Graham Holdings Company (NYSE: GHC) today reported its financial results for the second quarter and first six months of 2024. The Company also filed its Form 10-Q today for the quarter ended June 30, 2024 with the Securities and Exchange Commission.
Division Operating Results
Revenue for the second quarter of 2024 was $1,185.3 million, up 7% from $1,105.0 million in the second quarter of 2023. Revenues increased at education, healthcare and automotive, partially offset by declines at television broadcasting, manufacturing and other businesses. The Company reported operating income of $25.9 million for the second quarter of 2024, compared to $58.1 million for the second quarter of 2023. The decrease in operating results is due to goodwill and intangible asset impairment charges at World of Good Brands (WGB) and declines at television broadcasting, manufacturing and other businesses, partially offset by increases at education, healthcare and automotive. The Company reported adjusted operating cash flow (non-GAAP) of $98.5 million for the second quarter of 2024, compared to $100.0 million for the second quarter of 2023. Adjusted operating cash flow declined at television broadcasting, manufacturing and other businesses, partially offset by increases at education, healthcare and automotive. Capital expenditures totaled $20.8 million and $22.5 million for the second quarter of 2024 and 2023, respectively.
Revenue for the first six months of 2024 was $2,337.9 million, up 9% from $2,136.5 million in the first six months of 2023. Revenues increased at education, healthcare and automotive, partially offset by declines at television broadcasting, manufacturing and other businesses. The Company recorded operated income of $61.4 million for the first six months of 2024, compared to $85.7 million for the first six months of 2023. The decrease in operating results is due to goodwill and intangible asset impairment charges at WGB and declines at television broadcasting, manufacturing, automotive and other businesses, partially offset by increases at education and healthcare. The Company reported adjusted operating cash flow (non-GAAP) of $181.3 million for the first six months of 2024, compared to $171.6 million for the first six months of 2023. Adjusted operating cash flow improved at education, healthcare, automotive and other businesses, partially offset by declines at manufacturing. Capital expenditures totaled $42.2 million and $44.8 million for the first six months of 2024 and 2023, respectively.
Acquisitions and Dispositions of Businesses
There were no significant business acquisitions or dispositions during the first six months of 2024.
Debt, Cash and Marketable Equity Securities
At June 30, 2024, the Company had $834.8 million in borrowings outstanding at an average interest rate of 6.4%, including $132.2 million outstanding on its $300 million revolving credit facility. Cash, marketable equity securities and other investments totaled $1,009.6 million at June 30, 2024.
Overall, the Company recognized $19.6 million and $123.8 million in net gains on marketable equity securities in the second quarter and first six months of 2024, respectively, compared to $78.6 million and $96.7 million in net gains on marketable equity securities in the second quarter and first six months of 2023, respectively.
Common Stock Repurchases
During the second quarter and first six months of 2024, the Company purchased a total of 40,180 and 68,786 shares, respectively, of its Class B common stock at a cost of $29.5 million and $49.5 million, respectively. At June 30, 2024, there were 4,410,542 shares outstanding. On May 4, 2023, the Board of Directors authorized the Company to acquire up to 500,000 shares of its Class B common stock; the Company has remaining authorization for 167,617 shares as of June 30, 2024.
Mandatorily Redeemable Noncontrolling Interest
The Company recorded interest expense of $73.5 million and $75.4 million in the second quarter and first six months of 2024, respectively, to adjust the fair value of the mandatorily redeemable noncontrolling interest at Graham Healthcare Group (GHG). The significant adjustment recorded in the first half of 2024 is largely related to a substantial increase in the estimated fair value of CSI Pharmacy Holding Company, LLC (CSI). Refer to Notes 7 and 8 in the Company’s 10-Q filing for the second quarter of 2024 for additional information.
Overall Company Results
The Company reported a net loss attributable to common shares of $21.0 million ($4.79 per share) for the second quarter of 2024, compared to income of $122.8 million ($25.89 per share) for the second quarter of 2023. For the first six months of 2024, the Company recorded net income attributable to common shares of $103.3 million ($23.11 per share), compared to $175.1 million ($36.67 per share) for the first six months of 2023.
The results for the second quarter and first six months of 2024 and 2023 were affected by a number of items as described in the Non-GAAP Financial Information schedule attached to this release. Excluding these items, net income attributable to common shares was $56.9 million ($12.70 per share) for the second quarter of 2024, compared to $61.1 million ($12.88 per share) for the second quarter of 2023. Excluding these items, net income attributable to common shares was $107.3 million ($23.99 per share) for the first six months of 2024, compared to $101.4 million ($21.24 per share) for the first six months of 2023.
* * * * * * * * * * * *
Forward-Looking Statements
All public statements made by the Company and its representatives that are not statements of historical fact, including certain statements in this press release, in the Company’s Annual Report on Form 10-K and in the Company’s 2023 Annual Report to Stockholders, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on expectations, forecasts, and assumptions by the Company’s management and involve a number of risks, uncertainties, and other factors that could cause actual results to differ from those stated, including, without limitation, comments about expectations related to acquisitions or dispositions or related business activities, the Company’s business strategies and objectives, the prospects for growth in the Company’s various business operations, the Company’s future financial performance, and the risks and uncertainties described in Item 1A of the Company’s Annual Report on Form 10-K. Accordingly, undue reliance should not be placed on any forward-looking statement made by or on behalf of the Company. The Company assumes no obligation to update any forward-looking statement after the date on which such statement is made, even if new information subsequently becomes available.
|
GRAHAM HOLDINGS COMPANY
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(Unaudited)
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
June 30
|
%
|
|
(in thousands, except per share amounts)
|
2024
|
|
2023
|
Change
|
|
Operating revenues
|
$
|
1,185,280
|
|
|
$
|
1,104,999
|
|
7
|
|
|
Operating expenses
|
|
1,100,851
|
|
|
|
1,012,537
|
|
9
|
|
|
Depreciation of property, plant and equipment
|
|
22,173
|
|
|
|
21,103
|
|
5
|
|
|
Amortization of intangible assets
|
|
10,058
|
|
|
|
13,304
|
|
(24
|
)
|
|
Impairment of goodwill and other long-lived assets
|
|
26,287
|
|
|
|
—
|
|
—
|
|
|
Operating income
|
|
25,911
|
|
|
|
58,055
|
|
(55
|
)
|
|
Equity in earnings (losses) of affiliates, net
|
|
2,560
|
|
|
|
(6,115
|
)
|
—
|
|
|
Interest income
|
|
2,111
|
|
|
|
1,548
|
|
36
|
|
|
Interest expense
|
|
(91,383
|
)
|
|
|
(11,774
|
)
|
—
|
|
|
Non-operating pension and postretirement benefit income, net
|
|
24,655
|
|
|
|
29,815
|
|
(17
|
)
|
|
Gain on marketable equity securities, net
|
|
19,628
|
|
|
|
78,648
|
|
(75
|
)
|
|
Other income, net
|
|
1,791
|
|
|
|
15,794
|
|
(89
|
)
|
|
(Loss) income before income taxes
|
|
(14,727
|
)
|
|
|
165,971
|
|
—
|
|
|
Provision for income taxes
|
|
4,100
|
|
|
|
41,800
|
|
(90
|
)
|
|
Net (loss) income
|
|
(18,827
|
)
|
|
|
124,171
|
|
—
|
|
|
Net income attributable to noncontrolling interests
|
|
(2,213
|
)
|
|
|
(1,383
|
)
|
60
|
|
|
Net (Loss) Income Attributable to Graham Holdings Company Common Stockholders
|
$
|
(21,040
|
)
|
|
$
|
122,788
|
|
—
|
|
|
Per Share Information Attributable to Graham Holdings Company Common Stockholders
|
|
|
|
|
|
Basic net (loss) income per common share
|
$
|
(4.79
|
)
|
|
$
|
25.96
|
|
—
|
|
|
Basic average number of common shares outstanding
|
|
4,401
|
|
|
|
4,700
|
|
|
|
Diluted net (loss) income per common share
|
$
|
(4.79
|
)
|
|
$
|
25.89
|
|
—
|
|
|
Diluted average number of common shares outstanding
|
|
4,401
|
|
|
|
4,713
|
|
|
|
GRAHAM HOLDINGS COMPANY
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(Unaudited)
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
June 30
|
%
|
|
(in thousands, except per share amounts)
|
2024
|
|
2023
|
Change
|
|
Operating revenues
|
$
|
2,337,942
|
|
|
$
|
2,136,545
|
|
9
|
|
|
Operating expenses
|
|
2,184,793
|
|
|
|
1,981,713
|
|
10
|
|
|
Depreciation of property, plant and equipment
|
|
44,700
|
|
|
|
41,128
|
|
9
|
|
|
Amortization of intangible assets
|
|
20,809
|
|
|
|
27,248
|
|
(24
|
)
|
|
Impairment of goodwill and other long-lived assets
|
|
26,287
|
|
|
|
745
|
|
—
|
|
|
Operating income
|
|
61,353
|
|
|
|
85,711
|
|
(28
|
)
|
|
Equity in earnings (losses) of affiliates, net
|
|
4,891
|
|
|
|
(1,454
|
)
|
—
|
|
|
Interest income
|
|
4,289
|
|
|
|
2,752
|
|
56
|
|
|
Interest expense
|
|
(110,711
|
)
|
|
|
(26,068
|
)
|
—
|
|
|
Non-operating pension and postretirement benefit income, net
|
|
67,072
|
|
|
|
61,660
|
|
9
|
|
|
Gain on marketable equity securities, net
|
|
123,780
|
|
|
|
96,670
|
|
28
|
|
|
Other income, net
|
|
3,438
|
|
|
|
18,877
|
|
(82
|
)
|
|
Income before income taxes
|
|
154,112
|
|
|
|
238,148
|
|
(35
|
)
|
|
Provision for income taxes
|
|
47,600
|
|
|
|
61,000
|
|
(22
|
)
|
|
Net income
|
|
106,512
|
|
|
|
177,148
|
|
(40
|
)
|
|
Net income attributable to noncontrolling interests
|
|
(3,172
|
)
|
|
|
(2,088
|
)
|
52
|
|
|
Net Income Attributable to Graham Holdings Company Common Stockholders
|
$
|
103,340
|
|
|
$
|
175,060
|
|
(41
|
)
|
|
Per Share Information Attributable to Graham Holdings Company Common Stockholders
|
|
|
|
|
|
Basic net income per common share
|
$
|
23.24
|
|
|
$
|
36.78
|
|
(37
|
)
|
|
Basic average number of common shares outstanding
|
|
4,416
|
|
|
|
4,729
|
|
|
|
Diluted net income per common share
|
$
|
23.11
|
|
|
$
|
36.67
|
|
(37
|
)
|
|
Diluted average number of common shares outstanding
|
|
4,442
|
|
|
|
4,744
|
|
|
|
GRAHAM HOLDINGS COMPANY
|
|
BUSINESS DIVISION INFORMATION
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
|
|
|
June 30
|
|
%
|
|
June 30
|
|
%
|
|
(in thousands)
|
2024
|
|
2023
|
|
Change
|
|
2024
|
|
2023
|
|
Change
|
|
Operating Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
|
|
$
|
422,899
|
|
|
$
|
402,227
|
|
|
5
|
|
|
$
|
845,497
|
|
|
$
|
780,268
|
|
|
8
|
|
|
Television broadcasting
|
|
|
115,478
|
|
|
|
118,829
|
|
|
(3
|
)
|
|
|
228,536
|
|
|
|
231,706
|
|
|
(1
|
)
|
|
Manufacturing
|
|
|
103,626
|
|
|
|
120,082
|
|
|
(14
|
)
|
|
|
205,529
|
|
|
|
234,666
|
|
|
(12
|
)
|
|
Healthcare
|
|
|
147,528
|
|
|
|
113,282
|
|
|
30
|
|
|
|
275,729
|
|
|
|
215,341
|
|
|
28
|
|
|
Automotive
|
|
|
308,814
|
|
|
|
260,672
|
|
|
18
|
|
|
|
612,654
|
|
|
|
493,233
|
|
|
24
|
|
|
Other businesses
|
|
|
86,991
|
|
|
|
90,449
|
|
|
(4
|
)
|
|
|
170,289
|
|
|
|
182,457
|
|
|
(7
|
)
|
|
Corporate office
|
|
|
575
|
|
|
|
850
|
|
|
(32
|
)
|
|
|
1,151
|
|
|
|
850
|
|
|
35
|
|
|
Intersegment elimination
|
|
|
(631
|
)
|
|
|
(1,392
|
)
|
|
—
|
|
|
|
(1,443
|
)
|
|
|
(1,976
|
)
|
|
—
|
|
|
|
|
$
|
1,185,280
|
|
|
$
|
1,104,999
|
|
|
7
|
|
|
$
|
2,337,942
|
|
|
$
|
2,136,545
|
|
|
9
|
|
|
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
|
|
$
|
387,622
|
|
|
$
|
372,111
|
|
|
4
|
|
|
$
|
779,633
|
|
|
$
|
727,112
|
|
|
7
|
|
|
Television broadcasting
|
|
|
84,350
|
|
|
|
85,639
|
|
|
(2
|
)
|
|
|
167,775
|
|
|
|
169,933
|
|
|
(1
|
)
|
|
Manufacturing
|
|
|
99,361
|
|
|
|
108,100
|
|
|
(8
|
)
|
|
|
198,195
|
|
|
|
215,356
|
|
|
(8
|
)
|
|
Healthcare
|
|
|
134,791
|
|
|
|
104,905
|
|
|
28
|
|
|
|
256,901
|
|
|
|
204,028
|
|
|
26
|
|
|
Automotive
|
|
|
298,611
|
|
|
|
251,212
|
|
|
19
|
|
|
|
592,799
|
|
|
|
472,930
|
|
|
25
|
|
|
Other businesses
|
|
|
139,953
|
|
|
|
114,310
|
|
|
22
|
|
|
|
252,205
|
|
|
|
237,319
|
|
|
6
|
|
|
Corporate office
|
|
|
15,312
|
|
|
|
12,059
|
|
|
27
|
|
|
|
30,524
|
|
|
|
26,132
|
|
|
17
|
|
|
Intersegment elimination
|
|
|
(631
|
)
|
|
|
(1,392
|
)
|
|
—
|
|
|
|
(1,443
|
)
|
|
|
(1,976
|
)
|
|
—
|
|
|
|
|
$
|
1,159,369
|
|
|
$
|
1,046,944
|
|
|
11
|
|
|
$
|
2,276,589
|
|
|
$
|
2,050,834
|
|
|
11
|
|
|
Operating Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
|
|
$
|
35,277
|
|
|
$
|
30,116
|
|
|
17
|
|
|
$
|
65,864
|
|
|
$
|
53,156
|
|
|
24
|
|
|
Television broadcasting
|
|
|
31,128
|
|
|
|
33,190
|
|
|
(6
|
)
|
|
|
60,761
|
|
|
|
61,773
|
|
|
(2
|
)
|
|
Manufacturing
|
|
|
4,265
|
|
|
|
11,982
|
|
|
(64
|
)
|
|
|
7,334
|
|
|
|
19,310
|
|
|
(62
|
)
|
|
Healthcare
|
|
|
12,737
|
|
|
|
8,377
|
|
|
52
|
|
|
|
18,828
|
|
|
|
11,313
|
|
|
66
|
|
|
Automotive
|
|
|
10,203
|
|
|
|
9,460
|
|
|
8
|
|
|
|
19,855
|
|
|
|
20,303
|
|
|
(2
|
)
|
|
Other businesses
|
|
|
(52,962
|
)
|
|
|
(23,861
|
)
|
|
—
|
|
|
|
(81,916
|
)
|
|
|
(54,862
|
)
|
|
(49
|
)
|
|
Corporate office
|
|
|
(14,737
|
)
|
|
|
(11,209
|
)
|
|
(31
|
)
|
|
|
(29,373
|
)
|
|
|
(25,282
|
)
|
|
(16
|
)
|
|
|
|
$
|
25,911
|
|
|
$
|
58,055
|
|
|
(55
|
)
|
|
$
|
61,353
|
|
|
$
|
85,711
|
|
|
(28
|
)
|
|
Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
|
|
$
|
2,872
|
|
|
$
|
3,984
|
|
|
(28
|
)
|
|
$
|
5,846
|
|
|
$
|
8,400
|
|
|
(30
|
)
|
|
Television broadcasting
|
|
|
1,360
|
|
|
|
1,363
|
|
|
0
|
|
|
|
2,710
|
|
|
|
2,725
|
|
|
(1
|
)
|
|
Manufacturing
|
|
|
2,648
|
|
|
|
4,332
|
|
|
(39
|
)
|
|
|
5,768
|
|
|
|
9,194
|
|
|
(37
|
)
|
|
Healthcare
|
|
|
598
|
|
|
|
882
|
|
|
(32
|
)
|
|
|
1,234
|
|
|
|
1,836
|
|
|
(33
|
)
|
|
Automotive
|
|
|
5
|
|
|
|
—
|
|
|
—
|
|
|
|
5
|
|
|
|
—
|
|
|
—
|
|
|
Other businesses
|
|
|
28,862
|
|
|
|
2,743
|
|
|
—
|
|
|
|
31,533
|
|
|
|
5,838
|
|
|
—
|
|
|
Corporate office
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
|
$
|
36,345
|
|
|
$
|
13,304
|
|
|
—
|
|
|
$
|
47,096
|
|
|
$
|
27,993
|
|
|
68
|
|
|
Operating Income (Loss) before Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
|
|
$
|
38,149
|
|
|
$
|
34,100
|
|
|
12
|
|
|
$
|
71,710
|
|
|
$
|
61,556
|
|
|
16
|
|
|
Television broadcasting
|
|
|
32,488
|
|
|
|
34,553
|
|
|
(6
|
)
|
|
|
63,471
|
|
|
|
64,498
|
|
|
(2
|
)
|
|
Manufacturing
|
|
|
6,913
|
|
|
|
16,314
|
|
|
(58
|
)
|
|
|
13,102
|
|
|
|
28,504
|
|
|
(54
|
)
|
|
Healthcare
|
|
|
13,335
|
|
|
|
9,259
|
|
|
44
|
|
|
|
20,062
|
|
|
|
13,149
|
|
|
53
|
|
|
Automotive
|
|
|
10,208
|
|
|
|
9,460
|
|
|
8
|
|
|
|
19,860
|
|
|
|
20,303
|
|
|
(2
|
)
|
|
Other businesses
|
|
|
(24,100
|
)
|
|
|
(21,118
|
)
|
|
(14
|
)
|
|
|
(50,383
|
)
|
|
|
(49,024
|
)
|
|
(3
|
)
|
|
Corporate office
|
|
|
(14,737
|
)
|
|
|
(11,209
|
)
|
|
(31
|
)
|
|
|
(29,373
|
)
|
|
|
(25,282
|
)
|
|
(16
|
)
|
|
|
|
$
|
62,256
|
|
|
$
|
71,359
|
|
|
(13
|
)
|
|
$
|
108,449
|
|
|
$
|
113,704
|
|
|
(5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
|
|
|
June 30
|
|
%
|
|
June 30
|
|
%
|
|
(in thousands)
|
2024
|
|
2023
|
|
Change
|
|
2024
|
|
2023
|
|
Change
|
|
Depreciation
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
|
|
$
|
8,855
|
|
|
$
|
9,460
|
|
|
(6
|
)
|
|
$
|
18,160
|
|
|
$
|
18,428
|
|
|
(1
|
)
|
|
Television broadcasting
|
|
|
2,870
|
|
|
|
3,087
|
|
|
(7
|
)
|
|
|
5,738
|
|
|
|
6,123
|
|
|
(6
|
)
|
|
Manufacturing
|
|
|
2,694
|
|
|
|
2,287
|
|
|
18
|
|
|
|
5,409
|
|
|
|
4,569
|
|
|
18
|
|
|
Healthcare
|
|
|
1,683
|
|
|
|
1,287
|
|
|
31
|
|
|
|
3,277
|
|
|
|
2,391
|
|
|
37
|
|
|
Automotive
|
|
|
1,716
|
|
|
|
1,148
|
|
|
49
|
|
|
|
3,429
|
|
|
|
2,261
|
|
|
52
|
|
|
Other businesses
|
|
|
4,204
|
|
|
|
3,681
|
|
|
14
|
|
|
|
8,387
|
|
|
|
7,050
|
|
|
19
|
|
|
Corporate office
|
|
|
151
|
|
|
|
153
|
|
|
(1
|
)
|
|
|
300
|
|
|
|
306
|
|
|
(2
|
)
|
|
|
|
$
|
22,173
|
|
|
$
|
21,103
|
|
|
5
|
|
|
$
|
44,700
|
|
|
$
|
41,128
|
|
|
9
|
|
|
Pension Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
|
|
$
|
4,712
|
|
|
$
|
2,256
|
|
|
—
|
|
|
$
|
8,822
|
|
|
$
|
4,454
|
|
|
98
|
|
|
Television broadcasting
|
|
|
1,416
|
|
|
|
805
|
|
|
76
|
|
|
|
3,055
|
|
|
|
1,665
|
|
|
83
|
|
|
Manufacturing
|
|
|
292
|
|
|
|
281
|
|
|
4
|
|
|
|
919
|
|
|
|
556
|
|
|
65
|
|
|
Healthcare
|
|
|
4,851
|
|
|
|
2,685
|
|
|
81
|
|
|
|
9,609
|
|
|
|
7,042
|
|
|
36
|
|
|
Automotive
|
|
|
42
|
|
|
|
5
|
|
|
—
|
|
|
|
57
|
|
|
|
10
|
|
|
—
|
|
|
Other businesses
|
|
|
1,674
|
|
|
|
613
|
|
|
—
|
|
|
|
3,614
|
|
|
|
1,185
|
|
|
—
|
|
|
Corporate office
|
|
|
1,084
|
|
|
|
928
|
|
|
17
|
|
|
|
2,029
|
|
|
|
1,904
|
|
|
7
|
|
|
|
|
$
|
14,071
|
|
|
$
|
7,573
|
|
|
86
|
|
|
$
|
28,105
|
|
|
$
|
16,816
|
|
|
67
|
|
|
Adjusted Operating Cash Flow (non-GAAP)(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
|
|
$
|
51,716
|
|
|
$
|
45,816
|
|
|
13
|
|
|
$
|
98,692
|
|
|
$
|
84,438
|
|
|
17
|
|
|
Television broadcasting
|
|
|
36,774
|
|
|
|
38,445
|
|
|
(4
|
)
|
|
|
72,264
|
|
|
|
72,286
|
|
|
0
|
|
|
Manufacturing
|
|
|
9,899
|
|
|
|
18,882
|
|
|
(48
|
)
|
|
|
19,430
|
|
|
|
33,629
|
|
|
(42
|
)
|
|
Healthcare
|
|
|
19,869
|
|
|
|
13,231
|
|
|
50
|
|
|
|
32,948
|
|
|
|
22,582
|
|
|
46
|
|
|
Automotive
|
|
|
11,966
|
|
|
|
10,613
|
|
|
13
|
|
|
|
23,346
|
|
|
|
22,574
|
|
|
3
|
|
|
Other businesses
|
|
|
(18,222
|
)
|
|
|
(16,824
|
)
|
|
(8
|
)
|
|
|
(38,382
|
)
|
|
|
(40,789
|
)
|
|
6
|
|
|
Corporate office
|
|
|
(13,502
|
)
|
|
|
(10,128
|
)
|
|
(33
|
)
|
|
|
(27,044
|
)
|
|
|
(23,072
|
)
|
|
(17
|
)
|
|
|
|
$
|
98,500
|
|
|
$
|
100,035
|
|
|
(2
|
)
|
|
$
|
181,254
|
|
|
$
|
171,648
|
|
|
6
|
|
____________
|
(1)
|
Adjusted Operating Cash Flow (non-GAAP) is calculated as Operating Income (Loss) before Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets plus Depreciation Expense and Pension Expense.
|
|
GRAHAM HOLDINGS COMPANY
|
|
EDUCATION DIVISION INFORMATION
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
|
|
|
June 30
|
|
%
|
|
June 30
|
|
%
|
|
(in thousands)
|
|
2024
|
|
2023
|
|
Change
|
|
2024
|
|
2023
|
|
Change
|
|
Operating Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kaplan international
|
|
$
|
267,026
|
|
|
$
|
237,663
|
|
|
12
|
|
|
$
|
536,824
|
|
|
$
|
464,739
|
|
|
16
|
|
|
Higher education
|
|
|
81,041
|
|
|
|
90,291
|
|
|
(10
|
)
|
|
|
161,163
|
|
|
|
168,632
|
|
|
(4
|
)
|
|
Supplemental education
|
|
|
73,133
|
|
|
|
74,616
|
|
|
(2
|
)
|
|
|
145,255
|
|
|
|
148,203
|
|
|
(2
|
)
|
|
Kaplan corporate and other
|
|
|
2,993
|
|
|
|
2,887
|
|
|
4
|
|
|
|
5,581
|
|
|
|
5,259
|
|
|
6
|
|
|
Intersegment elimination
|
|
|
(1,294
|
)
|
|
|
(3,230
|
)
|
|
—
|
|
|
|
(3,326
|
)
|
|
|
(6,565
|
)
|
|
—
|
|
|
|
|
$
|
422,899
|
|
|
$
|
402,227
|
|
|
5
|
|
|
$
|
845,497
|
|
|
$
|
780,268
|
|
|
8
|
|
|
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kaplan international
|
|
$
|
241,202
|
|
|
$
|
216,912
|
|
|
11
|
|
|
$
|
479,688
|
|
|
$
|
422,687
|
|
|
13
|
|
|
Higher education
|
|
|
66,687
|
|
|
|
72,496
|
|
|
(8
|
)
|
|
|
141,290
|
|
|
|
143,754
|
|
|
(2
|
)
|
|
Supplemental education
|
|
|
67,461
|
|
|
|
71,104
|
|
|
(5
|
)
|
|
|
135,003
|
|
|
|
140,940
|
|
|
(4
|
)
|
|
Kaplan corporate and other
|
|
|
11,048
|
|
|
|
10,711
|
|
|
3
|
|
|
|
21,221
|
|
|
|
17,921
|
|
|
18
|
|
|
Amortization of intangible assets
|
|
|
2,872
|
|
|
|
3,984
|
|
|
(28
|
)
|
|
|
5,846
|
|
|
|
7,923
|
|
|
(26
|
)
|
|
Impairment of long-lived assets
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
477
|
|
|
—
|
|
|
Intersegment elimination
|
|
|
(1,648
|
)
|
|
|
(3,096
|
)
|
|
—
|
|
|
|
(3,415
|
)
|
|
|
(6,590
|
)
|
|
—
|
|
|
|
|
$
|
387,622
|
|
|
$
|
372,111
|
|
|
4
|
|
|
$
|
779,633
|
|
|
$
|
727,112
|
|
|
7
|
|
|
Operating Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kaplan international
|
|
$
|
25,824
|
|
|
$
|
20,751
|
|
|
24
|
|
|
$
|
57,136
|
|
|
$
|
42,052
|
|
|
36
|
|
|
Higher education
|
|
|
14,354
|
|
|
|
17,795
|
|
|
(19
|
)
|
|
|
19,873
|
|
|
|
24,878
|
|
|
(20
|
)
|
|
Supplemental education
|
|
|
5,672
|
|
|
|
3,512
|
|
|
62
|
|
|
|
10,252
|
|
|
|
7,263
|
|
|
41
|
|
|
Kaplan corporate and other
|
|
|
(8,055
|
)
|
|
|
(7,824
|
)
|
|
(3
|
)
|
|
|
(15,640
|
)
|
|
|
(12,662
|
)
|
|
(24
|
)
|
|
Amortization of intangible assets
|
|
|
(2,872
|
)
|
|
|
(3,984
|
)
|
|
28
|
|
|
|
(5,846
|
)
|
|
|
(7,923
|
)
|
|
26
|
|
|
Impairment of long-lived assets
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
(477
|
)
|
|
—
|
|
|
Intersegment elimination
|
|
|
354
|
|
|
|
(134
|
)
|
|
—
|
|
|
|
89
|
|
|
|
25
|
|
|
—
|
|
|
|
|
$
|
35,277
|
|
|
$
|
30,116
|
|
|
17
|
|
|
$
|
65,864
|
|
|
$
|
53,156
|
|
|
24
|
|
|
Operating Income (Loss) before Amortization of Intangible Assets and Impairment of Long-Lived Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Kaplan international
|
|
$
|
25,824
|
|
|
$
|
20,751
|
|
|
24
|
|
|
$
|
57,136
|
|
|
$
|
42,052
|
|
|
36
|
|
|
Higher education
|
|
|
14,354
|
|
|
|
17,795
|
|
|
(19
|
)
|
|
|
19,873
|
|
|
|
24,878
|
|
|
(20
|
)
|
|
Supplemental education
|
|
|
5,672
|
|
|
|
3,512
|
|
|
62
|
|
|
|
10,252
|
|
|
|
7,263
|
|
|
41
|
|
|
Kaplan corporate and other
|
|
|
(8,055
|
)
|
|
|
(7,824
|
)
|
|
(3
|
)
|
|
|
(15,640
|
)
|
|
|
(12,662
|
)
|
|
(24
|
)
|
|
Intersegment elimination
|
|
|
354
|
|
|
|
(134
|
)
|
|
—
|
|
|
|
89
|
|
|
|
25
|
|
|
—
|
|
|
|
|
$
|
38,149
|
|
|
$
|
34,100
|
|
|
12
|
|
|
$
|
71,710
|
|
|
$
|
61,556
|
|
|
16
|
|
|
Depreciation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kaplan international
|
|
$
|
7,177
|
|
|
$
|
6,903
|
|
|
4
|
|
|
$
|
14,533
|
|
|
$
|
13,233
|
|
|
10
|
|
|
Higher education
|
|
|
799
|
|
|
|
1,071
|
|
|
(25
|
)
|
|
|
1,702
|
|
|
|
2,173
|
|
|
(22
|
)
|
|
Supplemental education
|
|
|
857
|
|
|
|
1,461
|
|
|
(41
|
)
|
|
|
1,876
|
|
|
|
2,970
|
|
|
(37
|
)
|
|
Kaplan corporate and other
|
|
|
22
|
|
|
|
25
|
|
|
(12
|
)
|
|
|
49
|
|
|
|
52
|
|
|
(6
|
)
|
|
|
|
$
|
8,855
|
|
|
$
|
9,460
|
|
|
(6
|
)
|
|
$
|
18,160
|
|
|
$
|
18,428
|
|
|
(1
|
)
|
|
Pension Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kaplan international
|
|
$
|
166
|
|
|
$
|
81
|
|
|
—
|
|
|
$
|
329
|
|
|
$
|
161
|
|
|
—
|
|
|
Higher education
|
|
|
2,045
|
|
|
|
923
|
|
|
—
|
|
|
|
3,826
|
|
|
|
1,845
|
|
|
—
|
|
|
Supplemental education
|
|
|
2,094
|
|
|
|
1,023
|
|
|
—
|
|
|
|
3,912
|
|
|
|
2,047
|
|
|
91
|
|
|
Kaplan corporate and other
|
|
|
407
|
|
|
|
229
|
|
|
78
|
|
|
|
755
|
|
|
|
401
|
|
|
88
|
|
|
|
|
$
|
4,712
|
|
|
$
|
2,256
|
|
|
—
|
|
|
$
|
8,822
|
|
|
$
|
4,454
|
|
|
98
|
|
|
Adjusted Operating Cash Flow (non-GAAP)(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Kaplan international
|
|
$
|
33,167
|
|
|
$
|
27,735
|
|
|
20
|
|
|
$
|
71,998
|
|
|
$
|
55,446
|
|
|
30
|
|
|
Higher education
|
|
|
17,198
|
|
|
|
19,789
|
|
|
(13
|
)
|
|
|
25,401
|
|
|
|
28,896
|
|
|
(12
|
)
|
|
Supplemental education
|
|
|
8,623
|
|
|
|
5,996
|
|
|
44
|
|
|
|
16,040
|
|
|
|
12,280
|
|
|
31
|
|
|
Kaplan corporate and other
|
|
|
(7,626
|
)
|
|
|
(7,570
|
)
|
|
(1
|
)
|
|
|
(14,836
|
)
|
|
|
(12,209
|
)
|
|
(22
|
)
|
|
Intersegment elimination
|
|
|
354
|
|
|
|
(134
|
)
|
|
—
|
|
|
|
89
|
|
|
|
25
|
|
|
—
|
|
|
|
|
$
|
51,716
|
|
|
$
|
45,816
|
|
|
13
|
|
|
$
|
98,692
|
|
|
$
|
84,438
|
|
|
17
|
|
____________
|
(1)
|
Adjusted Operating Cash Flow (non-GAAP) is calculated as Operating Income (Loss) before Amortization of Intangible Assets and Impairment of Long-Lived Assets plus Depreciation Expense and Pension Expense.
|
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 Adjusted Operating Cash Flow and Net income 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.
Adjusted Operating Cash Flow and Net income, 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 gains and losses on marketable equity securities relate to the change in the fair value (quoted prices) of its portfolio of equity securities. The mandatorily redeemable noncontrolling interest represents the ownership portion of a group of minority shareholders at a subsidiary of the Company's Healthcare business. The Company measures the redemption value of this minority ownership on a quarterly basis with changes in the fair value recorded as interest expense or income, which is included in net income for the period. The effect of gains and losses on marketable equity securities and net interest expense related to fair value adjustments of the mandatorily redeemable noncontrolling interest are not directly related to the core performance of the Company’s business operations since these items do not directly relate to the sale of the Company’s services or products. The accounting principles generally accepted in the United States (“GAAP”) require that the Company include the gains and losses on marketable equity securities and net interest expense related to fair value adjustments of the mandatorily redeemable noncontrolling interest in net income on the Condensed Consolidated Statements of Operations. The Company excludes the gains and losses on marketable equity securities and net interest expense related to fair value adjustments of the mandatorily redeemable noncontrolling interest from the non-GAAP adjusted net income because these items are independent of the Company’s core operations and not indicative of the performance of the Company’s business operations.
The following tables reconcile the non-GAAP financial measures for Net income, excluding certain items, to the most directly comparable GAAP measures:
|
|
Three Months Ended June 30
|
|
|
2024
|
|
2023
|
|
(in thousands, except per share amounts)
|
(Loss)
Income
before
income
taxes
|
|
Income
Taxes
|
|
Net
(Loss)
Income
|
|
Income
before
income
taxes
|
|
Income
Taxes
|
|
Net
Income
|
|
Amounts attributable to Graham Holdings Company Common Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
As reported
|
$
|
(14,727
|
)
|
|
$
|
4,100
|
|
|
$
|
(18,827
|
)
|
|
$
|
165,971
|
|
|
$
|
41,800
|
|
|
$
|
124,171
|
|
|
Attributable to noncontrolling interests
|
|
|
|
|
|
(2,213
|
)
|
|
|
|
|
|
|
(1,383
|
)
|
|
Attributable to Graham Holdings Company Stockholders
|
|
|
|
|
|
(21,040
|
)
|
|
|
|
|
|
|
122,788
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net credit related to fair value changes in contingent consideration from prior acquisitions
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(4,797
|
)
|
|
|
(144
|
)
|
|
|
(4,653
|
)
|
|
Goodwill and intangible asset impairment charges
|
|
26,287
|
|
|
|
5,693
|
|
|
|
20,594
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Charges related to non-operating Voluntary Retirement Incentive Program and Separation Incentive Programs
|
|
16,410
|
|
|
|
4,201
|
|
|
|
12,209
|
|
|
|
5,517
|
|
|
|
1,419
|
|
|
|
4,098
|
|
|
Interest expense (credit) related to the fair value adjustment of the mandatorily redeemable noncontrolling interest
|
|
73,539
|
|
|
|
12,145
|
|
|
|
61,394
|
|
|
|
(1,179
|
)
|
|
|
(27
|
)
|
|
|
(1,152
|
)
|
|
Net gains on marketable equity securities
|
|
(19,628
|
)
|
|
|
(5,026
|
)
|
|
|
(14,602
|
)
|
|
|
(78,648
|
)
|
|
|
(20,704
|
)
|
|
|
(57,944
|
)
|
|
Net losses of affiliates whose operations are not managed by the Company
|
|
1,128
|
|
|
|
289
|
|
|
|
839
|
|
|
|
8,633
|
|
|
|
2,273
|
|
|
|
6,360
|
|
|
Gain on sale of certain WGB websites
|
|
(3,483
|
)
|
|
|
(760
|
)
|
|
|
(2,723
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Gain on sale of Pinna
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(10,033
|
)
|
|
|
(2,641
|
)
|
|
|
(7,392
|
)
|
|
Non-operating loss (gain) from impairment, write-up and sale of cost method investments
|
|
337
|
|
|
|
86
|
|
|
|
251
|
|
|
|
(1,320
|
)
|
|
|
(347
|
)
|
|
|
(973
|
)
|
|
Net Income, adjusted (non-GAAP)
|
|
|
|
|
$
|
56,922
|
|
|
|
|
|
|
$
|
61,132
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share information attributable to Graham Holdings Company Common Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss) income per common share, as reported
|
|
|
|
|
$
|
(4.79
|
)
|
|
|
|
|
|
$
|
25.89
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net credit related to fair value changes in contingent consideration from prior acquisitions
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
(0.98
|
)
|
|
Goodwill and intangible asset impairment charges
|
|
|
|
|
|
4.62
|
|
|
|
|
|
|
|
—
|
|
|
Charges related to non-operating Voluntary Retirement Incentive Program and Separation Incentive Programs
|
|
|
|
|
|
2.74
|
|
|
|
|
|
|
|
0.86
|
|
|
Interest expense (credit) related to the fair value adjustment of the mandatorily redeemable noncontrolling interest
|
|
|
|
|
|
13.77
|
|
|
|
|
|
|
|
(0.24
|
)
|
|
Net gains on marketable equity securities
|
|
|
|
|
|
(3.28
|
)
|
|
|
|
|
|
|
(12.22
|
)
|
|
Net losses of affiliates whose operations are not managed by the Company
|
|
|
|
|
|
0.19
|
|
|
|
|
|
|
|
1.34
|
|
|
Gain on sale of certain WGB websites
|
|
|
|
|
|
(0.61
|
)
|
|
|
|
|
|
|
—
|
|
|
Gain on sale of Pinna
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
(1.56
|
)
|
|
Non-operating loss (gain) from impairment, write-up and sale of cost method investments
|
|
|
|
|
|
0.06
|
|
|
|
|
|
|
|
(0.21
|
)
|
|
Diluted income per common share, adjusted (non-GAAP)
|
|
|
|
|
$
|
12.70
|
|
|
|
|
|
|
$
|
12.88
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The adjusted diluted per share amounts may not compute due to rounding.
|
|
|
Six Months Ended June 30
|
|
|
2024
|
|
2023
|
|
(in thousands, except per share amounts)
|
Income
before
income
taxes
|
|
Income
Taxes
|
|
Net
Income
|
|
Income
before
income
taxes
|
|
Income
Taxes
|
|
Net
Income
|
|
Amounts attributable to Graham Holdings Company Common Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
As reported
|
$
|
154,112
|
|
|
$
|
47,600
|
|
|
$
|
106,512
|
|
|
$
|
238,148
|
|
|
$
|
61,000
|
|
|
$
|
177,148
|
|
|
Attributable to noncontrolling interests
|
|
|
|
|
|
(3,172
|
)
|
|
|
|
|
|
|
(2,088
|
)
|
|
Attributable to Graham Holdings Company Stockholders
|
|
|
|
|
$
|
103,340
|
|
|
|
|
|
|
$
|
175,060
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net credit related to fair value changes in contingent consideration from prior acquisitions
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(4,688
|
)
|
|
|
(143
|
)
|
|
|
(4,545
|
)
|
|
Goodwill and intangible asset impairment charges
|
|
26,287
|
|
|
|
5,693
|
|
|
|
20,594
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Charges related to non-operating Voluntary Retirement Incentive Program and Separation Incentive Programs
|
|
16,828
|
|
|
|
4,308
|
|
|
|
12,520
|
|
|
|
9,646
|
|
|
|
2,481
|
|
|
|
7,165
|
|
|
Interest expense related to the fair value adjustment of the mandatorily redeemable noncontrolling interest
|
|
75,415
|
|
|
|
12,241
|
|
|
|
63,174
|
|
|
|
289
|
|
|
|
47
|
|
|
|
242
|
|
|
Net gains on marketable equity securities
|
|
(123,780
|
)
|
|
|
(31,693
|
)
|
|
|
(92,087
|
)
|
|
|
(96,670
|
)
|
|
|
(25,448
|
)
|
|
|
(71,222
|
)
|
|
Net losses of affiliates whose operations are not managed by the Company
|
|
2,615
|
|
|
|
670
|
|
|
|
1,945
|
|
|
|
6,820
|
|
|
|
1,795
|
|
|
|
5,025
|
|
|
Gain on sale of certain WGB websites
|
|
(3,483
|
)
|
|
|
(760
|
)
|
|
|
(2,723
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Gain on sale of Pinna
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(10,033
|
)
|
|
|
(2,641
|
)
|
|
|
(7,392
|
)
|
|
Non-operating loss (gain) from impairment, write-up and sales of cost method investments
|
|
744
|
|
|
|
191
|
|
|
|
553
|
|
|
|
(3,935
|
)
|
|
|
(1,008
|
)
|
|
|
(2,927
|
)
|
|
Net Income, adjusted (non-GAAP)
|
|
|
|
|
$
|
107,316
|
|
|
|
|
|
|
$
|
101,406
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share information attributable to Graham Holdings Company Common Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income per common share, as reported
|
|
|
|
|
$
|
23.11
|
|
|
|
|
|
|
$
|
36.67
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net credit related to fair value changes in contingent consideration from prior acquisitions
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
(0.95
|
)
|
|
Goodwill and intangible asset impairment charges
|
|
|
|
|
|
4.60
|
|
|
|
|
|
|
|
—
|
|
|
Charges related to non-operating Voluntary Retirement Incentive Program and Separation Incentive Programs
|
|
|
|
|
|
2.80
|
|
|
|
|
|
|
|
1.50
|
|
|
Interest expense related to the fair value adjustment of the mandatorily redeemable noncontrolling interest
|
|
|
|
|
|
14.13
|
|
|
|
|
|
|
|
0.05
|
|
|
Net gains on marketable equity securities
|
|
|
|
|
|
(20.59
|
)
|
|
|
|
|
|
|
(14.92
|
)
|
|
Net losses of affiliates whose operations are not managed by the Company
|
|
|
|
|
|
0.43
|
|
|
|
|
|
|
|
1.05
|
|
|
Gain on sale of certain WGB websites
|
|
|
|
|
|
(0.61
|
)
|
|
|
|
|
|
|
—
|
|
|
Gain on sale of Pinna
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
(1.55
|
)
|
|
Non-operating loss (gain) from impairment, write-up and sales of cost method investments
|
|
|
|
|
|
0.12
|
|
|
|
|
|
|
|
(0.61
|
)
|
|
Diluted income per common share, adjusted (non-GAAP)
|
|
|
|
|
$
|
23.99
|
|
|
|
|
|
|
$
|
21.24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The adjusted diluted per share amounts may not compute due to rounding.
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240730170504/en/