However, there is one question Senator Obama has not answered and has apparently even tried to distance himself from. During this campaign, Barack Obama has successfully been able to avoid any questions on the subject of the diversion of government small business contracts to Fortune 500 firms.

Wolf Blitzer should ask Senator Obama, "What would you do to stop Fortune 500 firms from receiving billions in government small business contracts?"

As recently as last Wednesday, the Washington Post published a story that found the Bush Administration had diverted 40 percent of all government small business contracts to Fortune 500 firms. Based on the Washington Post's statistical sampling, approximately $450 billion in government contracts earmarked for middle class firms actually went to Fortune 500 firms. The Washington Post sampling was only looking for Fortune 500 and other clearly large firms; what about other large businesses that are not household names? If all of those firms were considered, the percentage of those contracts could even be 60, 70, or 80 percent.

The Washington Post only looked at prime contracts from federal agencies; what about all the subcontracts from prime contractors? How many billions in small business subcontracts are actually going to Fortune 500 firms and other large businesses?

As the saying goes, "a billion here, a billion there, pretty soon you're talking about some real money." It is highly likely the Bush Administration has intentionally diverted over a half a trillion dollars in federal small business contracts to Fortune 500 firms and hundreds of other large businesses.

It is extremely unusual for a Democratic candidate for President to miss an opportunity to respond to a major story in the Washington Post that would provide a legitimate justification to criticize the current Republican administration. Why has Senator Obama avoided this issue?

Neither Senator Obama nor Senator McCain have been asked even a single question on this issue. Wolf Blitzer could rectify that situation on Friday.

SOURCE American Small Business League

http://www.asbl.com

WHILE DEMOCRATS PLAN TO "SPREAD THE WEALTH AROUND," HOUSE GOP OFFERS PLAN TO HELP FAMILIES WITH COSTS OF LIVING, HELP SMALL BUSINESSES CREATE JOBS

October 27, 2008

As families, seniors, and small businesses continue to struggle during these times of economic uncertainty, Democrats and Republicans in Washington are offering starkly different plans to strengthen our economy and create new jobs. In yesterday's Washington Post, House Democratic Caucus Chairman Rahm Emanuel (D-IL) claimed Democrats should be the "party of reform" but fails to mention that his Party is relying on higher taxes and more government spending to address this economic crisis - failed ideas that will worsen our economy and which poll after poll show aren't supported by the American people:

"There are certain things that people this year are voting for and certain things they're voting against. We'll be successful as a party if we're known as the party of reform. We will be unsuccessful if we do things the way they've always been done."

The party of reform" Hardly. Take a look at the policy pronouncements from leading Democrats in recent weeks and determine for yourself whether or not this is "reform":

*House Speaker Nancy Pelosi (D-CA) and her Democratic colleagues in charge of Congress are crafting a massive $300 billion package of more government spending masquerading as "economic stimulus" that they hope to bring to the House and Senate floors soon after the November election.

*Sen. Barack Obama (D-IL) infamously promised to "spread the wealth around" through higher, jobs-killing taxes on the small businesses that represent the backbone of the American economy.

*And just last week, the powerful Chairman of the House Financial Services Committee, Rep. Barney Frank (D-MA), called for a 25 percent cut in defense spending and announced, "We'll have to raise taxes ultimately."

Higher taxes, more pork-laden Washington spending, and a slashed defense budget while our military is fighting two wars. That's not reform. That's more of the same failed Washington policies that slow economic growth, kill American jobs, and weaken our national defense. And House Republicans are prepared to fight against them - and promote a real plan to spur economic growth and create jobs.

In a recent letter to Speaker Pelosi, House Republican Leader John Boehner (R-OH) outlined some straightforward, common sense economic policies that represent real reform on behalf of families, seniors, and small businesses - not the kind of rhetorical con game Rep. Emanuel outlined in the Washington Post over the weekend. These pro-growth, pro-jobs reforms include:

*Giving American families real tax relief so they can keep more of their own hard-earned money.

*Bringing American jobs back home by lowering the tax rate on profits that companies bring back to the United States.

*Spurring economic growth by immediately and completely suspending the capital gains tax on individuals and corporations during the next two years.

*Creating jobs and reducing energy and food costs by enacting an "all of the above" energy plan that increases production of American energy to reduce gas prices, encourages more efficiency and conservation, and promotes the use of renewable and alternative fuels.

If Rep. Emanuel, Speaker Pelosi, Sen. Obama, and Senate Majority Leader Harry Reid (D-NV) are truly interested in economic "reform," will they join House Republicans in supporting this agenda to assist families in dealing with rising costs of living and help small businesses create more jobs" Or will they instead stick to their plans to plunge our nation into further economic turmoil by raising taxes and "spreading the wealth around" through $300 billon in more spending on government programs?

Republican Leader Press Office

Rep. John Boehner (R-OH)

H-204, The Capitol

(202) 225-4000

* Q3 earnings per share $1.08

* Q3 revenue rose 10 percent to $1.13 billion

* Says Q3 includes $59.7 million goodwill impairment charge at the community newspapers and the herald

* Reuters Estimates Q3 earnings per share view $5.04, revenue view $1,079.60 million

* Says Q3 also includes $0.84/ share in accelerated depreciation related to

closing of the Washington post's College Park plant

* Says Q3 also includes $1.39 per share in non-operating unrealized foreign

currency losses

((Bangalore Equities Newsroom; +91 80 4135 5800; within U.S. +1 646 223 8780))

Varghese Joseph vj

COPYRIGHT

Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.

MMMM

-- A $59.7 million goodwill impairment charge at the Company's community newspapers and The Herald, which are part of the newspaper publishing division (after-tax impact of $41.9 million, or $4.48 per share);

-- $12.5 million in accelerated depreciation related to the closing of The Washington Post's College Park, MD, plant (after-tax impact of $7.9 million, or $0.84 per share); and

-- $20.6 million in non-operating unrealized foreign currency losses arising from the strengthening of the U.S. dollar (after-tax impact of $13.0 million, or $1.39 per share).

Items included in the Company's results for the third quarter of 2007:

-- A $9.5 million gain from the sale of property at the Company's television station in Miami (after-tax impact of $5.9 million, or $0.62 per share); and

-- $9.2 million in non-operating unrealized foreign currency gains arising from the weakening of the U.S. dollar (after-tax impact of $5.7 million, or $0.60 per share).

Revenue for the third quarter of 2008 was $1,128.7 million, up 10% from $1,022.5 million in the third quarter of 2007. The increase is due to significant revenue growth at the education and cable television divisions, and a small increase at the television broadcasting division. Revenues were down at the Company's newspaper and magazine publishing divisions.

Operating income declined in the third quarter of 2008 to $40.3 million, from $110.5 million in the third quarter of 2007. 2008 results included a $59.7 million goodwill impairment charge and $12.5 million in accelerated depreciation at The Washington Post; 2007 results included a $9.5 million gain from the sale of property at the Company's television station in Miami. Offsetting these declines were improved results at the education, cable and magazine publishing divisions.

For the first nine months of 2008, net income totaled $46.9 million ($4.86 per share), compared with $205.7 million ($21.48 per share) for the same period of 2007.

Items included in the Company's results for the first nine months of 2008:

-- Charges of $112.0 million related to early retirement program expense at The Washington Post newspaper, the corporate office and Newsweek (after-tax impact of $67.8 million, or $7.13 per share);

-- A $59.7 million goodwill impairment charge at the Company's community newspapers and The Herald, which are part of the newspaper publishing division (after-tax impact of $41.9 million, or $4.48 per share);

-- $13.7 million in accelerated depreciation related to the closing of The Washington Post's College Park, MD, plant (after-tax impact of $8.6 million, or $0.91 per share);

-- A decline in equity in earnings (losses) of affiliates associated with $6.8 million in impairment charges at two of the Company's affiliates (after-tax impact of $4.1 million, or $0.43 per share); and

-- $13.4 million in non-operating unrealized foreign currency losses arising from the strengthening of the U.S. dollar (after-tax impact of $8.4 million, or $0.89 per share).

Items included in the Company's results for the first nine months of 2007:

-- A $9.5 million gain from the sale of property at the Company's television station in Miami (after-tax impact of $5.9 million, or $0.62 per share);

-- An increase in equity in earnings of affiliates primarily from a $8.9 million gain on the sale of land at the Company's Bowater Mersey affiliate (after-tax impact of $6.5 million, or $0.68 per share);

-- $13.8 million in non-operating unrealized foreign currency gains arising from the weakening of the U.S. dollar (after-tax impact of $8.6 million, or $0.90 per share); and

-- Additional net income tax expense of $6.6 million ($0.70 per share) as a result of a $12.9 million ($1.36 per share) increase in taxes associated with Bowater Mersey and a tax benefit of $6.3 million ($0.66 per share) associated with changes in certain state income tax laws. Both of these were non-cash items in 2007, impacting the Company's long-term net deferred income tax liabilities.

Revenue for the first nine months of 2008 was $3,298.0 million, up 8% from $3,054.9 million in the first nine months of 2007, due to increased revenues at the Company's education and cable divisions, partially offset by revenue declines at the Company's newspaper publishing, magazine publishing and television broadcasting divisions.

Operating income for the first nine months of 2008 decreased to $112.0 million, from $327.7 million in the first nine months of 2007. 2008 results included early retirement program expenses of $112.0 million, a $59.7 million goodwill impairment charge, $13.7 million in additional depreciation at The Washington Post along with a decline in overall newspaper division revenues; 2007 results included a $9.5 million gain from the sale of property at the Company's television station in Miami. Offsetting these declines were improved results at the education and cable divisions.

The Company's operating income for the third quarter and first nine months of 2008 included $6.4 million and $19.6 million of net pension credits, respectively, compared to $5.9 million and $16.7 million of net pension credits, respectively, for the same periods of 2007, excluding charges related to early retirement programs.

Divisional Results

Education

Education division revenue totaled $602.7 million for the third quarter of 2008, a 17% increase over revenue of $514.6 million for the same period of 2007. Excluding revenue from acquired businesses, education division revenue increased 14% for the third quarter of 2008. Kaplan reported operating income of $51.1 million for the third quarter of 2008, up 36% from $37.6 million in the third quarter of 2007. Operating income in the third quarter of 2008 included stock compensation expense of $2.5 million, compared to stock compensation expense of $12.0 million in the third quarter of 2007.

For the first nine months of 2008, education division revenue totaled $1,722.5 million, a 15% increase over revenue of $1,493.9 million for the same period of 2007. Excluding revenue from acquired businesses, education division revenue increased 11% for the first nine months of 2008. Kaplan reported operating income of $145.3 million for the first nine months of 2008, up 33% from $109.4 million for the first nine months of 2007. Operating income in the first nine months of 2008 included stock compensation expense of $9.8 million, compared to stock compensation expense of $35.3 million in the first nine months of 2007.

A summary of Kaplan's operating results for the third quarter and the first nine months of 2008 compared to 2007 is as follows:

                            Third Quarter                             YTD
(In thousands)                                            %                                             %
                               2008           2007        Change         2008             2007          Change
Revenue
Higher education            $  320,965     $  251,611     28          $  914,449       $  743,332       23
Test prep                      168,489        155,649     8              458,015          438,447       4
Professional                   113,457        107,309     6              349,757          312,022       12
Kaplan corporate               370            294         26             1,058            974           9
Intersegment elimination       (542     )     (268     )  -              (820       )     (912       )  -
                            $  602,739     $  514,595     17          $  1,722,459     $  1,493,863     15
Operating income (loss)
Higher education            $  36,224      $  27,340      32          $  121,678       $  89,291        36
Test prep                      27,927         28,214      (1   )         62,362           68,806        (9   )
Professional                   4,384          8,364       (48  )         15,271           26,918        (43  )
Kaplan corporate               (11,475  )     (10,864  )  (6   )         (33,546    )     (30,330    )  (11  )
Other*                         (5,666   )     (15,539  )  64             (20,300    )     (45,046    )  55
Intersegment elimination       (268     )     40          -              (187       )     (193       )  -
                            $  51,126      $  37,555      36          $  145,278       $  109,446       33

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

Higher education includes Kaplan's domestic and international post-secondary education businesses, including fixed-facility colleges as well as online post-secondary and career programs. Higher education revenue grew by 28% for the third quarter of 2008 and 23% in the first nine months of 2008. Enrollments increased 22% to 99,700 at September 30, 2008, compared to 81,600 at September 30, 2007, due to growth in both online and residential programs. Higher education results in the first nine months of 2008 include additional costs associated with the expansion of Kaplan's online high school and international programs. Higher education results in the first quarter of 2007 were adversely affected by $2.7 million in lease termination charges.

Funds provided under student financial aid programs created under Title IV of the Federal Higher Education Act account for a large portion of Kaplan Higher Education (KHE) revenues; these funds are provided in the form of federal loans and grants. In addition, some KHE students also obtain non-Title IV private loans from lenders to finance a portion of their education. In response to recent tightening in the credit markets, certain lenders have announced that they will apply more stringent lending standards for non-Title IV private student loans. KHE estimates that approximately 6% of its domestic revenues in 2008 will come from non-Title IV private loans obtained by its students. Prospectively, KHE expects private student loan funding to diminish due to strains in the U.S. credit markets; KHE expects this source to be replaced with funds provided under Title IV sources, student cash payments and, to a lesser extent, a self-funded internal loan program.

Test prep includes Kaplan's standardized test preparation and English-language course offerings, as well as the K12 and Score businesses. Test prep revenue, excluding Score, grew 14% in the third quarter of 2008 and 10% in the first nine months of 2008 largely due to growth in English-language programs. Score revenues declined 50% and 47%, respectively, for the third quarter and first nine months of 2008, respectively, as a result of the restructuring announced in the fourth quarter of 2007, which included the closing of 75 Score centers. After closings and consolidations,Score operates 79 centers that focus on providing computer-assisted instruction and small-group tutoring. Operating income for test prep declined in the first nine months of 2008 due to higher payroll and marketing costs for the traditional test preparation programs, along with continued weakness at Score.

Professional includes Kaplan's domestic and overseas training businesses. Professional revenue grew 6% in the third quarter of 2008 and 12% in the first nine months of 2008, largely due to acquisitions made since the comparable periods of 2007. Excluding revenue from acquired businesses, professional revenue was down 3% for the third quarter of 2008 but grew 1% in the first nine months of 2008 due to continued declines in professional's real estate book publishing and real estate course offerings, offset by revenue growth at Kaplan Professional (Asia-Pacific) and Schweser CFA exam course offerings. Operating income is down largely due to continued weakness in professional's real estate businesses and to severance and other transition costs related to the restructuring of the Kaplan Professional (U.S.) financial education businesses, which was announced in the fourth quarter of 2007. In connection with this restructuring, product changes are being implemented and certain operations are being decentralized, in addition to employee terminations. The restructuring has largely been completed, and $0.7 million and $3.9 million in severance costs were recorded in the third quarter and first nine months of 2008, respectively.

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

Other includes charges for incentive compensation arising from equity awards under the Kaplan stock option plan, which was established for certain members of Kaplan's management. Under the plan, the amount of compensation expense varies directly with the estimated fair value of Kaplan's common stock, which is based on a comparison of operating results and public market values of other education companies. Kaplan recorded stock compensation expense of $2.5 million and $12.0 million in the third quarter of 2008 and 2007, respectively, and $9.8 million and $35.3 million in the first nine months of 2008 and 2007, respectively, related to this plan. In addition, Other includes amortization of certain intangibles, which increased due to recent Kaplan acquisitions.

Newspaper Publishing

Newspaper publishing division revenue totaled $196.2 million for the third quarter of 2008, a decrease of 7% from $210.2 million in the third quarter of 2007; division revenue decreased 9% to $599.6 million for the first nine months of 2008, from $657.2 million for the first nine months of 2007.

The Company offered a Voluntary Retirement Incentive Program to some employees of The Washington Post newspaper in March 2008, and 231 employees accepted the offer. Early retirement program expense of $79.8 million was recorded in the second quarter of 2008, which is being funded mostly from the assets of the Company's pension plans. Also, as previously announced, The Post will close its College Park, MD, printing plant. The Post has recently determined that the plant will close in the second half of 2009 and that none of the four presses will be moved to The Post's Springfield, VA, plant. The Company reassessed the useful life of the presses and the fair value of the plant building and recorded accelerated depreciation beginning in June 2008; as a result, accelerated depreciation of $12.5 million and $13.7 million, respectively, was recorded in the third quarter and first nine months of 2008, respectively. The Company estimates that additional accelerated depreciation of $9.4 million and $28.4 million, respectively, will be recorded in the fourth quarter of 2008 and in 2009, respectively. Additionally, in the third quarter of 2008, the Company completed an impairment review of its community newspapers and The Herald, which resulted in a $59.7 million goodwill impairment loss.

The newspaper division reported an operating loss of $82.7 million in the third quarter of 2008, compared to operating income of $8.8 million in the third quarter of 2007. For the first nine months of 2008, the newspaper division reported an operating loss of $178.3 million, compared to operating income of $41.5 million for the first nine months of 2007. The decline in operating results is due primarily to the $59.7 million goodwill impairment charge in the third quarter of 2008, the $79.8 million in early retirement program expense recorded in the second quarter of 2008 and accelerated depreciation of $13.7 million recorded in the first nine months of 2008. Excluding these charges, the newspaper division reported operating losses of $10.6 million* for the third quarter and $25.1 million* for the first nine months of 2008 due primarily to the continued decline in division revenues; expenses were modestly higher, with newsprint expense up 7% for the third quarter of 2008, but down 5% for the first nine months of 2008.

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

                                                      Third Quarter                               Year-to-Date
                                                      2008               2007           %         2008                2007           %
                                                                                        Change                                       Change
Operating revenues                                    $196,217           $210,181       (7)       $599,593            $657,236       (9)
Operating expenses, excluding special charges         (206,807)  *       (201,400)      3         (624,716)   *       (615,771)      1
                                                      (10,590)   *       8,781          --        (25,123)    *       41,465         --
Early retirement program expense                      --                 --             --        (79,800)            --             --
Goodwill impairment charge                            (59,690)           --             --        (59,690)            --             --
Accelerated depreciation                              (12,469)                                    (13,682)
Operating (loss) income                               $(82,749)          $ 8,781        --        $(178,295)          $ 41,465       --
*Non-GAAP measure

Print advertising revenue at The Post in the third quarter of 2008 declined 14% to $97.2 million, from $113.1 million in the third quarter of 2007, and decreased 16% to $308.6 million for the first nine months of 2008, from $366.6 million in the same period of 2007. The decreases are primarily the result of a large decline in classified advertising revenue, along with reductions in retail and supplements.

For the first nine months of 2008, Post daily and Sunday circulation declined 2.4% and 3.6%, respectively, compared to the same periods of the prior year. For the nine months ended September 28, 2008, average daily circulation at The Post totaled 623,100 and average Sunday circulation totaled 872,700.

Revenue generated by the Company's online publishing activities, primarily washingtonpost.com, increased 13% to $30.8 million for the third quarter of 2008, from $27.2 million for the third quarter of 2007; online revenues increased 8% to $87.2 million in the first nine months of 2008, from $80.5 million for the first nine months of 2007. Display online advertising revenue grew 32% and 20% for the third quarter and first nine months of 2008, respectively. Online classified advertising revenue on washingtonpost.com declined 8% in the third quarter of 2008, and was down 2% for the first nine months of 2008. A small portion of the Company's online publishing revenues is included in the magazine publishing division.

Television Broadcasting

Revenue for the television broadcasting division increased slightly in the third quarter of 2008 to $78.0 million, from $77.8 million in 2007; for the first nine months of 2008, revenue decreased 3% to $238.5 million, from $246.5 million in 2007. The increase in third quarter revenue was due to a $4.9 million increase in political advertising and $6.3 million in incremental summer Olympics-related advertising at the Company's NBC affiliates, offset by weak advertising demand in most markets and product categories. The revenue decline for the first nine months of 2008 is the result of weak advertising demand in most markets and product categories, offset by an $8.3 million increase in political advertising and $6.3 million in incremental summer Olympics-related advertising at the Company's NBC affiliates.

In the third quarter of 2008, the television broadcasting division recorded $4.9 million in non-cash property, plant and equipment gains as a reduction to expense due to new digital equipment received at no cost from Sprint/Nextel in connection with an FCC mandate reallocating a portion of the broadcast spectrum in order to eliminate interference with public safety wireless communication systems. In July 2007, the Company entered into a transaction to sell and lease back its current Miami television station facility; a $9.5 million gain was recorded as a reduction to expense in the third quarter of 2007.

Operating income for the third quarter of 2008 declined 16% to $30.1 million, from $36.0 million in 2007; operating income for the first nine months of 2008 declined 14% to $86.4 million, from $100.6 million in 2007. The declines in operating income are due to a $9.5 million gain on the sale of property at the Miami television station in the third quarter of 2007 and overall weak advertising demand for both the third quarter and nine months of 2008, offset by the $4.9 million in non-cash gains in the third quarter of 2008.

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

Magazine Publishing

Revenue for the magazine publishing division totaled $60.0 million for the third quarter of 2008, a 4% decrease from $62.5 million for the third quarter of 2007; division revenue totaled $176.0 million for the first nine months of 2008, an 11% decrease from $197.1 million for the first nine months of 2007. The revenue decline for the third quarter of 2008 is primarily due to a decline in subscription revenue at the domestic edition as a result of the previously announced circulation rate base reduction, from 3.1 million to 2.6 million. The revenue decline for the first nine months of 2008 is largely due to a 13% reduction in advertising revenue at Newsweek as a result of fewer ad pages at the domestic edition and lower rates due to the rate base reduction. Subscription revenue at the domestic edition also declined due to the rate base reduction.

As previously announced, Newsweek offered a Voluntary Retirement Incentive Program to certain employees in the first quarter of 2008 and 117 employees accepted the offer. The early retirement program expense totaled $29.2 million, which will be funded mostly from the assets of the Company's pension plans. Of this amount, $24.6 million was recorded in the first quarter of 2008 and $4.6 million was recorded in the second quarter of 2008.

Operating income totaled $9.0 million in the third quarter of 2008, compared to operating income of $7.0 million in the third quarter of 2007, with the increase due to a reduction in subscription, manufacturing and distribution expenses at the domestic edition of Newsweek, partially offset by revenue declines. The division had an operating loss of $27.0 million for the first nine months of 2008, compared to operating income of $13.9 million for the first nine months of 2007, with the decline due primarily to $29.2 million in early retirement program expense and the revenue reductions discussed above, offset by a decline in subscription, manufacturing and distribution expenses at the domestic edition of Newsweek.

Cable Television

Cable division revenue of $181.8 million for the third quarter of 2008 represents a 15% increase from $157.8 million in the third quarter of 2007; for the first nine months of 2008, revenue increased 16% to $535.0 million, from $461.1 million in the same period of 2007. The 2008 revenue increase is due to continued growth in the division's cable modem, telephone and digital revenues, as well as a rate increase in September 2007 for most high-speed data subscribers; a January 2008 basic video cable service rate increase at nearly all of its systems; and a rate increase in August 2008 for telephone subscribers. The last rate increase for most high-speed data subscribers was in March 2003, and the last rate increase for basic cable subscribers was in February 2006. In January 2008, the cable division purchased approximately 6,600 subscribers in Winona, MS, which also had a favorable impact on revenue growth for 2008.

Cable division operating income increased 40% to $41.6 million in the third quarter of 2008, versus $29.8 million in the third quarter of 2007; cable division operating income for the first nine months of 2008 increased 29% to $116.0 million, from $89.9 million for the first nine months of 2007. The increase in operating income is due to the division's revenue growth, offset by higher depreciation and programming expenses and increases in Internet and telephony costs.

At September 30, 2008, Revenue Generating Units (RGUs) grew 7% due to continued growth in high-speed data and telephony subscribers and increases in the basic video and digital video subscriber categories. The cable division began offering telephone service on a very limited basis in the second quarter of 2006; as of September 30, 2008, telephone service is being offered in all or part of systems representing 94% of homes passed. A summary of RGUs is as follows:

Cable Television Division Subscribers    September 30,    September 30,
                                         2008             2007
Basic                                    701,711          699,268
Digital                                  224,231          221,033
High-speed data                          368,614          329,815
Telephony                                90,994           40,225
Total                                    1,385,550        1,290,341

Other Businesses and Corporate Office

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

In the first nine months of 2008, other businesses and corporate office included the expenses of the Company's corporate office and the operating results of CourseAdvisor. In the first nine months of 2007, other businesses and corporate office included the expenses of the Company's corporate office.

Revenue for other businesses (CourseAdvisor) totaled $11.5 million and $30.1 million for the third quarter and first nine months of 2008, respectively. Operating expenses were $20.4 million for the third quarter of 2008, up from $8.6 million for the third quarter of 2007; operating expenses for the first nine months of 2008 were $60.5 million, up from $27.6 million in the first nine months of 2007. The increase in expenses for 2008 is due to expenses at CourseAdvisor and $3.0 million in corporate office early retirement program expense recorded in the second quarter of 2008.

Equity in (Losses) Earnings of Affiliates

The Company's equity in losses of affiliates for both the third quarter of 2008 and the third quarter of 2007 was $0.6 million. For the first nine months of 2008, the Company's equity in losses of affiliates totaled $9.5 million, compared to income of $8.3 million for the same period of 2007. Results for the first nine months of 2008 included $6.8 million in impairment charges at two of the Company's affiliates. In the first quarter of 2007, $8.9 million of the equity in earnings of affiliates was due to a gain on the sale of land at the Company's Bowater Mersey Paper Company Limited affiliate. The Company holds a 49% interest in Bowater Mersey Paper Company.

Other Non-Operating Income (Expense)

The Company's non-operating income (expense) is primarily due to unrealized foreign currency gains or losses arising from the translation of British pound and Australian dollar denominated intercompany loans into U.S. dollars.

The Company recorded other non-operating expense, net, of $21.1 million for the third quarter of 2008, compared to other non-operating income, net, of $10.1 million for the third quarter of 2007. The third quarter 2008 non-operating income, net, included $20.6 million in unrealized foreign currency losses. The third quarter 2007 non-operating income, net, included $9.2 million in unrealized foreign currency gains.

The Company recorded other non-operating expense, net, of $14.2 million for the first nine months of 2008, compared to other non-operating income, net, of $15.3 million for the same period of the prior year. The 2008 non-operating expense, net, included $13.4 million in unrealized foreign currency losses. The 2007 non-operating income, net, included $13.8 million in unrealized foreign currency gains.

The unrealized foreign currency losses in 2008 were the result of a strengthening of the U.S. dollar against the British pound and the Australian dollar; the unrealized foreign currency gains in 2007 were the result of a weakening of the U.S. dollar against the British pound and the Australian dollar.

Net Interest Expense

The Company incurred net interest expense of $5.7 million and $15.0 million for the third quarter and first nine months of 2008, respectively, compared to $3.0 million and $9.1 million for the same periods of 2007. The increases are due to a decline in interest income, as well as higher average borrowings in the first nine months of 2008 versus the same period of the prior year. At September 28, 2008, the Company had $509.1 million in borrowings outstanding at an average interest rate of 4.7%.

Provision for Income Taxes

The effective tax rate for the third quarter and first nine months of 2008 was 19.5% and 36.0%, respectively. The low effective tax rate for both of these periods is due to a reduction in state income taxes and a favorable $4.6 million provision to return adjustment from 2007, offset by $5.9 million from nondeductible goodwill in connection with the impairment charge recorded in the third quarter of 2008.

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

Earnings Per Share

The calculation of diluted earnings per share for the third quarter and first nine months of 2008 was based on 9,358,096 and 9,458,193 weighted average shares outstanding, respectively, compared to 9,508,752 and 9,531,195, respectively, for the third quarter and first nine months of 2007. The Company repurchased 167,642 shares of its Class B common stock at a cost of $99.0 million during the first nine months of 2008.

Forward-Looking Statements

This report contains certain forward-looking statements that are based largely on the Company's current expectations. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results and achievements to differ materially from those expressed in the forward-looking statements. For more information about these forward-looking statements and related risks, please refer to the section titled "Forward-Looking Statements" in Part I of the Company's Annual Report on Form 10-K.

THE WASHINGTON POST COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except share and per share amounts)
                                                                  Third Quarter                                             %
                                                                        2008                         2007                   Change
Operating revenues                                                $     1,128,658              $     1,022,504              10
Operating expenses                                                      (950,265   )                 (852,529   )           11
Depreciation                                                            (73,524    )                 (55,722    )           32
Amortization of intangibles and goodwill impairment charge              (64,602    )                 (3,787     )           --
Operating income                                                        40,267                       110,466                (64   )
Equity in losses of affiliates, net                                     (609       )                 (622       )           (2    )
Interest income                                                         1,173                        3,011                  (61   )
Interest expense                                                        (6,882     )                 (6,014     )           14
Other (expense) income, net                                             (21,120    )                 10,121                 --
Income before income taxes                                              12,829                       116,962                (89   )
Provision for income taxes                                              (2,500     )                 (44,500    )           (94   )
Net income                                                              10,329                       72,462                 (86   )
Redeemable preferred stock dividends                                    (236       )                 (237       )           0
Net income available for common stock                             $     10,093                 $     72,225                 (86   )
Basic earnings per share                                          $     1.08                   $     7.62                   (86   )
Diluted earnings per share                                        $     1.08                   $     7.60                   (86   )
Basic average shares outstanding                                        9,334,057                    9,472,870
Diluted average shares outstanding                                      9,358,096                    9,508,752

THE WASHINGTON POST COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except share and per share amounts)
                                                                  Year-to-Date                                                %
                                                                        2008                          2007                    Change
Operating revenues                                                $     3,298,015               $     3,054,885               8
Operating expenses                                                      (2,915,106  )                 (2,553,100  )           14
Depreciation                                                            (195,463    )                 (163,231    )           20
Amortization of intangibles and goodwill impairment charge              (75,494     )                 (10,833     )           --
Operating income                                                        111,952                       327,721                 (66   )
Equity in (losses) earnings of affiliates, net                          (9,505      )                 8,326                   --
Interest income                                                         4,555                         8,992                   (49   )
Interest expense                                                        (19,514     )                 (18,098     )           8
Other (expense) income, net                                             (14,193     )                 15,267                  --
Income before income taxes                                              73,295                        342,208                 (79   )
Provision for income taxes                                              (26,400     )                 (136,500    )           (81   )
Net income                                                              46,895                        205,708                 (77   )
Redeemable preferred stock dividends                                    (946        )                 (952        )           (1    )
Net income available for common stock                             $     45,949                  $     204,756                 (78   )
Basic earnings per share                                          $     4.87                    $     21.56                   (77   )
Diluted earnings per share                                        $     4.86                    $     21.48                   (77   )
Basic average shares outstanding                                        9,432,642                     9,495,999
Diluted average shares outstanding                                      9,458,193                     9,531,195

THE WASHINGTON POST COMPANY
BUSINESS SEGMENT INFORMATION
(Unaudited)
(In thousands)
                                                                Third Quarter                           %            Year-to-Date                            %
                                                                2008                2007                Change       2008                2007                Change
Operating Revenues:
Education                                                       $  602,739          $  514,595          17           $  1,722,459        $  1,493,863        15
Newspaper publishing                                               196,217             210,181          (7   )          599,593             657,236          (9   )
Television broadcasting                                            78,003              77,758           0               238,507             246,455          (3   )
Magazine publishing                                                59,969              62,477           (4   )          176,043             197,138          (11  )
Cable television                                                   181,840             157,752          15              535,011             461,148          16
Other businesses and corporate office                              11,534              --               --              30,134              --               --
Intersegment elimination                                           (1,644     )        (259       )     --              (3,732     )        (955       )     --
                                                                $  1,128,658        $  1,022,504        10           $  3,298,015        $  3,054,885        8
Operating Expenses:
Education                                                       $  551,613          $  477,040          16           $  1,577,181        $  1,384,417        14
Newspaper publishing                                               278,966             201,400          39              777,888             615,771          26
Television broadcasting                                            47,895              41,761           15              152,143             145,844          4
Magazine publishing                                                50,925              55,470           (8   )          203,045             183,200          11
Cable television                                                   140,215             127,981          10              418,996             371,261          13
Other businesses and corporate office                              20,421              8,645            --              60,542              27,626           --
Intersegment elimination                                           (1,644     )        (259       )     --              (3,732     )        (955       )     --
                                                                $  1,088,391        $  912,038          19           $  3,186,063        $  2,727,164        17
Operating Income (Loss):
Education                                                       $  51,126           $  37,555           36           $  145,278          $  109,446          33
Newspaper publishing                                               (82,749    )        8,781            --              (178,295   )        41,465           --
Television broadcasting                                            30,108              35,997           (16  )          86,364              100,611          (14  )
Magazine publishing                                                9,044               7,007            29              (27,002    )        13,938           --
Cable television                                                   41,625              29,771           40              116,015             89,887           29
Other businesses and corporate office                              (8,887     )        (8,645     )     (3   )          (30,408    )        (27,626    )     (10  )
                                                                $  40,267           $  110,466          (64  )       $  111,952          $  327,721          (66  )
Depreciation:
Education                                                       $  16,390           $  15,861           3            $  49,171           $  44,213           11
Newspaper publishing                                               23,596              9,467            --              45,481              28,277           61
Television broadcasting                                            2,361               2,357            0               6,831               7,089            (4   )
Magazine publishing                                                504                 534              (6   )          1,553               1,643            (5   )
Cable television                                                   30,524              27,138           12              92,091              80,914           14
Other businesses and corporate office                              149                 365              (59  )          336                 1,095            (69  )
                                                                $  73,524           $  55,722           32           $  195,463          $  163,231          20
Amortization of intangibles and goodwill impairment charge:
Education                                                       $  3,151            $  3,493            (10  )       $  10,503           $  9,781            7
Newspaper publishing                                               59,840              292              --              60,164              876              --
Television broadcasting                                            --                  --               --              --                  --               --
Magazine publishing                                                --                  --               --              --                  --               --
Cable television                                                   81                  2                --              236                 176              34
Other businesses and corporate office                              1,530               --               --              4,591               --               --
                                                                $  64,602           $  3,787            --           $  75,494           $  10,833           --
Pension (Expense) Credit:
Education                                                       $  (1,287     )     $  (796       )     62           $  (3,095     )     $  (2,544     )     22
Newspaper publishing                                               (3,159     )        (2,362     )     34              (84,315    )        (7,562     )     --
Television broadcasting                                            241                 151              60              809                 763              6
Magazine publishing                                                10,860              9,282            17              4,140               27,056           (85  )
Cable television                                                   (398       )        (383       )     4               (1,116     )        (1,022     )     9
Other businesses and corporate office                              (16        )        --               --              (1,875     )        --               --
                                                                $  6,241            $  5,892            6            $  (85,452    )     $  16,691           --

SOURCE: The Washington Post Company

The Washington Post Company 
John B. Morse, Jr., 202-334-6662