases of
    Equity Securities |                              |  | 28 |   
|Item 6.                                                                                                                                                       |  | Selected Financial Data                                                                                                  |                              |  | 30 |   
|Item 7.                                                                                                                                                       |  | Managements Discussion and Analysis
    of Financial Condition and Results of Operation                                 |                              |  | 30 |   
|Item 7A.                                                                                                                                                      |  | Quantitative and Qualitative Disclosures
    About Market Risk                                                           |                              |  | 30 |   
|Item 8.                                                                                                                                                       |  | Financial Statements and Supplementary
    Data                                                                          |                              |  | 31 |   
|Item 9.                                                                                                                                                       |  | Changes in and Disagreements With
    Accountants on Accounting and Financial Disclosure                                 |                              |  | 31 |   
|Item 9A.                                                                                                                                                      |  | Controls and Procedures                                                                                                  |                              |  | 31 |   
|Item 9B                                                                                                                                                       |  | Other Information                                                                                                        |                              |  | 32 |   
|                                                                                                                                                             
|PART III                                                                                                                                                     
|Item 10.                                                                                                                                                      |  | Directors, Executive Officers and Corporate
    Governance                                                               |                              |  | 32 |   
|Item 11.                                                                                                                                                      |  | Executive Compensation                                                                                                   |                              |  | 32 |   
|Item 12.                                                                                                                                                      |  | Security Ownership of Certain Beneficial
    Owners and Management and Related Stockholder Matters                       |                              |  | 32 |   
|Item 13.                                                                                                                                                      |  | Certain Relationships and Related
    Transactions, and Director Independence                                            |                              |  | 32 |   
|Item 14.                                                                                                                                                      |  | Principal Accountant Fees and Services                                                                                   |                              |  | 32 |   
|                                                                                                                                                             
|PART IV                                                                                                                                                      
|Item 15.                                                                                                                                                      |  | Exhibits and Financial Statement
    Schedules                                                                           |                              |  | 33 |   
|SIGNATURES                                                                                                                                                    |  |                                                                                                                          | 34                           | 
|INDEX TO FINANCIAL INFORMATION                                                                                                                                |  |                                                                                                                          | 35                           | 
|Managements Discussion
    and Analysis of Results of Operations and Financial Condition
    (Unaudited)                                                     |  |                                                                                                                          | 36                           | 
|Financial Statements and Schedules:                                                                                                                           |  |                                                                                                                          |                              | 
|Report of
    Independent Registered Public Accounting Firm                                                                                                   |  |                                                                                                                          | 48                           | 
|Consolidated
    Statements of Income and Consolidated Statements of
    Comprehensive Income for the Three Fiscal
    Years      Ended
    December 31, 2006 |  |                                                                                                                          | 49                           | 
|Consolidated
    Balance Sheets at December 31, 2006 and January 1,
    2006                                                                                  |  |                                                                                                                          | 50                           | 
|Consolidated
    Statements of Cash Flows for the Three Fiscal Years Ended
    December 31, 2006                                                              |  |                                                                                                                          | 52                           | 
|Consolidated
    Statements of Changes in Common Shareholders Equity for
    the Three Fiscal Years Ended December 31, 2006                                  |  |                                                                                                                          | 53                           | 
|Notes to
    Consolidated Financial Statements                                                                                                                |  |                                                                                                                          | 54                           | 
|Financial Statement Schedule for the
    Three Fiscal Years Ended December 31, 2006:                                                                          |  |                                                                                                                          |                              | 
|II 
    Valuation and Qualifying Accounts                                                                                                                    |  |                                                                                                                          | 73                           | 
|Ten-Year Summary of
    Selected Historical Financial Data (Unaudited)                                                                                        |  |                                                                                                                          | 74                           | 
|INDEX TO EXHIBITS                                                                                                                                             |  |                                                                                                                          | 77                           | 
|EX-11                                                                                                                                                        
|EX-21                                                                                                                                                        
|EX-23                                                                                                                                                        
|EX-24                                                                                                                                                        
|EX-31.1                                                                                                                                                      
|EX-32.2                                                                                                                                                      
|EX-32                                                                                                                                                        





---



##### Table of Contents








PART I





Item 1. Business.


The Washington Post Newsweek


10-K.


Newsweek





Education




Supplemental Education


Test Preparation and Admissions Division














---



##### Table of Contents











Professional Division










Kaplan Publishing












---



##### Table of Contents





Higher Education


Higher Education Division




Dublin Business School




Asia Pacific Management Institute


pre-university


Holborn College




Student Visas for Study in the U.S.












---



##### Table of Contents





Title IV Federal Student Financial Aid Programs
























---



##### Table of Contents
















Newspaper Publishing


The Washington Post


The Washington Post,


The Post 12-month The Post 12-month










---



##### Table of Contents





|     |  |                          |         |  |        |  |           | 
|---- |  | ------------------------ | ------- |  | ------ |  | --------- | 
|     |  | Average Paid Circulation |        
|     |  |                          |        
|     |  | Daily                    |         |  | Sunday | 
|     |  |                          |        
|2002 |  |                          | 767,843 |  |        |  | 1,058,458 | 
|2003 |  |                          | 749,323 |  |        |  | 1,035,204 | 
|2004 |  |                          | 729,068 |  |        |  | 1,016,163 | 
|2005 |  |                          | 706,105 |  |        |  | 983,243   | 
|2006 |  |                          | 681,187 |  |        |  | 945,651   | 

The Post 50-mile The Post The Post




The Post


|                            |                 |      |       |       |      |  |       |       |  |  |       |       |  |      |       |       |  |  |       |       | 
|--------------------------- | --------------- | ---- | ----- | ----- | ---- |  | ----- | ----- |  |  | ----- | ----- |  | ---- | ----- | ----- |  |  | ----- | ----- | 
|                            |                 | 2002 |       |       | 2003 |  |       | 2004  |  |  | 2005  |       |  | 2006 |      
|                            |                 |      |      
|Total Inches (in thousands) |                 |      | 2,657 |       |      |  | 2,675 |       |  |  | 2,726 |       |  |      | 2,661 |       |  |  | 2,613 |      
|                            | Full-Run Inches |      |       | 2,180 |      |  |       | 2,121 |  |  |       | 2,120 |  |      |       | 1,941 |  |  |       | 1,838 | 
|                            | Part-Run Inches |      |       | 477   |      |  |       | 554   |  |  |       | 606   |  |      |       | 720   |  |  |       | 775   | 
|Preprints (in millions)     |                 |      | 1,656 |       |      |  | 1,835 |       |  |  | 1,887 |       |  |      | 1,833 |       |  |  | 1,828 |      

The Washington Post National Weekly
Edition, The Washington Post National Weekly Edition


The Post The Post


The Post,


Express Publications


Express, Express Express





|  |                                                                                                                                                                                                                                                                                                                                                                                  
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | The percentages set forth in this paragraph were calculated from
    The Posts published non-discounted advertising
    rates. However most advertisers qualify for multiple-insertion
    and other discounts and the demand for advertising varies over
    time so those percentages may not accurately reflect the actual
    revenue impact of year-over-year rate changes.









---



##### Table of Contents



Express Express www.readexpress.com,


Washingtonpost.Newsweek Interactive


The Washington
Post The Post Post Post e-mail


Newsweek Newsweek Budget Travel Arthur Frommers Budget Travel


Slate, Slate


Slate Newsweek


www.cars.com www.apartments.com www.homescape.com


Newsweek The
Washington Post.


Post-Newsweek Media


The Gazette Newspapers, Southern Maryland
Newspapers,










---



##### Table of Contents



The Gazette Newspapers www.gazette.net www.dcmilitary.com


The Gazette Newspapers Southern Maryland
Newspapers




The Herald


The
Herald The Herald The
Enterprise Newspapers La Raza del
Noroeste,


The Herald The Enterprise
Newspapers 12-month La Raza del Noroeste


The Herald, The Enterprise Newspapers La Raza


Greater Washington Publishing


The Washington Post Apartment Showcase, New Homes Guide, Washington
Spaces, Washington Spaces,


El Tiempo Latino


El Tiempo Latino, El Tiempo Latino





Television Broadcasting














---



##### Table of Contents





|         |       |   |             |             | 
|-------- | ----- | - | ----------- | ----------- | 
|National |       | $ | 133,367,000 |            
|Local    |       |   | 206,145,000 |            
|Network  |       |   | 13,210,000  |            
|         |       |   |            
|         | Total |   | $           | 352,722,000 | 
|         |       |   |            



|                     |  |            |      |  |             |  |            |             |  |         |                              |  |        |           |          |  |           |  |        |  |  |  |        | 
|-------------------- |  | ---------- | ---- |  | ----------- |  | ---------- | ----------- |  | ------- | ---------------------------- |  | ------ | --------- | -------- |  | --------- |  | ------ |  |  |  | ------ | 
|Station Location and |  |            |      |  |             |  |            | Expiration  |  |         | Total Commercial Stations in | 
|Year Commercial      |  | National   |      |  |             |  | Expiration |             |  | Date of |                              |  | DMA(b) |          
|Operation            |  | Market     |      |  | Network     |  |            | Date of FCC |  |         | Network                      |  |        |           |         
|Commenced            |  | Ranking(a) |      |  | Affiliation |  |            | License     |  |         | Agreement                    |  |        | Allocated |          |  | Operating | 
|                     | 
|KPRC                 |  |            | 10th |  |             |  | NBC        |             |  |         | Aug. 1,                      |  |        |           | Dec. 31, |  |           |  | VHF-3  |  |  |  | VHF-3  | 
|Houston, Tx          |  |            |      |  |             |  |            |             |  |         | 2006(c)                      |  |        |           | 2011     |  |           |  | UHF-11 |  |  |  | UHF-11 | 
|1949                 |  |            |      |  |             |  |            |             |  |         |                              |  |        |           |          |  |           |  |        |  |  |  |        | 
|                    
|WDIV                 |  |            | 11th |  |             |  | NBC        |             |  |         | Oct. 1,                      |  |        |           | Dec. 31, |  |           |  | VHF-4  |  |  |  | VHF-4  | 
|Detroit, Mich        |  |            |      |  |             |  |            |             |  |         | 2005(c)                      |  |        |           | 2011     |  |           |  | UHF-6  |  |  |  | UHF-5  | 
|1947                 |  |            |      |  |             |  |            |             |  |         |                              |  |        |           |          |  |           |  |        |  |  |  |        | 
|                    
|WPLG                 |  |            | 16th |  |             |  | ABC        |             |  |         | Feb. 1,                      |  |        |           | Dec. 31, |  |           |  | VHF-5  |  |  |  | VHF-5  | 
|Miami, Fla           |  |            |      |  |             |  |            |             |  |         | 2005(c)                      |  |        |           | 2009     |  |           |  | UHF-8  |  |  |  | UHF-8  | 
|1961                 |  |            |      |  |             |  |            |             |  |         |                              |  |        |           |          |  |           |  |        |  |  |  |        | 
|                    
|WKMG                 |  |            | 19th |  |             |  | CBS        |             |  |         | Feb. 1,                      |  |        |           | Apr. 6,  |  |           |  | VHF-3  |  |  |  | VHF-3  | 
|Orlando, Fla         |  |            |      |  |             |  |            |             |  |         | 2013                         |  |        |           | 2015     |  |           |  | UHF-10 |  |  |  | UHF-9  | 
|1954                 |  |            |      |  |             |  |            |             |  |         |                              |  |        |           |          |  |           |  |        |  |  |  |        | 
|                    
|KSAT                 |  |            | 37th |  |             |  | ABC        |             |  |         | Aug. 1,                      |  |        |           | Dec. 31, |  |           |  | VHF-4  |  |  |  | VHF-4  | 
|San Antonio, Tx      |  |            |      |  |             |  |            |             |  |         | 2006(c)                      |  |        |           | 2009     |  |           |  | UHF-6  |  |  |  | UHF-6  | 
|1957                 |  |            |      |  |             |  |            |             |  |         |                              |  |        |           |          |  |           |  |        |  |  |  |        | 
|                    
|WJXT                 |  |            | 50th |  |             |  | None       |             |  |         | Feb. 1,                      |  |        |           |         |  |           |  | VHF-2  |  |  |  | VHF-2  | 
|Jacksonville, Fla    |  |            |      |  |             |  |            |             |  |         | 2013                         |  |        |           |          |  |           |  | UHF-6  |  |  |  | UHF-5  | 
|1947                 |  |            |      |  |             |  |            |             |  |         |                              |  |        |           |          |  |           |  |        |  |  |  |        | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Source: 2006/2007 DMA Market Rankings, Nielsen Media Research,
    Fall 2006, based on television homes in DMA (see note
    (b) below).                                                                                                                                                                                                                                                                                                               
|   
|(b) | Designated Market Area (DMA) is a market designation
    of A.C. Nielsen which defines each television market exclusive
    of another, based on measured viewing patterns. References to
    stations that are operating in each market are to stations that
    are broadcasting analog signals. However most of the stations in
    these markets are also engaged in digital broadcasting using the
    FCC-assigned channels for DTV operations.
|   
|(c) | The Company has filed timely applications to renew the FCC
    licenses of KPRC, WDIV, WPLG and KSAT, and such filings extend
    the effectiveness of each stations existing license until
    the renewal application is acted upon.                                                                                                                                                                                                                



24-hour 24-hour


Regulation of Broadcasting and Related Matters












---



##### Table of Contents



























---



##### Table of Contents























---



##### Table of Contents


















Magazine Publishing


Newsweek


Newsweek Newsweek


Newsweek Newsweek Newsweek, Time U.S. News & World
Report Newsweek


Newsweek Newsweek










---



##### Table of Contents



Newsweek Newsweek Newsweek


Newsweek Newsweek


Newsweek The Bulletin, Newsweek, Newsweek Nihon Ban, Newsweek Hankuk Pan, Newsweek, Newsweek en Español, Newsweek Newsweek Bil Logha Al-Arabia, Newsweek, Newsweek Polska, Russky Newsweek, Newsweek Newsweek Select, Newsweek The Bulletin Newsweek


Newsweek, Newsweek


Arthur Frommers Budget Travel Budget Travel


PostNewsweek Tech Media


FOSE





Cable Television Operations


over-the














---



##### Table of Contents







15-year 10-year


Regulation of Cable Television and Related Matters






over-the cost-of














---



##### Table of Contents























---



##### Table of Contents



over-the


fiber-to video-on












---



##### Table of Contents





















---



##### Table of Contents












Other Activities


Bowater Mersey Paper Company




BrassRing







Production and Raw Materials


The Washington Post, Express El Tiempo Latino The Herald, The Enterprise Newspapers La Raza del Noroeste The
Gazette Newspapers Southern Maryland Newspapers


Newsweek Newsweek The
Bulletin





|  |                                                                                                                                                                                                
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | All references in this report to newsprint tonnage and prices
    refer to short tons (2,000 pounds) and not to metric tons
    (2,204.6 pounds), which are often used in newsprint quotations.









---



##### Table of Contents



Newsweek Time. Budget Travel Newsweek


The Washington Post, Express El Tiempo
Latino


The Washington Post The
Washington Post


Newsweek


Newsweek Budget Travel





Competition












---



##### Table of Contents



The Washington Post The Washington Times, The Post The Post Express


Slate


The Herald Seattle Times Seattle Post-Intelligencer, The Enterprise Newspapers Seattle Times The Journal
Newspapers, The Herald The Enterprise
Newspapers La Raza del Noroeste El Mundo Seattle Latino,


The Gazette Newspapers The Gazette Newspapers The Potomac Bethesda/ Chevy Chase Almanacs, The Western Montgomery
Bulletin, The Bowie Blade-News, The West County News The Laurel Leader, The Montgomery Sentinel, The Prince
Georges Sentinel, The Frederick News-Post Carroll
County Times, Southern Maryland Newspapers Calvert County Independent St. Marys Today,










---



##### Table of Contents



The
Montgomery, Prince Georges Northern Virginia
Journals, The Journal The Washington Examiner, The Washington Examiner The Washington Examiner The Gazette Newspapers, Express The Washington Post. The Baltimore Examiner, .




El Tiempo Latino


out-of out-of










---



##### Table of Contents







Newsweek







Executive Officers




The
Washington Post












---



##### Table of Contents





Newsweek,




The Washington Post, The Post





Employees




























---



##### Table of Contents








Forward-Looking Statements


10-K 10-K,





Available Information


www.washpostco.com. 10-K, 10-Q, 8-K 10-K





Item 1A. Risk Factors.


10-K




|  |                                                                                                                         
|- | ------------------------------------------------------------------------------------------------------------------------
| | Changes in the Extent to Which Standardized Tests Are Used in
    the Admissions Process by Colleges or Graduate Schools





|  |                                                                                                                                        
|- | ---------------------------------------------------------------------------------------------------------------------------------------
| | Changes in the Extent to Which Licensing and Proficiency
    Examinations Are Used to Qualify Individuals to Pursue Certain
    Careers





|  |                                                                                                                                                                                                                     
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Reductions in the Amount of Funds Available Under the Federal
    Title IV Programs to Students in Kaplans Higher
    Education Division Schools Or Changes in the Terms on Which Such
    Funds Are Made Available











---



##### Table of Contents







|  |                                                                        
|- | -----------------------------------------------------------------------
| | Risks and Uncertainties Related to Acquisitions of Other
    Businesses





|  |                                                                                                  
|- | -------------------------------------------------------------------------------------------------
| | Actions of Competitors, Including Price Changes and the
    Introduction of Competitive Offerings





|  |                                                                                                                                                                                       
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Changes in Prevailing Economic Conditions, Particularly in the
    Specific Geographic Markets Served by the Companys
    Newspaper Publishing and Television Broadcasting Businesses





|  |                                           
|- | ------------------------------------------
| | Changing Preferences of Readers or Viewers





|  |                                                                                                                     
|- | --------------------------------------------------------------------------------------------------------------------
| | Changing Perceptions About the Effectiveness of Publishing and
    Television Broadcasting in Delivering Advertising





|  |                                                                                             
|- | --------------------------------------------------------------------------------------------
| | Technological Innovations in News, Information or Video
    Programming Distribution Systems





|  |                                                                                                                                                        
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------
| | Changes in the Nature and Extent of Government Regulations,
    Particularly in the Case of Television Broadcasting and Cable
    Television Operations











---



##### Table of Contents





|  |                                                                                 
|- | --------------------------------------------------------------------------------
| | Changes in the Cost or Availability of Raw Materials,
    Particularly Newsprint






Item 1B. Unresolved Staff Comments.







Item 2. Properties.


26,000-square 2,300-square 15,000-square 39,000-square 19,000-square 25,000-square 131,000-square 18,000-square 25,000-square 45,000-square 35,000-square 5,000-square 97,000-square 97,000-square 291,000-square


The Washington Post The
Post The Post


17-acre




The Gazette Newspapers










---



##### Table of Contents



Southern
Maryland Newspapers. Southern Maryland Newspapers.


5.8-acre


15-year Budget Travel




The Washington
Post


Slate







Item 3. Legal Proceedings.







Item 4. Submission of Matters to a Vote of Security
Holders.












---



##### Table of Contents






PART II





Item 5. Market for the Registrants Common
Equity, Related Stockholder Matters and Issuer  Purchases
of Equity Securities.


Market Information and Holders






|                   |  |      |      |  |      |  |      |      |  |  |      |  |  |  |      | 
|------------------ |  | ---- | ---- |  | ---- |  | ---- | ---- |  |  | ---- |  |  |  | ---- | 
|                   |  | 2006 |      |  | 2005 | 
|                   |  |      |      |  |      | 
|Quarter            |  | High |      |  | Low  |  |      | High |  |  | Low  | 
|                   | 
|January  March    |  |      | $805 |  |      |  | $717 |      |  |  | $963 |  |  |  | $880 | 
|April  June       |  |      | 815  |  |      |  | 737  |      |  |  | 900  |  |  |  | 814  | 
|July  September   |  |      | 780  |  |      |  | 690  |      |  |  | 900  |  |  |  | 787  | 
|October  December |  |      | 766  |  |      |  | 713  |      |  |  | 806  |  |  |  | 717  | 



Dividend Information




Securities Authorized for Issuance Under Equity Compensation
Plans




|                                                           |       |                         |         |         |                              |                         |                       |                         |  |  |         |         | 
|---------------------------------------------------------- | ----- | ----------------------- | ------- | ------- | ---------------------------- | ----------------------- | --------------------- | ----------------------- |  |  | ------- | ------- | 
|                                                           |       |                         |         |         |                              | Number of Securities    |                      
|                                                           |       |                         |         |         |                              | Remaining Available for |                      
|                                                           |       | Number of Securities to |         |         |                              |                         | Future Issuance Under |                        
|                                                           |       | Be Issued Upon          |         |         |                              |                         | Equity Compensation   |                        
|                                                           |       | Exercise of Outstanding |         |         | Weighted-Average Exercise    |                         |                       | Plans (Excluding        | 
|                                                           |       | Options, Warrants and   |         |         | Price of Outstanding Options |                         |                       | Securities Reflected in | 
|                                                           |       | Rights                  |         |         | Warrants and Rights          |                         |                       | Column (a))             | 
|                                                           |      
|Plan Category                                              |       | (a)                     |         |         | (b)                          |                         |                       | (c)                     | 
|Equity compensation plans approved by security holders     |       |                         | 109,175 |         |                              |                         | $     714.79          |                         |  |  | 286,875 |        
|Equity compensation plans not approved by security holders |       |                         |        |         |                              |                         |                      |                         |  |  |        |        
|                                                           | Total |                         |         | 109,175 |                              |                         |                       | $     714.79            |  |  |         | 286,875 | 














---



##### Table of Contents



Purchases of Equity Securities by the Issuer and Affiliated
Purchasers




|                      |       |                  |        |        |                |                     |        |                  |                    |  |                  |        |  |  |         |  | 
|--------------------- | ----- | ---------------- | ------ | ------ | -------------- | ------------------- | ------ | ---------------- | ------------------ |  | ---------------- | ------ |  |  | ------- |  | 
|                      |       |                  |        |        |                | Total Number of     |        |                  | Maximum Number     | 
|                      |       |                  |        |        |                | Shares Purchased as |        |                  | of Shares That May | 
|                      |       | Total Number of  |        |        | Average Price  |                     |        | Part of Publicly |                    |  | Yet Be Purchased |       
|Period                |       | Shares Purchased |        |        | Paid per Share |                     |        | Announced Plan*  |                    |  | Under the Plan*  |       
|                      |      
|Oct. 2  Nov. 1, 2006 |       |                  | 0      |        |                |                     |       |                  |                    |  | 0                |        |  |  | 542,800 | 
|Nov. 2  Dec. 1, 2006 |       |                  | 65,800 |        |                | $                   | 731.46 |                  |                    |  | 65,800           |        |  |  | 477,000 | 
|Dec. 2  31, 2006     |       |                  | 11,500 |        |                | $                   | 732.66 |                  |                    |  | 11,500           |        |  |  | 465,500 | 
|                      | Total |                  |        | 77,300 |                |                     | $      | 731.64           |                    |  |                  | 77,300 |  |  |         |  | 






|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | On September 22, 2003, the Companys Board of
    Directors authorized the Company to purchase, on the open market
    or otherwise, up to 542,800 shares of its Class B
    Common Stock, and the existence of that authorization was
    disclosed in the Companys Annual Report on
    Form 10-K for the
    fiscal year ended December 28, 2003. There is no expiration
    date for that authorization. All purchases made during the
    quarter ended December 31, 2006, were open-market
    transactions. Under the Companys Incentive Compensation
    Plan, the Compensation Committee may permit the recipient of a
    vested award of restricted shares of the Companys
    Class B Common Stock to receive some or all of the value of
    the award in cash rather than in shares. In addition, under the
    Companys Stock Option Plan, the holder of a vested stock
    option has the right to pay some or all of the exercise price of
    the option by surrendering shares of the Companys
    Class B Common Stock owned by such holder. No conversions
    of vested restricted shares into cash or surrenders of owned
    shares to pay for the exercise price of stock options occurred
    during the period covered by this table.

Performance Graph







|                            |  |  |      |        |  |      |  |  |        |  |  |      |  |        |      |  |  |      |        |  |  |  |  |        |  |  |  |  |        |  | 
|--------------------------- |  |  | ---- | ------ |  | ---- |  |  | ------ |  |  | ---- |  | ------ | ---- |  |  | ---- | ------ |  |  |  |  | ------ |  |  |  |  | ------ |  | 
|                            |  |  |      |        |  |      |  |  |        |  |  |      |  |        |      |  |  |      |        |  |  |  |  |        | 
|December 31                 |  |  | 2001 |        |  | 2002 |  |  | 2003   |  |  | 2004 |  |        | 2005 |  |  | 2006 |       
|                            |  |  |      |        |  |      |  |  |        |  |  |      |  |        |      |  |  |      |        |  |  |  |  |        | 
|The Washington Post Company |  |  |      | 100.00 |  |      |  |  | 140.49 |  |  |      |  | 151.87 |      |  |  |      | 190.14 |  |  |  |  | 149.26 |  |  |  |  | 146.97 |  | 
|                            |  |  |      |        |  |      |  |  |        |  |  |      |  |        |      |  |  |      |        |  |  |  |  |        | 
|S&P 500 Index               |  |  |      | 100.00 |  |      |  |  | 77.90  |  |  |      |  | 100.25 |      |  |  |      | 111.15 |  |  |  |  | 116.61 |  |  |  |  | 135.03 |  | 
|                            |  |  |      |        |  |      |  |  |        |  |  |      |  |        |      |  |  |      |        |  |  |  |  |        | 
|S&P Publishing Index        |  |  |      | 100.00 |  |      |  |  | 106.55 |  |  |      |  | 126.59 |      |  |  |      | 122.94 |  |  |  |  | 107.27 |  |  |  |  | 123.70 |  | 
|                            |  |  |      |        |  |      |  |  |        |  |  |      |  |        |      |  |  |      |        |  |  |  |  |        | 









---



##### Table of Contents






Item 6. Selected Financial Data.


10-K 10-K).





Item 7. Managements Discussion and Analysis
of Financial Condition and Results of  Operations.


10-K





Item 7A. Quantitative and Qualitative Disclosures
About Market Risk.




Equity Price Risk






|                                  |             |  |                                   |   |             |      |  |   |             |  |  |      |             |  |      |   |             |  |  |   |             | 
|--------------------------------- | ----------- |  | --------------------------------- | - | ----------- | ---- |  | - | ----------- |  |  | ---- | ----------- |  | ---- | - | ----------- |  |  | - | ----------- | 
|Value of Common Stock Investments |             |  | Value of Common Stock Investments |  
|Assuming Indicated Decrease in    |             |  | Assuming Indicated Increase in    |  
|Each Stocks Price                |             |  | Each Stocks Price                |  
|                                  |            
|-30%                              |             |  | -20%                              |   |             | -10% |  |   | +10%        |  |  | +20% |             |  | +30% |  
|                                  |             |  |                                   |   |             |      |  |   |             |  |  |      |             |  |      |  
|$                                 | 248,310,000 |  |                                   | $ | 283,782,000 |      |  | $ | 319,255,000 |  |  | $    | 390,201,000 |  |      | $ | 425,674,000 |  |  | $ | 461,146,000 | 



Interest Rate Risk














---



##### Table of Contents



Foreign Exchange Rate Risk







Item 8. Financial Statements and Supplementary
Data.


10-K







|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreements With Accountants on Accounting
    and Financial Disclosure.






Item 9A. Controls and Procedures.


Disclosure Controls and Procedures


13a-15(e) 15d-15(e)),


Managements Report on Internal Control Over Financial
Reporting


13a-15(f) 15d-15(f)).




Internal
ControlIntegrated Framework.










---



##### Table of Contents



Changes in Internal Control Over Financial Reporting







Item 9B. Other Information.







PART III





Item 10. Directors, Executive Officers and Corporate
Governance.




S-K www.washpostco.com, 8-K


10-K,





Item 11. Executive Compensation.









|         |                                                                                                    
|-------- | ---------------------------------------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial Owners and
    Management and Related Stockholder Matters.






Item 13. Certain Relationships and Related Transactions,
and Director Independence.









|         |                                        
|-------- | ---------------------------------------
|Item 14. | Principal Accountant Fees and Services.











---



##### Table of Contents






PART IV





Item 15. Exhibits and Financial Statement Schedules.






| |                        
| | -----------------------
| | 1. Financial Statements



| |                                                                       
| | ----------------------------------------------------------------------
| | As listed in the index to financial information on page 35
    hereof.



| |                                 
| | --------------------------------
| | 2. Financial Statement Schedules



| |                                                                       
| | ----------------------------------------------------------------------
| | As listed in the index to financial information on page 35
    hereof.



| |            
| | -----------
| | 3. Exhibits



| |                                                      
| | -----------------------------------------------------
| | As listed in the index to exhibits on page 77 hereof.









---



##### Table of Contents






SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) 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, on February 28,
2007.




| |                            
| | ---------------------------
| | THE WASHINGTON POST COMPANY
| | (Registrant)               



| |    |                       
| | -- | ----------------------
| | By | /s/ John B. Morse, Jr.

| |                       
| | ----------------------
| |                       
| | John B. Morse, Jr.    
| | Vice PresidentFinance

Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities
indicated on February 28, 2007:


|                     |  |                                                                                                  |  | 
|-------------------- |  | ------------------------------------------------------------------------------------------------ |  | 
|                    
|Donald E. Graham     |  | Chairman of the Board and Chief Executive Officer (Principal
    Executive Officer) and Director |  | 
|                    
|John B. Morse, Jr.   |  | Vice PresidentFinance (Principal Financial and
    Accounting Officer)                          |  | 
|                    
|Warren E. Buffett    |  | Director                                                                                         |  | 
|                    
|Christopher C. Davis |  | Director                                                                                         |  | 
|                    
|Barry Diller         |  | Director                                                                                         |  | 
|                    
|John L. Dotson Jr.   |  | Director                                                                                         |  | 
|                    
|Melinda French Gates |  | Director                                                                                         |  | 
|                    
|Thomas S. Gayner     |  | Director                                                                                         |  | 
|                    
|Ronald L. Olson      |  | Director                                                                                         |  | 
|                    
|Richard D. Simmons   |  | Director                                                                                         |  | 
|                    
|George W. Wilson     |  | Director                                                                                         |  | 



| |    |                       
| | -- | ----------------------
| | By | /s/ John B. Morse, Jr.

| |                   
| | ------------------
| |                   
| | John B. Morse, Jr.
| | Attorney-in-Fact  











---



##### Table of Contents






INDEX TO FINANCIAL INFORMATION





THE WASHINGTON POST COMPANY


|                                                                                                      |                                                                                                                                                  |                                            |    |    |    | 
|----------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------ | -- | -- | -- | 
|                                                                                                      |                                                                                                                                                  | Page                                       |   
|                                                                                                      |                                                                                                                                                  |                                            |   
|Managements Discussion and Analysis
    of Results of Operations and Financial Condition (Unaudited) |                                                                                                                                                  |                                            | 36 |   
|                                                                                                     
|Financial Statements and Schedules:                                                                   |                                                                                                                                                  |                                            |    |   
|                                                                                                     
|                                                                                                      | Report of Independent Registered Public
    Accounting Firm                                                                                      |                                            |    | 48 |   
|                                                                                                     
|                                                                                                      | Consolidated Statements of Income and
    Consolidated Statements of Comprehensive Income for the Three
    Fiscal Years Ended December 31, 2006 |                                            |    | 49 |   
|                                                                                                     
|                                                                                                      | Consolidated Balance Sheets at
    December 31, 2006 and January 1, 2006                                                                         |                                            |    | 50 |   
|                                                                                                     
|                                                                                                      | Consolidated Statements of Cash Flows for
    the Three Fiscal Years Ended December 31, 2006                                                     |                                            |    | 52 |   
|                                                                                                     
|                                                                                                      | Consolidated Statements of Changes in
    Common Shareholders Equity for the Three Fiscal Years
    Ended December 31, 2006                     |                                            |    | 53 |   
|                                                                                                     
|                                                                                                      | Notes to Consolidated Financial
    Statements                                                                                                   |                                            |    | 54 |   
|                                                                                                     
|                                                                                                      | Financial Statement Schedule for the Three Fiscal Years Ended
    December 31, 2006:                                                             |                                            |    |    |   
|                                                                                                     
|                                                                                                      |                                                                                                                                                  | II  Valuation and Qualifying
    Accounts |    |    | 73 | 
|                                                                                                     
|Ten-Year Summary of Selected Historical
    Financial Data (Unaudited)                                |                                                                                                                                                  |                                            | 74 |   














---



##### Table of Contents






MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION




OVERVIEW
























---



##### Table of Contents



RESULTS OF OPERATIONS  2006 COMPARED TO 2005






|  |                                                                                                                                                                                                                                                                                                   
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Charges of $50.9 million related to early retirement plan
    buyouts (after-tax impact of $31.7 million, or
    $3.30 per share);                                                                                                                                                                
| | A non-operating write-down of $14.2 million of a marketable
    equity security (after-tax impact of $9.0 million, or $0.94
    per share);                                                                                                                                                       
| | A charge of $13.0 million related to an agreement to settle
    a lawsuit at Kaplan (after-tax impact of $8.3 million, or
    $0.86 per share);                                                                                                                                                   
| | A goodwill impairment charge of $9.9 million at
    PostNewsweek Tech Media and a $1.5 million loss on the sale
    of PostNewsweek Tech Media, which was part of the magazine
    publishing segment (after-tax impact of $7.3 million, or
    $0.75 per share);                                 
| | Transition costs and operating losses at Kaplan related to
    acquisitions and
    start-ups for 2006 of
    $11.9 million (after-tax impact of $8.0 million, or
    $0.83 per share);                                                                                                           
| | A charge for the cumulative effect of a change in accounting for
    Kaplan equity awards (after-tax impact of $5.1 million, or
    $0.53 per share) in connection with the Companys
    adoption of Statement of Financial Accounting Standards
    No. 123R (SFAS 123R), Share-Based Payment;
| | A non-operating gain of $43.2 million on the sale of
    BrassRing, in which the Company held a 49% interest (after-tax
    impact of $27.4 million, or $2.86 per share);                                                                                                                         
| | Insurance recoveries of $10.4 million from cable division
    losses related to Hurricane Katrina (after-tax impact of
    $6.4 million, or $0.67 per share); and                                                                                                                                 
| | Non-operating gains of $33.8 million from sales of
    marketable equity securities for the year (after-tax impact of
    $21.1 million, or $2.19 per share).                                                                                                                                     



|  |                                                                                                                                                                                                                                                                                                                                 
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Charges and lost revenue associated with Hurricane Katrina and
    other hurricanes; estimated adverse impact on operating income
    of $27.5 million (after-tax impact of $17.3 million,
    or $1.80 per share) primarily at the cable division, but
    also at the television broadcasting and education
    divisions; and
| | Non-operating gains of $17.8 million from the sales of
    non-operating land and marketable securities (after-tax impact
    of $11.2 million, or $1.16 per share).                                                                                                                                                            









DIVISION RESULTS


Education Division. start-ups;












---



##### Table of Contents



start-ups,






|                        |                           |      |           |         |      |   |           |          |   |  |     |     |  
|----------------------- | ------------------------- | ---- | --------- | ------- | ---- | - | --------- | -------- | - |  | --- | --- | -
|                        |                           | 2006 |           |         | 2005 |   |           | % Change |  
|                        |                          
|Revenue                 |                           |      |           |         |      |   |           |          |   |  |     |    
|                        | Supplemental education    |      | $         | 805,152 |      |   | $         | 690,815  |   |  |     | 17  |  
|                        | Higher education          |      |           | 878,989 |      |   |           | 721,579  |   |  |     | 22  |  
|                        |                           |     
|                       
|                        |                           | $    | 1,684,141 |         |      | $ | 1,412,394 |          |   |  | 19  |    
|                        |                           |     
|Operating income (loss) |                           |      |           |         |      |   |           |          |   |  |     |    
|                        | Supplemental education    |      | $         | 109,887 |      |   | $         | 117,075  |   |  |     | (6  | )
|                        | Higher education          |      |           | 103,938 |      |   |           | 82,660   |   |  |     | 26  |  
|                        | Kaplan corporate overhead |      |           | (50,726 | )    |   |           | (33,305  | ) |  |     | (52 | )
|                        | Other                     |      |           | (32,910 | )    |   |           | (8,595   | ) |  |     |    |  
|                        |                           |     
|                       
|                        |                           | $    | 130,189   |         |      | $ | 157,835   |          |   |  | (18 | )  
|                        |                           |     









Newspaper Publishing Division.










---



##### Table of Contents











Television Broadcasting Division.






Magazine Publishing Division.






Cable Television Division. 30-day


30-day












---



##### Table of Contents





|                          |                 |              |  |         |              |  |  |         |           | 
|------------------------- | --------------- | ------------ |  | ------- | ------------ |  |  | ------- | --------- | 
|Cable Television Division |                 | December 31, |  |         | December 31, | 
|Subscribers               |                 | 2006         |  |         | 2005*        | 
|                          |                
|Gulf Coast Region         |                 |              |  |         |              |  |  |        
|                          | Basic           |              |  | 84,531  |              |  |  | 72,770  |          
|                          | Digital         |              |  | 31,686  |              |  |  | 27,501  |          
|                          | High-speed data |              |  | 36,335  |              |  |  | 24,049  |          
|                          | Telephony       |              |  |        |              |  |  |        |          
|                          |                 |             
|                          |                 | Total        |  |         | 152,552      |  |  |         | 124,320   | 
|                          |                 |             
|All Other Regions         |                 |              |  |         |              |  |  |        
|                          | Basic           |              |  | 609,019 |              |  |  | 616,408 |          
|                          | Digital         |              |  | 182,187 |              |  |  | 186,900 |          
|                          | High-speed data |              |  | 252,675 |              |  |  | 210,012 |          
|                          | Telephony       |              |  | 2,925   |              |  |  |        |          
|                          |                 |             
|                          |                 | Total        |  |         | 1,046,806    |  |  |         | 1,013,320 | 
|                          |                 |             
|Total                     |                 |              |  |         |              |  |  |        
|                          | Basic           |              |  | 693,550 |              |  |  | 689,178 |          
|                          | Digital         |              |  | 213,873 |              |  |  | 214,401 |          
|                          | High-speed data |              |  | 289,010 |              |  |  | 234,061 |          
|                          | Telephony       |              |  | 2,925   |              |  |  |        |          
|                          |                 |             
|                          |                 | Total        |  |         | 1,199,358    |  |  |         | 1,137,640 | 
|                          |                 |             







|                           |       |      |      |       |      |   |      |       | 
|-------------------------- | ----- | ---- | ---- | ----- | ---- | - | ---- | ----- | 
|                           |       | 2006 |      |       | 2005 |  
|                           |      
|Customer premise equipment |       | $    | 49.7 |       |      | $ | 30.0 |      
|Commercial                 |       |      | 0.1  |       |      |   | 0.2  |      
|Scaleable infrastructure   |       |      | 24.4 |       |      |   | 8.1  |      
|Line extensions            |       |      | 19.4 |       |      |   | 14.6 |      
|Upgrade/rebuild            |       |      | 9.5  |       |      |   | 13.1 |      
|Support capital            |       |      | 39.4 |       |      |   | 45.3 |      
|                           |       |     
|                           | Total |      | $    | 142.5 |      |   | $    | 111.3 | 
|                           |       |     

Corporate Office.


Equity in Earnings (Losses) of Affiliates.


Non-Operating Items.




|                                       |       |      |       |      |      |   |      |     | 
|-------------------------------------- | ----- | ---- | ----- | ---- | ---- | - | ---- | --- | 
|                                       |       | 2006 |       |      | 2005 |  
|                                       |      
|Gain on sale of affiliate              |       | $    | 43.2  |      |      | $ |     |    
|Gain on sales of marketable securities |       |      | 33.8  |      |      |   | 12.7 |    
|Foreign currency gains (losses), net   |       |      | 11.9  |      |      |   | (8.1 | )  
|Impairment write-downs on investments  |       |      | (15.1 | )    |      |   | (1.5 | )  
|Gain on sales of non-operating land    |       |      |      |      |      |   | 5.1  |    
|Other (losses) gains                   |       |      | (0.3  | )    |      |   | 0.8  |    
|                                       |       |     
|                                       | Total |      | $     | 73.5 |      |   | $    | 9.0 | 
|                                       |       |     



Income Taxes.


Cumulative Effect of Change in Accounting Principle.










---



##### Table of Contents





RESULTS OF OPERATIONS  2005 COMPARED TO 2004




30-day










DIVISION RESULTS


Education Division.


|                        |                           |      |           |         |      |   |           |          |   |    |     
|----------------------- | ------------------------- | ---- | --------- | ------- | ---- | - | --------- | -------- | - | -- | ----
|                        |                           | 2005 |           |         | 2004 |   |           | % Change
|                       
|Revenue                 |                           |      |           |         |      |   |           |          |   |   
|                        | Supplemental education    |      | $         | 690,815 |      |   | $         | 575,014  |   |    | 20  
|                        | Higher education          |      |           | 721,579 |      |   |           | 559,877  |   |    | 29  
|                        |                           |     
|                       
|                        |                           | $    | 1,412,394 |         |      | $ | 1,134,891 |          |   | 24
|                        |                           |     
|Operating income (loss) |                           |      |           |         |      |   |           |          |   |   
|                        | Supplemental education    |      | $         | 117,075 |      |   | $         | 100,795  |   |    | 16  
|                        | Higher education          |      |           | 82,660  |      |   |           | 93,402   |   |    | (12)
|                        | Kaplan corporate overhead |      |           | (33,305 | )    |   |           | (31,533  | ) |    | (6) 
|                        | Other                     |      |           | (8,595  | )    |   |           | (41,209  | ) |    | 79  
|                        |                           |     
|                       
|                        |                           | $    | 157,835   |         |      | $ | 121,455   |          |   | 30
|                        |                           |     











---



##### Table of Contents





year-to






Newspaper Publishing Division.








Television Broadcasting Division.






Magazine Publishing Division.










---



##### Table of Contents







Cable Television Division. 30-day


30-day








|                           |       |      |      |       |      |   |      |      | 
|-------------------------- | ----- | ---- | ---- | ----- | ---- | - | ---- | ---- | 
|                           |       | 2005 |      |       | 2004 |  
|                           |      
|Customer premise equipment |       | $    | 30.0 |       |      | $ | 23.5 |     
|Commercial                 |       |      | 0.2  |       |      |   | 0.1  |     
|Scaleable infrastructure   |       |      | 8.1  |       |      |   | 8.6  |     
|Line extensions            |       |      | 14.6 |       |      |   | 14.0 |     
|Upgrade/rebuild            |       |      | 13.1 |       |      |   | 15.6 |     
|Support capital            |       |      | 45.3 |       |      |   | 17.1 |     
|                           |       |     
|                           | Total |      | $    | 111.3 |      |   | $    | 78.9 | 
|                           |       |     

Equity in Losses of Affiliates.


Non-Operating Items.




|                                                            |       |      |      |     |      |   |      |     | 
|----------------------------------------------------------- | ----- | ---- | ---- | --- | ---- | - | ---- | --- | 
|                                                            |       | 2005 |      |     | 2004 |  
|                                                            |      
|Gain on sales of marketable securities                      |       | $    | 12.7 |     |      | $ |     |    
|Gain on sales of non-operating land                         |       |      | 5.1  |     |      |   |     |    
|Foreign currency (losses) gains, net                        |       |      | (8.1 | )   |      |   | 5.5  |    
|Impairment write-downs on cost method and other investments |       |      | (1.5 | )   |      |   | (0.7 | )  
|Gain on exchange of cable system business                   |       |      |     |     |      |   | 0.5  |    
|Other gains                                                 |       |      | 0.8  |     |      |   | 2.8  |    
|                                                            |       |     
|                                                            | Total |      | $    | 9.0 |      |   | $    | 8.1 | 
|                                                            |       |     











---



##### Table of Contents





Income Taxes.


FINANCIAL CONDITION: CAPITAL RESOURCES AND LIQUIDITY


Acquisitions and Dispositions.










Capital Expenditures.


Investments in Marketable Equity Securities.




Common Stock Repurchases and Dividend Rate.


Liquidity.














---



##### Table of Contents



364-day 5-year 5-year












Contractual Obligations


(in thousands)


|                                    |  |      |         |   |      |   |         |      |  |   |         |  |  |      |         |  |            |   |         |       |  |   |         |  |  |   |           | 
|----------------------------------- |  | ---- | ------- | - | ---- | - | ------- | ---- |  | - | ------- |  |  | ---- | ------- |  | ---------- | - | ------- | ----- |  | - | ------- |  |  | - | --------- | 
|                                    |  | 2007 |         |   | 2008 |   |         | 2009 |  |   | 2010    |  |  | 2011 |         |  | Thereafter |   |         | Total | 
|                                    |  |      |        
|Debt and interest                   |  | $    | 27,622  |   |      | $ | 23,387  |      |  | $ | 411,184 |  |  | $    |        |  |            | $ |        |       |  | $ |        |  |  | $ | 462,193   | 
|Programming purchase commitments(1) |  |      | 147,777 | ) |      |   | 128,325 |      |  |   | 101,327 |  |  |      | 78,548  |  |            |   | 70,300  |       |  |   | 143,965 |  |  |   | 670,242   | 
|Operating leases                    |  |      | 109,343 |   |      |   | 98,345  |      |  |   | 86,879  |  |  |      | 75,370  |  |            |   | 59,309  |       |  |   | 197,403 |  |  |   | 626,649   | 
|Other purchase obligations(2)       |  |      | 289,931 | ) |      |   | 116,967 |      |  |   | 80,699  |  |  |      | 11,570  |  |            |   | 6,858   |       |  |   | 1,133   |  |  |   | 507,158   | 
|Long-term liabilities(3)            |  |      | 5,776   | ) |      |   | 6,139   |      |  |   | 6,552   |  |  |      | 7,036   |  |            |   | 7,432   |       |  |   | 62,636  |  |  |   | 95,571    | 
|                                    |  |     
|Total                               |  | $    | 580,449 |   |      | $ | 373,163 |      |  | $ | 686,641 |  |  | $    | 172,524 |  |            | $ | 143,899 |       |  | $ | 405,137 |  |  | $ | 2,361,813 | 
|                                    |  |     






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes commitments for the Companys television
    broadcasting and cable television businesses that are reflected
    in the Companys Consolidated Balance Sheets and
    commitments to purchase programming to be produced in future
    years.                                                                                                                                                                                                                                                        
|   
|(2) | Includes purchase obligations related to newsprint contracts,
    printing contracts, employment agreements, circulation
    distribution agreements, capital projects and other legally
    binding commitments. Other purchase orders made in the ordinary
    course of business are excluded from the table above. Any
    amounts for which the Company is liable under purchase orders
    are reflected in the Companys Consolidated Balance Sheets
    as Accounts payable and accrued liabilities.
|   
|(3) | Primarily made up of postretirement benefit obligations other
    than pensions. The Company has other long-term liabilities
    excluded from the table above, including obligations for
    deferred compensation, long-term incentive plans and long-term
    deferred revenue.                                                                                                                                                                                                                            

Other Commercial Commitments


(in thousands)


|            |      |         |         |         | 
|----------- | ---- | ------- | ------- | ------- | 
|            |      | Line of |        
|Fiscal Year |      | Credit  |        
|            |     
|            | 2007 |         | $       |        | 
|            | 2008 |         |         |        | 
|            | 2009 |         |         |        | 
|            | 2010 |         |         |        | 
|            | 2011 |         |         | 500,000 | 
|Thereafter  |      |         |        |        
|            |      |         |        
|           
|Total       |      | $       | 500,000 |        
|            |      |         |        

Other. off-balance


CRITICAL ACCOUNTING POLICIES AND ESTIMATES






Revenue Recognition and Trade Accounts Receivable, Less
Estimated Returns, Doubtful Accounts and Allowances.










---



##### Table of Contents







Pension Costs.




Kaplan Stock Compensation.






30-day










---



##### Table of Contents









Goodwill and Other Intangibles.


OTHER


New Accounting Pronouncements.












---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM








Consolidated financial statements and financial statement
schedule






Internal control over financial reporting


Internal Control  Integrated Framework Internal Control 
Integrated Framework




















---



##### Table of Contents






CONSOLIDATED STATEMENTS OF INCOME


|                                                                                               |                                                            |                   |           |           |            |   |           |            |   |   |           |           |  
|---------------------------------------------------------------------------------------------- | ---------------------------------------------------------- | ----------------- | --------- | --------- | ---------- | - | --------- | ---------- | - | - | --------- | --------- | -
|                                                                                               |                                                            | Fiscal year ended |          
|                                                                                               |                                                            |                   |          
|                                                                                               |                                                            | December 31,      |           |           | January 1, |   |           | January 2, |  
|(in thousands, except per share amounts)                                                       |                                                            | 2006              |           |           | 2006       |   |           | 2005       |  
|                                                                                               |                                                           
|Operating Revenues                                                                             |                                                            |                   |           |           |            |   |           |            |   |   |           |          
|                                                                                               | Education                                                  |                   | $         | 1,684,141 |            |   | $         | 1,412,394  |   |   | $         | 1,134,891 |  
|                                                                                               | Advertising                                                |                   |           | 1,358,739 |            |   |           | 1,317,484  |   |   |           | 1,346,870 |  
|                                                                                               | Circulation and subscriber                                 |                   |           | 782,527   |            |   |           | 747,079    |   |   |           | 741,810   |  
|                                                                                               | Other                                                      |                   |           | 79,520    |            |   |           | 76,930     |   |   |           | 76,533    |  
|                                                                                               |                                                            |                  
|                                                                                              
|                                                                                               |                                                            |                   | 3,904,927 |           |            |   | 3,553,887 |            |   |   | 3,300,104 |          
|                                                                                               |                                                            |                  
|                                                                                              
|Operating Costs and Expenses                                                                   |                                                            |                   |           |           |            |   |           |            |   |   |           |          
|                                                                                               | Operating                                                  |                   |           | 2,042,393 |            |   |           | 1,909,615  |   |   |           | 1,717,059 |  
|                                                                                               | Selling, general and administrative                        |                   |           | 1,180,528 |            |   |           | 931,337    |   |   |           | 835,367   |  
|                                                                                               | Depreciation of property, plant and equipment              |                   |           | 205,295   |            |   |           | 190,543    |   |   |           | 175,338   |  
|                                                                                               | Amortization of intangibles and goodwill impairment charge |                   |           | 16,907    |            |   |           | 7,478      |   |   |           | 9,334     |  
|                                                                                               |                                                            |                  
|                                                                                              
|                                                                                               |                                                            |                   | 3,445,123 |           |            |   | 3,038,973 |            |   |   | 2,737,098 |          
|                                                                                               |                                                            |                  
|Income from Operations                                                                         |                                                            |                   | 459,804   |           |            |   | 514,914   |            |   |   | 563,006   |          
|                                                                                               | Equity in earnings (losses) of affiliates                  |                   |           | 790       |            |   |           | (881       | ) |   |           | (2,291    | )
|                                                                                               | Interest income                                            |                   |           | 10,431    |            |   |           | 3,385      |   |   |           | 1,622     |  
|                                                                                               | Interest expense                                           |                   |           | (25,343   | )          |   |           | (26,754    | ) |   |           | (28,032   | )
|                                                                                               | Other income (expense), net                                |                   |           | 73,452    |            |   |           | 8,980      |   |   |           | 8,127     |  
|                                                                                               |                                                            |                  
|Income Before Income Taxes and Cumulative Effect of Change in
    Accounting Principle         |                                                            |                   | 519,134   |           |            |   | 499,644   |            |   |   | 542,432   |          
|Provision for Income Taxes                                                                     |                                                            |                   | 189,600   |           |            |   | 185,300   |            |   |   | 209,700   |          
|                                                                                               |                                                            |                  
|Income Before Cumulative Effect of Change in Accounting
    Principle                          |                                                            |                   | 329,534   |           |            |   | 314,344   |            |   |   | 332,732   |          
|Cumulative Effect of Change in Method of Accounting for
    Share-based Payments, Net of Taxes |                                                            |                   | (5,075    | )         |            |   |          |            |   |   |          |          
|                                                                                               |                                                            |                  
|Net Income                                                                                     |                                                            |                   | 324,459   |           |            |   | 314,344   |            |   |   | 332,732   |          
|Redeemable Preferred Stock Dividends                                                           |                                                            |                   | (981      | )         |            |   | (981      | )          |   |   | (992      | )        
|                                                                                               |                                                            |                  
|                                                                                              
|Net Income Available for Common Shares                                                         |                                                            | $                 | 323,478   |           |            | $ | 313,363   |            |   | $ | 331,740   |          
|                                                                                               |                                                            |                  
|Basic Earnings per Common Share:                                                               |                                                            |                   |           |           |            |   |           |            |   |   |           |          
|Before Cumulative Effect of Change in Accounting Principle                                     |                                                            | $                 | 34.34     |           |            | $ | 32.66     |            |   | $ | 34.69     |          
|Cumulative Effect of Change in Accounting Principle                                            |                                                            |                   | (0.53     | )         |            |   |          |            |   |   |          |          
|                                                                                               |                                                            |                  
|                                                                                              
|Net Income Available for Common Shares                                                         |                                                            | $                 | 33.81     |           |            | $ | 32.66     |            |   | $ | 34.69     |          
|                                                                                               |                                                            |                  
|Diluted Earnings per Common Share:                                                             |                                                            |                   |           |           |            |   |           |            |   |   |           |          
|Before Cumulative Effect of Change in Accounting Principle                                     |                                                            | $                 | 34.21     |           |            | $ | 32.59     |            |   | $ | 34.59     |          
|Cumulative Effect of Change in Accounting Principle                                            |                                                            |                   | (0.53     | )         |            |   |          |            |   |   |          |          
|                                                                                               |                                                            |                  
|                                                                                              
|Net Income Available for Common Shares                                                         |                                                            | $                 | 33.68     |           |            | $ | 32.59     |            |   | $ | 34.59     |          
|                                                                                               |                                                            |                  

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


|                                  |                                                                                |                   |         |         |            |   |         |            |   |   |         |         |  
|--------------------------------- | ------------------------------------------------------------------------------ | ----------------- | ------- | ------- | ---------- | - | ------- | ---------- | - | - | ------- | ------- | -
|                                  |                                                                                | Fiscal year ended |        
|                                  |                                                                                |                   |        
|                                  |                                                                                | December 31,      |         |         | January 1, |   |         | January 2, |  
|(in thousands)                    |                                                                                | 2006              |         |         | 2006       |   |         | 2005       |  
|                                  |                                                                               
|Net Income                        |                                                                                | $                 | 324,459 |         |            | $ | 314,344 |            |   | $ | 332,732 |        
|Other Comprehensive Income (Loss) |                                                                                |                   |         |         |            |   |         |            |   |   |         |        
|                                  | Foreign currency translation adjustments                                       |                   |         | 17,650  |            |   |         | (8,834     | ) |   |         | 9,601   |  
|                                  | Change in net unrealized gain on available-for-sale securities                 |                   |         | 64,858  |            |   |         | (15,014    | ) |   |         | 63,022  |  
|                                  | Less reclassification adjustment for realized gains included in
    net income |                   |         | (19,560 | )          |   |         | (13,085    | ) |   |         | (202    | )
|                                  |                                                                                |                  
|                                  |                                                                                |                   | 62,948  |         |            |   | (36,933 | )          |   |   | 72,421  |        
|                                  | Income tax (expense) benefit related to other comprehensive
    income (loss)  |                   |         | (18,997 | )          |   |         | 10,964     |   |   |         | (24,577 | )
|                                  |                                                                                |                  
|                                  |                                                                                |                   | 43,951  |         |            |   | (25,969 | )          |   |   | 47,844  |        
|                                  |                                                                                |                  
|Comprehensive Income              |                                                                                | $                 | 368,410 |         |            | $ | 288,375 |            |   | $ | 380,576 |        
|                                  |                                                                                |                  











---



##### Table of Contents






CONSOLIDATED BALANCE SHEETS


|                                            |                                             |              |           |            |            |   |           |            |  
|------------------------------------------- | ------------------------------------------- | ------------ | --------- | ---------- | ---------- | - | --------- | ---------- | -
|                                            |                                             | December 31, |           |            | January 1, |  
|(in thousands)                              |                                             | 2006         |           |            | 2006       |  
|                                            |                                            
|Assets                                      |                                             |              |           |            |            |   |           |           
|Current Assets                              |                                             |              |           |            |            |   |           |           
|                                            | Cash and cash equivalents                   |              | $         | 348,148    |            |   | $         | 215,861    |  
|                                            | Investments in marketable equity securities |              |           | 28,923     |            |   |           | 67,596     |  
|                                            | Accounts receivable, net                    |              |           | 423,403    |            |   |           | 398,552    |  
|                                            | Income taxes                                |              |           |           |            |   |           | 26,651     |  
|                                            | Deferred income taxes                       |              |           | 48,936     |            |   |           | 37,320     |  
|                                            | Inventories                                 |              |           | 19,973     |            |   |           | 15,079     |  
|                                            | Other current assets                        |              |           | 65,442     |            |   |           | 57,267     |  
|                                            |                                             |             
|                                           
|                                            |                                             |              | 934,825   |            |            |   | 818,326   |           
|Property, Plant and Equipment               |                                             |              |           |            |            |   |           |           
|                                            | Buildings                                   |              |           | 331,682    |            |   |           | 327,569    |  
|                                            | Machinery, equipment and fixtures           |              |           | 1,939,110  |            |   |           | 1,839,983  |  
|                                            | Leasehold improvements                      |              |           | 204,797    |            |   |           | 167,116    |  
|                                            |                                             |             
|                                           
|                                            |                                             |              | 2,475,589 |            |            |   | 2,334,668 |           
|                                            | Less accumulated depreciation               |              |           | (1,433,060 | )          |   |           | (1,325,676 | )
|                                            |                                             |             
|                                           
|                                            |                                             |              | 1,042,529 |            |            |   | 1,008,992 |           
|                                            | Land                                        |              |           | 42,030     |            |   |           | 42,257     |  
|                                            | Construction in progress                    |              |           | 133,750    |            |   |           | 91,383     |  
|                                            |                                             |             
|                                           
|                                            |                                             |              | 1,218,309 |            |            |   | 1,142,632 |           
|Investments in Marketable Equity Securities |                                             |              | 325,805   |            |            |   | 262,325   |           
|Investments in Affiliates                   |                                             |              | 53,510    |            |            |   | 66,775    |           
|Goodwill, Net                               |                                             |              | 1,240,251 |            |            |   | 1,125,570 |           
|Indefinite-Lived Intangible Assets, Net     |                                             |              | 517,742   |            |            |   | 494,692   |           
|Amortized Intangible Assets, Net            |                                             |              | 31,799    |            |            |   | 22,814    |           
|Prepaid Pension Cost                        |                                             |              | 975,292   |            |            |   | 593,469   |           
|Deferred Charges and Other Assets           |                                             |              | 83,839    |            |            |   | 58,170    |           
|                                            |                                             |             
|                                           
|                                            |                                             | $            | 5,381,372 |            |            | $ | 4,584,773 |           
|                                            |                                             |             











---



##### Table of Contents





|                                                                                                                                                                                                      |                                                                                       |                                                                                                                                                |           |            |            |   |           |            |        | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------- | --------- | ---------- | ---------- | - | --------- | ---------- | ------ | 
|                                                                                                                                                                                                      |                                                                                       | December 31,                                                                                                                                   |           |            | January 1, |  
|(in thousands, except share amounts)                                                                                                                                                                  |                                                                                       | 2006                                                                                                                                           |           |            | 2006       |  
|                                                                                                                                                                                                      |                                                                                      
|Liabilities and Shareholders Equity                                                                                                                                                                  |                                                                                       |                                                                                                                                                |           |            |            |   |           |           
|Current Liabilities                                                                                                                                                                                   |                                                                                       |                                                                                                                                                |           |            |            |   |           |           
|                                                                                                                                                                                                      | Accounts payable and accrued liabilities                                              |                                                                                                                                                | $         | 509,375    |            |   | $         | 438,693    |       
|                                                                                                                                                                                                      | Income taxes                                                                          |                                                                                                                                                |           | 4,728      |            |   |           |           |       
|                                                                                                                                                                                                      | Deferred revenue                                                                      |                                                                                                                                                |           | 283,475    |            |   |           | 231,208    |       
|                                                                                                                                                                                                      | Short-term borrowings                                                                 |                                                                                                                                                |           | 5,622      |            |   |           | 24,820     |       
|                                                                                                                                                                                                      |                                                                                       |                                                                                                                                               
|                                                                                                                                                                                                     
|                                                                                                                                                                                                      |                                                                                       |                                                                                                                                                | 803,200   |            |            |   | 694,721   |           
|Postretirement Benefits Other Than Pensions                                                                                                                                                           |                                                                                       |                                                                                                                                                | 81,337    |            |            |   | 150,909   |           
|Other Liabilities                                                                                                                                                                                     |                                                                                       |                                                                                                                                                | 324,143   |            |            |   | 262,270   |           
|Deferred Income Taxes                                                                                                                                                                                 |                                                                                       |                                                                                                                                                | 599,487   |            |            |   | 422,548   |           
|Long-Term Debt                                                                                                                                                                                        |                                                                                       |                                                                                                                                                | 401,571   |            |            |   | 403,635   |           
|                                                                                                                                                                                                      |                                                                                       |                                                                                                                                               
|                                                                                                                                                                                                     
|                                                                                                                                                                                                      |                                                                                       |                                                                                                                                                | 2,209,738 |            |            |   | 1,934,083 |           
|                                                                                                                                                                                                      |                                                                                       |                                                                                                                                               
|Commitments and Contingencies                                                                                                                                                                         |                                                                                       |                                                                                                                                                |           |            |            |   |           |           
|Redeemable Preferred Stock,Series A, $1 par
    value, with a redemption and liquidation value of
    $1,000 per share; 23,000 shares authorized; 12,120 and
    12,267 shares issued and outstanding |                                                                                       |                                                                                                                                                | 12,120    |            |            |   | 12,267    |           
|                                                                                                                                                                                                      |                                                                                       |                                                                                                                                               
|                                                                                                                                                                                                     
|Preferred Stock,$1 par value; 977,000 shares
    authorized, none issued                                                                                                                              |                                                                                       |                                                                                                                                                |          |            |            |   |          |           
|                                                                                                                                                                                                      |                                                                                       |                                                                                                                                               
|Common Shareholders Equity                                                                                                                                                                           |                                                                                       |                                                                                                                                                |           |            |            |   |           |           
|                                                                                                                                                                                                      | Common stock                                                                          |                                                                                                                                                |           |            |            |   |           |            |       
|                                                                                                                                                                                                      |                                                                                       | Class A common stock, $1 par value;
    7,000,000 shares authorized; 1,722,250 shares issued
    and outstanding                               |           |            | 1,722      |   |           |            | 1,722  | 
|                                                                                                                                                                                                      |                                                                                       | Class B common stock, $1 par value;
    40,000,000 shares authorized; 18,277,750 shares
    issued; 7,813,940 and 7,879,281 shares outstanding |           |            | 18,278     |   |           |            | 18,278 | 
|                                                                                                                                                                                                      | Capital in excess of par value                                                        |                                                                                                                                                |           | 205,820    |            |   |           | 192,672    |       
|                                                                                                                                                                                                      | Retained earnings                                                                     |                                                                                                                                                |           | 4,120,143  |            |   |           | 3,871,587  |       
|                                                                                                                                                                                                      | Accumulated other comprehensive income, net of taxes                                  |                                                                                                                                                |           |            |            |   |           |            |       
|                                                                                                                                                                                                      |                                                                                       | Cumulative foreign currency translation adjustment                                                                                             |           |            | 22,689     |   |           |            | 5,039  | 
|                                                                                                                                                                                                      |                                                                                       | Unrealized gain on available-for-sale securities                                                                                               |           |            | 84,614     |   |           |            | 58,313 | 
|                                                                                                                                                                                                      |                                                                                       | Unrealized gain on pensions and other postretirement plans                                                                                     |           |            | 270,258    |   |           |            |       | 
|                                                                                                                                                                                                      | Cost of 10,463,810 and 10,398,469 shares of Class B
    common stock held in treasury |                                                                                                                                                |           | (1,564,010 | )          |   |           | (1,509,188 | )     
|                                                                                                                                                                                                      |                                                                                       |                                                                                                                                               
|                                                                                                                                                                                                     
|                                                                                                                                                                                                      |                                                                                       |                                                                                                                                                | 3,159,514 |            |            |   | 2,638,423 |           
|                                                                                                                                                                                                      |                                                                                       |                                                                                                                                               
|                                                                                                                                                                                                     
|                                                                                                                                                                                                      |                                                                                       | $                                                                                                                                              | 5,381,372 |            |            | $ | 4,584,773 |           
|                                                                                                                                                                                                      |                                                                                       |                                                                                                                                               











---



##### Table of Contents






CONSOLIDATED STATEMENTS OF CASH FLOWS


|                                               |                                                                                       |                                                                                               |                                                                 |          |            |          |         |            |         |          |         |          |         |          |  
|---------------------------------------------- | ------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------- | --------------------------------------------------------------- | -------- | ---------- | -------- | ------- | ---------- | ------- | -------- | ------- | -------- | ------- | -------- | -
|                                               |                                                                                       | Fiscal Year Ended                                                                             |                                                                
|                                               |                                                                                       |                                                                                               |                                                                
|                                               |                                                                                       | December 31,                                                                                  |                                                                 |          | January 1, |          |         | January 2, |        
|(In thousands)                                 |                                                                                       | 2006                                                                                          |                                                                 |          | 2006       |          |         | 2005       |        
|                                               |                                                                                      
|Cash Flows from Operating Activities:          |                                                                                       |                                                                                               |                                                                 |          |            |          |         |            |         |          |         |         
|                                               | Net income                                                                            |                                                                                               | $                                                               | 324,459  |            |          | $       | 314,344    |         |          | $       | 332,732  |        
|                                               | Adjustments to reconcile net income to net cash provided by
    operating activities: |                                                                                               |                                                                 |          |            |          |         |            |         |          |         |          |        
|                                               |                                                                                       | Cumulative effect of change in accounting principle                                           |                                                                 |          | 5,075      |          |         |            |        |          |         |          |        |         
|                                               |                                                                                       | Depreciation of property, plant and equipment                                                 |                                                                 |          | 205,295    |          |         |            | 190,543 |          |         |          | 175,338 |         
|                                               |                                                                                       | Amortization of intangible assets                                                             |                                                                 |          | 7,043      |          |         |            | 7,478   |          |         |          | 9,334   |         
|                                               |                                                                                       | Goodwill impairment charge                                                                    |                                                                 |          | 9,864      |          |         |            |        |          |         |          |        |         
|                                               |                                                                                       | Net pension benefit                                                                           |                                                                 |          | (21,833    | )        |         |            | (37,914 | )        |         |          | (41,954 | )       
|                                               |                                                                                       | Early retirement program expense                                                              |                                                                 |          | 50,942     |          |         |            | 1,192   |          |         |          | 132     |         
|                                               |                                                                                       | Loss (gain) on sale or write-down of property, plant and
    equipment and non-operating land |                                                                 |          | 3,433      |          |         |            | 4,517   |          |         |          | (2,669  | )       
|                                               |                                                                                       | Gain on sale of marketable equity securities                                                  |                                                                 |          | (33,805    | )        |         |            | (12,661 | )        |         |          |        |         
|                                               |                                                                                       | Foreign exchange (gain) loss                                                                  |                                                                 |          | (11,920    | )        |         |            | 8,099   |          |         |          | (5,505  | )       
|                                               |                                                                                       | Write-downs of marketable equity securities and other investments                             |                                                                 |          | 15,051     |          |         |            | 1,465   |          |         |          | 677     |         
|                                               |                                                                                       | Gain from sale or exchange of businesses                                                      |                                                                 |          | (41,742    | )        |         |            |        |          |         |          | (497    | )       
|                                               |                                                                                       | Equity in (earnings) losses of affiliates, net of distributions                               |                                                                 |          | 110        |          |         |            | 1,731   |          |         |          | 3,091   |         
|                                               |                                                                                       | Provision for deferred income taxes                                                           |                                                                 |          | (38,234    | )        |         |            | 29,297  |          |         |          | 44,321  |         
|                                               |                                                                                       | Change in assets and liabilities:                                                             |                                                                 |          |            |          |         |            |         |          |         |          |         |         
|                                               |                                                                                       |                                                                                               | Increase in accounts receivable, net                            |          |            | (10,494  | )       |            |         | (19,416  | )       |          |         | (23,722  | )
|                                               |                                                                                       |                                                                                               | (Increase) decrease in inventories                              |          |            | (4,222   | )       |            |         | 11,483   |         |          |         | 2,640    |  
|                                               |                                                                                       |                                                                                               | Increase (decrease) in accounts payable and accrued liabilities |          |            | 42,916   |         |            |         | (27,033  | )       |          |         | 70,058   |  
|                                               |                                                                                       |                                                                                               | Decrease (increase) in income taxes receivable                  |          |            | 31,343   |         |            |         | (8,139   | )       |          |         | (13,079  | )
|                                               |                                                                                       |                                                                                               | Decrease in other assets and other liabilities, net             |          |            | 63,571   |         |            |         | 53,618   |         |          |         | 3,477    |  
|                                               |                                                                                       | Other                                                                                         |                                                                 |          | (2,102     | )        |         |            | 4,168   |          |         |          | 7,347   |         
|                                               |                                                                                       |                                                                                              
|                                               |                                                                                       |                                                                                               | Net cash provided by operating activities                       |          |            | 594,750  |         |            |         | 522,772  |         |          |         | 561,721  |  
|                                               |                                                                                       |                                                                                              
|Cash Flows from Investing Activities:          |                                                                                       |                                                                                               |                                                                 |          |            |          |         |            |         |          |         |         
|                                               | Purchases of property, plant and equipment                                            |                                                                                               |                                                                 | (284,022 | )          |          |         | (238,349   | )       |          |         | (204,632 | )      
|                                               | Investments in certain businesses                                                     |                                                                                               |                                                                 | (153,696 | )          |          |         | (143,478   | )       |          |         | (55,232  | )      
|                                               | Proceeds from sale of marketable equity securities                                    |                                                                                               |                                                                 | 82,910   |            |          |         | 64,801     |         |          |         |         |        
|                                               | Net proceeds from sale of businesses                                                  |                                                                                               |                                                                 | 76,389   |            |          |         |           |         |          |         |         |        
|                                               | Purchases of marketable equity securities                                             |                                                                                               |                                                                 | (42,888  | )          |          |         |           |         |          |         | (94,560  | )      
|                                               | Insurance proceeds from property, plant, and equipment losses                         |                                                                                               |                                                                 | 9,281    |            |          |         |           |         |          |         |         |        
|                                               | Proceeds from sale of property, plant and equipment                                   |                                                                                               |                                                                 | 6,794    |            |          |         | 24,077     |         |          |         | 5,340    |        
|                                               | Purchases of cost method investments                                                  |                                                                                               |                                                                 | (8,422   | )          |          |         | (8,709     | )       |          |         | (224     | )      
|                                               | Investments in affiliates                                                             |                                                                                               |                                                                 | (3,349   | )          |          |         | (4,981     | )       |          |         |         |        
|                                               | Other                                                                                 |                                                                                               |                                                                 | (4,267   | )          |          |         |           |         |          |         |         |        
|                                               |                                                                                       |                                                                                              
|                                               |                                                                                       |                                                                                               | Net cash used in investing activities                           |          |            | (321,270 | )       |            |         | (306,639 | )       |          |         | (349,308 | )
|                                               |                                                                                       |                                                                                              
|Cash Flows from Financing Activities:          |                                                                                       |                                                                                               |                                                                 |          |            |          |         |            |         |          |         |         
|                                               | Principal payments on debt                                                            |                                                                                               |                                                                 | (27,846  | )          |          |         | (6,964     | )       |          |         | (19,253  | )      
|                                               | Dividends paid                                                                        |                                                                                               |                                                                 | (75,903  | )          |          |         | (71,979    | )       |          |         | (67,917  | )      
|                                               | Common shares repurchased                                                             |                                                                                               |                                                                 | (56,559  | )          |          |         |           |         |          |         |         |        
|                                               | Proceeds from exercise of stock options                                               |                                                                                               |                                                                 | 5,905    |            |          |         | 6,832      |         |          |         | 15,616   |        
|                                               | Repayment of commercial paper, net                                                    |                                                                                               |                                                                 |         |            |          |         | (50,201    | )       |          |         | (138,116 | )      
|                                               | Cash overdraft.                                                                       |                                                                                               |                                                                 | 4,375    |            |          |         | 6,534      |         |          |         | (1,953   | )      
|                                               | Excess tax benefit on stock options                                                   |                                                                                               |                                                                 | 1,432    |            |          |         |           |         |          |         |         |        
|                                               | Other                                                                                 |                                                                                               |                                                                 | (147     | )          |          |         |           |         |          |         |         |        
|                                               |                                                                                       |                                                                                              
|                                               |                                                                                       |                                                                                               | Net cash used in financing activities                           |          |            | (148,743 | )       |            |         | (115,778 | )       |          |         | (211,623 | )
|                                               |                                                                                       |                                                                                              
|                                              
|Effect of Currency Exchange Rate Change        |                                                                                       |                                                                                               | 7,550                                                           |          |            |          | (3,894  | )          |         |          | 2,049   |         
|                                               |                                                                                       |                                                                                              
|Net Increase in Cash and Cash Equivalents      |                                                                                       |                                                                                               | 132,287                                                         |          |            |          | 96,461  |            |         |          | 2,839   |         
|Cash and Cash Equivalents at Beginning of Year |                                                                                       |                                                                                               | 215,861                                                         |          |            |          | 119,400 |            |         |          | 116,561 |         
|                                               |                                                                                       |                                                                                              
|Cash and Cash Equivalents at End of Year       |                                                                                       | $                                                                                             | 348,148                                                         |          |            | $        | 215,861 |            |         | $        | 119,400 |         
|                                               |                                                                                       |                                                                                              
|Supplemental Cash Flow Information:            |                                                                                       |                                                                                               |                                                                 |          |            |          |         |            |         |          |         |         
|                                               | Cash paid during the year for:                                                        |                                                                                               |                                                                 |          |            |          |         |            |         |          |         |          |        
|                                               |                                                                                       | Income taxes                                                                                  |                                                                 | $        | 194,900    |          |         | $          | 161,600 |          |         | $        | 171,400 |         
|                                               |                                                                                       | Interest, net of amounts capitalized                                                          |                                                                 | $        | 24,600     |          |         | $          | 27,300  |          |         | $        | 25,500  |         











---



##### Table of Contents






CONSOLIDATED STATEMENTS OF CHANGES IN COMMON
SHAREHOLDERS EQUITY


|                           |                                                                                                       |         |       |         |  |            |        |          |  |             |         |            |  |                |           |                |   |   |        |        |   |   |        |         |   |   |         |         |  |   |            |         |  
|-------------------------- | ----------------------------------------------------------------------------------------------------- | ------- | ----- | ------- |  | ---------- | ------ | -------- |  | ----------- | ------- | ---------- |  | -------------- | --------- | -------------- | - | - | ------ | ------ | - | - | ------ | ------- | - | - | ------- | ------- |  | - | ---------- | ------- | -
|                           |                                                                                                       |         |       |         |  |            |        |          |  |             |         |            |  | Unrealized     |           |                |   |  
|                           |                                                                                                       |         |       |         |  |            |        |          |  | Cumulative  |         | Unrealized |  | Gains on       |           |                |   |  
|                           |                                                                                                       |         |       |         |  |            |        |          |  | Foreign     |         | Gain on    |  | Pensions and   |           |               
|                           |                                                                                                       | Class A |       | Class B |  | Capital in |        |          |  | Currency    |         | Available- |  | Other          |           |                |  
|                           |                                                                                                       | Common  |       | Common  |  | Excess of  |        | Retained |  | Translation |         | for-Sale   |  | Postretirement |           |                |   |   |       
|(in thousands)             |                                                                                                       | Stock   |       | Stock   |  | Par Value  |        | Earnings |  | Adjustment  |         | Securities |  | Plans          |           | Treasury Stock |  
|                           |                                                                                                      
|Balance, December 28, 2003 |                                                                                                       | $       | 1,722 |         |  | $          | 18,278 |          |  | $           | 154,691 |            |  | $              | 3,364,407 |                |   | $ | 4,272  |        |   | $ | 37,205 |         |   | $ |        |         |  | $ | (1,517,894 | )       |  
|                           | Net income for the year                                                                               |         |       |         |  |            |        |          |  |             |         |            |  |                |           | 332,732        |   |   |        |        |   |   |        |         |   |   |         |         |  |   |            |         |  
|                           | Dividends paid on common stock  $7.00 per share                                                      |         |       |         |  |            |        |          |  |             |         |            |  |                |           | (66,925        | ) |   |        |        |   |   |        |         |   |   |         |         |  |   |            |         |  
|                           | Dividends paid on redeemable preferred stock                                                          |         |       |         |  |            |        |          |  |             |         |            |  |                |           | (992           | ) |   |        |        |   |   |        |         |   |   |         |         |  |   |            |         |  
|                           | Issuance of 34,492 shares of Class B common stock, net
    of restricted stock award forfeitures      |         |       |         |  |            |        |          |  |             |         | 10,163     |  |                |           |                |   |   |        |        |   |   |        |         |   |   |         |         |  |   |            | 5,006   |  
|                           | Amortization of unearned stock compensation                                                           |         |       |         |  |            |        |          |  |             |         | 6,177      |  |                |           |                |   |   |        |        |   |   |        |         |   |   |         |         |  |   |            |         |  
|                           | Change in foreign currency translation adjustment (net of taxes)                                      |         |       |         |  |            |        |          |  |             |         |            |  |                |           |                |   |   |        | 9,601  |   |   |        |         |   |   |         |         |  |   |            |         |  
|                           | Change in unrealized gain on available-for-sale securities (net
    of taxes)                         |         |       |         |  |            |        |          |  |             |         |            |  |                |           |                |   |   |        |        |   |   |        | 38,243  |   |   |         |         |  |   |            |         |  
|                           | Stock option expense                                                                                  |         |       |         |  |            |        |          |  |             |         | 829        |  |                |           |                |   |   |        |        |   |   |        |         |   |   |         |         |  |   |            |         |  
|                           | Tax benefits arising from employee stock plans                                                        |         |       |         |  |            |        |          |  |             |         | 7,091      |  |                |           |                |   |   |        |        |   |   |        |         |   |   |         |         |  |   |            |         |  
|                           |                                                                                                       |         |      
|                           |                                                                                                      
|Balance, January 2, 2005   |                                                                                                       |         | 1,722 |         |  |            | 18,278 |          |  |             | 178,951 |            |  |                | 3,629,222 |                |   |   | 13,873 |        |   |   | 75,448 |         |   |   |        |         |  |   | (1,512,888 | )       |  
|                           | Net income for the year                                                                               |         |       |         |  |            |        |          |  |             |         |            |  |                |           | 314,344        |   |   |        |        |   |   |        |         |   |   |         |         |  |   |            |         |  
|                           | Dividends paid on common stock  $7.40 per share                                                      |         |       |         |  |            |        |          |  |             |         |            |  |                |           | (70,998        | ) |   |        |        |   |   |        |         |   |   |         |         |  |   |            |         |  
|                           | Dividends paid on redeemable preferred stock                                                          |         |       |         |  |            |        |          |  |             |         |            |  |                |           | (981           | ) |   |        |        |   |   |        |         |   |   |         |         |  |   |            |         |  
|                           | Issuance of 25,459 shares of Class B common stock, net
    of restricted stock award forfeitures      |         |       |         |  |            |        |          |  |             |         | 3,138      |  |                |           |                |   |   |        |        |   |   |        |         |   |   |         |         |  |   |            | 3,700   |  
|                           | Amortization of unearned stock compensation                                                           |         |       |         |  |            |        |          |  |             |         | 5,578      |  |                |           |                |   |   |        |        |   |   |        |         |   |   |         |         |  |   |            |         |  
|                           | Change in foreign currency translation adjustment (net of taxes)                                      |         |       |         |  |            |        |          |  |             |         |            |  |                |           |                |   |   |        | (8,834 | ) |   |        |         |   |   |         |         |  |   |            |         |  
|                           | Change in unrealized gain on available-for-sale securities (net
    of taxes)                         |         |       |         |  |            |        |          |  |             |         |            |  |                |           |                |   |   |        |        |   |   |        | (17,135 | ) |   |         |         |  |   |            |         |  
|                           | Stock option expense                                                                                  |         |       |         |  |            |        |          |  |             |         | 1,101      |  |                |           |                |   |   |        |        |   |   |        |         |   |   |         |         |  |   |            |         |  
|                           | Tax benefits arising from employee stock plans                                                        |         |       |         |  |            |        |          |  |             |         | 3,904      |  |                |           |                |   |   |        |        |   |   |        |         |   |   |         |         |  |   |            |         |  
|                           |                                                                                                       |         |      
|                           |                                                                                                      
|Balance, January 1, 2006   |                                                                                                       |         | 1,722 |         |  |            | 18,278 |          |  |             | 192,672 |            |  |                | 3,871,587 |                |   |   | 5,039  |        |   |   | 58,313 |         |   |   |        |         |  |   | (1,509,188 | )       |  
|                           | Net income for the year                                                                               |         |       |         |  |            |        |          |  |             |         |            |  |                |           | 324,459        |   |   |        |        |   |   |        |         |   |   |         |         |  |   |            |         |  
|                           | Dividends paid on common stock  $7.80 per share                                                      |         |       |         |  |            |        |          |  |             |         |            |  |                |           | (74,922        | ) |   |        |        |   |   |        |         |   |   |         |         |  |   |            |         |  
|                           | Dividends paid on redeemable preferred stock                                                          |         |       |         |  |            |        |          |  |             |         |            |  |                |           | (981           | ) |   |        |        |   |   |        |         |   |   |         |         |  |   |            |         |  
|                           | Repurchase of 77,300 shares of Class B common stock                                                   |         |       |         |  |            |        |          |  |             |         |            |  |                |           |                |   |   |        |        |   |   |        |         |   |   |         |         |  |   |            | (56,559 | )
|                           | Issuance of 11,959 shares of Class B common stock, net
    of restricted stock award forfeitures      |         |       |         |  |            |        |          |  |             |         | 3,589      |  |                |           |                |   |   |        |        |   |   |        |         |   |   |         |         |  |   |            | 1,737   |  
|                           | Amortization of unearned stock compensation                                                           |         |       |         |  |            |        |          |  |             |         | 6,315      |  |                |           |                |   |   |        |        |   |   |        |         |   |   |         |         |  |   |            |         |  
|                           | Change in foreign currency translation adjustment (net of taxes)                                      |         |       |         |  |            |        |          |  |             |         |            |  |                |           |                |   |   |        | 17,650 |   |   |        |         |   |   |         |         |  |   |            |         |  
|                           | Change in unrealized gain on available-for-sale securities (net
    of taxes)                         |         |       |         |  |            |        |          |  |             |         |            |  |                |           |                |   |   |        |        |   |   |        | 26,301  |   |   |         |         |  |   |            |         |  
|                           | Adjustment to initially apply SFAS 158 for pensions and other
    postretirement plans (net of taxes) |         |       |         |  |            |        |          |  |             |         |            |  |                |           |                |   |   |        |        |   |   |        |         |   |   |         | 270,258 |  |   |            |         |  
|                           | Stock option expense                                                                                  |         |       |         |  |            |        |          |  |             |         | 1,291      |  |                |           |                |   |   |        |        |   |   |        |         |   |   |         |         |  |   |            |         |  
|                           | Tax benefits arising from employee stock plans                                                        |         |       |         |  |            |        |          |  |             |         | 1,953      |  |                |           |                |   |   |        |        |   |   |        |         |   |   |         |         |  |   |            |         |  
|                           |                                                                                                       |         |      
|                           |                                                                                                      
|Balance, December 31, 2006 |                                                                                                       | $       | 1,722 |         |  | $          | 18,278 |          |  | $           | 205,820 |            |  | $              | 4,120,143 |                |   | $ | 22,689 |        |   | $ | 84,614 |         |   | $ | 270,258 |         |  | $ | (1,564,010 | )       |  
|                           |                                                                                                       |         |      











---



##### Table of Contents






NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




|   |                                           
|-- | ------------------------------------------
|A. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Fiscal Year. 53-week


Principles of Consolidation.


Presentation.


Use of Estimates.


Cash Equivalents.


Investments in Marketable Equity Securities.


Inventories. first-in,


Property, Plant and Equipment.






Investments in Affiliates.


Cost Method Investments.


Goodwill and Other Intangibles.


Long-Lived Assets.










---



##### Table of Contents





Program Rights.


Revenue Recognition.




Pensions and Other Postretirement Benefits.


Income Taxes.


Foreign Currency Translation.


Stock Options.


|                                                                                                                                                        |  |      |         |   |      |   |         |  
|------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ------- | - | ---- | - | ------- | -
|                                                                                                                                                        |  | 2005 |         |   | 2004 |  
|                                                                                                                                                        | 
|Net income available for common shares, as reported                                                                                                     |  | $    | 313,363 |   |      | $ | 331,740 |  
|Add: Company stock option compensation expense included in net
    income, net of related tax effects                                                   |  |      | 694     |   |      |   | 536     |  
|Deduct: Total Company stock option compensation expense
    determined under the fair-value-based method for all awards, net
    of related tax effects |  |      | (1,071  | ) |      |   | (2,946  | )
|                                                                                                                                                        |  |     
|Pro forma net income available for common shares                                                                                                        |  | $    | 312,986 |   |      | $ | 329,330 |  
|                                                                                                                                                        |  |     
|Basic earnings per share, as reported                                                                                                                   |  | $    | 32.66   |   |      | $ | 34.69   |  
|Pro forma basic earnings per share                                                                                                                      |  | $    | 32.62   |   |      | $ | 34.44   |  
|Diluted earnings per share, as reported                                                                                                                 |  | $    | 32.59   |   |      | $ | 34.59   |  
|Pro forma diluted earnings per share                                                                                                                    |  | $    | 32.55   |   |      | $ | 34.34   |  





|   |                                                                     
|-- | --------------------------------------------------------------------
|B. | ACCOUNTS RECEIVABLE AND ACCOUNTS PAYABLE AND ACCRUED
    LIABILITIES



|                                                                                                               |  |      |         |  |      |   |         | 
|-------------------------------------------------------------------------------------------------------------- |  | ---- | ------- |  | ---- | - | ------- | 
|                                                                                                               |  | 2006 |         |  | 2005 |  
|                                                                                                               | 
|Trade accounts receivable, less estimated returns, doubtful
    accounts and allowances of $86,227 and $78,099 |  | $    | 400,380 |  |      | $ | 375,668 | 
|Other accounts receivable                                                                                      |  |      | 23,023  |  |      |   | 22,884  | 
|                                                                                                               |  |     
|                                                                                                               |  | $    | 423,403 |  |      | $ | 398,552 | 
|                                                                                                               |  |     









---



##### Table of Contents





|                                          |  |      |         |  |      |   |         | 
|----------------------------------------- |  | ---- | ------- |  | ---- | - | ------- | 
|                                          |  | 2006 |         |  | 2005 |  
|                                          | 
|Accounts payable and accrued expenses     |  | $    | 322,044 |  |      | $ | 272,441 | 
|Accrued compensation and related benefits |  |      | 181,289 |  |      |   | 158,612 | 
|Due to affiliates (newsprint)             |  |      | 6,042   |  |      |   | 7,640   | 
|                                          |  |     
|                                          |  | $    | 509,375 |  |      | $ | 438,693 | 
|                                          |  |     





|   |            
|-- | -----------
|C. | INVESTMENTS

Investments in Marketable Equity Securities.


|                     |  |      |         |  |      |   |         | 
|-------------------- |  | ---- | ------- |  | ---- | - | ------- | 
|                     |  | 2006 |         |  | 2005 |  
|                     | 
|Total cost           |  | $    | 213,705 |  |      | $ | 234,196 | 
|Net unrealized gains |  |      | 141,023 |  |      |   | 95,725  | 
|                     |  |     
|Total fair value     |  | $    | 354,728 |  |      | $ | 329,921 | 
|                     |  |     







Investments in Affiliates.


|                             |  |      |        |  |      |   |        | 
|---------------------------- |  | ---- | ------ |  | ---- | - | ------ | 
|                             |  | 2006 |        |  | 2005 |  
|                             | 
|Bowater Mersey Paper Company |  | $    | 49,230 |  |      | $ | 54,407 | 
|BrassRing                    |  |      |       |  |      |   | 11,349 | 
|Other                        |  |      | 4,280  |  |      |   | 1,019  | 
|                             |  |     
|                             |  | $    | 53,510 |  |      | $ | 66,775 | 
|                             |  |     



|                      |                               |      |   |         |      |  |   |         |   |  |   |         |  
|--------------------- | ----------------------------- | ---- | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                      |                               | 2006 |   |         | 2005 |  |   | 2004    |  
|                      |                              
|Financial Position    |                               |      |   |         |      |  |   |         |   |  |   |        
|                      | Working capital               |      | $ | 26,046  |      |  | $ | 13,861  |   |  | $ | 9,014   |  
|                      | Property, plant and equipment |      |   | 116,293 |      |  |   | 131,823 |   |  |   | 137,321 |  
|                      | Total assets                  |      |   | 172,819 |      |  |   | 214,333 |   |  |   | 202,904 |  
|                      | Long-term debt                |      |   |        |      |  |   |        |   |  |   |        |  
|                      | Net equity                    |      |   | 125,660 |      |  |   | 164,801 |   |  |   | 155,147 |  
|Results of Operations |                               |      |   |         |      |  |   |         |   |  |   |        
|                      | Operating revenues            |      | $ | 247,919 |      |  | $ | 236,233 |   |  | $ | 221,618 |  
|                      | Operating income              |      |   | 11,020  |      |  |   | 3,513   |   |  |   | 1,695   |  
|                      | Net income (loss)             |      |   | 1,352   |      |  |   | (1,806  | ) |  |   | (4,577  | )



|                                                                                       |  |      |        |   |      |   |        |  
|-------------------------------------------------------------------------------------- |  | ---- | ------ | - | ---- | - | ------ | -
|                                                                                       |  | 2006 |        |   | 2005 |  
|                                                                                       | 
|Beginning investment                                                                   |  | $    | 66,775 |   |      | $ | 61,814 |  
|Additional investment                                                                  |  |      | 3,349  |   |      |   | 4,981  |  
|Equity in earnings (losses)                                                            |  |      | 790    |   |      |   | (881   | )
|Dividends and distributions received                                                   |  |      | (900   | ) |      |   | (850   | )
|Foreign currency translation                                                           |  |      | (52    | ) |      |   | 1,711  |  
|Adjustment to initially apply SFAS 158 for pensions and
    other postretirement plans |  |      | (7,642 | ) |      |   |       |  
|Sale of interest in BrassRing                                                          |  |      | (8,810 | ) |      |   |       |  
|                                                                                       |  |     
|Ending investment                                                                      |  | $    | 53,510 |   |      | $ | 66,775 |  
|                                                                                       |  |     



Cost Method Investments.










---



##### Table of Contents





Cash and Cash Equivalents.


D. INCOME TAXES




|     |                 |         |         |         |          |   |         |         |   |   |         |         | 
|---- | --------------- | ------- | ------- | ------- | -------- | - | ------- | ------- | - | - | ------- | ------- | 
|     |                 | Current |         |         | Deferred |   |         | Total   |  
|     |                
|2006 |                 |         |         |         |          |   |         |         |   |   |         |        
|     | U.S. Federal    |         | $       | 193,261 |          |   | $       | (19,681 | ) |   | $       | 173,580 | 
|     | Foreign         |         |         | 6,949   |          |   |         | (1,088  | ) |   |         | 5,861   | 
|     | State and local |         |         | 27,624  |          |   |         | (17,465 | ) |   |         | 10,159  | 
|     |                 |        
|    
|     |                 | $       | 227,834 |         |          | $ | (38,234 | )       |   | $ | 189,600 |        
|     |                 |        
|2005 |                 |         |         |         |          |   |         |         |   |   |         |        
|     | U.S. Federal    |         | $       | 132,650 |          |   | $       | 22,591  |   |   | $       | 155,241 | 
|     | Foreign         |         |         | 4,849   |          |   |         | 29      |   |   |         | 4,878   | 
|     | State and local |         |         | 18,504  |          |   |         | 6,677   |   |   |         | 25,181  | 
|     |                 |        
|    
|     |                 | $       | 156,003 |         |          | $ | 29,297  |         |   | $ | 185,300 |        
|     |                 |        
|2004 |                 |         |         |         |          |   |         |         |   |   |         |        
|     | U.S. Federal    |         | $       | 138,429 |          |   | $       | 35,544  |   |   | $       | 173,973 | 
|     | Foreign         |         |         | 4,751   |          |   |         | (361    | ) |   |         | 4,390   | 
|     | State and local |         |         | 22,199  |          |   |         | 9,138   |   |   |         | 31,337  | 
|     |                 |        
|    
|     |                 | $       | 165,379 |         |          | $ | 44,321  |         |   | $ | 209,700 |        
|     |                 |        





|                                                                                                          |  |      |         |  |      |   |         |      |  |   |         |  
|--------------------------------------------------------------------------------------------------------- |  | ---- | ------- |  | ---- | - | ------- | ---- |  | - | ------- | -
|                                                                                                          |  | 2006 |         |  | 2005 |   |         | 2004 | 
|                                                                                                          | 
|U.S. Federal statutory taxes                                                                              |  | $    | 181,697 |  |      | $ | 174,875 |      |  | $ | 189,851 |  
|State and local taxes, net of U.S. Federal income tax
    benefit                                         |  |      | 6,604   |  |      |   | 16,368  |      |  |   | 20,369  |  
|Tax provided on foreign subsidiary earnings at less than the
    expected U.S. Federal statutory tax rate |  |      | 190     |  |      |   | (6,704  | )    |  |   | (1,373  | )
|Other, net                                                                                                |  |      | 1,109   |  |      |   | 761     |      |  |   | 853     |  
|                                                                                                          |  |     
|                                                                                                         
|Provision for income taxes                                                                                |  | $    | 189,600 |  |      | $ | 185,300 |      |  | $ | 209,700 |  
|                                                                                                          |  |     



|                                                 |  |      |         |  |      |   |         | 
|------------------------------------------------ |  | ---- | ------- |  | ---- | - | ------- | 
|                                                 |  | 2006 |         |  | 2005 |  
|                                                 | 
|Accrued postretirement benefits                  |  | $    | 33,640  |  |      | $ | 63,129  | 
|Other benefit obligations                        |  |      | 129,909 |  |      |   | 104,105 | 
|Accounts receivable                              |  |      | 24,839  |  |      |   | 21,762  | 
|State income tax loss carryforwards              |  |      | 12,002  |  |      |   | 9,185   | 
|Affiliate operations                             |  |      |        |  |      |   | 3,135   | 
|Other                                            |  |      | 27,140  |  |      |   | 20,335  | 
|                                                 |  |     
|                                                
|Deferred tax asset                               |  |      | 227,530 |  |      |   | 221,651 | 
|                                                 |  |     
|                                                
|Property, plant and equipment                    |  |      | 132,095 |  |      |   | 153,445 | 
|Prepaid pension cost                             |  |      | 392,253 |  |      |   | 240,495 | 
|Unrealized gain on available-for-sale securities |  |      | 56,419  |  |      |   | 37,422  | 
|Affiliate operations                             |  |      | 2,188   |  |      |   |        | 
|Goodwill and other intangibles                   |  |      | 195,126 |  |      |   | 175,517 | 
|                                                 |  |     
|                                                
|Deferred tax liability                           |  |      | 778,081 |  |      |   | 606,879 | 
|                                                 |  |     
|                                                
|Deferred income taxes                            |  | $    | 550,551 |  |      | $ | 385,228 | 
|                                                 |  |     







|             |  |   |       | 
|------------ |  | - | ----- | 
|2007         |  | $ | 5.7   | 
|2008         |  |   | 2.8   | 
|2009         |  |   | 12.1  | 
|2010         |  |   | 2.3   | 
|2011         |  |   | 9.9   | 
|2012 to 2024 |  |   | 209.2 | 
|             |  |   |      
|Total        |  | $ | 242.0 | 
|             |  |   |       | 













---



##### Table of Contents





E. DEBT




|                                           |  |              |       |            |  |  |        |  
|------------------------------------------ |  | ------------ | ----- | ---------- |  |  | ------ | -
|                                           |  | December 31, |       | January 1,
|                                           |  | 2006         |       | 2006      
|                                          
|5.5% unsecured notes due February 15, 2009 |  | $            | 399.4 |            |  |  | $399.2 |  
|4.0% notes due 2006                        |  |              |      |            |  |  | 14.4   |  
|Other indebtedness                         |  |              | 7.8   |            |  |  | 14.8   |  
|                                           |  |             
|                                          
|Total                                      |  |              | 407.2 |            |  |  | 428.4  |  
|Less current portion                       |  |              | (5.6  | )          |  |  | (24.8  | )
|                                           |  |             
|                                          
|Total long-term debt                       |  | $            | 401.6 |            |  |  | $403.6 |  
|                                           |  |             





5-year 364-day 5-year












|   |                           
|-- | --------------------------
|F. | REDEEMABLE PREFERRED STOCK



60-day




|   |                                              
|-- | ---------------------------------------------
|G. | CAPITAL STOCK, STOCK AWARDS AND STOCK OPTIONS

Adoption of SFAS 123R.










---



##### Table of Contents





Capital Stock.




Stock Awards.


|                              |           |        |        |        |         |  |         |        |  |  |         |         |   |        |         |        |         |  |        |        |   |  |         |        | 
|----------------------------- | --------- | ------ | ------ | ------ | ------- |  | ------- | ------ |  |  | ------- | ------- | - | ------ | ------- | ------ | ------- |  | ------ | ------ | - |  | ------- | ------ | 
|                              |           | 2006   |        |        | 2005    |  |         | 2004   | 
|                              |           |        |        |        |         |  |         |        | 
|                              |           | Number |        |        | Average |  |         | Number |  |  | Average |         |   | Number |         |        | Average | 
|                              |           | of     |        |        | Award   |  |         | of     |  |  | Award   |         |   | of     |         |        | Award   | 
|                              |           | Shares |        |        | Price   |  |         | Shares |  |  | Price   |         |   | Shares |         |        | Price   | 
|                              |          
|Beginning of year (nonvested) |           |        | 29,580 |        |         |  | $819.83 |        |  |  | 28,001  |         |   |        | $644.51 |        |         |  | 29,845 |        |   |  | $643.89 |       
|                              | Awarded   |        |        | 1,300  |         |  |         | 769.43 |  |  |         | 16,550  |   |        |         | 940.96 |         |  |        | 200    |   |  |         | 973.88 | 
|                              | Vested    |        |        | (159   | )       |  |         | 721.32 |  |  |         | (13,830 | ) |        |         | 609.87 |         |  |        | (561   | ) |  |         | 625.91 | 
|                              | Forfeited |        |        | (1,616 | )       |  |         | 866.07 |  |  |         | (1,141  | ) |        |         | 819.22 |         |  |        | (1,483 | ) |  |         | 683.58 | 
|                              |           |       
|                             
|End of year (nonvested)       |           |        | 29,105 |        |         |  | $815.55 |        |  |  | 29,580  |         |   |        | $819.83 |        |         |  | 28,001 |        |   |  | $644.51 |       
|                              |           |       







Stock Options.




|                  |           |        |         |         |         |  |         |        |  |  |         |         |   |        |         |        |         |  |         |         |   |  |         |        | 
|----------------- | --------- | ------ | ------- | ------- | ------- |  | ------- | ------ |  |  | ------- | ------- | - | ------ | ------- | ------ | ------- |  | ------- | ------- | - |  | ------- | ------ | 
|                  |           | 2006   |         |         | 2005    |  |         | 2004   | 
|                  |           |        |         |         |         |  |         |        | 
|                  |           | Number |         |         | Average |  |         | Number |  |  | Average |         |   | Number |         |        | Average | 
|                  |           | of     |         |         | Option  |  |         | of     |  |  | Option  |         |   | of     |         |        | Option  | 
|                  |           | Shares |         |         | Price   |  |         | Shares |  |  | Price   |         |   | Shares |         |        | Price   | 
|                  |          
|Beginning of year |           |        | 113,325 |         |         |  | $572.36 |        |  |  | 122,250 |         |   |        | $561.05 |        |         |  | 152,475 |         |   |  | $530.81 |       
|                  | Granted   |        |         | 9,000   |         |  |         | 729.67 |  |  |         | 4,500   |   |        |         | 762.50 |         |  |         | 4,000   |   |  |         | 953.50 | 
|                  | Exercised |        |         | (12,275 | )       |  |         | 481.05 |  |  |         | (12,800 | ) |        |         | 533.24 |         |  |         | (33,225 | ) |  |         | 467.68 | 
|                  | Forfeited |        |         | (875    | )       |  |         | 803.61 |  |  |         | (625    | ) |        |         | 530.87 |         |  |         | (1,000  | ) |  |         | 621.38 | 
|                  |           |       
|                 
|End of year       |           |        | 109,175 |         |         |  | $714.79 |        |  |  | 113,325 |         |   |        | $572.36 |        |         |  | 122,250 |         |   |  | $561.05 |       
|                  |           |       



|                |  |                     |         |          |                     |  |     |          |  |  |             |  |  |             |        |  |          |  |     |  |  |  |         | 
|--------------- |  | ------------------- | ------- | -------- | ------------------- |  | --- | -------- |  |  | ----------- |  |  | ----------- | ------ |  | -------- |  | --- |  |  |  | ------- | 
|                |  | Options Outstanding |         |          | Options Exercisable | 
|                |  |                     |         |          |                     | 
|                |  |                     |         | Weighted |                     |  |     |          |  |  | Weighted    |  |  |            
|                |  | Shares              |         |          | Average             |  |     | Weighted |  |  | Shares      |  |  | Average     |        |  | Weighted | 
|                |  | Outstanding         |         |          | Remaining           |  |     | Average  |  |  | Exercisable |  |  | Remaining   |        |  | Average  | 
|Range of        |  | at                  |         |          | Contractual         |  |     | Exercise |  |  | at          |  |  | Contractual |        |  | Exercise | 
|Exercise Prices |  | 12/31/2006          |         |          | Life (yrs.)         |  |     | Price    |  |  | 12/31/2006  |  |  | Life (yrs.) |        |  | Price    | 
|                | 
|$472480        |  |                     | 8,975   |          |                     |  | 1.3 |          |  |  | $472.89     |  |  |             | 8,975  |  |          |  | 1.3 |  |  |  | $472.89 | 
|503586         |  |                     | 69,450  |          |                     |  | 3.8 |          |  |  | 529.97      |  |  |             | 69,450 |  |          |  | 3.8 |  |  |  | 529.97  | 
|693             |  |                     | 500     |          |                     |  | 7.0 |          |  |  | 692.51      |  |  |             | 375    |  |          |  | 7.0 |  |  |  | 692.51  | 
|729763         |  |                     | 22,500  |          |                     |  | 8.2 |          |  |  | 735.97      |  |  |             | 10,125 |  |          |  | 6.3 |  |  |  | 732.72  | 
|816             |  |                     | 3,750   |          |                     |  | 7.0 |          |  |  | 816.05      |  |  |             | 2,813  |  |          |  | 7.0 |  |  |  | 816.05  | 
|954             |  |                     | 4,000   |          |                     |  | 8.0 |          |  |  | 953.50      |  |  |             | 2,000  |  |          |  | 8.0 |  |  |  | 953.50  | 
|                |  |                     |         |          |                     |  |     |          |  |  |             |  |  |             |        |  |          | 
|                |  |                     | 109,175 |          |                     |  | 4.9 |          |  |  | $714.79     |  |  |             | 93,738 |  |          |  | 4.1 |  |  |  | $564.67 | 
|                |  |                    













---



##### Table of Contents







|                      |  |      |       |   |      |  |       |      |  |  |        | 
|--------------------- |  | ---- | ----- | - | ---- |  | ----- | ---- |  |  | ------ | 
|                      |  | 2006 |       |   | 2005 |  |       | 2004 | 
|                      | 
|Expected life (years) |  |      | 7     |   |      |  | 7     |      |  |  | 7      | 
|Interest rate         |  |      | 4.45  | % |      |  | 4.49  | %    |  |  | 3.85%  | 
|Volatility            |  |      | 20.35 | % |      |  | 19.08 | %    |  |  | 20.24% | 
|Dividend yield        |  |      | 1.07  | % |      |  | 0.97  | %    |  |  | 0.73%  | 

30-day




|                  |           |           |        |         |        |   |          |           |         |  |        |         |   |           |        |          |        |  |        |   |  |   |        |   | 
|----------------- | --------- | --------- | ------ | ------- | ------ | - | -------- | --------- | ------- |  | ------ | ------- | - | --------- | ------ | -------- | ------ |  | ------ | - |  | - | ------ | - | 
|                  |           | 2006      |        |         | 2005   |   |          | 2004      |        
|                  |           |           |        |         |        |   |          |           |        
|                  |           |           |        | Average |        |   |          |           | Average |  |        |         |   | Average   |       
|                  |           | Number    |        |         | Option |   |          | Number of |         |  | Option |         |   | Number of |        |          | Option | 
|                  |           | of Shares |        |         | Price  |   |          | Shares    |         |  | Price  |         |   | Shares    |        |          | Price  | 
|                  |          
|Beginning of year |           |           | 62,229 |         |        | $ | 944.63   |           |         |  | 68,000 |         |   | $         | 596.17 |          |        |  | 68,000 |   |  | $ | 596.17 |  
|                  | Granted   |           |        | 29,785  |        |   |          | 1,833.00  |         |  |        | 10,582  |   |           |        | 2,080.00 |        |  |        |  |  |   |        |  | 
|                  | Exercised |           |        | (18,662 | )      |   |          | 257.73    |         |  |        | (16,153 | ) |           |        | 225.14   |        |  |        |  |  |   |        |  | 
|                  | Forfeited |           |        |        |        |   |          |          |         |  |        | (200    | ) |           |        | 652.00   |        |  |        |  |  |   |        |  | 
|                  |           |          
|End of year       |           |           | 73,352 |         |        | $ | 1,480.11 |           |         |  | 62,229 |         |   | $         | 944.63 |          |        |  | 68,000 |   |  | $ | 596.17 |  
|                  |           |          



stock-based


stock-based




| |                |                     |  |            |                     |  |             |                |          |            |             |  |             |  |  |  |     | 
| | -------------- | ------------------- |  | ---------- | ------------------- |  | ----------- | -------------- | -------- | ---------- | ----------- |  | ----------- |  |  |  | --- | 
| |                | Options Outstanding |  |            | Options Exercisable | 
| |                |                     |  |            |                     | 
| |                |                     |  | Weighted   |                     |  |             |                | Weighted |           
| |                |                     |  | Average    |                     |  |             |                | Average  |           
| |                | Shares              |  |            | Remaining           |  |             | Shares         |          |            | Remaining   | 
| |                | Outstanding at      |  |            | Contractual         |  |             | Exercisable at |          |            | Contractual | 
| | Exercise Price |                     |  | 12/31/2006 |                     |  | Life (yrs.) |                |          | 12/31/2006 |             |  | Life (yrs.) | 
| |               
| | $ 190          |                     |  |            | 1,750               |  |             |                | 1.0      |            |             |  | 1,750       |  |  |  | 1.0 | 
| | 375            |                     |  |            | 338                 |  |             |                | 3.5      |            |             |  | 338         |  |  |  | 3.5 | 
| | 526            |                     |  |            | 14,910              |  |             |                | 4.7      |            |             |  | 14,910      |  |  |  | 4.7 | 
| | 652            |                     |  |            | 2,000               |  |             |                | 5.0      |            |             |  | 1,600       |  |  |  | 5.0 | 
| | 861            |                     |  |            | 487                 |  |             |                | 5.0      |            |             |  | 292         |  |  |  | 5.0 | 
| | 1,625          |                     |  |            | 13,500              |  |             |                | 5.0      |            |             |  | 8,100       |  |  |  | 5.0 | 
| | 1,833          |                     |  |            | 29,785              |  |             |                | 5.5      |            |             |  |            |  |  |  | 5.5 | 
| | 2,080          |                     |  |            | 10,582              |  |             |                | 5.0      |            |             |  | 2,646       |  |  |  | 5.0 | 
| |                |                     |  |            |                     |  |             |                |          |            |             |  |            
| |                |                     |  |            | 73,352              |  |             |                | 5.0      |            |             |  | 29,636      |  |  |  | 4.6 | 
| |                |                     |  |           













---



##### Table of Contents



Black-Scholes


|                      |  |                   |               |  |                 |  |             | 
|--------------------- |  | ----------------- | ------------- |  | --------------- |  | ----------- | 
|                      |  | December 31, 2006 |               |  | January 1, 2006 | 
|                      | 
|Expected life (years) |  |                   | 06           |  |                 |  | 14         | 
|Interest rate         |  |                   | 4.70%5.00%   |  |                 |  | 4.27%4.34% | 
|Volatility            |  |                   | 34.78%46.50% |  |                 |  | 33.0%38.0% | 
|Dividend yield        |  |                   | 0%            |  |                 |  | 0%          | 



Average Number of Shares Outstanding.


|     |  |          |           |  |                    |  |         |          |  |  |           | 
|---- |  | -------- | --------- |  | ------------------ |  | ------- | -------- |  |  | --------- | 
|     |  | Basic    |           |  |                    |  | Diluted |         
|     |  | Weighted |           |  | Dilutive Effect of |  |         | Weighted | 
|     |  | Average  |           |  | Stock Options and  |  |         | Average  | 
|     |  | Shares   |           |  | Restricted Stock   |  |         | Shares   | 
|     | 
|2006 |  |          | 9,568,392 |  |                    |  | 37,173  |          |  |  | 9,605,565 | 
|2005 |  |          | 9,593,837 |  |                    |  | 22,060  |          |  |  | 9,615,897 | 
|2004 |  |          | 9,563,314 |  |                    |  | 28,311  |          |  |  | 9,591,625 | 





|   |                                        
|-- | ---------------------------------------
|H. | PENSIONS AND OTHER POSTRETIREMENT PLANS







Adoption of SFAS 158.


|                                                              |  |                   |         |  |            |   |          |                |  |   |         | 
|------------------------------------------------------------- |  | ----------------- | ------- |  | ---------- | - | -------- | -------------- |  | - | ------- | 
|                                                              |  | December 31, 2006 |        
|                                                              |  |                   |        
|                                                              |  | Before Adoption   |         |  | Adjustment |   |          | After Adoption | 
|                                                              | 
|Investment in affiliates                                      |  | $                 | 61,152  |  |            | $ | (7,642)  |                |  | $ | 53,510  | 
|Prepaid pension cost                                          |  |                   | 565,262 |  |            |   | 410,030  |                |  |   | 975,292 | 
|Accounts payable and accrued liabilities                      |  |                   | 502,528 |  |            |   | 6,847    |                |  |   | 509,375 | 
|Postretirement benefits other than pensions                   |  |                   | 153,701 |  |            |   | (72,364) |                |  |   | 81,337  | 
|Other liabilities                                             |  |                   | 311,126 |  |            |   | 13,017   |                |  |   | 324,143 | 
|Deferred tax liability                                        |  |                   | 414,857 |  |            |   | 184,630  |                |  |   | 599,487 | 
|Unrealized gain on pensions and other postretirement benefits |  |                   |        |  |            |   | 270,258  |                |  |   | 270,258 | 



Defined Benefit Plans.






|                                          |  |               |           |   |      |   |           |      |  |   |         |   |  |   |         |  
|----------------------------------------- |  | ------------- | --------- | - | ---- | - | --------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                          |  | Pension Plans |           |   | SERP |  
|                                          |  |               |           |   |      |  
|                                          |  | 2006          |           |   | 2005 |   |           | 2006 |  |   | 2005    |  
|                                          | 
|Change in Benefit Obligation              |  |               |           |   |      |   |           |      |  |   |         |   |  |   |         |  
|Benefit obligation at beginning of year   |  | $             | 748,873   |   |      | $ | 689,141   |      |  | $ | 51,625  |   |  | $ | 42,751  |  
|Service cost                              |  |               | 27,298    |   |      |   | 27,161    |      |  |   | 1,728   |   |  |   | 1,496   |  
|Interest cost                             |  |               | 43,707    |   |      |   | 39,989    |      |  |   | 2,936   |   |  |   | 2,642   |  
|Amendments                                |  |               | 60,695    |   |      |   | 3,751     |      |  |   | 1,349   |   |  |   |        |  
|Actuarial (gain) loss                     |  |               | (21,499   | ) |      |   | 15,272    |      |  |   | (2,123  | ) |  |   | 5,709   |  
|Benefits paid                             |  |               | (56,283   | ) |      |   | (26,441   | )    |  |   | (1,133  | ) |  |   | (973    | )
|                                          |  |              
|Benefit obligation at end of year         |  | $             | 802,791   |   |      | $ | 748,873   |      |  | $ | 54,382  |   |  | $ | 51,625  |  
|                                          |  |              
|Change in Plan Assets                     |  |               |           |   |      |   |           |      |  |   |         |   |  |   |         |  
|Fair value of assets at beginning of year |  | $             | 1,683,265 |   |      | $ | 1,588,213 |      |  | $ |        |   |  | $ |        |  
|Actual return on plan assets              |  |               | 151,101   |   |      |   | 121,493   |      |  |   |        |   |  |   |        |  
|Employer contributions                    |  |               |          |   |      |   |          |      |  |   | 1,133   |   |  |   | 973     |  
|Benefits paid                             |  |               | (56,283   | ) |      |   | (26,441   | )    |  |   | (1,133  | ) |  |   | (973    | )
|                                          |  |              
|Fair value of assets at end of year       |  | $             | 1,778,083 |   |      | $ | 1,683,265 |      |  | $ |        |   |  | $ |        |  
|                                          |  |              
|Funded status                             |  | $             | 975,292   |   |      | $ | 934,392   |      |  | $ | (54,382 | ) |  | $ | (51,625 | )
|                                          |  |               |           |   |      |   |           |      |  |   |         |  
|Unrecognized transition asset             |  |               |           |   |      |   | (249      | )    |  |   |         |   |  |   |        |  
|Unrecognized prior service cost           |  |               |           |   |      |   | 36,233    |      |  |   |         |   |  |   | 2,204   |  
|Unrecognized actuarial (gain) loss        |  |               |           |   |      |   | (376,907  | )    |  |   |         |   |  |   | 16,117  |  
|                                          |  |               |           |   |      |   |           |      |  |   |         |  
|Net amount recognized                     |  |               |           |   |      | $ | 593,469   |      |  |   |         |   |  | $ | (33,304 | )
|                                          |  |               |           |   |      |   |           |      |  |   |         |  









---



##### Table of Contents







|                              |  |               |     |   |      |  |      |      |  |  |      |   |  |  |       | 
|----------------------------- |  | ------------- | --- | - | ---- |  | ---- | ---- |  |  | ---- | - |  |  | ----- | 
|                              |  | Pension Plans |     |   | SERP | 
|                              |  |               |     |   |      | 
|                              |  | 2006          |     |   | 2005 |  |      | 2006 |  |  | 2005 |  
|                              | 
|Discount rate                 |  |               | 6.0 | % |      |  | 5.75 | %    |  |  | 6.0  | % |  |  | 5.75% | 
|Rate of compensation increase |  |               | 4.0 | % |      |  | 4.0  | %    |  |  | 4.0  | % |  |  | 4.0%  | 





|          |  |               |       |  |      |   |      | 
|--------- |  | ------------- | ----- |  | ---- | - | ---- | 
|          |  | Pension Plans |       |  | SERP |  
|          | 
|2007      |  | $             | 36.4  |  |      | $ | 1.7  | 
|2008      |  | $             | 37.7  |  |      | $ | 1.7  | 
|2009      |  | $             | 38.5  |  |      | $ | 2.2  | 
|2010      |  | $             | 39.6  |  |      | $ | 2.5  | 
|2011      |  | $             | 41.2  |  |      | $ | 2.9  | 
|20122016 |  | $             | 234.5 |  |      | $ | 19.6 | 



|             |  |                                |       |  |                 |  |        |  |  |   |       |  |  |  |        | 
|------------ |  | ------------------------------ | ----- |  | --------------- |  | ------ |  |  | - | ----- |  |  |  | ------ | 
|             |  | Pension Plan Asset Allocations |      
|             |  |                                |      
|             |  | December 31, 2006              |       |  | January 1, 2006 | 
|             | 
|Equities     |  | $                              | 1,585 |  |                 |  | 89.1%  |  |  | $ | 1,427 |  |  |  | 84.8%  | 
|Fixed income |  |                                | 193   |  |                 |  | 10.9%  |  |  |   | 256   |  |  |  | 15.2%  | 
|             |  |                               
|            
|Total        |  | $                              | 1,778 |  |                 |  | 100.0% |  |  | $ | 1,683 |  |  |  | 100.0% | 
|             |  |                               







|                                         |  |               |         |   |      |   |          |      |  |   |         |   |  |      |       |  |      |   |       |  |  |   |       | 
|---------------------------------------- |  | ------------- | ------- | - | ---- | - | -------- | ---- |  | - | ------- | - |  | ---- | ----- |  | ---- | - | ----- |  |  | - | ----- | 
|                                         |  | Pension Plans |         |   | SERP |  
|                                         |  |               |         |   |      |  
|                                         |  | 2006          |         |   | 2005 |   |          | 2004 |  |   | 2006    |   |  | 2005 |       |  | 2004 |  
|                                         | 
|Service cost                             |  | $             | 27,298  |   |      | $ | 27,161   |      |  | $ | 22,896  |   |  | $    | 1,728 |  |      | $ | 1,496 |  |  | $ | 1,394 | 
|Interest cost                            |  |               | 43,707  |   |      |   | 39,989   |      |  |   | 37,153  |   |  |      | 2,936 |  |      |   | 2,642 |  |  |   | 2,450 | 
|Expected return on assets                |  |               | (93,968 | ) |      |   | (104,589 | )    |  |   | (97,702 | ) |  |      |      |  |      |   |      |  |  |   |      | 
|Amortization of transition asset         |  |               | (82     | ) |      |   | (106     | )    |  |   | (1,086  | ) |  |      |      |  |      |   |      |  |  |   |      | 
|Amortization of prior service cost       |  |               | 4,857   |   |      |   | 4,716    |      |  |   | 4,530   |   |  |      | 412   |  |      |   | 465   |  |  |   | 575   | 
|Recognized actuarial (gain) loss         |  |               | (3,645  | ) |      |   | (5,085   | )    |  |   | (7,745  | ) |  |      | 1,589 |  |      |   | 1,215 |  |  |   | 1,215 | 
|                                         |  |              
|                                        
|Net periodic (benefit) cost for the year |  |               | (21,833 | ) |      |   | (37,914  | )    |  |   | (41,954 | ) |  |      | 6,665 |  |      |   | 5,818 |  |  |   | 5,634 | 
|Early retirement programs expense        |  |               | 50,040  |   |      |   | 1,192    |      |  |   | 132     |   |  |      | 902   |  |      |   |      |  |  |   |      | 
|                                         |  |              
|Total cost (benefit) for the year        |  | $             | 28,207  |   |      | $ | (36,722  | )    |  | $ | (41,822 | ) |  | $    | 7,567 |  |      | $ | 5,818 |  |  | $ | 5,634 | 
|                                         |  |              



|                               |  |               |       |  |      |  |       |      |  |  |       |  |  |      |       |  |      |  |       |  |  |  |       | 
|------------------------------ |  | ------------- | ----- |  | ---- |  | ----- | ---- |  |  | ----- |  |  | ---- | ----- |  | ---- |  | ----- |  |  |  | ----- | 
|                               |  | Pension Plans |       |  | SERP | 
|                               |  |               |       |  |      | 
|                               |  | 2006          |       |  | 2005 |  |       | 2004 |  |  | 2006  |  |  | 2005 |       |  | 2004 | 
|                               | 
|Discount rate                  |  |               | 5.75% |  |      |  | 5.75% |      |  |  | 6.25% |  |  |      | 5.75% |  |      |  | 5.75% |  |  |  | 6.25% | 
|Expected return on plan assets |  |               | 6.5%  |  |      |  | 7.5%  |      |  |  | 7.5%  |  |  |      |      |  |      |  |      |  |  |  |      | 
|Rate of compensation increase  |  |               | 4.0%  |  |      |  | 4.0%  |      |  |  | 4.0%  |  |  |      | 4.0%  |  |      |  | 4.0%  |  |  |  | 4.0%  | 





|                                   |  |               |          |   |      |   |        |  
|---------------------------------- |  | ------------- | -------- | - | ---- | - | ------ | -
|                                   |  | 2006          |         
|                                   |  |               |         
|                                   |  | Pension Plans |          |   | SERP |  
|                                   | 
|Unrecognized actuarial (gain) loss |  | $             | (451,894 | ) |      | $ | 12,586 |  
|Unrecognized prior service cost    |  |               | 42,031   |   |      |   | 2,058  |  
|Unrecognized transition asset      |  |               | (167     | ) |      |   |       |  
|                                   |  |              
|                                  
|Gross amount                       |  |               | (410,030 | ) |      |   | 14,644 |  
|Deferred tax liability             |  |               | 164,012  |   |      |   | (5,858 | )
|                                   |  |              
|                                  
|Net amount                         |  | $             | (246,018 | ) |      | $ | 8,786  |  
|                                   |  |              



|                                  |  |               |          |  |      |  |      | 
|--------------------------------- |  | ------------- | -------- |  | ---- |  | ---- | 
|                                  |  | 2007          |         
|                                  |  |               |         
|                                  |  | Pension Plans |          |  | SERP | 
|                                  | 
|Actuarial (gain) loss recognition |  |               | $(4,549) |  |      |  | $921 | 
|Prior service cost recognition    |  |               | 5,053    |  |      |  | 446  | 
|Transition asset recognition      |  |               | (53)     |  |      |  |     | 









---



##### Table of Contents



Other Postretirement Plans.


|                                          |  |                      |         |   |      |   |          |  
|----------------------------------------- |  | -------------------- | ------- | - | ---- | - | -------- | -
|                                          |  | Postretirement Plans |        
|                                          |  |                      |        
|                                          |  | 2006                 |         |   | 2005 |  
|                                          | 
|Change in Benefit Obligation              |  |                      |         |   |      |   |          |  
|Benefit obligation at beginning of year   |  | $                    | 141,469 |   |      | $ | 132,540  |  
|Service cost                              |  |                      | 5,270   |   |      |   | 6,026    |  
|Interest cost                             |  |                      | 6,611   |   |      |   | 7,434    |  
|Amendments                                |  |                      | (45,915 | ) |      |   |         |  
|Actuarial (gain) loss                     |  |                      | (15,429 | ) |      |   | 1,860    |  
|Benefits paid, net of Medicare Subsidy    |  |                      | (5,449  | ) |      |   | (6,391   | )
|                                          |  |                     
|Benefit obligation at end of year         |  | $                    | 86,557  |   |      | $ | 141,469  |  
|                                          |  |                     
|Change in Plan Assets                     |  |                      |         |   |      |   |          |  
|Fair value of assets at beginning of year |  | $                    |        |   |      | $ |         |  
|Employer contributions                    |  |                      | 5,674   |   |      |   | 6,391    |  
|Benefits paid                             |  |                      | (5,674  | ) |      |   | (6,391   | )
|                                          |  |                     
|Fair value of assets at end of year       |  | $                    |        |   |      | $ |         |  
|                                          |  |                     
|                                         
|Funded status                             |  | $                    | (86,557 | ) |      | $ | (141,469 | )
|                                          |  |                      |         |   |      |  
|Unrecognized prior service credit         |  |                      |         |   |      |   | (7,413   | )
|Unrecognized actuarial gain               |  |                      |         |   |      |   | (2,027   | )
|                                          |  |                      |         |   |      |  
|Net amount recognized                     |  |                      |         |   |      | $ | (150,909 | )
|                                          |  |                      |         |   |      |  









|                                  |  |          |        |  |          |   |         |  
|--------------------------------- |  | -------- | ------ |  | -------- | - | ------- | -
|                                  |  | 1%       |        |  | 1%       |  
|                                  |  | Increase |        |  | Decrease |  
|                                  | 
|Benefit obligation at end of year |  | $        | 12,390 |  |          | $ | (11,543 | )
|Service cost plus interest cost   |  | $        | 1,835  |  |          | $ | (1,778  | )





|          |  |                |      | 
|--------- |  | -------------- | ---- | 
|          |  | Postretirement |     
|          |  | Plans          |     
|          |  |                |     
|2007      |  | $              | 5.4  | 
|2008      |  | $              | 5.6  | 
|2009      |  | $              | 6.0  | 
|2010      |  | $              | 6.4  | 
|2011      |  | $              | 6.7  | 
|20122016 |  | $              | 36.7 | 



|                                     |  |                      |        |   |      |   |        |      |  |   |        |  
|------------------------------------ |  | -------------------- | ------ | - | ---- | - | ------ | ---- |  | - | ------ | -
|                                     |  | Postretirement Plans |       
|                                     |  |                      |       
|                                     |  | 2006                 |        |   | 2005 |   |        | 2004 | 
|                                     | 
|Service cost                         |  | $                    | 5,270  |   |      | $ | 6,026  |      |  | $ | 5,285  |  
|Interest cost                        |  |                      | 6,611  |   |      |   | 7,434  |      |  |   | 7,355  |  
|Amortization of prior service credit |  |                      | (2,551 | ) |      |   | (588   | )    |  |   | (588   | )
|Recognized actuarial gain            |  |                      | (864   | ) |      |   | (1,061 | )    |  |   | (995   | )
|                                     |  |                     
|Total cost for the year              |  | $                    | 8,466  |   |      | $ | 11,811 |      |  | $ | 11,057 |  
|                                     |  |                     





|                                  |  |                   |         |  
|--------------------------------- |  | ----------------- | ------- | -
|                                  |  | December 31, 2006 |        
|                                  | 
|Unrecognized actuarial gain       |  | $                 | (14,403 | )
|Unrecognized prior service credit |  |                   | (52,741 | )
|                                  |  |                   |        
|Gross amount                      |  |                   | (67,144 | )
|Deferred tax liability            |  |                   | 26,858  |  
|                                  |  |                   |        
|Net amount                        |  | $                 | (40,286 | )
|                                  |  |                   |        



|                                 |  |      |        |  
|-------------------------------- |  | ---- | ------ | -
|                                 |  | 2007 |       
|                                 | 
|Actuarial gain recognition       |  | $    | (1,640 | )
|Prior service credit recognition |  |      | (4,704 | )

Multi-employer Pension Plans.


Savings Plans.










---



##### Table of Contents





|   |                            
|-- | ---------------------------
|I. | LEASE AND OTHER COMMITMENTS





|           |  |   |         | 
|---------- |  | - | ------- | 
|2007       |  | $ | 109,343 | 
|2008       |  |   | 98,345  | 
|2009       |  |   | 86,879  | 
|2010       |  |   | 75,370  | 
|2011       |  |   | 59,309  | 
|Thereafter |  |   | 197,403 | 
|           |  |   |        
|          
|           |  | $ | 626,649 | 
|           |  |   |        









|   |                              
|-- | -----------------------------
|J. | ACQUISITIONS AND DISPOSITIONS



























---



##### Table of Contents





|   |                                     
|-- | ------------------------------------
|K. | GOODWILL AND OTHER INTANGIBLE ASSETS









|                                   |  |       |           |             |              |   |         |     |  |   |           | 
|---------------------------------- |  | ----- | --------- | ----------- | ------------ | - | ------- | --- |  | - | --------- | 
|                                   |  |       |           | Accumulated |              |   |        
|                                   |  | Gross |           |             | Amortization |   |         | Net | 
|                                   | 
|2006:                              |  |       |           |             |              |   |         |     |  |   |           | 
|Goodwill                           |  | $     | 1,538,653 |             |              | $ | 298,402 |     |  | $ | 1,240,251 | 
|Indefinite-lived intangible assets |  |       | 681,548   |             |              |   | 163,806 |     |  |   | 517,742   | 
|Amortized intangible assets        |  |       | 58,454    |             |              |   | 26,655  |     |  |   | 31,799    | 
|                                   |  |      
|                                   |  | $     | 2,278,655 |             |              | $ | 488,863 |     |  | $ | 1,789,792 | 
|                                   |  |      
|2005:                              |  |       |           |             |              |   |         |     |  |   |           | 
|Goodwill                           |  | $     | 1,423,972 |             |              | $ | 298,402 |     |  | $ | 1,125,570 | 
|Indefinite-lived intangible assets |  |       | 658,498   |             |              |   | 163,806 |     |  |   | 494,692   | 
|Amortized intangible assets        |  |       | 42,434    |             |              |   | 19,620  |     |  |   | 22,814    | 
|                                   |  |      
|                                   |  | $     | 2,124,904 |             |              | $ | 481,828 |     |  | $ | 1,643,076 | 
|                                   |  |      



|                                        |  |           |         |           |            |            |        |         |  |          |            |  |       |            |         |   |       |   |         |   |  |   |           |  
|--------------------------------------- |  | --------- | ------- | --------- | ---------- | ---------- | ------ | ------- |  | -------- | ---------- |  | ----- | ---------- | ------- | - | ----- | - | ------- | - |  | - | --------- | -
|                                        |  |           |         |           |            | Television |        |         |  |          |            |  |      
|                                        |  |           |         | Newspaper |            |            | Broad- |         |  | Magazine |            |  | Cable |            |         |  
|                                        |  | Education |         |           | Publishing |            |        | casting |  |          | Publishing |  |       | Television |         |   | Total |  
|                                        | 
|Goodwill, Net                           |  |           |         |           |            |            |        |         |  |          |            |  |       |            |         |   |       |   |         |   |  |   |           |  
|Beginning of year                       |  | $         | 686,532 |           |            | $          | 80,651 |         |  | $        | 203,165    |  |       | $          | 69,556  |   |       | $ | 85,666  |   |  | $ | 1,125,570 |  
|Acquisitions                            |  |           | 133,340 |           |            |            |        |         |  |          |            |  |       |            |         |   |       |   |         |   |  |   | 133,340   |  
|Foreign currency exchange rate          |  |           | 25,882  |           |            |            |        |         |  |          |            |  |       |            |         |   |       |   |         |   |  |   | 25,882    |  
|Impairment charge                       |  |           |         |           |            |            |        |         |  |          |            |  |       |            | (9,864  | ) |       |   |         |   |  |   | (9,864    | )
|Disposition                             |  |           |         |           |            |            |        |         |  |          |            |  |       |            | (34,677 | ) |       |   |         |   |  |   | (34,677   | )
|                                        |  |          
|End of year                             |  | $         | 845,754 |           |            | $          | 80,651 |         |  | $        | 203,165    |  |       | $          | 25,015  |   |       | $ | 85,666  |   |  | $ | 1,240,251 |  
|                                        |  |          
|Indefinite-Lived Intangible Assets, Net |  |           |         |           |            |            |        |         |  |          |            |  |       |            |         |   |       |   |         |   |  |   |           |  
|Beginning of year                       |  | $         | 8,362   |           |            |            |        |         |  |          |            |  |       |            |         |   |       | $ | 486,330 |   |  | $ | 494,692   |  
|Acquisitions                            |  |           | 900     |           |            |            |        |         |  |          |            |  |       |            |         |   |       |   | 22,150  |   |  |   | 23,050    |  
|                                        |  |          
|End of year                             |  | $         | 9,262   |           |            |            |        |         |  |          |            |  |       |            |         |   |       | $ | 508,480 |   |  | $ | 517,742   |  
|                                        |  |          
|Amortized Intangible Assets, Net        |  |           |         |           |            |            |        |         |  |          |            |  |       |            |         |   |       |   |         |   |  |   |           |  
|Beginning of year                       |  | $         | 14,428  |           |            | $          | 6,676  |         |  |          |            |  |       |            |         |   |       | $ | 1,710   |   |  | $ | 22,814    |  
|Acquisitions                            |  |           | 15,545  |           |            |            |        |         |  |          |            |  |       |            |         |   |       |   |         |   |  |   | 15,545    |  
|Foreign currency exchange rate          |  |           | 483     |           |            |            |        |         |  |          |            |  |       |            |         |   |       |   |         |   |  |   | 483       |  
|Amortization                            |  |           | (5,186  | )         |            |            | (1,168 | )       |  |          |            |  |       |            |         |   |       |   | (689    | ) |  |   | (7,043    | )
|                                        |  |          
|End of year                             |  | $         | 25,270  |           |            | $          | 5,508  |         |  |          |            |  |       |            |         |   |       | $ | 1,021   |   |  | $ | 31,799    |  
|                                        |  |          



|                                        |  |           |         |           |            |            |        |         |  |          |            |  |       |            |        |  |       |   |         |   |  |   |           |  
|--------------------------------------- |  | --------- | ------- | --------- | ---------- | ---------- | ------ | ------- |  | -------- | ---------- |  | ----- | ---------- | ------ |  | ----- | - | ------- | - |  | - | --------- | -
|                                        |  |           |         |           |            | Television |        |         |  |          |            |  |      
|                                        |  |           |         | Newspaper |            |            | Broad- |         |  | Magazine |            |  | Cable |            |        | 
|                                        |  | Education |         |           | Publishing |            |        | casting |  |          | Publishing |  |       | Television |        |  | Total |  
|                                        | 
|Goodwill, Net                           |  |           |         |           |            |            |        |         |  |          |            |  |       |            |        |  |       |   |         |   |  |   |           |  
|Beginning of year                       |  | $         | 591,983 |           |            | $          | 72,770 |         |  | $        | 203,165    |  |       | $          | 69,556 |  |       | $ | 85,666  |   |  | $ | 1,023,140 |  
|Acquisitions                            |  |           | 111,623 |           |            |            | 7,881  |         |  |          |            |  |       |            |        |  |       |   |         |   |  |   | 119,504   |  
|Foreign currency exchange rate          |  |           | (17,074 | )         |            |            |        |         |  |          |            |  |       |            |        |  |       |   |         |   |  |   | (17,074   | )
|                                        |  |          
|End of year                             |  | $         | 686,532 |           |            | $          | 80,651 |         |  | $        | 203,165    |  |       | $          | 69,556 |  |       | $ | 85,666  |   |  | $ | 1,125,570 |  
|                                        |  |          
|Indefinite-Lived Intangible Assets, Net |  |           |         |           |            |            |        |         |  |          |            |  |       |            |        |  |       |   |         |   |  |   |           |  
|Beginning of year                       |  | $         | 6,862   |           |            |            |        |         |  |          |            |  |       |            |        |  |       | $ | 486,330 |   |  | $ | 493,192   |  
|Acquisitions                            |  |           | 1,500   |           |            |            |        |         |  |          |            |  |       |            |        |  |       |   |         |   |  |   | 1,500     |  
|                                        |  |          
|End of year                             |  | $         | 8,362   |           |            |            |        |         |  |          |            |  |       |            |        |  |       | $ | 486,330 |   |  | $ | 494,692   |  
|                                        |  |          
|Amortized Intangible Assets, Net        |  |           |         |           |            |            |        |         |  |          |            |  |       |            |        |  |       |   |         |   |  |   |           |  
|Beginning of year                       |  | $         | 5,287   |           |            | $          | 118    |         |  |          |            |  |       |            |        |  |       | $ | 2,474   |   |  | $ | 7,879     |  
|Acquisitions                            |  |           | 14,989  |           |            |            | 7,677  |         |  |          |            |  |       |            |        |  |       |   |         |   |  |   | 22,666    |  
|Foreign currency exchange rate          |  |           | (253    | )         |            |            |        |         |  |          |            |  |       |            |        |  |       |   |         |   |  |   | (253      | )
|Amortization                            |  |           | (5,595  | )         |            |            | (1,119 | )       |  |          |            |  |       |            |        |  |       |   | (764    | ) |  |   | (7,478    | )
|                                        |  |          
|End of year                             |  | $         | 14,428  |           |            | $          | 6,676  |         |  |          |            |  |       |            |        |  |       | $ | 1,710   |   |  | $ | 22,814    |  
|                                        |  |          



|   |                                     
|-- | ------------------------------------
|L. | OTHER NON-OPERATING INCOME (EXPENSE)











---



##### Table of Contents





|                                                    |       |      |       |      |      |   |      |      |  |   |      |     | 
|--------------------------------------------------- | ----- | ---- | ----- | ---- | ---- | - | ---- | ---- |  | - | ---- | --- | 
|                                                    |       | 2006 |       |      | 2005 |   |      | 2004 | 
|                                                    |      
|Gain on sale of affiliate                           |       | $    | 43.2  |      |      | $ |     |      |  | $ |     |    
|Gain on sales of marketable securities              |       |      | 33.8  |      |      |   | 12.7 |      |  |   |     |    
|Foreign currency gains (losses), net                |       |      | 11.9  |      |      |   | (8.1 | )    |  |   | 5.5  |    
|Impairment write-downs on investments               |       |      | (15.1 | )    |      |   | (1.5 | )    |  |   | (0.7 | )  
|Gain on sale of non-operating land                  |       |      |      |      |      |   | 5.1  |      |  |   |     |    
|Gain on sale or exchange of cable system businesses |       |      |      |      |      |   |     |      |  |   | 0.5  |    
|Other (losses) gains                                |       |      | (0.3  | )    |      |   | 0.8  |      |  |   | 2.8  |    
|                                                    |       |     
|                                                   
|                                                    | Total |      | $     | 73.5 |      |   | $    | 9.0  |  |   | $    | 8.1 | 
|                                                    |       |     



|   |                         
|-- | ------------------------
|M. | CONTINGENCIES AND LOSSES







30-day




|   |                  
|-- | -----------------
|N. | BUSINESS SEGMENTS

















---



##### Table of Contents



























---



##### Table of Contents



|               |                                               |                            |   |            |   |              |   |            |   |            |   |           |  |              |   |         |  |  |   |           |   |  |   |         |   |  |   |           |           | 
|-------------- | --------------------------------------------- | -------------------------- | - | ---------- | - | ------------ | - | ---------- | - | ---------- | - | --------- |  | ------------ | - | ------- |  |  | - | --------- | - |  | - | ------- | - |  | - | --------- | --------- | 
|               |                                               |                            |   | Newspaper  |   | Television   |   | Magazine   |   | Cable      |   | Corporate |  |             
|(in thousands) |                                               | Education                  |   | Publishing |   | Broadcasting |   | Publishing |   | Television |   | Office    |  | Consolidated
|              
|2006           |                                               |                            |   |            |   |              |   |            |   |            |   |           |  |              |   |         |  |  |   |           |   |  |   |         |   |  |   |          
|               | Operating revenues                            |                            | $ | 1,684,141  |   |              | $ | 961,905    |   |            | $ | 361,904   |  |              | $ | 331,045 |  |  | $ | 565,932   |   |  | $ |        |   |  | $ | 3,904,927 |          
|               | Income (loss) from operations                 |                            | $ | 130,189    |   |              | $ | 63,389     |   |            | $ | 160,831   |  |              | $ | 27,949  |  |  | $ | 119,974   |   |  | $ | (42,528 | ) |  | $ | 459,804   |          
|               | Equity in earnings of affiliates              |                            |   |            |   |              |   |            |   |            |   |           |  |              |   |         |  |  |   |           |   |  |   |         |   |  |   | 790       |          
|               | Interest expense, net                         |                            |   |            |   |              |   |            |   |            |   |           |  |              |   |         |  |  |   |           |   |  |   |         |   |  |   | (14,912   | )        
|               | Other income, net                             |                            |   |            |   |              |   |            |   |            |   |           |  |              |   |         |  |  |   |           |   |  |   |         |   |  |   | 73,452    |          
|               |                                               |                           
|              
|               |                                               | Income before income taxes |   |            |   |              |   |            |   |            |   |           |  |              |   |         |  |  |   |           |   |  |   |         |   |  |   | $         | 519,134   | 
|               |                                               |                           
|               | Identifiable assets                           |                            | $ | 1,571,347  |   |              | $ | 830,415    |   |            | $ | 458,751   |  |              | $ | 788,450 |  |  | $ | 1,178,132 |   |  | $ | 146,039 |   |  | $ | 4,973,134 |          
|               | Investments in marketable equity securities   |                            |   |            |   |              |   |            |   |            |   |           |  |              |   |         |  |  |   |           |   |  |   |         |   |  |   | 354,728   |          
|               | Investments in affiliates                     |                            |   |            |   |              |   |            |   |            |   |           |  |              |   |         |  |  |   |           |   |  |   |         |   |  |   | 53,510    |          
|               |                                               |                           
|              
|               |                                               | Total assets               |   |            |   |              |   |            |   |            |   |           |  |              |   |         |  |  |   |           |   |  |   |         |   |  |   | $         | 5,381,372 | 
|               |                                               |                           
|               | Depreciation of property, plant and equipment |                            | $ | 51,820     |   |              | $ | 35,729     |   |            | $ | 9,915     |  |              | $ | 2,640   |  |  | $ | 103,892   |   |  | $ | 1,299   |   |  | $ | 205,295   |          
|               | Amortization expense and impairment charge    |                            | $ | 5,186      |   |              | $ | 1,168      |   |            | $ |          |  |              | $ | 9,864   |  |  | $ | 689       |   |  | $ |        |   |  | $ | 16,907    |          
|               | Pension credit (expense)                      |                            | $ | (3,064     | ) |              | $ | (56,785    | ) |            | $ | 1,413     |  |              | $ | 34,704  |  |  | $ | (1,575    | ) |  | $ | (2,900  | ) |  | $ | (28,207   | )        
|               | Kaplan stock-based incentive compensation     |                            | $ | 27,724     |   |              |   |            |   |            |   |           |  |              |   |         |  |  |   |           |   |  |   |         |   |  | $ | 27,724    |          
|               | Capital expenditures                          |                            | $ | 74,510     |   |              | $ | 57,664     |   |            | $ | 8,800     |  |              | $ | 564     |  |  | $ | 142,484   |   |  | $ |        |   |  | $ | 284,022   |          
|2005           |                                               |                            |   |            |   |              |   |            |   |            |   |           |  |              |   |         |  |  |   |           |   |  |   |         |   |  |   |          
|               | Operating revenues                            |                            | $ | 1,412,394  |   |              | $ | 957,082    |   |            | $ | 331,817   |  |              | $ | 344,894 |  |  | $ | 507,700   |   |  | $ |        |   |  | $ | 3,553,887 |          
|               | Income (loss) from operations                 |                            | $ | 157,835    |   |              | $ | 125,359    |   |            | $ | 142,478   |  |              | $ | 45,122  |  |  | $ | 76,720    |   |  | $ | (32,600 | ) |  | $ | 514,914   |          
|               | Equity in losses of affiliates                |                            |   |            |   |              |   |            |   |            |   |           |  |              |   |         |  |  |   |           |   |  |   |         |   |  |   | (881      | )        
|               | Interest expense, net                         |                            |   |            |   |              |   |            |   |            |   |           |  |              |   |         |  |  |   |           |   |  |   |         |   |  |   | (23,369   | )        
|               | Other income, net                             |                            |   |            |   |              |   |            |   |            |   |           |  |              |   |         |  |  |   |           |   |  |   |         |   |  |   | 8,980     |          
|               |                                               |                           
|              
|               |                                               | Income before income taxes |   |            |   |              |   |            |   |            |   |           |  |              |   |         |  |  |   |           |   |  |   |         |   |  |   | $         | 499,644   | 
|               |                                               |                           
|               | Identifiable assets                           |                            | $ | 1,257,952  |   |              | $ | 702,221    |   |            | $ | 420,154   |  |              | $ | 594,937 |  |  | $ | 1,122,654 |   |  | $ | 90,159  |   |  | $ | 4,188,077 |          
|               | Investments in marketable equity securities   |                            |   |            |   |              |   |            |   |            |   |           |  |              |   |         |  |  |   |           |   |  |   |         |   |  |   | 329,921   |          
|               | Investments in affiliates                     |                            |   |            |   |              |   |            |   |            |   |           |  |              |   |         |  |  |   |           |   |  |   |         |   |  |   | 66,775    |          
|               |                                               |                           
|              
|               |                                               | Total assets               |   |            |   |              |   |            |   |            |   |           |  |              |   |         |  |  |   |           |   |  |   |         |   |  |   | $         | 4,584,773 | 
|               |                                               |                           
|               | Depreciation of property, plant and equipment |                            | $ | 39,453     |   |              | $ | 36,556     |   |            | $ | 10,202    |  |              | $ | 2,801   |  |  | $ | 100,031   |   |  | $ | 1,500   |   |  | $ | 190,543   |          
|               | Amortization expense                          |                            | $ | 5,595      |   |              | $ | 1,119      |   |            | $ |          |  |              | $ |        |  |  | $ | 764       |   |  | $ |        |   |  | $ | 7,478     |          
|               | Pension credit (expense)                      |                            | $ | (2,365     | ) |              | $ | (784       | ) |            | $ | 2,939     |  |              | $ | 38,184  |  |  | $ | (1,252    | ) |  | $ |        |   |  | $ | 36,722    |          
|               | Kaplan stock-based incentive compensation     |                            | $ | 3,000      |   |              |   |            |   |            |   |           |  |              |   |         |  |  |   |           |   |  |   |         |   |  | $ | 3,000     |          
|               | Capital expenditures                          |                            | $ | 84,257     |   |              | $ | 33,276     |   |            | $ | 8,557     |  |              | $ | 660     |  |  | $ | 111,331   |   |  | $ | 268     |   |  | $ | 238,349   |          
|2004           |                                               |                            |   |            |   |              |   |            |   |            |   |           |  |              |   |         |  |  |   |           |   |  |   |         |   |  |   |          
|               | Operating revenues                            |                            | $ | 1,134,891  |   |              | $ | 938,066    |   |            | $ | 361,716   |  |              | $ | 366,119 |  |  | $ | 499,312   |   |  | $ |        |   |  | $ | 3,300,104 |          
|               | Income (loss) from operations                 |                            | $ | 121,455    |   |              | $ | 143,086    |   |            | $ | 174,176   |  |              | $ | 52,921  |  |  | $ | 104,171   |   |  | $ | (32,803 | ) |  | $ | 563,006   |          
|               | Equity in losses of affiliates                |                            |   |            |   |              |   |            |   |            |   |           |  |              |   |         |  |  |   |           |   |  |   |         |   |  |   | (2,291    | )        
|               | Interest expense, net                         |                            |   |            |   |              |   |            |   |            |   |           |  |              |   |         |  |  |   |           |   |  |   |         |   |  |   | (26,410   | )        
|               | Other income, net                             |                            |   |            |   |              |   |            |   |            |   |           |  |              |   |         |  |  |   |           |   |  |   |         |   |  |   | 8,127     |          
|               |                                               |                           
|               |                                               | Income before income taxes |   |            |   |              |   |            |   |            |   |           |  |              |   |         |  |  |   |           |   |  |   |         |   |  |   | $         | 542,432   | 
|               |                                               |                           
|               | Identifiable assets                           |                            | $ | 1,033,810  |   |              | $ | 685,744    |   |            | $ | 409,574   |  |              | $ | 581,601 |  |  | $ | 1,112,935 |   |  | $ | 13,551  |   |  | $ | 3,837,215 |          
|               | Investments in marketable equity securities   |                            |   |            |   |              |   |            |   |            |   |           |  |              |   |         |  |  |   |           |   |  |   |         |   |  |   | 409,736   |          
|               | Investments in affiliates                     |                            |   |            |   |              |   |            |   |            |   |           |  |              |   |         |  |  |   |           |   |  |   |         |   |  |   | 61,814    |          
|               |                                               |                           
|              
|               |                                               | Total assets               |   |            |   |              |   |            |   |            |   |           |  |              |   |         |  |  |   |           |   |  |   |         |   |  |   | $         | 4,308,765 | 
|               |                                               |                           
|               | Depreciation of property, plant and equipment |                            | $ | 29,154     |   |              | $ | 36,862     |   |            | $ | 11,093    |  |              | $ | 3,255   |  |  | $ | 94,974    |   |  | $ |        |   |  | $ | 175,338   |          
|               | Amortization expense                          |                            | $ | 8,663      |   |              | $ | 19         |   |            | $ |          |  |              | $ |        |  |  | $ | 652       |   |  | $ |        |   |  | $ | 9,334     |          
|               | Pension credit (expense)                      |                            | $ | (1,531     | ) |              | $ | 3,598      |   |            | $ | 3,172     |  |              | $ | 37,613  |  |  | $ | (1,030    | ) |  | $ |        |   |  | $ | 41,822    |          
|               | Kaplan stock-based incentive compensation     |                            | $ | 32,546     |   |              |   |            |   |            |   |           |  |              |   |         |  |  |   |           |   |  |   |         |   |  | $ | 32,546    |          
|               | Capital expenditures                          |                            | $ | 85,221     |   |              | $ | 27,959     |   |            | $ | 6,967     |  |              | $ | 1,499   |  |  | $ | 78,873    |   |  | $ | 4,113   |   |  | $ | 204,632   |          









---



##### Table of Contents





|               |                                               |           |   |         |              |           |   |           |  |  |           |         |   |  |   |           | 
|-------------- | --------------------------------------------- | --------- | - | ------- | ------------ | --------- | - | --------- |  |  | --------- | ------- | - |  | - | --------- | 
|               |                                               |           |   |         |              | Corporate |   |           | 
|               |                                               | Higher    |   |         | Supplemental |           |   | Overhead  |  |  | Total     |        
|(in thousands) |                                               | Education |   |         | Education    |           |   | and Other |  |  | Education |        
|               |                                              
|2006           |                                               |           |   |         |              |           |   |           |  |  |           |         |   |  |   |          
|               | Operating revenues                            |           | $ | 878,989 |              |           | $ | 805,152   |  |  | $         |        |   |  | $ | 1,684,141 | 
|               | Income (loss) from operations                 |           | $ | 103,938 |              |           | $ | 109,887   |  |  | $         | (83,636 | ) |  | $ | 130,189   | 
|               | Identifiable assets                           |           | $ | 655,209 |              |           | $ | 878,196   |  |  | $         | 37,942  |   |  | $ | 1,571,347 | 
|               | Depreciation of property, plant and equipment |           | $ | 26,405  |              |           | $ | 20,862    |  |  | $         | 4,553   |   |  | $ | 51,820    | 
|               | Amortization expense                          |           |   |         |              |           |   |           |  |  | $         | 5,186   |   |  | $ | 5,186     | 
|               | Kaplan stock-based incentive compensation     |           |   |         |              |           |   |           |  |  | $         | 27,724  |   |  | $ | 27,724    | 
|               | Capital expenditures                          |           | $ | 35,946  |              |           | $ | 26,962    |  |  | $         | 11,602  |   |  | $ | 74,510    | 
|2005           |                                               |           |   |         |              |           |   |           |  |  |           |         |   |  |   |          
|               | Operating revenues                            |           | $ | 721,579 |              |           | $ | 690,815   |  |  | $         |        |   |  | $ | 1,412,394 | 
|               | Income (loss) from operations                 |           | $ | 82,660  |              |           | $ | 117,075   |  |  | $         | (41,900 | ) |  | $ | 157,835   | 
|               | Identifiable assets                           |           | $ | 587,997 |              |           | $ | 645,957   |  |  | $         | 23,998  |   |  | $ | 1,257,952 | 
|               | Depreciation of property, plant and equipment |           | $ | 20,100  |              |           | $ | 16,073    |  |  | $         | 3,280   |   |  | $ | 39,453    | 
|               | Amortization expense                          |           |   |         |              |           |   |           |  |  | $         | 5,595   |   |  | $ | 5,595     | 
|               | Kaplan stock-based incentive compensation     |           |   |         |              |           |   |           |  |  | $         | 3,000   |   |  | $ | 3,000     | 
|               | Capital expenditures                          |           | $ | 49,406  |              |           | $ | 30,134    |  |  | $         | 4,717   |   |  | $ | 84,257    | 
|2004           |                                               |           |   |         |              |           |   |           |  |  |           |         |   |  |   |          
|               | Operating revenues                            |           | $ | 559,877 |              |           | $ | 575,014   |  |  | $         |        |   |  | $ | 1,134,891 | 
|               | Income (loss) from operations                 |           | $ | 93,402  |              |           | $ | 100,795   |  |  | $         | (72,742 | ) |  | $ | 121,455   | 
|               | Identifiable assets                           |           | $ | 505,077 |              |           | $ | 492,195   |  |  | $         | 36,538  |   |  | $ | 1,033,810 | 
|               | Depreciation of property, plant and equipment |           | $ | 13,222  |              |           | $ | 13,899    |  |  | $         | 2,033   |   |  | $ | 29,154    | 
|               | Amortization expense                          |           |   |         |              |           |   |           |  |  | $         | 8,663   |   |  | $ | 8,663     | 
|               | Kaplan stock-based incentive compensation     |           |   |         |              |           |   |           |  |  | $         | 32,546  |   |  | $ | 32,546    | 
|               | Capital expenditures                          |           | $ | 48,990  |              |           | $ | 26,550    |  |  | $         | 9,681   |   |  | $ | 85,221    | 









---



##### Table of Contents



O. SUMMARY OF QUARTERLY OPERATING RESULTS AND
COMPREHENSIVE INCOME (UNAUDITED)




|                                 |                                                                                                |                                                            |         |         |         |   |         |         |         |   |         |         |         |   |           |         |         |  
|-------------------------------- | ---------------------------------------------------------------------------------------------- | ---------------------------------------------------------- | ------- | ------- | ------- | - | ------- | ------- | ------- | - | ------- | ------- | ------- | - | --------- | ------- | ------- | -
|                                 |                                                                                                | First                                                      |         |         | Second  |   |         | Third   |         |   | Fourth  |        
|                                 |                                                                                                | Quarter                                                    |         |         | Quarter |   |         | Quarter |         |   | Quarter |        
|                                 |                                                                                               
|2006 Quarterly Operating Results |                                                                                                |                                                            |         |         |         |   |         |         |         |   |         |         |         |   |           |        
|                                 | Operating revenues                                                                             |                                                            |         |         |         |   |         |         |         |   |         |         |         |   |           |         |        
|                                 |                                                                                                | Education                                                  |         | $       | 408,934 |   |         | $       | 409,244 |   |         | $       | 420,604 |   |           | $       | 445,359 |  
|                                 |                                                                                                | Advertising                                                |         |         | 327,165 |   |         |         | 346,390 |   |         |         | 312,238 |   |           |         | 372,946 |  
|                                 |                                                                                                | Circulation and subscriber                                 |         |         | 189,319 |   |         |         | 195,643 |   |         |         | 195,243 |   |           |         | 202,322 |  
|                                 |                                                                                                | Other                                                      |         |         | 22,862  |   |         |         | 17,764  |   |         |         | 18,809  |   |           |         | 20,085  |  
|                                 |                                                                                                |                                                           
|                                 |                                                                                                |                                                            | 948,280 |         |         |   | 969,041 |         |         |   | 946,894 |         |         |   | 1,040,712 |        
|                                 |                                                                                                |                                                           
|                                 | Operating costs and expenses                                                                   |                                                            |         |         |         |   |         |         |         |   |         |         |         |   |           |         |        
|                                 |                                                                                                | Operating                                                  |         |         | 493,638 |   |         |         | 495,934 |   |         |         | 509,231 |   |           |         | 543,590 |  
|                                 |                                                                                                | Selling, general and administrative                        |         |         | 266,469 |   |         |         | 325,012 |   |         |         | 267,563 |   |           |         | 321,484 |  
|                                 |                                                                                                | Depreciation of property, plant and equipment              |         |         | 49,025  |   |         |         | 49,512  |   |         |         | 49,929  |   |           |         | 56,829  |  
|                                 |                                                                                                | Amortization of intangibles and goodwill impairment charge |         |         | 1,389   |   |         |         | 1,378   |   |         |         | 11,525  |   |           |         | 2,615   |  
|                                 |                                                                                                |                                                           
|                                 |                                                                                                |                                                            | 810,521 |         |         |   | 871,836 |         |         |   | 838,248 |         |         |   | 924,518   |        
|                                 |                                                                                                |                                                           
|                                 | Income from operations                                                                         |                                                            |         | 137,759 |         |   |         | 97,205  |         |   |         | 108,646 |         |   |           | 116,194 |        
|                                 |                                                                                                | Equity in (losses) earnings of affiliates                  |         |         | (179    | ) |         |         | (562    | ) |         |         | (625    | ) |           |         | 2,156   |  
|                                 |                                                                                                | Interest income                                            |         |         | 1,603   |   |         |         | 2,539   |   |         |         | 2,967   |   |           |         | 3,322   |  
|                                 |                                                                                                | Interest expense                                           |         |         | (6,259  | ) |         |         | (6,439  | ) |         |         | (6,400  | ) |           |         | (6,245  | )
|                                 |                                                                                                | Other income (expense), net                                |         |         | (175    | ) |         |         | 33,701  |   |         |         | 4,708   |   |           |         | 35,218  |  
|                                 |                                                                                                |                                                           
|                                 | Income before income taxes and cumulative effect of change in
    accounting principle         |                                                            |         | 132,749 |         |   |         | 126,444 |         |   |         | 109,296 |         |   |           | 150,645 |        
|                                 | Provision for income taxes                                                                     |                                                            |         | 50,800  |         |   |         | 47,700  |         |   |         | 36,000  |         |   |           | 55,100  |        
|                                 |                                                                                                |                                                           
|                                 | Income before cumulative effect of change in accounting principle                              |                                                            |         | 81,949  |         |   |         | 78,744  |         |   |         | 73,296  |         |   |           | 95,545  |        
|                                 | Cumulative effect of change in method of accounting for
    share-based payments, net of taxes |                                                            |         | (5,075  | )       |   |         |        |         |   |         |        |         |   |           |        |        
|                                 |                                                                                                |                                                           
|                                 | Net income                                                                                     |                                                            |         | 76,874  |         |   |         | 78,744  |         |   |         | 73,296  |         |   |           | 95,545  |        
|                                 | Redeemable preferred stock dividends                                                           |                                                            |         | (491    | )       |   |         | (245    | )       |   |         | (245    | )       |   |           |        |        
|                                 |                                                                                                |                                                           
|                                 | Net income available for common shares                                                         |                                                            | $       | 76,383  |         |   | $       | 78,499  |         |   | $       | 73,051  |         |   | $         | 95,545  |        
|                                 |                                                                                                |                                                           
|                                 | Basic earnings per share:                                                                      |                                                            |         |         |         |   |         |         |         |   |         |         |         |   |           |         |        
|                                 | Before cumulative effect of change in accounting principle                                     |                                                            | $       | 8.51    |         |   | $       | 8.20    |         |   | $       | 7.62    |         |   | $         | 10.01   |        
|                                 | Cumulative effect of change in accounting principle                                            |                                                            |         | (0.53   | )       |   |         |        |         |   |         |        |         |   |           |        |        
|                                 |                                                                                                |                                                           
|                                 | Net income available for common shares                                                         |                                                            | $       | 7.98    |         |   | $       | 8.20    |         |   | $       | 7.62    |         |   | $         | 10.01   |        
|                                 |                                                                                                |                                                           
|                                 | Diluted earnings per share:                                                                    |                                                            |         |         |         |   |         |         |         |   |         |         |         |   |           |         |        
|                                 | Before cumulative effect of change in accounting principle                                     |                                                            | $       | 8.48    |         |   | $       | 8.17    |         |   | $       | 7.60    |         |   | $         | 9.97    |        
|                                 | Cumulative effect of change in accounting principle                                            |                                                            |         | (0.53   | )       |   |         |        |         |   |         |        |         |   |           |        |        
|                                 |                                                                                                |                                                           
|                                 | Net income available for common shares                                                         |                                                            | $       | 7.95    |         |   | $       | 8.17    |         |   | $       | 7.60    |         |   | $         | 9.97    |        
|                                 |                                                                                                |                                                           
|                                 | Basic average shares outstanding                                                               |                                                            |         | 9,570   |         |   |         | 9,575   |         |   |         | 9,581   |         |   |           | 9,548   |        
|                                 | Diluted average shares outstanding                                                             |                                                            |         | 9,606   |         |   |         | 9,613   |         |   |         | 9,617   |         |   |           | 9,581   |        
|                                 | 2006 Quarterly comprehensive income                                                            |                                                            | $       | 85,633  |         |   | $       | 71,544  |         |   | $       | 83,256  |         |   | $         | 127,977 |        
|                                 |                                                                                                |                                                           













---



##### Table of Contents



|                                         |                                        |                                               |         |         |         |   |         |         |         |   |         |         |         |   |         |         |         |  
|---------------------------------------- | -------------------------------------- | --------------------------------------------- | ------- | ------- | ------- | - | ------- | ------- | ------- | - | ------- | ------- | ------- | - | ------- | ------- | ------- | -
|                                         |                                        | First                                         |         |         | Second  |   |         | Third   |         |   | Fourth  |        
|(In thousands, except per share amounts) |                                        | Quarter                                       |         |         | Quarter |   |         | Quarter |         |   | Quarter |        
|                                         |                                       
|2005 Quarterly Operating Results         |                                        |                                               |         |         |         |   |         |         |         |   |         |         |         |   |         |        
|                                         | Operating revenues                     |                                               |         |         |         |   |         |         |         |   |         |         |         |   |         |         |        
|                                         |                                        | Education                                     |         | $       | 325,383 |   |         | $       | 345,780 |   |         | $       | 362,822 |   |         | $       | 378,409 |  
|                                         |                                        | Advertising                                   |         |         | 305,550 |   |         |         | 336,563 |   |         |         | 311,581 |   |         |         | 363,790 |  
|                                         |                                        | Circulation and subscriber                    |         |         | 186,222 |   |         |         | 191,622 |   |         |         | 182,677 |   |         |         | 186,557 |  
|                                         |                                        | Other                                         |         |         | 16,775  |   |         |         | 23,612  |   |         |         | 16,582  |   |         |         | 19,962  |  
|                                         |                                        |                                              
|                                         |                                        |                                               | 833,930 |         |         |   | 897,577 |         |         |   | 873,662 |         |         |   | 948,718 |        
|                                         |                                        |                                              
|                                         | Operating costs and expenses           |                                               |         |         |         |   |         |         |         |   |         |         |         |   |         |         |        
|                                         |                                        | Operating                                     |         |         | 452,453 |   |         |         | 472,981 |   |         |         | 486,400 |   |         |         | 497,782 |  
|                                         |                                        | Selling, general and administrative           |         |         | 226,312 |   |         |         | 237,531 |   |         |         | 225,760 |   |         |         | 241,734 |  
|                                         |                                        | Depreciation of property, plant and equipment |         |         | 45,568  |   |         |         | 47,905  |   |         |         | 47,531  |   |         |         | 49,538  |  
|                                         |                                        | Amortization of intangibles                   |         |         | 1,608   |   |         |         | 1,465   |   |         |         | 1,587   |   |         |         | 2,818   |  
|                                         |                                        |                                              
|                                         |                                        |                                               | 725,941 |         |         |   | 759,882 |         |         |   | 761,278 |         |         |   | 791,872 |        
|                                         |                                        |                                              
|                                         | Income from operations                 |                                               |         | 107,989 |         |   |         | 137,695 |         |   |         | 112,384 |         |   |         | 156,846 |        
|                                         |                                        | Equity in (losses) earnings of affiliates     |         |         | (525    | ) |         |         | 342     |   |         |         | (952    | ) |         |         | 254     |  
|                                         |                                        | Interest income                               |         |         | 574     |   |         |         | 576     |   |         |         | 611     |   |         |         | 1,624   |  
|                                         |                                        | Interest expense                              |         |         | (6,519  | ) |         |         | (6,436  | ) |         |         | (7,554  | ) |         |         | (6,245  | )
|                                         |                                        | Other income (expense), net                   |         |         | 7,072   |   |         |         | (3,622  | ) |         |         | 6,869   |   |         |         | (1,339  | )
|                                         |                                        |                                              
|                                         | Income before income taxes             |                                               |         | 108,591 |         |   |         | 128,555 |         |   |         | 111,358 |         |   |         | 151,140 |        
|                                         | Provision for income taxes             |                                               |         | 42,000  |         |   |         | 49,800  |         |   |         | 44,800  |         |   |         | 48,700  |        
|                                         |                                        |                                              
|                                         | Net income                             |                                               |         | 66,591  |         |   |         | 78,755  |         |   |         | 66,558  |         |   |         | 102,440 |        
|                                         | Redeemable preferred stock dividends   |                                               |         | (491    | )       |   |         | (245    | )       |   |         | (245    | )       |   |         |        |        
|                                         |                                        |                                              
|                                         | Net income available for common shares |                                               | $       | 66,100  |         |   | $       | 78,510  |         |   | $       | 66,313  |         |   | $       | 102,440 |        
|                                         |                                        |                                              
|                                         | Basic earnings per common share        |                                               | $       | 6.89    |         |   | $       | 8.18    |         |   | $       | 6.91    |         |   | $       | 10.67   |        
|                                         |                                        |                                              
|                                         | Diluted earnings per common share      |                                               | $       | 6.87    |         |   | $       | 8.16    |         |   | $       | 6.89    |         |   | $       | 10.65   |        
|                                         |                                        |                                              
|                                         | Basic average shares outstanding       |                                               |         | 9,589   |         |   |         | 9,594   |         |   |         | 9,596   |         |   |         | 9,598   |        
|                                         | Diluted average shares outstanding     |                                               |         | 9,617   |         |   |         | 9,618   |         |   |         | 9,618   |         |   |         | 9,616   |        
|                                         | 2005 Quarterly comprehensive income    |                                               | $       | 51,301  |         |   | $       | 66,397  |         |   | $       | 56,318  |         |   | $       | 114,359 |        
|                                         |                                        |                                              













---



##### Table of Contents





|                                                                                                                                                                                                                                                              |  |         |       |   |         |   |       |         |  |   |         |   |  |   |       |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------- | ----- | - | ------- | - | ----- | ------- |  | - | ------- | - |  | - | ----- | -
|                                                                                                                                                                                                                                                              |  | First   |       |   | Second  |   |       | Third   |  |   | Fourth  |  
|                                                                                                                                                                                                                                                              |  | Quarter |       |   | Quarter |   |       | Quarter |  |   | Quarter |  
|                                                                                                                                                                                                                                                              | 
|Charges of $31.7 million related to early retirement plan
    buyouts ($31.4 million and $0.3 million in the second
    and third quarters, respectively)                                                                                                     |  |         |       |   |         | $ | (3.27 | )       |  | $ | (0.03   | ) |  |   |       |  
|Goodwill impairment charge of $6.3 million at PostNewsweek
    Tech Media during the third quarter of 2006 and a
    $1.0 million loss on the sale of PostNewsweek Tech Media
    during the fourth quarter of 2006                                           |  |         |       |   |         |   |       |         |  | $ | (0.65   | ) |  | $ | (0.10 | )
|Transition costs and operating losses at Kaplan related to
    acquisitions and start-ups for 2006 totaled $8.0 million
    ($0.1 million, $5.6 million, $0.5 million and
    $1.8 million in the first, second, third and fourth
    quarters, respectively) |  | $       | (0.02 | ) |         | $ | (0.58 | )       |  | $ | (0.05   | ) |  | $ | (0.19 | )
|Charge of $5.1 million for the cumulative effect of a
    change in accounting for Kaplan equity awards in connection with
    the adoption of SFAS 123R                                                                                                      |  | $       | (0.53 | ) |         |   |       |         |  |   |         |   |  |   |       |  
|Insurance recoveries of $6.4 million from cable division
    losses related to Hurricane Katrina                                                                                                                                                              |  |         |       |   |         | $ | 0.67  |         |  |   |         |   |  |   |       |  
|Gains of $21.1 million from the sales of marketable equity
    securities ($19.6 million, $1.3 million, and
    $0.2 million in the second, third and fourth quarters,
    respectively)                                                                      |  |         |       |   |         | $ | 2.04  |         |  | $ | 0.13    |   |  | $ | 0.02  |  
|Charge of $9.0 million for the write-down of a marketable
    equity security                                                                                                                                                                                 |  |         |       |   |         |   |       |         |  |   |         |   |  | $ | (0.94 | )
|Charges of $8.3 million related to an agreement to settle a
    lawsuit at Kaplan                                                                                                                                                                             |  |         |       |   |         |   |       |         |  |   |         |   |  | $ | (0.86 | )
|Gain of $27.4 million on the sale of the Companys 49%
    interest in BrassRing                                                                                                                                                                              |  |         |       |   |         |   |       |         |  |   |         |   |  | $ | 2.86  |  
|                                                                                                                                                                                                                                                              |  |        



|                                                                                                                                                                  |  |         |      |  |         |  |  |         |  |   |         |   |  |   |       |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------- | ---- |  | ------- |  |  | ------- |  | - | ------- | - |  | - | ----- | -
|                                                                                                                                                                  |  | First   |      |  | Second  |  |  | Third   |  |   | Fourth  |  
|                                                                                                                                                                  |  | Quarter |      |  | Quarter |  |  | Quarter |  |   | Quarter |  
|                                                                                                                                                                  | 
|Charges and lost revenue associated with Katrina and other
    hurricanes ($12.6 million and $4.7 million in the
    third and fourth quarters, respectively)     |  |         |      |  |         |  |  |         |  | $ | (1.31   | ) |  | $ | (0.49 | )
|Gain on sale of marketable equity securities and land
    ($5.4 million, $5.2 million and $0.6 million in
    the first, third and fourth quarters, respectively) |  | $       | 0.56 |  |         |  |  |         |  | $ | 0.54    |   |  | $ | 0.06  |  
|                                                                                                                                                                  |  |        









---



##### Table of Contents



SCHEDULE II


THE WASHINGTON POST COMPANY





SCHEDULE II  VALUATION AND QUALIFYING
ACCOUNTS


|                             |                                                          |             |            |            |            |   |             |             |  |            |             |             |  |   |            |            | 
|---------------------------- | -------------------------------------------------------- | ----------- | ---------- | ---------- | ---------- | - | ----------- | ----------- |  | ---------- | ----------- | ----------- |  | - | ---------- | ---------- | 
|                             |                                                         
|Column A                     |                                                          | Column B    |            |            | Column C   |   |             | Column D    |  |            | Column E    |            
|                             |                                                         
|                             |                                                          | Additions  |            |            |           
|                             |                                                          | Balance at  |            |            | Charged to |   |             |             |  | Balance at |            
|                             |                                                          | Beginning   |            |            | Costs and  |   |             |             |  | End of     |            
|Description                  |                                                          | of Period   |            |            | Expenses   |   |             | Deductions  |  |            | Period      |            
|                             |                                                         
|Year Ended January 2, 2005   |                                                          |             |            |            |            |   |             |             |  |            |             |             |  |   |            |           
|                             | Allowance for doubtful accounts and returns              |             | $          | 61,854,000 |            |   | $           | 106,605,000 |  |            | $           | 102,807,000 |  |   | $          | 65,652,000 | 
|                             | Allowance for advertising rate adjustments and discounts |             |            | 4,670,000  |            |   |             | 7,874,000   |  |            |             | 7,231,000   |  |   |            | 5,313,000  | 
|                             |                                                          |            
|                             |                                                          | $           | 66,524,000 |            |            | $ | 114,479,000 |             |  | $          | 110,038,000 |             |  | $ | 70,965,000 |           
|                             |                                                          |            
|Year Ended January 1, 2006   |                                                          |             |            |            |            |   |             |             |  |            |             |             |  |   |            |           
|                             | Allowance for doubtful accounts and returns              |             | $          | 65,652,000 |            |   | $           | 127,195,000 |  |            | $           | 121,722,000 |  |   | $          | 71,125,000 | 
|                             | Allowance for advertising rate adjustments and discounts |             |            | 5,313,000  |            |   |             | 14,970,000  |  |            |             | 13,309,000  |  |   |            | 6,974,000  | 
|                             |                                                          |            
|                             |                                                          | $           | 70,965,000 |            |            | $ | 142,165,000 |             |  | $          | 135,031,000 |             |  | $ | 78,099,000 |           
|                             |                                                          |            
|Year Ended December 31, 2006 |                                                          |             |            |            |            |   |             |             |  |            |             |             |  |   |            |           
|                             | Allowance for doubtful accounts and returns              |             | $          | 71,125,000 |            |   | $           | 136,663,000 |  |            | $           | 127,426,000 |  |   | $          | 80,362,000 | 
|                             | Allowance for advertising rate adjustments and discounts |             |            | 6,974,000  |            |   |             | 13,222,000  |  |            |             | 14,331,000  |  |   |            | 5,865,000  | 
|                             |                                                          |            
|                             |                                                          | $           | 78,099,000 |            |            | $ | 149,885,000 |             |  | $          | 141,757,000 |             |  | $ | 86,227,000 |           
|                             |                                                          |            









---



##### Table of Contents






TEN-YEAR SUMMARY OF SELECTED HISTORICAL FINANCIAL DATA




|                                         |                                                                   |                                                            |   |           |       |   |   |           |       |  |   |           |       | 
|---------------------------------------- | ----------------------------------------------------------------- | ---------------------------------------------------------- | - | --------- | ----- | - | - | --------- | ----- |  | - | --------- | ----- | 
|(in thousands, except per share amounts) |                                                                   | 2006                                                       |   |           | 2005  |   |   | 2004      |      
|                                         |                                                                  
|Results of Operations                    |                                                                   |                                                            |   |           |       |   |   |           |       |  |   |          
|                                         | Operating revenues                                                |                                                            | $ | 3,904,927 |       |   | $ | 3,553,887 |       |  | $ | 3,300,104 |      
|                                         | Income from operations                                            |                                                            | $ | 459,804   |       |   | $ | 514,914   |       |  | $ | 563,006   |      
|                                         | Income before cumulative effect of change in accounting principle |                                                            | $ | 329,534   |       |   | $ | 314,344   |       |  | $ | 332,732   |      
|                                         | Cumulative effect of change in method of accounting               |                                                            |   | (5,075    | )     |   |   |          |       |  |   |          |      
|                                         |                                                                   |                                                           
|                                         | Net income                                                        |                                                            | $ | 324,459   |       |   | $ | 314,344   |       |  | $ | 332,732   |      
|                                         |                                                                   |                                                           
|Per Share Amounts                        |                                                                   |                                                            |   |           |       |   |   |           |       |  |   |          
|                                         | Basic earnings per common share                                   |                                                            |   |           |       |   |   |           |       |  |   |           |      
|                                         |                                                                   | Before cumulative effect of change in accounting principle |   | $         | 34.34 |   |   | $         | 32.66 |  |   | $         | 34.69 | 
|                                         |                                                                   | Cumulative effect of change in accounting principle        |   |           | (0.53 | ) |   |           |      |  |   |           |      | 
|                                         |                                                                   |                                                           
|                                         |                                                                   | Net income available for common shares                     |   | $         | 33.81 |   |   | $         | 32.66 |  |   | $         | 34.69 | 
|                                         |                                                                   |                                                           
|                                         |                                                                   | Basic average shares outstanding                           |   |           | 9,568 |   |   |           | 9,594 |  |   |           | 9,563 | 
|                                         | Diluted earnings per share                                        |                                                            |   |           |       |   |   |           |       |  |   |           |      
|                                         |                                                                   | Before cumulative effect of change in accounting principle |   | $         | 34.21 |   |   | $         | 32.59 |  |   | $         | 34.59 | 
|                                         |                                                                   | Cumulative effect of change in accounting principle        |   |           | (0.53 | ) |   |           |      |  |   |           |      | 
|                                         |                                                                   |                                                           
|                                         |                                                                   | Net income available for common shares                     |   | $         | 33.68 |   |   | $         | 32.59 |  |   | $         | 34.59 | 
|                                         |                                                                   |                                                           
|                                         |                                                                   | Diluted average shares outstanding                         |   |           | 9,606 |   |   |           | 9,616 |  |   |           | 9,592 | 
|                                         | Cash dividends                                                    |                                                            | $ | 7.80      |       |   | $ | 7.40      |       |  | $ | 7.00      |      
|                                         | Common shareholders equity                                       |                                                            | $ | 331.32    |       |   | $ | 274.79    |       |  | $ | 251.11    |      
|Financial Position                       |                                                                   |                                                            |   |           |       |   |   |           |       |  |   |          
|                                         | Current assets                                                    |                                                            | $ | 934,825   |       |   | $ | 818,326   |       |  | $ | 750,509   |      
|                                         | Working capital                                                   |                                                            |   | 131,625   |       |   |   | 123,605   |       |  |   | 62,348    |      
|                                         | Property, plant and equipment                                     |                                                            |   | 1,218,309 |       |   |   | 1,142,632 |       |  |   | 1,089,952 |      
|                                         | Total assets                                                      |                                                            |   | 5,381,372 |       |   |   | 4,584,773 |       |  |   | 4,308,765 |      
|                                         | Long-term debt                                                    |                                                            |   | 401,571   |       |   |   | 403,635   |       |  |   | 425,889   |      
|                                         | Common shareholders equity                                       |                                                            |   | 3,159,514 |       |   |   | 2,638,423 |       |  |   | 2,404,606 |      

Impact from certain unusual items (after-tax and diluted EPS
amounts):


2006


|  |                                                                                                                                                                                          
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | charges of $31.7 million ($3.30 per share) related to
    early retirement plan buyouts                                                                                                  
| | goodwill impairment charge of $6.3 million ($0.65 per
    share) at PostNewsweek Tech Media and a loss of
    $1.0 million ($0.10 per share) on the sale of
    PostNewsweek Tech Media  
| | transition costs and operating losses at Kaplan related to
    acquisitions and
    start-ups for 2006 of
    $8.0 million ($0.83 per share)                                             
| | charges of $5.1 million ($0.53 per share) for the
    cumulative effect of a change in accounting for Kaplan equity
    awards in connection with the Companys adoption of
    SFAS 123R
| | insurance recoveries of $6.4 million ($0.67 per share)
    from cable division losses related to Hurricane Katrina                                                                       
| | gains of $21.1 million ($2.19 per share) from the
    sales of marketable equity securities                                                                                              
| | charge of $9.0 million ($0.94 per share) from the
    write-down of a marketable equity security                                                                                         
| | charges of $8.3 million ($0.86 per share) related to
    an agreement to settle a lawsuit at Kaplan                                                                                      
| | gain of $27.4 million ($2.86 per share) on the sale of
    the Companys 49% interest in BrassRing                                                                                       

2005


|  |                                                                                                              
|- | -------------------------------------------------------------------------------------------------------------
| | charges and lost revenue of $17.3 million ($1.80 per
    share) associated with Katrina and other hurricanes 
| | gain of $11.2 million ($1.16 per share) from sales of
    non-operating land and marketable equity securities









---



##### Table of Contents








|                      |                                                                   |                                                            |   |           |       |  |   |           |       |   |      |           |       |      |   |           |       |  |   |           |        |  |      |           |        |  |   |           |        | 
|--------------------- | ----------------------------------------------------------------- | ---------------------------------------------------------- | - | --------- | ----- |  | - | --------- | ----- | - | ---- | --------- | ----- | ---- | - | --------- | ----- |  | - | --------- | ------ |  | ---- | --------- | ------ |  | - | --------- | ------ | 
|                      |                                                                   |                                                            |   |           | 2003  |  |   | 2002      |       |   | 2001 |           |       | 2000 |   |           | 1999  |  |   | 1998      |        |  | 1997 |          
|                      |                                                                   |                                                            |   |           |      
|Results of Operations |                                                                   |                                                            |   |           |       |  |   |           |       |   |      |           |       |      |   |           |       |  |   |           |        |  |      |           |        |  |   |          
|                      | Operating revenues                                                |                                                            | $ | 2,838,911 |       |  | $ | 2,584,203 |       |   | $    | 2,411,024 |       |      | $ | 2,409,633 |       |  | $ | 2,212,177 |        |  | $    | 2,107,593 |        |  | $ | 1,952,986 |       
|                      | Income from operations                                            |                                                            | $ | 363,820   |       |  | $ | 377,590   |       |   | $    | 219,932   |       |      | $ | 339,882   |       |  | $ | 388,453   |        |  | $    | 378,897   |        |  | $ | 381,351   |       
|                      | Income before cumulative effect of change in accounting principle |                                                            | $ | 241,088   |       |  | $ | 216,368   |       |   | $    | 229,639   |       |      | $ | 136,470   |       |  | $ | 225,785   |        |  | $    | 417,259   |        |  | $ | 281,574   |       
|                      | Cumulative effect of change in method of accounting               |                                                            |   |          |       |  |   | (12,100   | )     |   |      |          |       |      |   |          |       |  |   |          |        |  |      |          |        |  |   |          |       
|                      |                                                                   |                                                           
|                      | Net income                                                        |                                                            | $ | 241,088   |       |  | $ | 204,268   |       |   | $    | 229,639   |       |      | $ | 136,470   |       |  | $ | 225,785   |        |  | $    | 417,259   |        |  | $ | 281,574   |       
|                      |                                                                   |                                                           
|Per Share Amounts     |                                                                   |                                                            |   |           |       |  |   |           |       |   |      |           |       |      |   |           |       |  |   |           |        |  |      |           |        |  |   |          
|                      | Basic earnings per common share                                   |                                                            |   |           |       |  |   |           |       |   |      |           |       |      |   |           |       |  |   |           |        |  |      |           |        |  |   |           |       
|                      |                                                                   | Before cumulative effect of change in accounting principle |   | $         | 25.19 |  |   | $         | 22.65 |   |      | $         | 24.10 |      |   | $         | 14.34 |  |   | $         | 22.35  |  |      | $         | 41.27  |  |   | $         | 26.23  | 
|                      |                                                                   | Cumulative effect of change in accounting principle        |   |           |      |  |   |           | (1.27 | ) |      |           |      |      |   |           |      |  |   |           |       |  |      |           |       |  |   |           |       | 
|                      |                                                                   |                                                           
|                      |                                                                   | Net income available for common shares                     |   | $         | 25.19 |  |   | $         | 21.38 |   |      | $         | 24.10 |      |   | $         | 14.34 |  |   | $         | 22.35  |  |      | $         | 41.27  |  |   | $         | 26.23  | 
|                      |                                                                   |                                                           
|                      |                                                                   | Basic average shares outstanding                           |   |           | 9,530 |  |   |           | 9,504 |   |      |           | 9,486 |      |   |           | 9,445 |  |   |           | 10,061 |  |      |           | 10,087 |  |   |           | 10,700 | 
|                      | Diluted earnings per share                                        |                                                            |   |           |       |  |   |           |       |   |      |           |       |      |   |           |       |  |   |           |        |  |      |           |        |  |   |           |       
|                      |                                                                   | Before cumulative effect of change in accounting principle |   | $         | 25.12 |  |   | $         | 22.61 |   |      | $         | 24.06 |      |   | $         | 14.32 |  |   | $         | 22.30  |  |      | $         | 41.10  |  |   | $         | 26.15  | 
|                      |                                                                   | Cumulative effect of change in accounting principle        |   |           |      |  |   |           | (1.27 | ) |      |           |      |      |   |           |      |  |   |           |       |  |      |           |       |  |   |           |       | 
|                      |                                                                   |                                                           
|                      |                                                                   | Net income available for common shares                     |   | $         | 25.12 |  |   | $         | 21.34 |   |      | $         | 24.06 |      |   | $         | 14.32 |  |   | $         | 22.30  |  |      | $         | 41.10  |  |   | $         | 26.15  | 
|                      |                                                                   |                                                           
|                      |                                                                   | Diluted average shares outstanding                         |   |           | 9,555 |  |   |           | 9,523 |   |      |           | 9,500 |      |   |           | 9,460 |  |   |           | 10,082 |  |      |           | 10,129 |  |   |           | 10,733 | 
|                      | Cash dividends                                                    |                                                            | $ | 5.80      |       |  | $ | 5.60      |       |   | $    | 5.60      |       |      | $ | 5.40      |       |  | $ | 5.20      |        |  | $    | 5.00      |        |  | $ | 4.80      |       
|                      | Common shareholders equity                                       |                                                            | $ | 216.17    |       |  | $ | 192.45    |       |   | $    | 177.30    |       |      | $ | 156.55    |       |  | $ | 144.90    |        |  | $    | 157.34    |        |  | $ | 117.36    |       
|Financial Position    |                                                                   |                                                            |   |           |       |  |   |           |       |   |      |           |       |      |   |           |       |  |   |           |        |  |      |           |        |  |   |          
|                      | Current assets                                                    |                                                            | $ | 550,571   |       |  | $ | 407,347   |       |   | $    | 426,603   |       |      | $ | 405,067   |       |  | $ | 476,159   |        |  | $    | 404,878   |        |  | $ | 308,492   |       
|                      | Working capital                                                   |                                                            |   | (190,426  | )     |  |   | (356,644  | )     |   |      | (37,233   | )     |      |   | (3,730    | )     |  |   | (346,389  | )      |  |      | 15,799    |        |  |   | (300,264  | )     
|                      | Property, plant and equipment                                     |                                                            |   | 1,051,373 |       |  |   | 1,094,400 |       |   |      | 1,098,211 |       |      |   | 927,061   |       |  |   | 854,906   |        |  |      | 841,062   |        |  |   | 653,750   |       
|                      | Total assets                                                      |                                                            |   | 3,949,798 |       |  |   | 3,604,866 |       |   |      | 3,588,844 |       |      |   | 3,200,743 |       |  |   | 2,986,944 |        |  |      | 2,729,661 |        |  |   | 2,077,317 |       
|                      | Long-term debt                                                    |                                                            |   | 422,471   |       |  |   | 405,547   |       |   |      | 883,078   |       |      |   | 873,267   |       |  |   | 397,620   |        |  |      | 395,000   |        |  |   |          |       
|                      | Common shareholders equity                                       |                                                            |   | 2,062,681 |       |  |   | 1,830,386 |       |   |      | 1,683,485 |       |      |   | 1,481,007 |       |  |   | 1,367,790 |        |  |      | 1,588,103 |        |  |   | 1,184,074 |       

2003


|  |                                                                                                                                                                 
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
| | gain of $32.3 million ($3.38 per share) on the sale of
    the Companys 50% interest in the International Herald
    Tribune                                   
| | gain of $25.5 million ($2.66 per share) on sale of
    land at The Washington Post newspaper                                                                    
| | charge of $20.8 million ($2.18 per share) for early
    retirement programs at The Washington Post newspaper                                                    
| | Kaplan stock compensation expense of $6.4 million
    ($0.67 per share) for the 10% premium associated with the
    purchase of outstanding Kaplan stock options
| | charge of $3.9 million ($0.41 per share) in connection
    with the establishment of the Kaplan Educational Foundation                                          

2002


|  |                                                                                                                          
|- | -------------------------------------------------------------------------------------------------------------------------
| | gain of $16.7 million ($1.75 per share) on the
    exchange of certain cable systems                                     
| | charge of $11.3 million ($1.18 per share) for early
    retirement programs at Newsweek and The Washington Post newspaper

2001


|  |                                                                                                                                                                           
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | gain of $196.5 million ($20.69 per share) on the
    exchange of certain cable systems                                                                                    
| | non-cash goodwill and other intangibles impairment charge of
    $19.9 million ($2.10 per share) recorded in
    conjunction with the Companys BrassRing investment      
| | charges of $18.3 million ($1.93 per share) from the
    write-down of a non-operating parcel of land and certain cost
    method investments to their estimated fair value

2000


|  |                                                                                                               
|- | --------------------------------------------------------------------------------------------------------------
| | charge of $16.5 million ($1.74 per share) for an early
    retirement program at The Washington Post newspaper

1999


|  |                                                                                          
|- | -----------------------------------------------------------------------------------------
| | gains of $18.6 million ($1.81 per share) on the sales
    of marketable equity securities

1998


|  |                                                                                                                                              
|- | ---------------------------------------------------------------------------------------------------------------------------------------------
| | gain of $168.0 million ($16.59 per share) on the
    disposition of the Companys 28% interest in Cowles Media
    Company                   
| | gain of $13.8 million ($1.36 per share) from the sale
    of 14 small cable systems                                                          
| | gain of $12.6 million ($1.24 per share) on the
    disposition of the Companys investment in Junglee, a
    facilitator of Internet commerce

1997


|  |                                                                                                                                                                  
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
| | gain of $28.4 million ($2.65 per share) from the sale
    of the Companys investments in Bear Island Paper Company
    LP and Bear Island Timberlands Company LP
| | gain of $16.0 million ($1.50 per share) from the sale
    of the PASS regional cable sports network                                                              









---



##### Table of Contents















---



##### Table of Contents






INDEX TO EXHIBITS


|        |    |    |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|------- | -- | -- | ----------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |    |            
|Number  |    |    | Description
|       
|       
|        | 3  | .1 |             | Restated Certificate of Incorporation of the Company dated
    November 13, 2003 (incorporated by reference to
    Exhibit 3.1 to the Companys Annual Report on
    Form 10-K for the fiscal year ended December 28, 2003).                                                                                                                                                                                                                                        
|       
|        | 3  | .2 |             | Certificate of Designation for the Companys Series A
    Preferred Stock dated September 22, 2003 (incorporated by
    reference to Exhibit 3.2 to Amendment No. 1 to the
    Companys Current Report on Form 8-K dated
    September 22, 2003).                                                                                                                                                                                                                  
|       
|        | 3  | .3 |             | By-Laws of the Company as amended and restated through
    September 22, 2003 (incorporated by reference to
    Exhibit 3.4 to the Companys Current Report on
    Form 8-K dated September 22, 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 |             | First Supplemental Indenture dated as of September 22,
    2003, among WP Company LLC, the Company and Bank One, NA, as
    successor to The First National Bank of Chicago, as Trustee, to
    the Indenture dated as of February 17, 1999, between The
    Washington Post Company and The First National Bank of Chicago,
    as Trustee (incorporated by reference to Exhibit 4.1 to the
    Companys Current Report on Form 8-K dated
    September 22, 2003).
|       
|        | 4  | .4 |             | Five Year Credit Agreement dated as of August 8, 2006,
    among the Company, Citibank, N.A., JPMorgan Chase Bank, N.A.,
    Wachovia Bank, National Association, SunTrust Bank, The Bank of
    New York, PNC Bank, National Association, Bank of America, N.A.
    and Wells Fargo Bank, N.A. (incorporated by reference to
    Exhibit 4.4 to the Companys Quarterly Report on
    Form 10-Q for the quarter ended July 2, 2006).                               
|       
|        | 10 | .1 |             | The Washington Post Company Incentive Compensation Plan as
    amended and restated on May 11, 2006 (incorporated by
    reference to Exhibit 10.1 to the Companys Current
    Report on Form 8-K dated May 11, 2006).*                                                                                                                                                                                                                                            
|       
|        | 10 | .2 |             | The Washington Post Company Stock Option Plan as amended and
    restated effective May 31, 2003 (incorporated by reference
    to Exhibit 10.1 to the Companys Quarterly Report on
    Form 10-Q for the quarter ended September 28, 2003).*                                                                                                                                                                                                                      
|       
|        | 10 | .3 |             | The Washington Post Company Supplemental Executive Retirement
    Plan as amended and restated through March 14, 2002
    (incorporated by reference to Exhibit 10.4 to the
    Companys Annual Report on Form 10-K for the fiscal
    year ended December 30, 2001).*                                                                                                                                                                                             
|       
|        | 10 | .4 |             | The Washington Post Company Deferred Compensation Plan as
    amended and restated effective May 12, 2005 (incorporated
    by reference to Exhibit 10.1 to the Companys Current
    Report on Form 8-K dated May 12, 2005).*                                                                                                                                                                                                                                      
|       
|        | 11 |    |             | Calculation of earnings per share of common stock.                                                                                                                                                                                                                                                                                                                                                                                                                  
|       
|        | 21 |    |             | List of subsidiaries of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                
|       
|        | 23 |    |             | Consent of independent registered public accounting firm.                                                                                                                                                                                                                                                                                                                                                                                                           
|       
|        | 24 |    |             | Power of attorney dated February 27, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                          
|       
|        | 31 | .1 |             | Rule 13a-14(a)/15d-14(a) Certification of the Chief
    Executive Officer.                                                                                                                                                                                                                                                                                                                                                                                          
|       
|        | 31 | .2 |             | Rule 13a-14(a)/15d-14(a) Certification of the Chief
    Financial Officer.                                                                                                                                                                                                                                                                                                                                                                                          
|       
|        | 32 |    |             | Section 1350 Certification of the Chief Executive Officer
    and the Chief Financial Officer.                                                                                                                                                                                                                                                                                                                                                                      




10-K.