Borrowings

6 Months Ended

Jul. 03, 2011

Borrowings

Borrowings

Note 6: Borrowings

The Company's borrowings consist of the following (in thousands):

	July 3, 2011			January 2, 2011
7.25% unsecured notes due February 1, 2019	$	396,858		$	396,650
Other indebtedness		8,689			3,000
Total		405,547			399,650
Less: current portion		(3,219	)		(3,000	)
Total long-term debt	$	402,328		$	396,650

The Company's other indebtedness at July 3, 2011 and January 2, 2011 is at an interest rate of 0% to 6% and matures from 2011 to 2016.

During the second quarter of 2011 and 2010, the Company had average borrowings outstanding of approximately $401.2 million and $399.4 million, respectively, at average annual interest rates of approximately 7.2%. During the second quarter of 2011 and 2010, the Company incurred net interest expense of $7.0 million.

During the first six months of 2011 and 2010, the Company had average borrowings outstanding of approximately $400.6 million and $399.4 million, respectively, at average annual interest rates of approximately 7.2%. During the first six months of 2011 and 2010, the Company incurred net interest expense of $13.9 million and $14.3 million, respectively.

On June 17, 2011, The Washington Post Company (the "Company") terminated its U.S. $500,000,000 five year revolving credit agreement, dated as of August 8, 2006, among the Company, the lenders party thereto and Citibank, N.A. (the "2006 Credit Agreement"), in connection with the entrance into a new revolving credit facility. No borrowings were outstanding under the 2006 Credit Agreement at the time of termination. On June 17, 2011, the Company entered into a credit agreement (the "Credit Agreement") providing for a new U.S. $450 million, AUS $50 million four year revolving credit facility (the "Facility"), with each of the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent ("JP Morgan"), and J.P. Morgan Australia Limited, as Australian Sub-Agent. The Facility consists of two tranches: (a) U.S. $450 million and (b) AUS $50 million (subject, at the Company's option, to conversion of the unused Australian dollar commitments into U.S. dollar commitments at a specified exchange rate). The Credit Agreement provides for an option to increase the total U.S. dollar commitments up to an aggregate amount of U.S. $700 million. The Facility replaced the Company's 2006 Credit Agreement. The Company is required to pay a facility fee on a quarterly basis, based on the Company's long-term debt ratings, of between 0.08% and 0.20% of the amount of the Facility. Any borrowings are made on an unsecured basis and bear interest at (a) for U.S. dollar borrowings, at the Company's option, either (i) a fluctuating interest rate equal to the highest of JPMorgan's prime rate, 0.50 percent above the Federal funds rate or the one-month eurodollar rate plus 1%, or (ii) the eurodollar rate for the applicable interest period, or (b) for Australian dollar borrowings, the bank bill rate, in each case plus an applicable margin that depends on the Company's long-term debt ratings. The Facility supports the issuance of the Company's commercial paper, but the Company may also draw on the facility for other general corporate purposes. The Facility will expire on June 17, 2015, unless the Company and the banks agree to extend the term. Any outstanding borrowings must be repaid on or prior to the final termination date. The Credit Agreement contains terms and conditions, including remedies in the event of a default by the Company, typical of facilities of this type and, among other things, requires the Company to maintain at least $1.5 billion of consolidated shareholders' equity. The Company did not borrow funds under its commercial paper program or its revolving credit facility in the first half of 2011.

At July 3, 2011, the fair value of the Company's 7.25% unsecured notes, based on quoted market prices, totaled $463.1 million, compared with the carrying amount of $396.9 million. At January 2, 2011, the fair value of the Company's 7.25% unsecured notes, based on quoted market prices, totaled $457.2 million, compared with the carrying amount of $396.7 million. The carrying value of the Company's other unsecured debt at July 3, 2011 approximates fair value.