Graham (GHC) 8-K Entry into a Material Definitive Agreement

Exhibit 99.1

UNAUDITED PRO FORMA

CONDENSED CONSOLIDATED FINANCIAL INFORMATION

On October 1, 2013, The Washington Post Company (the Company) completed the sale of WP Company LLC, Express Publications Company, LLC, El Tiempo Latino LLC, Robinson Terminal Warehouse LLC, Greater Washington Publishing, LLC and Post-Newsweek Media, LLC (collectively referred to as the Publishing Subsidiaries) to Nash Holdings LLC (the Purchaser). Under the terms of the definitive Securities Purchase Agreement (the Purchase Agreement), the Purchaser acquired all the issued and outstanding equity securities of each of the entities that comprise the Publishing Subsidiaries. The Purchaser also acquired all other assets of the Company primarily related to the Company’s publishing businesses, including all of the Company’s rights in the name “The Washington Post.” The Company will change its name within 60 days following the closing. The Company retained its interest in Classified Ventures, LLC, The Slate Group LLC, The FP Group, WaPo Labs and certain excluded real estate. Liabilities and assets under the Retirement Plan for The Washington Post Companies relating to the active employees of the Company’s publishing businesses will be transferred to the Purchaser.

The accompanying unaudited pro forma condensed consolidated balance sheet presents the Company’s financial position assuming the sale of the Publishing Subsidiaries and the other transactions contemplated by the Purchase Agreement (the Sale) occurred on June 30, 2013. 

The accompanying unaudited pro forma condensed consolidated statements of income present the Company’s results of operations for the six months ended June 30, 2013 and 2012, and for each of the three fiscal years in the period ended December 31, 2012, assuming the Sale occurred on January 4, 2010.

The unaudited pro forma condensed consolidated financial statements have been prepared using assumptions and estimates that the Company believes are reasonable under the circumstances and are intended for informational purposes only. They are not necessarily indicative of the financial results that would have occurred if the transactions described herein had taken place on the dates indicated, nor are they indicative of the future consolidated results of the Company. However, management believes that the estimates and assumptions used provide a reasonable basis for presenting the significant effects of the Sale. Management also believes the pro forma adjustments give appropriate effect to the estimates and assumptions and are applied in conformity with accounting principles generally accepted in the United States of America.

The accompanying unaudited pro forma condensed consolidated balance sheet as of June 30, 2013 and the unaudited pro forma condensed consolidated statements of income for the six months ended June 30, 2013 and 2012, and for each of the three fiscal years in the period ended December 31, 2012, should be read in conjunction with the historical financial statements of the Company for the six months ended June 30, 2013 (unaudited) and for each of the three fiscal years in the period ended December 31, 2012 (audited), including the related notes, filed with the Securities and Exchange Commission, respectively, on Form 10-Q on August 7, 2013 and on Form 10-K on February 28, 2013.

The following is a brief description of the amounts recorded under each of the column headings in the accompanying unaudited condensed consolidated balance sheet and the unaudited condensed consolidated statements of income:

Historical TWPC

This column reflects the Company’s historical financial position as of June 30, 2013 and historical operating results for the six months ended June 30, 2013 and 2012, and each of the three years in the period ended December 31, 2012, prior to any adjustment for the Sale.

Sale of the Publishing Subsidiaries

This column reflects the Publishing Subsidiaries’ historical financial position of the assets sold and liabilities assumed as of June 30, 2013 and its historical operating results for the six months ended June 30, 2013 and 2012, and each of the three fiscal years in the period ended December 31, 2012, and the pro forma adjustments that arise as a direct result of the Sale. These adjustments are more fully described in the notes to the accompanying unaudited pro forma condensed consolidated financial information.

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THE WASHINGTON POST COMPANY
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 2013
						Sale of
				Historical		Publishing			The Company
(in thousands)				TWPC		Subsidiaries			Pro Forma
						(1)
Assets
Current Assets
	Cash and cash equivalents			$	386,567	$	250,000	(2)	$	636,567
	Restricted cash				30,351		―			30,351
	Investments in marketable equity securities and other investments				495,219		―			495,219
	Accounts receivable, net				364,963		(68,436)			296,527
	Inventories				4,541		(4,541)			―
	Other current assets				84,227		(5,328)			78,899
		Total Current Assets			1,365,868		171,695			1,537,563
Property, Plant and Equipment, Net					1,031,754		(120,755)			910,999
Investments in Affiliates					27,386		(351)			27,035
Goodwill, Net					1,288,419		(13,602)			1,274,817
Indefinite-Lived Intangible Assets, Net					539,728		―			539,728
Amortized Intangible Assets, Net					38,535		―			38,535
Prepaid Pension Cost					579,303		472,110	(3)		1,051,413
Deferred Charges and Other Assets					53,027		(4,126)			48,901
		Total Assets		$	4,924,020	$	504,971		$	5,428,991
Liabilities and Equity
Current Liabilities
	Accounts payable and accrued liabilities			$	447,538	$	609	(4)	$	448,147
	Income taxes payable				15,061		40,711	(5)		55,772
	Deferred income taxes				27,944		―			27,944
	Deferred revenue				369,631		(22,459)			347,172
	Dividends declared				213		―			213
	Short-term borrowings				3,129		―			3,129
		Total Current Liabilities			863,516		18,861			882,377
Postretirement Benefits Other Than Pensions					61,369		(24,271)	(3)		37,098
Accrued Compensation and Related Benefits					216,222		(15,243)	(3)		200,979
Other Liabilities					102,837		(13,058)			89,779
Deferred Income Taxes					531,384		185,044	(3) (5)		716,428
Long-Term Debt					446,904		―			446,904
		Total Liabilities			2,222,232		151,333			2,373,565
Redeemable Noncontrolling Interest					6,012		―			6,012
Redeemable Preferred Stock					10,665		―			10,665
Preferred Stock					―		―			―
Common Stockholders’ Equity
	Common stock				20,000		―			20,000
	Capital in excess of par value				252,767		9,049	(4)		261,816
	Retained earnings				4,596,167		80,110	(5)		4,676,277
	Accumulated other comprehensive income, net of tax
		Cumulative foreign currency translation adjustment			18,372		―			18,372
		Unrealized gain on available-for-sale securities			158,323		―			158,323
		Unrealized gain on pensions and other postretirement plans			117,186		269,647	(3)		386,833
		Cash flow hedge			(794)		―			(794)
	Cost of Class B common stock held in treasury				(2,477,248)		(5,168)	(4)		(2,482,416)
		Total Common Stockholders’ Equity			2,684,773		353,638			3,038,411
Noncontrolling Interests					338		―			338
		Total Equity			2,685,111		353,638			3,038,749
			Total Liabilities and Equity	$	4,924,020	$	504,971		$	5,428,991
_______________
Note:
(1)		This column includes the elimination of the historical assets and liabilities of the Publishing Subsidiaries estimated to be transferred to the Purchaser as part of the Sale as if the transaction occurred on June 30, 2013. This column also reflects the estimated impact of the Sale, including certain employee obligations, such as pension and other postretirement benefit obligations, and income taxes payable.
(2)		Cash proceeds from the Sale.
(3)		Includes estimated impact as of October 1, 2013 arising from the remeasurement of the Company's pension and postretirement benefit plans and related net curtailment and settlement gains.
(4)		Includes estimated impact as of October 1, 2013 arising from accelerated vesting and forfeitures of restricted stock and stock options.
(5)		Includes estimated tax provision and after-tax gain on the Sale.

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THE WASHINGTON POST COMPANY
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
	SIX MONTHS ENDED JUNE 30, 2013
				Sale of
		Historical		Publishing		The Company
(In thousands, except per share amounts)		TWPC		Subsidiaries		Pro Forma
				(1)
Operating Revenues
	Education	$	1,076,045	$	―	$	1,076,045
	Advertising		349,850		(170,186)		179,664
	Circulation and subscriber		449,462		(70,399)		379,063
	Other		105,599		(13,935)		91,664
			1,980,956		(254,520)		1,726,436
Operating Costs and Expenses
	Operating		921,300		(138,820)		782,480
	Selling, general and administrative		806,850		(145,803)		661,047
	Depreciation of property, plant and equipment		129,666		(11,955)		117,711
	Amortization of intangible assets		7,030		―		7,030
			1,864,846		(296,578)		1,568,268
Income from Operations			116,110		42,058		158,168
	Equity in earnings of affiliates, net		7,286		―		7,286
	Interest income		1,032		―		1,032
	Interest expense		(18,008)		―		(18,008)
	Other expense, net		(16,941)		―		(16,941)
Income from Continuing Operations Before Income Taxes			89,479		42,058		131,537
Provision for Income Taxes			37,700		14,600		52,300
Income from Continuing Operations			51,779		27,458		79,237
Income from Continuing Operations Attributable to Noncontrolling Interests			(350)		―		(350)
Income from Continuing Operations Attributable to The Washington Post Company			51,429		27,458		78,887
Redeemable Preferred Stock Dividends			(650)		―		(650)
Income from Continuing Operations Attributable to The Washington Post Company Common Stockholders		$	50,779	$	27,458	$	78,237
Per Share Information Attributable to The Washington Post Company Common Stockholders
Basic income per common share from continuing operations		$	6.84			$	10.54
Basic average number of common shares outstanding			7,228				7,228
Diluted income per common share from continuing operations		$	6.84			$	10.54
Diluted average number of common shares outstanding			7,276				7,276
_______________
Note:
(1)	The adjustment reflects the elimination of the results of operations of the Publishing Subsidiaries as if the transaction occurred on January 4, 2010. The elimination includes $22.7 million in early retirement program expense. The elimination excludes the Publishing Subsidiaries' historical pension and postretirement benefit expense for retirees since the associated assets and liabilities will be retained by the Company.

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THE WASHINGTON POST COMPANY
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
SIX MONTHS ENDED JUNE 30, 2012
				Sale of
		Historical		Publishing		The Company
(In thousands, except per share amounts)		TWPC		Subsidiaries		Pro Forma
				(1)
Operating Revenues
	Education	$	1,098,459	$	―	$	1,098,459
	Advertising		354,044		(176,795)		177,249
	Circulation and subscriber		431,424		(70,763)		360,661
	Other		60,677		(15,004)		45,673
			1,944,604		(262,562)		1,682,042
Operating Costs and Expenses
	Operating		922,088		(152,815)		769,273
	Selling, general and administrative		805,571		(122,676)		682,895
	Depreciation of property, plant and equipment		124,325		(11,566)		112,759
	Amortization of intangible assets		8,301		(55)		8,246
			1,860,285		(287,112)		1,573,173
Income from Operations			84,319		24,550		108,869
	Equity in earnings of affiliates, net		7,202		―		7,202
	Interest income		1,844		―		1,844
	Interest expense		(18,142)		―		(18,142)
	Other income, net		7,953		―		7,953
Income from Continuing Operations Before Income Taxes			83,176		24,550		107,726
Provision for Income Taxes			32,900		8,200		41,100
Income from Continuing Operations			50,276		16,350		66,626
Income from Continuing Operations Attributable to Noncontrolling Interests			(81)		―		(81)
Income from Continuing Operations Attributable to The Washington Post Company			50,195		16,350		66,545
Redeemable Preferred Stock Dividends			(673)		―		(673)
Income from Continuing Operations Attributable to The Washington Post Company Common Stockholders		$	49,522	$	16,350	$	65,872
Per Share Information Attributable to The Washington Post Company Common Stockholders
Basic income per common share from continuing operations		$	6.48			$	8.64
Basic average number of common shares outstanding			7,473				7,473
Diluted income per common share from continuing operations		$	6.48			$	8.64
Diluted average number of common shares outstanding			7,580				7,580
_______________
Note:
(1)	The adjustment reflects the elimination of the results of operations of the Publishing Subsidiaries as if the transaction occurred on January 4, 2010. The elimination excludes the Publishing Subsidiaries' historical pension and postretirement benefit expense for retirees since the associated assets and liabilities will be retained by the Company.

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THE WASHINGTON POST COMPANY
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
	TWELVE MONTHS ENDED DECEMBER 31, 2012
				Sale of
		Historical		Publishing		The Company
(In thousands, except per share amounts)		TWPC		Subsidiaries		Pro Forma
				(1)
Operating Revenues
	Education	$	2,196,496	$	―	$	2,196,496
	Advertising		771,447		(370,647)		400,800
	Circulation and subscriber		871,293		(138,923)		732,370
	Other		156,386		(30,482)		125,904
			3,995,622		(540,052)		3,455,570
Operating Costs and Expenses
	Operating		1,866,445		(300,188)		1,566,257
	Selling, general and administrative		1,583,065		(249,549)		1,333,516
	Depreciation of property, plant and equipment		267,315		(23,237)		244,078
	Amortization of intangible assets		21,002		(56)		20,946
	Impairment of goodwill and other long-lived assets		111,593		―		111,593
			3,849,420		(573,030)		3,276,390
Income from Operations			146,202		32,978		179,180
	Equity in earnings of affiliates, net		14,086		―		14,086
	Interest income		3,393		―		3,393
	Interest expense		(35,944)		―		(35,944)
	Other expense, net		(5,456)		―		(5,456)
Income from Continuing Operations Before Income Taxes			122,281		32,978		155,259
Provision for Income Taxes			72,200		11,000		83,200
Income from Continuing Operations			50,081		21,978		72,059
Income from Continuing Operations Attributable to Noncontrolling Interests			(74)		―		(74)
Income from Continuing Operations Attributable to The Washington Post Company			50,007		21,978		71,985
Redeemable Preferred Stock Dividends			(895)		―		(895)
Income from Continuing Operations Attributable to The Washington Post Company Common Stockholders		$	49,112	$	21,978	$	71,090
Per Share Information Attributable to The Washington Post Company Common Stockholders
Basic income per common share from continuing operations		$	6.23			$	9.22
Basic average number of common shares outstanding			7,360				7,360
Diluted income per common share from continuing operations		$	6.23			$	9.22
Diluted average number of common shares outstanding			7,404				7,404
_______________
Note:
(1)	The adjustment reflects the elimination of the results of operations of the Publishing Subsidiaries as if the transaction occurred on January 4, 2010. The elimination includes $8.5 million in early retirement program expense. The elimination excludes the Publishing Subsidiaries' historical pension and postretirement benefit expense for retirees since the associated assets and liabilities will be retained by the Company.

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THE WASHINGTON POST COMPANY
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
	TWELVE MONTHS ENDED DECEMBER 31, 2011
				Sale of
		Historical		Publishing		The Company
(In thousands, except per share amounts)		TWPC		Subsidiaries		Pro Forma
				(1)
Operating Revenues
	Education	$	2,404,459	$	―	$	2,404,459
	Advertising		738,489		(410,612)		327,877
	Circulation and subscriber		852,891		(142,638)		710,253
	Other		113,973		(30,565)		83,408
			4,109,812		(583,815)		3,525,997
Operating Costs and Expenses
	Operating		1,891,888		(329,273)		1,562,615
	Selling, general and administrative		1,617,641		(233,981)		1,383,660
	Depreciation of property, plant and equipment		247,650		(24,247)		223,403
	Amortization of intangible assets		22,335		(134)		22,201
			3,779,514		(587,635)		3,191,879
Income from Operations			330,298		3,820		334,118
	Equity in earnings of affiliates, net		5,949		―		5,949
	Interest income		4,147		―		4,147
	Interest expense		(33,226)		―		(33,226)
	Other expense, net		(55,200)		―		(55,200)
Income from Continuing Operations Before Income Taxes			251,968		3,820		255,788
Provision for Income Taxes			103,500		900		104,400
Income from Continuing Operations			148,468		2,920		151,388
Income from Continuing Operations Attributable to Noncontrolling Interests			(7)		―		(7)
Income from Continuing Operations Attributable to The Washington Post Company			148,461		2,920		151,381
Redeemable Preferred Stock Dividends			(917)		―		(917)
Income from Continuing Operations Attributable to The Washington Post Company Common Stockholders		$	147,544	$	2,920	$	150,464
Per Share Information Attributable to The Washington Post Company Common Stockholders
Basic income per common share from continuing operations		$	18.66			$	19.03
Basic average number of common shares outstanding			7,826				7,826
Diluted income per common share from continuing operations		$	18.66			$	19.03
Diluted average number of common shares outstanding			7,905				7,905
_______________
Note:
(1)	The adjustment reflects the elimination of the results of operations of the Publishing Subsidiaries as if the transaction occurred on January 4, 2010. The elimination excludes the Publishing Subsidiaries' historical pension and postretirement benefit expense for retirees since the associated assets and liabilities will be retained by the Company.

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THE WASHINGTON POST COMPANY
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
	TWELVE MONTHS ENDED JANUARY 2, 2011
				Sale of
		Historical		Publishing		The Company
(In thousands, except per share amounts)		TWPC		Subsidiaries		Pro Forma
				(1)
Operating Revenues
	Education	$	2,804,840	$	―	$	2,804,840
	Advertising		815,634		(455,966)		359,668
	Circulation and subscriber		853,442		(142,590)		710,852
	Other		89,269		(28,903)		60,366
			4,563,185		(627,459)		3,935,726
Operating Costs and Expenses
	Operating		1,837,480		(324,332)		1,513,148
	Selling, general and administrative		1,859,390		(272,813)		1,586,577
	Depreciation of property, plant and equipment		240,856		(27,851)		213,005
	Amortization of intangible assets		21,552		(134)		21,418
			3,959,278		(625,130)		3,334,148
Income from Operations			603,907		(2,329)		601,578
	Equity in losses of affiliates, net		(4,133)		―		(4,133)
	Interest income		2,576		―		2,576
	Interest expense		(30,503)		―		(30,503)
	Other income, net		7,515		―		7,515
Income from Continuing Operations Before Income Taxes			579,362		(2,329)		577,033
Provision for Income Taxes			222,800		(700)		222,100
Income from Continuing Operations			356,562		(1,629)		354,933
Income from Continuing Operations Attributable to Noncontrolling Interests			94		―		94
Income from Continuing Operations Attributable to The Washington Post Company			356,656		(1,629)		355,027
Redeemable Preferred Stock Dividends			(922)		―		(922)
Income from Continuing Operations Attributable to The Washington Post Company Common Stockholders		$	355,734	$	(1,629)	$	354,105
Per Share Information Attributable to The Washington Post Company Common Stockholders
Basic income per common share from continuing operations		$	39.85			$	39.67
Basic average number of common shares outstanding			8,869				8,869
Diluted income per common share from continuing operations		$	39.83			$	39.65
Diluted average number of common shares outstanding			8,931				8,931
_______________
Note:
(1)	The adjustment reflects the elimination of the results of operations of the Publishing Subsidiaries as if the transaction occurred on January 4, 2010. The elimination includes a $20.4 million charge related to the withdrawal from a multiemplyer pension plan. The elimination excludes the Publishing Subsidiaries' historical pension and postretirement benefit expense for retirees since the associated assets and liabilities will be retained by the Company.

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