Graham Holdings Company (NYSE: GHC) today reported a net loss
attributable to common shares of $101.3 million ($17.87 per share) for
the year ended December 31, 2015, compared to net income attributable to
common shares of $1,293.0 million ($195.03 per share) for the year ended
December 31, 2014. Net (loss) income includes $42.2 million ($7.36 per
share) and $527.9 million ($79.63 per share) in income from discontinued
operations for 2015 and 2014, respectively. Loss from continuing
operations attributable to common shares was $143.5 million ($25.23 per
share) for 2015, compared to income of $765.1 million ($115.40 per
share) for 2014.
For the fourth quarter of 2015, the Company reported net income
attributable to common shares of $51.2 million ($8.72 per share),
compared to $334.4 million ($57.41 per share) for the same period of
2014. Net income includes $28.6 million ($4.93 per share) in income from
discontinued operations for the fourth quarter of 2014. The Company
reported income from continuing operations attributable to common shares
of $51.2 million ($8.72 per share) for the fourth quarter of 2015,
compared to $305.8 million ($52.48 per share) for the same period of
2014. (Refer to "Discontinued Operations" discussion below.)
In connection with the tax-free Berkshire exchange transaction that
closed on June 30, 2014, the Company acquired 1,620,190 shares of its
Class B common stock, resulting in 13% fewer diluted shares outstanding
in 2015 compared to 2014.
In addition to discontinued operations, the results for 2015 and 2014
were affected by numerous items reflecting significant changes in our
businesses. These items are described in the following paragraphs.
Excluding these items, income from continuing operations attributable to
common shares was $138.1 million ($23.56 per share) for 2015, compared
to $147.1 million ($22.19 per share) for 2014. Excluding these items,
income from continuing operations attributable to common shares was
$50.5 million ($8.60 per share) for the fourth quarter of 2015, compared
to $74.5 million ($12.78 per share) for the fourth quarter of 2014.
(Refer to the Non-GAAP Financial Information schedule attached to this
release for additional details.)
Items included in the Company’s income from continuing operations for
2015 are listed below, and fourth quarter activity, if any, is
highlighted for each item:
-
$259.7 million goodwill and long-lived assets impairment charges at
the education division and other businesses (after-tax impact of
$225.2 million, or $38.96 per share); $4.2 million of these charges
were recorded in the fourth quarter (after-tax impact of $3.7 million,
or $0.63 per share);
-
$45.8 million in restructuring charges at the education division,
corporate office and other businesses (after-tax impact of $28.9
million, or $4.97 per share); $9.0 million of these charges were
recorded in the fourth quarter (after-tax impact of $5.5 million, or
$0.96 per share);
-
$24.9 million in expense related to the modification of stock option
awards in conjunction with the Cable ONE spin-off and the modification
of restricted stock awards (after-tax impact of $15.3 million, or
$2.64 per share); $6.0 million of these charges were recorded in the
fourth quarter (after-tax impact of $3.7 million, or $0.63 per share);
-
$12.5 million in net non-operating losses arising from the sales of
five businesses and an investment, and on the formation of a joint
venture (after-tax impact of $15.7 million, or $2.82 per share);
-
$21.4 million fourth quarter gain on the sale of land (after-tax
impact of $13.2 million, or $2.27 per share); and
-
$15.6 million in non-operating unrealized foreign currency losses
(after-tax impact of $9.7 million, or $1.67 per share); $0.6 million
in gains were recorded in the fourth quarter (after-tax impact of $0.4
million, or $0.07 per share).
Items included in the Company’s income from continuing operations for
2014 are listed below, and fourth quarter activity, if any, is
highlighted for each item:
-
$31.6 million in restructuring charges and early retirement program
expense and related charges at the education division and the
corporate office (after-tax impact of $20.2 million, or $3.05 per
share); $3.0 million of these charges were recorded in the fourth
quarter (after-tax impact of $1.9 million, or $0.33 per share);
-
$17.3 million in fourth quarter noncash intangible and other
long-lived assets impairment charges at Kaplan and other businesses
(after-tax impact of $11.2 million, or $1.69 per share);
-
$396.6 million fourth quarter gain from the sale of Classified
Ventures (after-tax impact of $249.8 million, or $37.68 per share);
-
$90.9 million gain from the Classified Ventures’ sale of
apartments.com (after-tax impact of $58.2 million, or $8.78 per share);
-
$266.7 million gain from the tax-free Berkshire exchange transaction
(after-tax impact of $266.7 million, or $40.23 per share);
-
$127.7 million gain on the sale of the corporate headquarters building
(after-tax impact of $81.8 million, or $12.34 per share); and
-
$11.1 million in non-operating unrealized foreign currency losses
(after-tax impact of $7.1 million, or $1.08 per share); $8.5 million
in losses were recorded in the fourth quarter (after-tax impact of
$5.5 million, or $0.94 per share).
Revenue for 2015 was $2,586.1 million, down 6% from $2,737.0 million in
2014. Revenues declined at the education division and were down slightly
at the television broadcasting division, offset by an increase in other
businesses. The Company reported an operating loss for 2015 of $80.8
million, compared with operating income of $232.7 million in
2014. Operating results were down at the education and television
broadcasting divisions, offset by improvement in other businesses.
For the fourth quarter of 2015, revenue was $616.4 million, down 15%
from $727.6 million in 2014. Revenues declined at the education and
television broadcasting divisions, offset by an increase in other
businesses. The Company reported operating income of $67.8 million in
the fourth quarter of 2015, compared to $99.0 million in 2014. Operating
results declined at all reporting segments.
Division Results
Education
Education division revenue in 2015 totaled $1,927.5 million, down 11%
from revenue of $2,160.4 million in 2014. For the fourth quarter of
2015, education division revenue totaled $421.5 million, down 24% from
revenue of $551.4 million for the same period of 2014.
Kaplan reported an operating loss of $223.5 million for 2015, compared
to operating income of $65.5 million in 2014; Kaplan reported operating
income for the fourth quarter of 2015 of $26.3 million, compared to
$33.4 million in the fourth quarter of 2014. Kaplan’s 2015 operating
results include goodwill and intangible assets impairment charges of
$256.8 million in comparison to a $17.2 million charge in 2014. In 2015,
operating results at Kaplan Higher Education and Kaplan International
were down, partially offset by improved results at Kaplan Test
Preparation.
In recent years, Kaplan has formulated and implemented restructuring
plans at its various businesses that have resulted in significant costs
in 2015 and 2014, with the objective of establishing lower cost levels
in future periods. Across all businesses, restructuring costs totaled
$44.4 million in 2015 and $16.8 million in 2014. Restructuring costs
totaled $7.6 million in the fourth quarter of 2015 and $3.0 million in
the fourth quarter of 2014. (Refer to the Education Division
Information, Summary of Restructuring Charges schedule attached to this
release for additional details.)
A summary of Kaplan’s operating results is as follows:
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Three Months Ended
December 31
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Twelve Months Ended
December 31
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(in thousands)
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2015
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2014
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% Change
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2015
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2014
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% Change
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Revenue
|
|
|
|
|
|
|
|
|
|
|
|
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|
Higher education
|
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$
|
167,811
|
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|
$
|
254,461
|
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|
(34
|
)
|
|
$
|
849,625
|
|
|
$
|
1,010,058
|
|
|
(16
|
)
|
|
Test preparation
|
|
68,294
|
|
|
70,652
|
|
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(3
|
)
|
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301,607
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|
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304,662
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(1
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)
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|
Kaplan international
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184,787
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225,408
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(18
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)
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770,273
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840,915
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|
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(8
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)
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Kaplan corporate and other
|
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779
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|
|
1,203
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(35
|
)
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6,502
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|
6,094
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7
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Intersegment elimination
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(123
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)
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(343
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)
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—
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(486
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)
|
|
(1,312
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)
|
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—
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|
|
|
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$
|
421,548
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|
|
$
|
551,381
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(24
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)
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$
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1,927,521
|
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$
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2,160,417
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(11
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)
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Operating Income (Loss)
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Higher education
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$
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27,062
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$
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43,582
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(38
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)
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$
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55,572
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|
|
$
|
83,069
|
|
|
(33
|
)
|
|
Test preparation
|
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433
|
|
|
(1,178
|
)
|
|
—
|
|
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16,798
|
|
|
(4,730
|
)
|
|
—
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|
|
Kaplan international
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20,076
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|
|
28,544
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|
|
(30
|
)
|
|
53,661
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|
|
69,153
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|
|
(22
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)
|
|
Kaplan corporate and other
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(18,677
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)
|
|
(18,134
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)
|
|
(3
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)
|
|
(87,230
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)
|
|
(57,093
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)
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|
(53
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)
|
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Amortization of intangible assets
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|
(1,210
|
)
|
|
(2,089
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)
|
|
42
|
|
|
(5,523
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)
|
|
(7,738
|
)
|
|
29
|
|
|
Impairment of goodwill and other long-lived assets
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|
(1,363
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)
|
|
(17,203
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)
|
|
92
|
|
|
(256,830
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)
|
|
(17,203
|
)
|
|
—
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|
|
Intersegment elimination
|
|
1
|
|
|
(109
|
)
|
|
—
|
|
|
96
|
|
|
5
|
|
|
—
|
|
|
|
|
$
|
26,322
|
|
|
$
|
33,413
|
|
|
(21
|
)
|
|
$
|
(223,456
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)
|
|
$
|
65,463
|
|
|
—
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Kaplan Higher Education (KHE) includes Kaplan’s domestic postsecondary
education businesses, made up of fixed-facility colleges and online
postsecondary and career programs. KHE also includes the domestic
professional training and other continuing education businesses.
Since 2012, KHE has continued to close campuses, consolidate facilities
and reduce its workforce. On September 3, 2015, Kaplan completed the
sale of substantially all of the remaining assets of its KHE Campuses
business. In connection with these and other plans, KHE incurred $12.9
million and $6.5 million in restructuring costs in 2015 and 2014,
respectively.
As a result of continued declines in student enrollments at KHE and the
challenging industry operating environment, Kaplan completed an interim
impairment review of KHE's remaining long-lived assets in the third
quarter of 2015 that resulted in a $248.6 million goodwill impairment
charge. This goodwill impairment charge followed long-lived asset
impairment charges of $6.9 million and $13.6 million that were recorded
in the second quarter of 2015 and fourth quarter of 2014, respectively,
in connection with the KHE Campuses business.
KHE results include revenue and operating losses (including
restructuring charges) related to all KHE Campuses, those sold or
closed, including Mount Washington College and Bauder College, as
follows:
|
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|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31
|
|
Twelve Months Ended
December 31
|
|
(in thousands)
|
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Revenue
|
|
|
|
|
$
|
1,934
|
|
|
$
|
71,911
|
|
|
$
|
178,734
|
|
|
$
|
299,109
|
|
|
Operating loss
|
|
|
|
|
$
|
(5,022
|
)
|
|
$
|
(2,914
|
)
|
|
$
|
(38,830
|
)
|
|
$
|
(28,549
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)
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|
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In 2015 and the fourth quarter of 2015, KHE revenue declined 16% and
34%, respectively, due to the campus sales and closings, and declines in
average enrollments at Kaplan University, reflecting weaker market
demand. KHE operating income declines in 2015 and the fourth quarter of
2015 are due to increased losses at the KHE Campuses business, the
revenue declines, and increased restructuring costs. In 2015, the
decline was partially offset by improved results at the domestic
professional training and other continuing education businesses.
New higher education student enrollments at Kaplan University declined
14% in 2015 due to lower demand across Kaplan University programs.
Total higher education students at Kaplan University at December 31,
2015, were down 6% compared to December 31, 2014. A summary of higher
education student enrollments is as follows:
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As of
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December 31,
2015
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December 31,
2014
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Kaplan University
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39,848
|
|
|
42,469
|
Kaplan University higher education student enrollments by certificate
and degree programs are as follows:
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|
As of December 31
|
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|
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2015
|
|
2014
|
|
Certificate
|
|
|
|
|
4.4
|
%
|
|
2.3
|
%
|
|
Associate’s
|
|
|
|
|
25.0
|
%
|
|
29.6
|
%
|
|
Bachelor’s
|
|
|
|
|
48.4
|
%
|
|
44.3
|
%
|
|
Master’s
|
|
|
|
|
22.2
|
%
|
|
23.8
|
%
|
|
|
|
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Kaplan Test Preparation (KTP) includes Kaplan’s standardized test
preparation programs. KTP revenue declined 1% in 2015 and 3% for the
fourth quarter of 2015. Excluding revenues from acquired businesses, KTP
revenue declined 3% in 2015. Enrollments, excluding the new economy
skills training offerings, were down 12% in 2015 due primarily to
declines in graduate and pre-college programs; however, unit prices were
generally higher. In comparison to 2014, KTP operating results improved
in 2015 due to a reduction in operating expenses and the inclusion of a
$7.7 million software asset write-off in the second quarter of 2014 that
did not recur in 2015.
Kaplan International includes English-language programs and
postsecondary education and professional training businesses largely
outside the United States. Kaplan International revenue declined 8% in
2015 and 18% in the fourth quarter of 2015 due to the adverse impact of
foreign exchange rates. On a constant currency basis, Kaplan
International revenue remained flat in 2015 but decreased 12% in the
fourth quarter of 2015, due to enrollment declines in English-language
programs, partially offset by growth in Singapore higher education
programs.
Kaplan International operating income decreased 22% and 30% in 2015 and
the fourth quarter of 2015, respectively, due to the declines in
English-language programs’ results. Restructuring costs at Kaplan
International totaled $1.3 million and $0.2 million in 2015 and 2014,
respectively.
Kaplan corporate represents unallocated expenses of Kaplan, Inc.’s
corporate office, other minor businesses and certain shared activities.
In 2015 and the fourth quarter of 2015, Kaplan corporate recorded $29.4
million and $2.9 million, respectively, in restructuring costs,
respectively, compared to $1.4 million in 2014.
In addition to the impairment charges of $255.5 million related to KHE
recorded in the second and third quarters of 2015, Kaplan recorded an
additional $1.4 million in noncash intangible and other long-lived
assets impairment charges in the fourth quarter of 2015, related to
businesses at KTP and Kaplan International. In 2014, Kaplan recorded
$17.2 million in noncash intangible and other long-lived assets
impairment charges in connection with businesses at KHE, KTP and Kaplan
International.
In addition to the sale of the KHE Campuses business in 2015, Kaplan
also sold a small business that was part of KHE, and two businesses that
were part of Kaplan International. The net loss on the sale of these
businesses totaled $24.9 million that is included in other non-operating
expense.
Television Broadcasting
Revenue for the television broadcasting division decreased 1% to $359.2
million in 2015, from $363.8 million in 2014; operating income for 2015
was down 12% to $164.9 million, from $187.8 million in 2014. The
decrease in revenue is due to a $27.7 million decrease in political
advertising revenue and $9.5 million in incremental winter
Olympics-related advertising revenue at the Company’s NBC affiliates in
2014, offset by $16.1 million in increased retransmission revenues,
revenues from the Super Bowl at the Company's NBC affiliates in February
2015 and an increase in advertising revenue in several key sectors. The
decline in operating income is due to the revenue decline and an
increase in spending on digital initiatives and increased network fees.
For the fourth quarter of 2015, revenue decreased 7% to $95.2 million,
from $102.4 million in 2014; operating income for the fourth quarter of
2015 was down 19% to $43.8 million, from $54.4 million in the same
period of 2014. The decrease in revenue is due to a $14.6 million
decrease in political advertising revenue, offset by $4.7 million in
increased retransmission revenues. The decrease in operating income is
due to the revenue decline and an increase in spending on digital
initiatives and increased network fees.
Other Businesses
Other businesses includes the following:
- Celtic Healthcare (Celtic) and Residential Healthcare Group, Inc.
(Residential, acquired in July 2014), providers of home health and
hospice services;
- Group Dekko, a Garrett, IN, based manufacturer of electrical workspace
solutions, architectural lighting, and electrical components and
assemblies (acquired in November 2015); Joyce/Dayton Corp., a Dayton,
OH, based manufacturer of screw jacks and other linear motion systems
(acquired in May 2014); and Forney, a global supplier of products and
systems that control and monitor combustion processes in electric
utility and industrial applications; and
- SocialCode, a marketing solutions provider helping companies with
marketing on social-media platforms; and The Slate Group and Foreign
Policy Group, which publish online and print magazines and websites.
In November 2015, the Company announced that Trove, a digital innovation
team, would largely be integrated into SocialCode and that Trove’s
existing offerings would be discontinued. In connection with this
action, the Company recorded a $2.8 million goodwill impairment charge
at Trove in the fourth quarter of 2015, along with $0.5 million in
severance costs.
The increase in revenues for 2015 and the fourth quarter of 2015 is due
primarily to the inclusion of revenues from the businesses acquired in
2015 and 2014. The improvement in operating results in 2015 reflects the
contribution of the acquired businesses, as well as improved results at
Celtic and SocialCode. The decline in operating results in the fourth
quarter of 2015 is due largely to declines at Slate and SocialCode,
partly due to investment spending initiatives at these businesses.
In the second quarter of 2015, the Company sold The Root, an online
magazine; the related gain on disposition is included in other
non-operating expense, net.
Corporate Office
Corporate office includes the expenses of the Company’s corporate
office, the pension credit for the Company’s traditional defined benefit
plan and certain continuing obligations related to prior business
dispositions. In the fourth quarter of 2015, the Company recorded $6.0
million in incremental stock compensation expense due to the
modification of restricted stock awards, and implemented a Special
Incentive Program that resulted in expense of $0.9 million, which is
being funded from the assets of the Company's pension plan. In the third
quarter of 2015, the Company recorded $18.8 million in incremental stock
option expense, due to stock option modifications that resulted from the
Cable ONE spin-off. In the first quarter of 2014, the corporate office
implemented a Separation Incentive Program that resulted in expense of
$4.5 million, which was funded from the assets of the Company’s pension
plan. In the third quarter of 2014, the Company recorded $10.3 million
in early retirement program expense and other related charges, a portion
of which was funded from the assets of the Company's pension plan.
Excluding early retirement program and other pension incentive program
expense, the total pension credit for the Company’s traditional defined
benefit plan was $83.2 million and $91.2 million for 2015 and 2014,
respectively.
Excluding the $24.9 million in incremental stock compensation expense in
2015, the pension credit, early retirement program and other pension
incentive program expense and other related charges in 2015 and 2014,
corporate office expense declined in 2015. The decline is from lower
compensation costs, and 2014 costs related to certain acquisitions, the
Berkshire exchange transaction and the corporate office headquarters
move to Arlington, VA, partially offset by 2015 costs related to the
Group Dekko acquisition.
Equity in (Losses) Earnings of Affiliates
At December 31, 2015, the Company held a 40% interest in a Celtic joint
venture and Residential Home Health Illinois, a 42.5% interest in
Residential Hospice Illinois, and interests in several other affiliates.
In the second quarter of 2015, the Company acquired an approximate 20%
interest in HomeHero, a company that created and manages an online
senior home care marketplace. At September 30, 2014, the Company held a
16.5% interest in Classified Ventures, LLC (CV) and interests in several
other affiliates. On October 1, 2014, the Company and the remaining
partners in CV completed the sale of their entire stakes in CV.
The Company’s equity in losses of affiliates, net, for 2015 was $0.7
million, compared to income of $100.4 million in 2014. The 2014 results
include a pre-tax gain of $90.9 million from Classified Ventures’ sale
of apartments.com in the second quarter of 2014.
Other Non-Operating (Expense) Income
The Company recorded other non-operating expense, net, of $8.6 million
in 2015, compared to income of $778.0 million in 2014. For the fourth
quarter of 2015, the Company recorded other non-operating income, net,
of $21.3 million, compared to $387.3 million for the fourth quarter of
2014.
The 2015 non-operating expense, net, included $23.3 million in losses
from the sales of businesses, $15.6 million in unrealized foreign
currency losses ($0.6 million in unrealized foreign currency gains in
the fourth quarter) and other items, offset by a fourth quarter $21.4
million gain on the sale of land from Robinson Terminal, $6.0 million
gain on the formation of a Celtic joint venture and a $4.8 million
increase to the CV gain. The 2014 non-operating income, net, included a
fourth quarter pre-tax gain of $396.6 million on the sale of Classified
Ventures, the pre-tax gain of $266.7 million in connection with the
Company’s exchange of Berkshire shares, a pre-tax gain of $127.7 million
on the sale of the headquarters building, $11.1 million in unrealized
foreign currency losses ($8.5 million in unrealized foreign currency
losses in the fourth quarter) and other items.
Net Interest Expense and Related Balances
The Company incurred net interest expense of $30.7 million in 2015,
compared to $33.4 million in 2014; net interest expense totaled $7.4
million and $8.6 million for the fourth quarters of 2015 and 2014,
respectively. At December 31, 2015, the Company had $399.9 million in
borrowings outstanding at an average interest rate of 7.2%, and cash,
marketable securities and other investments of $1,154.4 million. At
December 31, 2014, the Company had $445.9 million in borrowings
outstanding at an average interest rate of 7.1%, and cash, marketable
securities and other investments of $1,024.4 million.
Provision for Income Taxes
The Company recorded a tax provision on the pre-tax loss from continuing
operations in 2015, as a large portion of the goodwill impairment
charges and the goodwill included in the loss on the KHE Campuses sale
are permanent differences not deductible for income tax purposes.
Excluding the effect of these permanent differences, the effective tax
rate for continuing operations in 2015 was 38.1%, compared to an
effective tax rate of 29.0% in 2014. The lower effective tax rate in
2014 largely relates to the Berkshire exchange transaction. The pre-tax
gain of $266.7 million related to the disposition of the Berkshire
shares was not subject to income tax as the exchange qualified as a
tax-free transaction.
Discontinued Operations
On July 1, 2015, the Company completed the spin-off of Cable ONE as an
independent, publicly traded company.
In the third quarter of 2014, Kaplan completed the sale of three of its
schools in China that were previously part of Kaplan International. An
additional school was sold by Kaplan in January 2015.
In the second quarter of 2014, the Company closed on the Berkshire
exchange transaction, which included the disposition of WPLG, the
Company’s Miami-based television station.
As a result of these transactions, income from continuing operations
excludes the operating results and related net gain on dispositions of
these businesses, which have been reclassified to discontinued
operations, net of tax, for all periods presented.
(Loss) Earnings Per Share
The calculation of diluted (loss) earnings per share for 2015 and the
fourth quarter of 2015 was based on 5,727,074 and 5,833,850 weighted
average shares, respectively, compared to 6,559,442 and 5,769,889
weighted average shares, respectively, for 2014 and the fourth quarter
of 2014. At December 31, 2015, there were 5,803,854 shares outstanding.
On May 14, 2015, the Board of Directors authorized the Company to
acquire up to 500,000 shares of Class B common stock; the Company has
remaining authorization for 453,774 shares as of December 31, 2015.
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.
|
|
|
GRAHAM HOLDINGS COMPANY
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(Unaudited)
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
December 31
|
|
%
|
|
(in thousands, except per share amounts)
|
|
2015
|
|
2014
|
|
Change
|
|
Operating revenues
|
|
$
|
616,367
|
|
|
$
|
727,625
|
|
|
(15
|
)
|
|
Operating expenses
|
|
|
523,563
|
|
|
|
587,466
|
|
|
(11
|
)
|
|
Depreciation of property, plant and equipment
|
|
|
15,640
|
|
|
|
18,618
|
|
|
(16
|
)
|
|
Amortization of intangible assets
|
|
|
5,120
|
|
|
|
5,215
|
|
|
(2
|
)
|
|
Impairment of goodwill and other long-lived assets
|
|
|
4,233
|
|
|
|
17,302
|
|
|
(76
|
)
|
|
Operating income
|
|
|
67,811
|
|
|
|
99,024
|
|
|
(32
|
)
|
|
Equity in (losses) earnings of affiliates, net
|
|
|
(35
|
)
|
|
|
202
|
|
|
—
|
|
|
Interest income
|
|
|
546
|
|
|
|
367
|
|
|
49
|
|
|
Interest expense
|
|
|
(7,975
|
)
|
|
|
(8,922
|
)
|
|
(11
|
)
|
|
Other income, net
|
|
|
21,262
|
|
|
|
387,346
|
|
|
(95
|
)
|
|
Income from continuing operations before income taxes
|
|
|
81,609
|
|
|
|
478,017
|
|
|
(83
|
)
|
|
Provision for income taxes
|
|
|
30,500
|
|
|
|
172,000
|
|
|
(82
|
)
|
|
Income from continuing operations
|
|
|
51,109
|
|
|
|
306,017
|
|
|
(83
|
)
|
|
Income from discontinued operations, net of tax
|
|
|
—
|
|
|
|
28,649
|
|
|
—
|
|
|
Net income
|
|
|
51,109
|
|
|
|
334,666
|
|
|
(85
|
)
|
|
Net loss (income) attributable to noncontrolling interests
|
|
|
60
|
|
|
|
(256
|
)
|
|
—
|
|
|
Net income attributable to Graham Holdings Company
|
|
|
51,169
|
|
|
|
334,410
|
|
|
(85
|
)
|
|
Redeemable preferred stock dividends
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
Net Income Attributable to Graham Holdings Company Common
Stockholders
|
|
$
|
51,169
|
|
|
$
|
334,410
|
|
|
(85
|
)
|
|
Amounts Attributable to Graham Holdings Company Common
Stockholders
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
$
|
51,169
|
|
|
$
|
305,761
|
|
|
(83
|
)
|
|
Income from discontinued operations, net of tax
|
|
|
—
|
|
|
|
28,649
|
|
|
—
|
|
|
Net income
|
|
$
|
51,169
|
|
|
$
|
334,410
|
|
|
(85
|
)
|
|
Per Share Information Attributable to Graham Holdings Company
Common Stockholders
|
|
|
|
|
|
|
|
Basic income per common share from continuing operations
|
|
$
|
8.78
|
|
|
$
|
52.76
|
|
|
(83
|
)
|
|
Basic income per common share from discontinued operations
|
|
|
—
|
|
|
|
4.95
|
|
|
—
|
|
|
Basic net income per common share
|
|
$
|
8.78
|
|
|
$
|
57.71
|
|
|
(85
|
)
|
|
Basic average number of common shares outstanding
|
|
|
5,746
|
|
|
|
5,678
|
|
|
|
|
Diluted income per common share from continuing operations
|
|
$
|
8.72
|
|
|
$
|
52.48
|
|
|
(83
|
)
|
|
Diluted income per common share from discontinued operations
|
|
|
—
|
|
|
|
4.93
|
|
|
—
|
|
|
Diluted net income per common share
|
|
$
|
8.72
|
|
|
$
|
57.41
|
|
|
(85
|
)
|
|
Diluted average number of common shares outstanding
|
|
|
5,834
|
|
|
|
5,770
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GRAHAM HOLDINGS COMPANY
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(Unaudited)
|
|
|
|
|
|
Twelve Months Ended
|
|
|
|
|
|
December 31
|
|
%
|
|
(in thousands, except per share amounts)
|
|
2015
|
|
2014
|
|
Change
|
|
Operating revenues
|
|
$
|
2,586,114
|
|
|
$
|
2,737,032
|
|
|
(6
|
)
|
|
Operating expenses
|
|
|
2,310,316
|
|
|
|
2,393,910
|
|
|
(3
|
)
|
|
Depreciation of property, plant and equipment
|
|
|
77,906
|
|
|
|
74,913
|
|
|
4
|
|
|
Amortization of intangible assets
|
|
|
19,017
|
|
|
|
18,187
|
|
|
5
|
|
|
Impairment of intangible and other long-lived assets
|
|
|
259,700
|
|
|
|
17,302
|
|
|
—
|
|
|
Operating (loss) income
|
|
|
(80,825
|
)
|
|
|
232,720
|
|
|
—
|
|
|
Equity in (losses) earnings of affiliates, net
|
|
|
(697
|
)
|
|
|
100,370
|
|
|
—
|
|
|
Interest income
|
|
|
1,909
|
|
|
|
2,136
|
|
|
(11
|
)
|
|
Interest expense
|
|
|
(32,654
|
)
|
|
|
(35,533
|
)
|
|
(8
|
)
|
|
Other (expense) income, net
|
|
|
(8,623
|
)
|
|
|
778,010
|
|
|
—
|
|
|
(Loss) income from continuing operations before income taxes
|
|
|
(120,890
|
)
|
|
|
1,077,703
|
|
|
—
|
|
|
Provision for income taxes
|
|
|
20,500
|
|
|
|
312,300
|
|
|
(93
|
)
|
|
(Loss) income from continuing operations
|
|
|
(141,390
|
)
|
|
|
765,403
|
|
|
—
|
|
|
Income from discontinued operations, net of tax
|
|
|
42,170
|
|
|
|
527,857
|
|
|
(92
|
)
|
|
Net (loss) income
|
|
|
(99,220
|
)
|
|
|
1,293,260
|
|
|
—
|
|
|
Net (income) loss attributable to noncontrolling interests
|
|
|
(1,435
|
)
|
|
|
583
|
|
|
—
|
|
|
Net (loss) income attributable to Graham Holdings Company
|
|
|
(100,655
|
)
|
|
|
1,293,843
|
|
|
—
|
|
|
Redeemable preferred stock dividends
|
|
|
(631
|
)
|
|
|
(847
|
)
|
|
(26
|
)
|
|
Net (Loss) Income Attributable to Graham Holdings Company Common
Stockholders
|
|
$
|
(101,286
|
)
|
|
$
|
1,292,996
|
|
|
—
|
|
|
Amounts Attributable to Graham Holdings Company Common
Stockholders
|
|
|
|
|
|
|
|
(Loss) income from continuing operations
|
|
$
|
(143,456
|
)
|
|
$
|
765,139
|
|
|
—
|
|
|
Income from discontinued operations, net of tax
|
|
|
42,170
|
|
|
|
527,857
|
|
|
(92
|
)
|
|
Net (loss) income
|
|
$
|
(101,286
|
)
|
|
$
|
1,292,996
|
|
|
—
|
|
|
Per Share Information Attributable to Graham Holdings Company
Common Stockholders
|
|
|
|
|
|
|
|
Basic (loss) income per common share from continuing operations
|
|
$
|
(25.23
|
)
|
|
$
|
115.88
|
|
|
—
|
|
|
Basic income per common share from discontinued operations
|
|
|
7.36
|
|
|
|
79.93
|
|
|
(91
|
)
|
|
Basic net (loss) income per common share
|
|
$
|
(17.87
|
)
|
|
$
|
195.81
|
|
|
—
|
|
|
Basic average number of common shares outstanding
|
|
|
5,727
|
|
|
|
6,470
|
|
|
|
|
Diluted (loss) income per common share from continuing operations
|
|
$
|
(25.23
|
)
|
|
$
|
115.40
|
|
|
—
|
|
|
Diluted income per common share from discontinued operations
|
|
|
7.36
|
|
|
|
79.63
|
|
|
(91
|
)
|
|
Diluted net (loss) income per common share
|
|
$
|
(17.87
|
)
|
|
$
|
195.03
|
|
|
—
|
|
|
Diluted average number of common shares outstanding
|
|
|
5,727
|
|
|
|
6,559
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GRAHAM HOLDINGS COMPANY
|
|
BUSINESS SEGMENT INFORMATION
|
|
(Unaudited)
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Twelve Months Ended
|
|
|
|
|
|
December 31
|
|
%
|
|
December 31
|
|
%
|
|
(in thousands)
|
|
2015
|
|
2014
|
|
Change
|
|
2015
|
|
2014
|
|
Change
|
|
Operating Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
|
|
$
|
421,548
|
|
|
$
|
551,381
|
|
|
(24
|
)
|
|
$
|
1,927,521
|
|
|
$
|
2,160,417
|
|
|
(11
|
)
|
|
Television broadcasting
|
|
|
95,182
|
|
|
|
102,446
|
|
|
(7
|
)
|
|
|
359,192
|
|
|
|
363,836
|
|
|
(1
|
)
|
|
Other businesses
|
|
|
99,694
|
|
|
|
73,798
|
|
|
35
|
|
|
|
299,517
|
|
|
|
212,907
|
|
|
41
|
|
|
Corporate office
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
Intersegment elimination
|
|
|
(57
|
)
|
|
|
—
|
|
|
—
|
|
|
|
(116
|
)
|
|
|
(128
|
)
|
|
—
|
|
|
|
|
$
|
616,367
|
|
|
$
|
727,625
|
|
|
(15
|
)
|
|
$
|
2,586,114
|
|
|
$
|
2,737,032
|
|
|
(6
|
)
|
|
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
|
|
$
|
395,226
|
|
|
$
|
517,968
|
|
|
(24
|
)
|
|
$
|
2,150,977
|
|
|
$
|
2,094,954
|
|
|
3
|
|
|
Television broadcasting
|
|
|
51,357
|
|
|
|
48,066
|
|
|
7
|
|
|
|
194,265
|
|
|
|
176,003
|
|
|
10
|
|
|
Other businesses
|
|
|
102,979
|
|
|
|
67,850
|
|
|
52
|
|
|
|
313,184
|
|
|
|
233,993
|
|
|
34
|
|
|
Corporate office
|
|
|
(949
|
)
|
|
|
(5,283
|
)
|
|
(82
|
)
|
|
|
8,629
|
|
|
|
(510
|
)
|
|
—
|
|
|
Intersegment elimination
|
|
|
(57
|
)
|
|
|
—
|
|
|
—
|
|
|
|
(116
|
)
|
|
|
(128
|
)
|
|
—
|
|
|
|
|
$
|
548,556
|
|
|
$
|
628,601
|
|
|
(13
|
)
|
|
$
|
2,666,939
|
|
|
$
|
2,504,312
|
|
|
6
|
|
|
Operating Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
|
|
$
|
26,322
|
|
|
$
|
33,413
|
|
|
(21
|
)
|
|
$
|
(223,456
|
)
|
|
$
|
65,463
|
|
|
—
|
|
|
Television broadcasting
|
|
|
43,825
|
|
|
|
54,380
|
|
|
(19
|
)
|
|
|
164,927
|
|
|
|
187,833
|
|
|
(12
|
)
|
|
Other businesses
|
|
|
(3,285
|
)
|
|
|
5,948
|
|
|
—
|
|
|
|
(13,667
|
)
|
|
|
(21,086
|
)
|
|
35
|
|
|
Corporate office
|
|
|
949
|
|
|
|
5,283
|
|
|
(82
|
)
|
|
|
(8,629
|
)
|
|
|
510
|
|
|
—
|
|
|
|
|
$
|
67,811
|
|
|
$
|
99,024
|
|
|
(32
|
)
|
|
$
|
(80,825
|
)
|
|
$
|
232,720
|
|
|
—
|
|
|
Depreciation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
|
|
$
|
10,032
|
|
|
$
|
14,713
|
|
|
(32
|
)
|
|
$
|
61,177
|
|
|
$
|
61,737
|
|
|
(1
|
)
|
|
Television broadcasting
|
|
|
3,080
|
|
|
|
2,228
|
|
|
38
|
|
|
|
9,551
|
|
|
|
8,409
|
|
|
14
|
|
|
Other businesses
|
|
|
2,277
|
|
|
|
1,430
|
|
|
59
|
|
|
|
6,168
|
|
|
|
3,931
|
|
|
57
|
|
|
Corporate office
|
|
|
251
|
|
|
|
247
|
|
|
2
|
|
|
|
1,010
|
|
|
|
836
|
|
|
21
|
|
|
|
|
$
|
15,640
|
|
|
$
|
18,618
|
|
|
(16
|
)
|
|
$
|
77,906
|
|
|
$
|
74,913
|
|
|
4
|
|
|
Amortization of Intangible Assets and Impairment of Goodwill and
Other Long-Lived Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
|
|
$
|
2,573
|
|
|
$
|
19,292
|
|
|
(87
|
)
|
|
$
|
262,353
|
|
|
$
|
24,941
|
|
|
—
|
|
|
Television broadcasting
|
|
|
63
|
|
|
|
32
|
|
|
97
|
|
|
|
252
|
|
|
|
32
|
|
|
—
|
|
|
Other businesses
|
|
|
6,717
|
|
|
|
3,193
|
|
|
—
|
|
|
|
16,112
|
|
|
|
10,516
|
|
|
53
|
|
|
Corporate office
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
|
$
|
9,353
|
|
|
$
|
22,517
|
|
|
(58
|
)
|
|
$
|
278,717
|
|
|
$
|
35,489
|
|
|
—
|
|
|
Pension Expense (Credit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
|
|
$
|
3,385
|
|
|
$
|
3,855
|
|
|
(12
|
)
|
|
$
|
18,804
|
|
|
$
|
15,418
|
|
|
22
|
|
|
Television broadcasting
|
|
|
413
|
|
|
|
338
|
|
|
22
|
|
|
|
1,620
|
|
|
|
1,355
|
|
|
20
|
|
|
Other businesses
|
|
|
257
|
|
|
|
191
|
|
|
35
|
|
|
|
964
|
|
|
|
748
|
|
|
29
|
|
|
Corporate office
|
|
|
(23,535
|
)
|
|
|
(23,070
|
)
|
|
2
|
|
|
|
(81,945
|
)
|
|
|
(82,301
|
)
|
|
—
|
|
|
|
|
$
|
(19,480
|
)
|
|
$
|
(18,686
|
)
|
|
4
|
|
|
$
|
(60,557
|
)
|
|
$
|
(64,780
|
)
|
|
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GRAHAM HOLDINGS COMPANY
|
|
EDUCATION DIVISION INFORMATION
|
|
(Unaudited)
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Twelve Months Ended
|
|
|
|
|
|
December 31
|
|
%
|
|
December 31
|
|
%
|
|
(in thousands)
|
|
2015
|
|
2014
|
|
Change
|
|
2015
|
|
2014
|
|
Change
|
|
Operating Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Higher education
|
|
$
|
167,811
|
|
|
$
|
254,461
|
|
|
(34
|
)
|
|
$
|
849,625
|
|
|
$
|
1,010,058
|
|
|
(16
|
)
|
|
Test preparation
|
|
|
68,294
|
|
|
|
70,652
|
|
|
(3
|
)
|
|
|
301,607
|
|
|
|
304,662
|
|
|
(1
|
)
|
|
Kaplan international
|
|
|
184,787
|
|
|
|
225,408
|
|
|
(18
|
)
|
|
|
770,273
|
|
|
|
840,915
|
|
|
(8
|
)
|
|
Kaplan corporate and other
|
|
|
779
|
|
|
|
1,203
|
|
|
(35
|
)
|
|
|
6,502
|
|
|
|
6,094
|
|
|
7
|
|
|
Intersegment elimination
|
|
|
(123
|
)
|
|
|
(343
|
)
|
|
—
|
|
|
|
(486
|
)
|
|
|
(1,312
|
)
|
|
—
|
|
|
|
|
$
|
421,548
|
|
|
$
|
551,381
|
|
|
(24
|
)
|
|
$
|
1,927,521
|
|
|
$
|
2,160,417
|
|
|
(11
|
)
|
|
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Higher education
|
|
$
|
140,749
|
|
|
$
|
210,879
|
|
|
(33
|
)
|
|
$
|
794,053
|
|
|
$
|
926,989
|
|
|
(14
|
)
|
|
Test preparation
|
|
|
67,861
|
|
|
|
71,830
|
|
|
(6
|
)
|
|
|
284,809
|
|
|
|
309,392
|
|
|
(8
|
)
|
|
Kaplan international
|
|
|
164,711
|
|
|
|
196,864
|
|
|
(16
|
)
|
|
|
716,612
|
|
|
|
771,762
|
|
|
(7
|
)
|
|
Kaplan corporate and other
|
|
|
19,456
|
|
|
|
19,337
|
|
|
1
|
|
|
|
93,732
|
|
|
|
63,187
|
|
|
48
|
|
|
Amortization of intangible assets
|
|
|
1,210
|
|
|
|
2,089
|
|
|
(42
|
)
|
|
|
5,523
|
|
|
|
7,738
|
|
|
(29
|
)
|
|
Impairment of goodwill and other long-lived assets
|
|
|
1,363
|
|
|
|
17,203
|
|
|
(92
|
)
|
|
|
256,830
|
|
|
|
17,203
|
|
|
—
|
|
|
Intersegment elimination
|
|
|
(124
|
)
|
|
|
(234
|
)
|
|
—
|
|
|
|
(582
|
)
|
|
|
(1,317
|
)
|
|
—
|
|
|
|
|
$
|
395,226
|
|
|
$
|
517,968
|
|
|
(24
|
)
|
|
$
|
2,150,977
|
|
|
$
|
2,094,954
|
|
|
3
|
|
|
Operating Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Higher education
|
|
$
|
27,062
|
|
|
$
|
43,582
|
|
|
(38
|
)
|
|
$
|
55,572
|
|
|
$
|
83,069
|
|
|
(33
|
)
|
|
Test preparation
|
|
|
433
|
|
|
|
(1,178
|
)
|
|
—
|
|
|
|
16,798
|
|
|
|
(4,730
|
)
|
|
—
|
|
|
Kaplan international
|
|
|
20,076
|
|
|
|
28,544
|
|
|
(30
|
)
|
|
|
53,661
|
|
|
|
69,153
|
|
|
(22
|
)
|
|
Kaplan corporate and other
|
|
|
(18,677
|
)
|
|
|
(18,134
|
)
|
|
(3
|
)
|
|
|
(87,230
|
)
|
|
|
(57,093
|
)
|
|
(53
|
)
|
|
Amortization of intangible assets
|
|
|
(1,210
|
)
|
|
|
(2,089
|
)
|
|
42
|
|
|
|
(5,523
|
)
|
|
|
(7,738
|
)
|
|
29
|
|
|
Impairment of goodwill and other long-lived assets
|
|
|
(1,363
|
)
|
|
|
(17,203
|
)
|
|
92
|
|
|
|
(256,830
|
)
|
|
|
(17,203
|
)
|
|
—
|
|
|
Intersegment elimination
|
|
|
1
|
|
|
|
(109
|
)
|
|
—
|
|
|
|
96
|
|
|
|
5
|
|
|
—
|
|
|
|
|
$
|
26,322
|
|
|
$
|
33,413
|
|
|
(21
|
)
|
|
$
|
(223,456
|
)
|
|
$
|
65,463
|
|
|
—
|
|
|
Depreciation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Higher education
|
|
$
|
4,249
|
|
|
$
|
7,047
|
|
|
(40
|
)
|
|
$
|
17,937
|
|
|
$
|
29,187
|
|
|
(39
|
)
|
|
Test preparation
|
|
|
1,840
|
|
|
|
2,826
|
|
|
(35
|
)
|
|
|
9,045
|
|
|
|
12,547
|
|
|
(28
|
)
|
|
Kaplan international
|
|
|
3,807
|
|
|
|
4,751
|
|
|
(20
|
)
|
|
|
17,811
|
|
|
|
19,297
|
|
|
(8
|
)
|
|
Kaplan corporate and other
|
|
|
136
|
|
|
|
89
|
|
|
53
|
|
|
|
16,384
|
|
|
|
706
|
|
|
—
|
|
|
|
|
$
|
10,032
|
|
|
$
|
14,713
|
|
|
(32
|
)
|
|
$
|
61,177
|
|
|
$
|
61,737
|
|
|
(1
|
)
|
|
Pension Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Higher education
|
|
$
|
1,821
|
|
|
$
|
2,629
|
|
|
(31
|
)
|
|
$
|
10,849
|
|
|
$
|
10,514
|
|
|
3
|
|
|
Test preparation
|
|
|
776
|
|
|
|
722
|
|
|
7
|
|
|
|
3,101
|
|
|
|
2,888
|
|
|
7
|
|
|
Kaplan international
|
|
|
98
|
|
|
|
89
|
|
|
10
|
|
|
|
424
|
|
|
|
356
|
|
|
19
|
|
|
Kaplan corporate and other
|
|
|
690
|
|
|
|
415
|
|
|
66
|
|
|
|
4,430
|
|
|
|
1,660
|
|
|
—
|
|
|
|
|
$
|
3,385
|
|
|
$
|
3,855
|
|
|
(12
|
)
|
|
$
|
18,804
|
|
|
$
|
15,418
|
|
|
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GRAHAM HOLDINGS COMPANY
|
|
EDUCATION DIVISION INFORMATION
|
|
SUMMARY OF RESTRUCTURING CHARGES
|
|
(Unaudited)
|
|
|
|
(in thousands)
|
|
Severance
and SIP
Expense *
|
|
Accelerated
Depreciation
|
|
Lease
Obligation
Losses
|
|
Software
Asset
Write-offs
|
|
Other
|
|
Total
|
|
Three Months Ended December 31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Higher education
|
|
$
|
2,241
|
|
$
|
268
|
|
$
|
1,049
|
|
$
|
—
|
|
$
|
145
|
|
$
|
3,703
|
|
Test preparation
|
|
|
523
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
523
|
|
Kaplan international
|
|
|
389
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
389
|
|
Kaplan corporate and other
|
|
|
2,944
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,944
|
|
|
|
$
|
6,097
|
|
$
|
268
|
|
$
|
1,049
|
|
$
|
—
|
|
$
|
145
|
|
$
|
7,559
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Higher education
|
|
$
|
511
|
|
$
|
855
|
|
$
|
639
|
|
$
|
—
|
|
$
|
—
|
|
$
|
2,005
|
|
Test preparation
|
|
|
850
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
850
|
|
Kaplan international
|
|
|
78
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
78
|
|
Kaplan corporate and other
|
|
|
35
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|
|
$
|
1,474
|
|
$
|
855
|
|
$
|
639
|
|
$
|
—
|
|
$
|
—
|
|
$
|
2,968
|
|
Twelve Months Ended December 31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Higher education
|
|
$
|
7,531
|
|
$
|
1,773
|
|
$
|
3,371
|
|
$
|
—
|
|
$
|
209
|
|
$
|
12,884
|
|
Test preparation
|
|
|
727
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
730
|
|
Kaplan international
|
|
|
1,325
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,325
|
|
Kaplan corporate and other
|
|
|
8,385
|
|
|
16,180
|
|
|
4,869
|
|
|
—
|
|
|
—
|
|
|
29,434
|
|
|
|
$
|
17,968
|
|
$
|
17,956
|
|
$
|
8,240
|
|
$
|
—
|
|
$
|
209
|
|
$
|
44,373
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Higher education
|
|
$
|
3,478
|
|
$
|
2,062
|
|
$
|
725
|
|
$
|
—
|
|
$
|
230
|
|
$
|
6,495
|
|
Test preparation
|
|
|
1,040
|
|
|
—
|
|
|
—
|
|
|
7,689
|
|
|
—
|
|
|
8,729
|
|
Kaplan international
|
|
|
227
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
227
|
|
Kaplan corporate and other
|
|
|
330
|
|
|
—
|
|
|
1,025
|
|
|
—
|
|
|
—
|
|
|
1,355
|
|
|
|
$
|
5,075
|
|
$
|
2,062
|
|
$
|
1,750
|
|
$
|
7,689
|
|
$
|
230
|
|
$
|
16,806
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Includes $1.7 million and $2.1 million in third quarter 2015
expenses related to a Special Incentive Program (SIP) at Higher
Education and Corporate, respectively. The SIP expense was funded
from the assets of the Company's pension plan.
|
|
|
NON-GAAP FINANCIAL INFORMATION
GRAHAM HOLDINGS COMPANY
(Unaudited)
In addition to the results reported in accordance with accounting
principles generally accepted in the United States (GAAP) included in
this press release, the Company has provided information regarding
income from continuing operations excluding certain items described
below reconciled to the most directly comparable GAAP measures.
Management believes that these non-GAAP measures, when read in
conjunction with the Company’s GAAP financials, provide useful
information to investors by offering:
-
the ability to make meaningful period-to-period comparisons of the
Company’s ongoing results;
-
the ability to identify trends in the Company’s underlying business;
and
-
a better understanding of how management plans and measures the
Company’s underlying business.
Income from continuing operations excluding certain items should not be
considered substitutes or alternatives to computations calculated in
accordance with and required by GAAP. These non-GAAP financial measures
should be read only in conjunction with financial information presented
on a GAAP basis.
The following table reconciles the non-GAAP financial measures to the
most directly comparable GAAP measures:
|
|
|
Three Months Ended
December 31
|
|
Twelve Months Ended
December 31
|
|
(in thousands, except per share amounts)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Amounts Attributable to Graham Holdings Company Common
Stockholders
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations, as reported
|
|
$
|
51,169
|
|
|
$
|
305,761
|
|
|
$
|
(143,456
|
)
|
|
$
|
765,139
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Impairment of goodwill and long-lived assets
|
|
|
3,688
|
|
|
|
11,213
|
|
|
|
225,190
|
|
|
|
11,213
|
|
|
Restructuring and early retirement program charges
|
|
|
5,544
|
|
|
|
1,902
|
|
|
|
28,887
|
|
|
|
20,225
|
|
|
Modification of stock options and restricted stock
|
|
|
3,723
|
|
|
|
—
|
|
|
|
15,349
|
|
|
|
—
|
|
|
Gain on sale of Classified Ventures
|
|
|
—
|
|
|
|
(249,828
|
)
|
|
|
—
|
|
|
|
(249,828
|
)
|
|
Classified Ventures' sale of apartments.com
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(58,242
|
)
|
|
Gain from exchange of Berkshire shares
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(266,733
|
)
|
|
Net losses from the sales of businesses, an investment and the
formation of a joint venture
|
|
|
—
|
|
|
|
—
|
|
|
|
15,666
|
|
|
|
—
|
|
|
Sale of property, plant and equipment
|
|
|
(13,191
|
)
|
|
|
—
|
|
|
|
(13,191
|
)
|
|
|
(81,836
|
)
|
|
Foreign currency (gain) loss
|
|
|
(387
|
)
|
|
|
5,455
|
|
|
|
9,677
|
|
|
|
7,134
|
|
|
Income from continuing operations, adjusted (non-GAAP)
|
|
$
|
50,546
|
|
|
$
|
74,503
|
|
|
$
|
138,122
|
|
|
$
|
147,072
|
|
|
Per Share Information Attributable to Graham Holdings Company
Common Stockholders
|
|
|
|
|
|
|
|
|
|
Diluted income (loss) per common share from continuing operations,
as reported
|
|
$
|
8.72
|
|
|
$
|
52.48
|
|
|
$
|
(25.23
|
)
|
|
$
|
115.40
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Impairment of goodwill and long-lived assets
|
|
|
0.63
|
|
|
|
1.92
|
|
|
|
38.96
|
|
|
|
1.69
|
|
|
Restructuring and early retirement program charges
|
|
|
0.96
|
|
|
|
0.33
|
|
|
|
4.97
|
|
|
|
3.05
|
|
|
Modification of stock options and restricted stock
|
|
|
0.63
|
|
|
|
—
|
|
|
|
2.64
|
|
|
|
—
|
|
|
Gain on sale of Classified Ventures
|
|
|
—
|
|
|
|
(42.89
|
)
|
|
|
—
|
|
|
|
(37.68
|
)
|
|
Classified Ventures' sale of apartments.com
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(8.78
|
)
|
|
Gain from exchange of Berkshire shares
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(40.23
|
)
|
|
Net losses from the sales of businesses, an investment and the
formation of a joint venture
|
|
|
—
|
|
|
|
—
|
|
|
|
2.82
|
|
|
|
—
|
|
|
Sale of property, plant and equipment
|
|
|
(2.27
|
)
|
|
|
—
|
|
|
|
(2.27
|
)
|
|
|
(12.34
|
)
|
|
Foreign currency (gain) loss
|
|
|
(0.07
|
)
|
|
|
0.94
|
|
|
|
1.67
|
|
|
|
1.08
|
|
|
Diluted income per common share from continuing operations, adjusted
(non-GAAP)
|
|
$
|
8.60
|
|
|
$
|
12.78
|
|
|
$
|
23.56
|
|
|
$
|
22.19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The adjusted diluted per share amounts may not compute due to
rounding.
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160226005441/en/
Copyright Business Wire 2016