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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Graham Holdings Company | NYSE:GHC | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 764.94 | 610 | 14:29:31 |
|
FORM 10-Q
|
GRAHAM HOLDINGS COMPANY
|
(Exact name of registrant as specified in its charter)
|
Delaware
|
53-0182885
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
|
|
1300 North 17th Street, Arlington, Virginia
|
22209
|
(Address of principal executive offices)
|
(Zip Code)
|
|
Large accelerated
filer
|
ý
|
Accelerated
filer
|
¨
|
Non-accelerated
filer
|
¨
|
Smaller reporting
company
|
¨
|
Emerging growth
company
|
¨
|
|
|
Three Months Ended
September 30 |
|
Nine Months Ended
September 30 |
||||||||||||
|
|
||||||||||||||
(in thousands, except per share amounts)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Operating Revenues
|
|
|
|
|
|
|
|
|
|||||||
Education
|
$
|
377,033
|
|
|
$
|
386,936
|
|
|
$
|
1,136,706
|
|
|
$
|
1,207,086
|
|
Advertising
|
69,495
|
|
|
86,531
|
|
|
207,143
|
|
|
225,590
|
|
||||
Other
|
210,697
|
|
|
148,171
|
|
|
572,180
|
|
|
419,635
|
|
||||
|
657,225
|
|
|
621,638
|
|
|
1,916,029
|
|
|
1,852,311
|
|
||||
Operating Costs and Expenses
|
|
|
|
|
|
|
|
||||||||
Operating
|
352,635
|
|
|
293,194
|
|
|
1,011,553
|
|
|
880,859
|
|
||||
Selling, general and administrative
|
232,782
|
|
|
237,694
|
|
|
678,139
|
|
|
709,344
|
|
||||
Depreciation of property, plant and equipment
|
16,002
|
|
|
16,097
|
|
|
46,525
|
|
|
48,903
|
|
||||
Amortization of intangible assets
|
10,923
|
|
|
6,620
|
|
|
28,290
|
|
|
19,160
|
|
||||
Impairment of goodwill and other long-lived assets
|
312
|
|
|
—
|
|
|
9,536
|
|
|
—
|
|
||||
|
612,654
|
|
|
553,605
|
|
|
1,774,043
|
|
|
1,658,266
|
|
||||
Income from Operations
|
44,571
|
|
|
68,033
|
|
|
141,986
|
|
|
194,045
|
|
||||
Equity in (losses) earnings of affiliates, net
|
(532
|
)
|
|
(1,008
|
)
|
|
1,448
|
|
|
(895
|
)
|
||||
Interest income
|
861
|
|
|
740
|
|
|
3,397
|
|
|
2,052
|
|
||||
Interest expense
|
(8,619
|
)
|
|
(8,614
|
)
|
|
(25,783
|
)
|
|
(24,533
|
)
|
||||
Other income (expense), net
|
1,963
|
|
|
(18,225
|
)
|
|
6,881
|
|
|
15,871
|
|
||||
Income Before Income Taxes
|
38,244
|
|
|
40,926
|
|
|
127,929
|
|
|
186,540
|
|
||||
Provision for Income Taxes
|
13,400
|
|
|
7,800
|
|
|
40,000
|
|
|
54,000
|
|
||||
Net Income
|
24,844
|
|
|
33,126
|
|
|
87,929
|
|
|
132,540
|
|
||||
Net Income Attributable to Noncontrolling Interests
|
(60
|
)
|
|
—
|
|
|
(63
|
)
|
|
(868
|
)
|
||||
Net Income Attributable to Graham Holdings Company Common Stockholders
|
$
|
24,784
|
|
|
$
|
33,126
|
|
|
$
|
87,866
|
|
|
$
|
131,672
|
|
Per Share Information Attributable to Graham Holdings Company Common Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic net income per common share
|
$
|
4.45
|
|
|
$
|
5.90
|
|
|
$
|
15.74
|
|
|
$
|
23.33
|
|
Basic average number of common shares outstanding
|
5,518
|
|
|
5,544
|
|
|
5,530
|
|
|
5,570
|
|
||||
Diluted net income per common share
|
$
|
4.42
|
|
|
$
|
5.87
|
|
|
$
|
15.64
|
|
|
$
|
23.21
|
|
Diluted average number of common shares outstanding
|
5,554
|
|
|
5,574
|
|
|
5,567
|
|
|
5,600
|
|
|
Three Months Ended
September 30 |
|
Nine Months Ended
September 30 |
||||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net Income
|
$
|
24,844
|
|
|
$
|
33,126
|
|
|
$
|
87,929
|
|
|
$
|
132,540
|
|
Other Comprehensive Income, Before Tax
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments:
|
|
|
|
|
|
|
|
||||||||
Translation adjustments arising during the period
|
11,470
|
|
|
(353
|
)
|
|
34,776
|
|
|
(1,629
|
)
|
||||
Unrealized gains on available-for-sale securities:
|
|
|
|
|
|
|
|
||||||||
Unrealized gains for the period, net
|
47,836
|
|
|
12,154
|
|
|
71,370
|
|
|
7,190
|
|
||||
Reclassification of realized gain on sale of available-for-sale securities included in net income
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,256
|
)
|
||||
|
47,836
|
|
|
12,154
|
|
|
71,370
|
|
|
934
|
|
||||
Pension and other postretirement plans:
|
|
|
|
|
|
|
|
||||||||
Amortization of net prior service cost included in net income
|
118
|
|
|
105
|
|
|
358
|
|
|
314
|
|
||||
Amortization of net actuarial (gain) loss included in net income
|
(1,567
|
)
|
|
289
|
|
|
(4,958
|
)
|
|
868
|
|
||||
|
(1,449
|
)
|
|
394
|
|
|
(4,600
|
)
|
|
1,182
|
|
||||
Cash flow hedge (loss) gain
|
(72
|
)
|
|
49
|
|
|
(215
|
)
|
|
49
|
|
||||
Other Comprehensive Income, Before Tax
|
57,785
|
|
|
12,244
|
|
|
101,331
|
|
|
536
|
|
||||
Income tax expense related to items of other comprehensive income
|
(18,540
|
)
|
|
(5,039
|
)
|
|
(26,665
|
)
|
|
(866
|
)
|
||||
Other Comprehensive Income (Loss), Net of Tax
|
39,245
|
|
|
7,205
|
|
|
74,666
|
|
|
(330
|
)
|
||||
Comprehensive Income
|
64,089
|
|
|
40,331
|
|
|
162,595
|
|
|
132,210
|
|
||||
Comprehensive income attributable to noncontrolling interests
|
(60
|
)
|
|
—
|
|
|
(63
|
)
|
|
(868
|
)
|
||||
Total Comprehensive Income Attributable to Graham Holdings Company
|
$
|
64,029
|
|
|
$
|
40,331
|
|
|
$
|
162,532
|
|
|
$
|
131,342
|
|
|
As of
|
||||||
(in thousands)
|
September 30,
2017 |
|
December 31,
2016 |
||||
|
(Unaudited)
|
|
|
||||
Assets
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
395,009
|
|
|
$
|
648,885
|
|
Restricted cash
|
21,403
|
|
|
21,931
|
|
||
Investments in marketable equity securities and other investments
|
519,586
|
|
|
448,241
|
|
||
Accounts receivable, net
|
525,779
|
|
|
615,101
|
|
||
Income taxes receivable
|
28,108
|
|
|
41,635
|
|
||
Inventories and contracts in progress
|
62,531
|
|
|
34,818
|
|
||
Other current assets
|
65,443
|
|
|
60,735
|
|
||
Total Current Assets
|
1,617,859
|
|
|
1,871,346
|
|
||
Property, Plant and Equipment, Net
|
259,809
|
|
|
233,664
|
|
||
Investments in Affiliates
|
122,166
|
|
|
58,806
|
|
||
Goodwill, Net
|
1,299,226
|
|
|
1,122,954
|
|
||
Indefinite-Lived Intangible Assets, Net
|
109,901
|
|
|
66,026
|
|
||
Amortized Intangible Assets, Net
|
239,152
|
|
|
107,939
|
|
||
Prepaid Pension Cost
|
863,098
|
|
|
881,593
|
|
||
Deferred Income Taxes
|
15,820
|
|
|
17,246
|
|
||
Deferred Charges and Other Assets
|
92,884
|
|
|
73,096
|
|
||
Total Assets
|
$
|
4,619,915
|
|
|
$
|
4,432,670
|
|
|
|
|
|
||||
Liabilities and Equity
|
|
|
|
|
|
||
Current Liabilities
|
|
|
|
|
|
||
Accounts payable and accrued liabilities
|
$
|
446,076
|
|
|
$
|
500,726
|
|
Deferred revenue
|
353,367
|
|
|
312,107
|
|
||
Current portion of long-term debt
|
6,713
|
|
|
6,128
|
|
||
Dividends declared
|
7,025
|
|
|
—
|
|
||
Total Current Liabilities
|
813,181
|
|
|
818,961
|
|
||
Postretirement Benefits Other Than Pensions
|
22,929
|
|
|
21,859
|
|
||
Accrued Compensation and Related Benefits
|
198,907
|
|
|
195,910
|
|
||
Other Liabilities
|
67,589
|
|
|
65,554
|
|
||
Deferred Income Taxes
|
454,027
|
|
|
379,092
|
|
||
Mandatorily Redeemable Noncontrolling Interest
|
12,584
|
|
|
12,584
|
|
||
Long-Term Debt
|
486,242
|
|
|
485,719
|
|
||
Total Liabilities
|
2,055,459
|
|
|
1,979,679
|
|
||
Redeemable Noncontrolling Interest
|
3,779
|
|
|
50
|
|
||
Preferred Stock
|
—
|
|
|
—
|
|
||
Common Stockholders’ Equity
|
|
|
|
|
|
||
Common stock
|
20,000
|
|
|
20,000
|
|
||
Capital in excess of par value
|
368,505
|
|
|
364,363
|
|
||
Retained earnings
|
5,648,479
|
|
|
5,588,942
|
|
||
Accumulated other comprehensive income (loss), net of tax
|
|
|
|
|
|||
Cumulative foreign currency translation adjustment
|
7,778
|
|
|
(26,998
|
)
|
||
Unrealized gain on available-for-sale securities
|
135,753
|
|
|
92,931
|
|
||
Unrealized gain on pensions and other postretirement plans
|
168,070
|
|
|
170,830
|
|
||
Cash flow hedge
|
(449
|
)
|
|
(277
|
)
|
||
Cost of Class B common stock held in treasury
|
(3,787,459
|
)
|
|
(3,756,850
|
)
|
||
Total Equity
|
2,560,677
|
|
|
2,452,941
|
|
||
Total Liabilities and Equity
|
$
|
4,619,915
|
|
|
$
|
4,432,670
|
|
|
Nine Months Ended
September 30 |
||||||
(in thousands)
|
2017
|
|
2016
|
||||
Cash Flows from Operating Activities
|
|
|
|
||||
Net Income
|
$
|
87,929
|
|
|
$
|
132,540
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation, amortization and goodwill and other long-lived asset impairment
|
84,351
|
|
|
68,063
|
|
||
Net pension benefit
|
(44,281
|
)
|
|
(36,714
|
)
|
||
Early retirement program expense
|
932
|
|
|
—
|
|
||
Stock-based compensation expense, net
|
7,528
|
|
|
10,319
|
|
||
Loss (gain) on disposition of businesses, property, plant and equipment, investments and other assets, net
|
504
|
|
|
(62,132
|
)
|
||
Foreign exchange (gain) loss
|
(6,608
|
)
|
|
33,324
|
|
||
Write-down of cost method investments
|
200
|
|
|
15,161
|
|
||
Equity in (earnings) losses of affiliates, net of distributions
|
(1,434
|
)
|
|
895
|
|
||
Provision (benefit) for deferred income taxes
|
16,306
|
|
|
(17,281
|
)
|
||
Change in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable, net
|
106,230
|
|
|
5,980
|
|
||
Accounts payable and accrued liabilities
|
(63,255
|
)
|
|
(38,099
|
)
|
||
Deferred revenue
|
27,254
|
|
|
28,014
|
|
||
Income taxes receivable
|
14,477
|
|
|
27,206
|
|
||
Other assets and other liabilities, net
|
(9,795
|
)
|
|
(16,492
|
)
|
||
Other
|
519
|
|
|
671
|
|
||
Net Cash Provided by Operating Activities
|
220,857
|
|
|
151,455
|
|
||
Cash Flows from Investing Activities
|
|
|
|
||||
Investments in certain businesses, net of cash acquired
|
(299,938
|
)
|
|
(242,472
|
)
|
||
Investments in equity affiliates, cost method and other investments
|
(66,097
|
)
|
|
(4,550
|
)
|
||
Purchases of property, plant and equipment
|
(43,863
|
)
|
|
(41,373
|
)
|
||
Disbursement of loan to affiliate
|
(6,771
|
)
|
|
(7,730
|
)
|
||
Return of investment in equity affiliate
|
3,527
|
|
|
—
|
|
||
Net proceeds from disposition of businesses, property, plant and equipment, investments and other assets
|
2,672
|
|
|
36,777
|
|
||
Proceeds from sales of marketable equity securities
|
—
|
|
|
22,837
|
|
||
Purchases of marketable equity securities
|
—
|
|
|
(48,265
|
)
|
||
Net Cash Used in Investing Activities
|
(410,470
|
)
|
|
(284,776
|
)
|
||
Cash Flows from Financing Activities
|
|
|
|
||||
Common shares repurchased
|
(35,394
|
)
|
|
(90,328
|
)
|
||
Dividends paid
|
(21,304
|
)
|
|
(20,532
|
)
|
||
Repayments of borrowings
|
(7,712
|
)
|
|
—
|
|
||
Deferred payments of acquisition and noncontrolling interest
|
(5,187
|
)
|
|
—
|
|
||
Issuance of borrowings
|
—
|
|
|
98,610
|
|
||
Purchase of noncontrolling interest
|
—
|
|
|
(21,000
|
)
|
||
Payments of financing costs
|
—
|
|
|
(648
|
)
|
||
Other
|
(4,962
|
)
|
|
16,608
|
|
||
Net Cash Used in Financing Activities
|
(74,559
|
)
|
|
(17,290
|
)
|
||
Effect of Currency Exchange Rate Change
|
9,768
|
|
|
(3,147
|
)
|
||
Net Decrease in Cash and Cash Equivalents and Restricted Cash
|
(254,404
|
)
|
|
(153,758
|
)
|
||
Beginning Cash and Cash Equivalents and Restricted Cash
|
670,816
|
|
|
774,952
|
|
||
Ending Cash and Cash Equivalents and Restricted Cash
|
$
|
416,412
|
|
|
$
|
621,194
|
|
|
Nine Months Ended September 30, 2016
|
||||||||||
|
As
|
|
|
|
|
||||||
|
Previously
|
|
|
|
As
|
||||||
(in thousands)
|
Reported
|
|
Adjustment
|
|
Adopted
|
||||||
Cash Flows from Operating Activities
|
|
|
|
|
|
||||||
Increase in Restricted Cash
|
$
|
(7,266
|
)
|
|
$
|
7,266
|
|
|
$
|
—
|
|
Net Cash Provided by Operating Activities
|
144,189
|
|
|
7,266
|
|
|
151,455
|
|
|||
|
|
|
|
|
|
||||||
Net Decrease in Cash and Cash Equivalents and Restricted Cash
|
(161,024
|
)
|
|
7,266
|
|
|
(153,758
|
)
|
|||
Cash and Cash Equivalents and Restricted Cash at Beginning of Period
|
754,207
|
|
|
20,745
|
|
|
774,952
|
|
|||
Cash and Cash Equivalents and Restricted Cash at End of Period
|
593,183
|
|
|
28,011
|
|
|
621,194
|
|
|
Income from Operations
|
|
Non-operating pension and postretirement benefit income
|
|
Income Before Income Taxes
|
||||||
(in thousands)
|
|
|
|||||||||
Three Months Ended September 30, 2017
|
|
|
|
|
|
||||||
As Reported
|
$
|
44,571
|
|
|
$
|
—
|
|
|
$
|
38,244
|
|
Adjustment
|
(17,621
|
)
|
|
17,621
|
|
|
—
|
|
|||
Upon Adoption
|
26,950
|
|
|
17,621
|
|
|
38,244
|
|
|||
|
|
|
|
|
|
||||||
Three Months Ended September 30, 2016
|
|
|
|
|
|
||||||
As Reported
|
$
|
68,033
|
|
|
$
|
—
|
|
|
$
|
40,926
|
|
Adjustment
|
(15,705
|
)
|
|
15,705
|
|
|
—
|
|
|||
Upon Adoption
|
52,328
|
|
|
15,705
|
|
|
40,926
|
|
|||
|
|
|
|
|
|
||||||
Nine Months Ended September 30, 2017
|
|
|
|
|
|
||||||
As Reported
|
$
|
141,986
|
|
|
$
|
—
|
|
|
$
|
127,929
|
|
Adjustment
|
(55,042
|
)
|
|
55,042
|
|
|
—
|
|
|||
Upon Adoption
|
86,944
|
|
|
55,042
|
|
|
127,929
|
|
|||
|
|
|
|
|
|
||||||
Nine Months Ended September 30, 2016
|
|
|
|
|
|
||||||
As Reported
|
$
|
194,045
|
|
|
$
|
—
|
|
|
$
|
186,540
|
|
Adjustment
|
(46,966
|
)
|
|
46,966
|
|
|
—
|
|
|||
Upon Adoption
|
147,079
|
|
|
46,966
|
|
|
186,540
|
|
|||
|
|
|
|
|
|
||||||
Twelve Months Ended December 31, 2016
|
|
|
|
|
|
||||||
As Reported
|
$
|
303,534
|
|
|
$
|
—
|
|
|
$
|
250,658
|
|
Adjustment
|
(80,665
|
)
|
|
80,665
|
|
|
—
|
|
|||
Upon Adoption
|
222,869
|
|
|
80,665
|
|
|
250,658
|
|
|
As of
|
||||||
|
September 30,
2017 |
|
December 31,
2016 |
||||
(in thousands)
|
|
||||||
Total cost
|
$
|
269,343
|
|
|
$
|
269,343
|
|
Gross unrealized gains
|
226,256
|
|
|
154,886
|
|
||
Total Fair Value
|
$
|
495,599
|
|
|
$
|
424,229
|
|
|
|
Purchase Price Allocation
|
|||||
|
|
As of
|
|||||
(in thousands)
|
|
September 30, 2017
|
December 31, 2016
|
||||
Accounts receivable
|
|
$
|
12,502
|
|
$
|
8,538
|
|
Inventory
|
|
25,253
|
|
878
|
|
||
Other current assets
|
|
593
|
|
1,420
|
|
||
Property, plant and equipment
|
|
30,961
|
|
3,940
|
|
||
Goodwill
|
|
143,433
|
|
184,118
|
|
||
Indefinite-lived intangible assets
|
|
41,600
|
|
53,110
|
|
||
Amortized intangible assets
|
|
158,907
|
|
28,267
|
|
||
Pension and other postretirement benefits liabilities
|
|
(59,116
|
)
|
—
|
|
||
Other liabilities
|
|
(10,822
|
)
|
(21,892
|
)
|
||
Deferred income taxes
|
|
(34,875
|
)
|
(11,009
|
)
|
||
Redeemable noncontrolling interest
|
|
(3,666
|
)
|
—
|
|
||
Aggregate purchase price, net of cash acquired
|
|
$
|
304,770
|
|
$
|
247,370
|
|
|
Three Months Ended
September 30 |
|
Nine Months Ended
September 30 |
||||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Operating revenues
|
$
|
657,225
|
|
|
$
|
696,767
|
|
|
$
|
1,979,784
|
|
|
$
|
2,058,571
|
|
Net income
|
24,735
|
|
|
36,250
|
|
|
96,065
|
|
|
137,967
|
|
(in thousands)
|
Education
|
|
Television
Broadcasting
|
|
Other
Businesses
|
|
Total
|
||||||||
Balance as of December 31, 2016
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
$
|
1,111,003
|
|
|
$
|
168,345
|
|
|
$
|
202,141
|
|
|
$
|
1,481,489
|
|
Accumulated impairment losses
|
(350,850
|
)
|
|
—
|
|
|
(7,685
|
)
|
|
(358,535
|
)
|
||||
|
760,153
|
|
|
168,345
|
|
|
194,456
|
|
|
1,122,954
|
|
||||
Acquisitions
|
18,986
|
|
|
24,256
|
|
|
100,191
|
|
|
143,433
|
|
||||
Impairment
|
—
|
|
|
—
|
|
|
(7,616
|
)
|
|
(7,616
|
)
|
||||
Dispositions
|
—
|
|
|
—
|
|
|
(412
|
)
|
|
(412
|
)
|
||||
Foreign currency exchange rate changes
|
40,867
|
|
|
—
|
|
|
—
|
|
|
40,867
|
|
||||
Balance as of September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||
Goodwill
|
1,170,856
|
|
|
192,601
|
|
|
301,920
|
|
|
1,665,377
|
|
||||
Accumulated impairment losses
|
(350,850
|
)
|
|
—
|
|
|
(15,301
|
)
|
|
(366,151
|
)
|
||||
|
$
|
820,006
|
|
|
$
|
192,601
|
|
|
$
|
286,619
|
|
|
$
|
1,299,226
|
|
(in thousands)
|
Higher
Education
|
|
Test
Preparation
|
|
Kaplan
International
|
|
Total
|
||||||||
Balance as of December 31, 2016
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
$
|
389,720
|
|
|
$
|
166,098
|
|
|
$
|
555,185
|
|
|
$
|
1,111,003
|
|
Accumulated impairment losses
|
(248,591
|
)
|
|
(102,259
|
)
|
|
—
|
|
|
(350,850
|
)
|
||||
|
141,129
|
|
|
63,839
|
|
|
555,185
|
|
|
760,153
|
|
||||
Acquisitions
|
—
|
|
|
—
|
|
|
18,986
|
|
|
18,986
|
|
||||
Foreign currency exchange rate changes
|
154
|
|
|
—
|
|
|
40,713
|
|
|
40,867
|
|
||||
Balance as of September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||
Goodwill
|
389,874
|
|
|
166,098
|
|
|
614,884
|
|
|
1,170,856
|
|
||||
Accumulated impairment losses
|
(248,591
|
)
|
|
(102,259
|
)
|
|
—
|
|
|
(350,850
|
)
|
||||
|
$
|
141,283
|
|
|
$
|
63,839
|
|
|
$
|
614,884
|
|
|
$
|
820,006
|
|
|
|
|
As of September 30, 2017
|
|
As of December 31, 2016
|
||||||||||||||||||||
(in thousands)
|
Useful Life
Range
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying
Amount
|
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Net
Carrying Amount |
||||||||||||
Amortized Intangible Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Student and customer relationships
|
1–10 years (1)
|
|
$
|
224,872
|
|
|
$
|
74,304
|
|
|
$
|
150,568
|
|
|
$
|
129,616
|
|
|
$
|
55,863
|
|
|
$
|
73,753
|
|
Trade names and trademarks
|
2–10 years
|
|
58,917
|
|
|
33,143
|
|
|
25,774
|
|
|
55,240
|
|
|
29,670
|
|
|
25,570
|
|
||||||
Network affiliation agreements
|
15 years
|
|
42,600
|
|
|
2,067
|
|
|
40,533
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Databases and technology
|
3–6 years (1)
|
|
19,583
|
|
|
4,173
|
|
|
15,410
|
|
|
5,601
|
|
|
4,368
|
|
|
1,233
|
|
||||||
Noncompete agreements
|
2–5 years
|
|
2,080
|
|
|
1,549
|
|
|
531
|
|
|
1,730
|
|
|
1,404
|
|
|
326
|
|
||||||
Other
|
1–8 years
|
|
13,430
|
|
|
7,094
|
|
|
6,336
|
|
|
12,030
|
|
|
4,973
|
|
|
7,057
|
|
||||||
|
|
|
$
|
361,482
|
|
|
$
|
122,330
|
|
|
$
|
239,152
|
|
|
$
|
204,217
|
|
|
$
|
96,278
|
|
|
$
|
107,939
|
|
Indefinite-Lived Intangible Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Trade names and trademarks
|
|
|
$
|
82,651
|
|
|
|
|
|
|
|
|
$
|
65,192
|
|
|
|
|
|
|
|
||||
FCC licenses
|
|
|
26,600
|
|
|
|
|
|
|
—
|
|
|
|
|
|
||||||||||
Licensure and accreditation
|
|
|
650
|
|
|
|
|
|
|
|
|
834
|
|
|
|
|
|
|
|
||||||
|
|
|
$
|
109,901
|
|
|
|
|
|
|
$
|
66,026
|
|
|
|
|
|
(1)
|
As of December 31, 2016, the student and customer relationships’ minimum useful life was 2 years and the databases and technology’s maximum useful life was 5 years.
|
|
As of
|
||||||
|
September 30,
2017 |
|
December 31,
2016 |
||||
(in thousands)
|
|
||||||
7.25% unsecured notes due February 1, 2019
(1)
|
$
|
399,393
|
|
|
$
|
399,052
|
|
UK Credit facility
(2)
|
93,450
|
|
|
91,316
|
|
||
Other indebtedness
|
112
|
|
|
1,479
|
|
||
Total Debt
|
$
|
492,955
|
|
|
$
|
491,847
|
|
Less: current portion
|
(6,713
|
)
|
|
(6,128
|
)
|
||
Total Long-Term Debt
|
$
|
486,242
|
|
|
$
|
485,719
|
|
(1)
|
The carrying value is net of
$0.1 million
of unamortized debt issuance costs as of
September 30, 2017
and
December 31, 2016
, respectively.
|
(2)
|
The carrying value is net of
$0.4 million
and
$0.5 million
of unamortized debt issuance costs as of
September 30, 2017
and
December 31, 2016
, respectively.
|
|
As of September 30, 2017
|
||||||||||||||
(in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Money market investments
(1)
|
$
|
—
|
|
|
$
|
205,845
|
|
|
$
|
—
|
|
|
$
|
205,845
|
|
Marketable equity securities
(3)
|
495,599
|
|
|
—
|
|
|
—
|
|
|
495,599
|
|
||||
Other current investments
(4)
|
9,948
|
|
|
14,039
|
|
|
—
|
|
|
23,987
|
|
||||
Total Financial Assets
|
$
|
505,547
|
|
|
$
|
219,884
|
|
|
$
|
—
|
|
|
$
|
725,431
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Deferred compensation plan liabilities
(5)
|
$
|
—
|
|
|
$
|
43,575
|
|
|
$
|
—
|
|
|
$
|
43,575
|
|
Interest rate swap
(6)
|
—
|
|
|
595
|
|
|
—
|
|
|
595
|
|
||||
Mandatorily redeemable noncontrolling interest
(7)
|
—
|
|
|
—
|
|
|
12,584
|
|
|
12,584
|
|
||||
Total Financial Liabilities
|
$
|
—
|
|
|
$
|
44,170
|
|
|
$
|
12,584
|
|
|
$
|
56,754
|
|
|
As of December 31, 2016
|
||||||||||||||
(in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Money market investments
(1)
|
$
|
—
|
|
|
$
|
435,258
|
|
|
$
|
—
|
|
|
$
|
435,258
|
|
Commercial paper
(2)
|
49,882
|
|
|
—
|
|
|
—
|
|
|
49,882
|
|
||||
Marketable equity securities
(3)
|
424,229
|
|
|
—
|
|
|
—
|
|
|
424,229
|
|
||||
Other current investments
(4)
|
6,957
|
|
|
17,055
|
|
|
—
|
|
|
24,012
|
|
||||
Total Financial Assets
|
$
|
481,068
|
|
|
$
|
452,313
|
|
|
$
|
—
|
|
|
$
|
933,381
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Deferred compensation plan liabilities
(5)
|
$
|
—
|
|
|
$
|
46,300
|
|
|
$
|
—
|
|
|
$
|
46,300
|
|
Interest rate swap
(6)
|
—
|
|
|
365
|
|
|
—
|
|
|
365
|
|
||||
Mandatorily redeemable noncontrolling interest
(7)
|
—
|
|
|
—
|
|
|
12,584
|
|
|
12,584
|
|
||||
Total Financial Liabilities
|
$
|
—
|
|
|
$
|
46,665
|
|
|
$
|
12,584
|
|
|
$
|
59,249
|
|
(1)
|
The Company’s money market investments are included in cash, cash equivalents and restricted cash and the value considers the liquidity of the counterparty.
|
(2)
|
The Company’s commercial paper investments with original maturities of three months or less are included in cash and cash equivalents.
|
(3)
|
The Company’s investments in marketable equity securities are classified as available-for-sale.
|
(4)
|
Includes U.S. Government Securities, corporate bonds, mutual funds and time deposits. These investments are valued using a market approach based on the quoted market prices of the security or inputs that include quoted market prices for similar instruments and are classified as either Level 1 or Level 2 in the valuation hierarchy.
|
(5)
|
Includes Graham Holdings Company’s Deferred Compensation Plan and supplemental savings plan benefits under the Graham Holdings Company’s Supplemental Executive Retirement Plan, which are included in accrued compensation and related benefits. These plans measure the market value of a participant’s balance in a notional investment account that is comprised primarily of mutual funds, which are based on observable market prices. However, since the deferred compensation obligations are not exchanged in an active market, they are classified as Level 2 in the fair value hierarchy. Realized and unrealized gains (losses) on deferred compensation are included in operating income.
|
(6)
|
Included in Other Liabilities. The Company utilized a market approach model using the notional amount of the interest rate swap multiplied by the observable inputs of time to maturity and market interest rates.
|
(7)
|
The fair value of the mandatorily redeemable noncontrolling interest is based on an EBITDA multiple, adjusted for working capital and other items, which approximates fair value.
|
|
Three Months Ended
September 30 |
|
Nine Months Ended
September 30 |
||||||||||||
(in thousands, except per share amounts)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Numerator for basic earnings per share:
|
|
|
|
|
|
|
|
||||||||
Net income attributable to Graham Holdings Company common stockholders
|
$
|
24,784
|
|
|
$
|
33,126
|
|
|
$
|
87,866
|
|
|
$
|
131,672
|
|
Less: Dividends paid-common stock outstanding and unvested restricted shares
|
(7,047
|
)
|
|
(6,796
|
)
|
|
(28,329
|
)
|
|
(27,329
|
)
|
||||
Undistributed earnings
|
17,737
|
|
|
26,330
|
|
|
59,537
|
|
|
104,343
|
|
||||
Percent allocated to common stockholders
|
99.07
|
%
|
|
98.70
|
%
|
|
99.07
|
%
|
|
98.70
|
%
|
||||
|
17,572
|
|
|
25,987
|
|
|
58,981
|
|
|
102,987
|
|
||||
Add: Dividends paid-common stock outstanding
|
6,981
|
|
|
6,708
|
|
|
28,066
|
|
|
26,976
|
|
||||
Numerator for basic earnings per share
|
$
|
24,553
|
|
|
$
|
32,695
|
|
|
$
|
87,047
|
|
|
$
|
129,963
|
|
Add: Additional undistributed earnings due to dilutive stock options
|
1
|
|
|
2
|
|
|
4
|
|
|
7
|
|
||||
Numerator for diluted earnings per share
|
$
|
24,554
|
|
|
$
|
32,697
|
|
|
$
|
87,051
|
|
|
$
|
129,970
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
||||||
Denominator for basic earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares outstanding
|
5,518
|
|
|
5,544
|
|
|
5,530
|
|
|
5,570
|
|
||||
Add: Effect of dilutive stock options
|
36
|
|
|
30
|
|
|
37
|
|
|
30
|
|
||||
Denominator for diluted earnings per share
|
5,554
|
|
|
5,574
|
|
|
5,567
|
|
|
5,600
|
|
||||
Graham Holdings Company Common Stockholders:
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share
|
$
|
4.45
|
|
|
$
|
5.90
|
|
|
$
|
15.74
|
|
|
$
|
23.33
|
|
Diluted earnings per share
|
$
|
4.42
|
|
|
$
|
5.87
|
|
|
$
|
15.64
|
|
|
$
|
23.21
|
|
|
Three Months Ended
September 30 |
|
Nine Months Ended
September 30 |
||||||||
(in thousands)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Weighted average restricted stock
|
30
|
|
|
42
|
|
|
29
|
|
|
40
|
|
|
Three Months Ended September 30
|
|
Nine Months Ended September 30
|
||||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Service cost
|
$
|
4,591
|
|
|
$
|
5,040
|
|
|
$
|
14,096
|
|
|
$
|
15,422
|
|
Interest cost
|
11,980
|
|
|
12,845
|
|
|
35,945
|
|
|
38,763
|
|
||||
Expected return on assets
|
(30,338
|
)
|
|
(30,348
|
)
|
|
(91,078
|
)
|
|
(91,122
|
)
|
||||
Amortization of prior service cost
|
42
|
|
|
74
|
|
|
128
|
|
|
223
|
|
||||
Recognized actuarial gain
|
(1,039
|
)
|
|
—
|
|
|
(3,372
|
)
|
|
—
|
|
||||
Net Periodic Benefit
|
(14,764
|
)
|
|
(12,389
|
)
|
|
(44,281
|
)
|
|
(36,714
|
)
|
||||
Special separation benefit expense
|
932
|
|
|
—
|
|
|
932
|
|
|
—
|
|
||||
Total Benefit
|
$
|
(13,832
|
)
|
|
$
|
(12,389
|
)
|
|
$
|
(43,349
|
)
|
|
$
|
(36,714
|
)
|
|
Three Months Ended September 30
|
|
Nine Months Ended September 30
|
||||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Service cost
|
$
|
214
|
|
|
$
|
246
|
|
|
$
|
643
|
|
|
$
|
738
|
|
Interest cost
|
1,059
|
|
|
1,096
|
|
|
3,175
|
|
|
3,288
|
|
||||
Amortization of prior service cost
|
114
|
|
|
114
|
|
|
342
|
|
|
342
|
|
||||
Recognized actuarial loss
|
444
|
|
|
665
|
|
|
1,331
|
|
|
1,995
|
|
||||
Net Periodic Cost
|
$
|
1,831
|
|
|
$
|
2,121
|
|
|
$
|
5,491
|
|
|
$
|
6,363
|
|
|
As of
|
||||
|
September 30,
2017 |
|
December 31,
2016 |
||
|
|
||||
U.S. equities
|
51
|
%
|
|
53
|
%
|
U.S. stock index fund
|
32
|
%
|
|
30
|
%
|
U.S. fixed income
|
11
|
%
|
|
11
|
%
|
International equities
|
6
|
%
|
|
6
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Three Months Ended September 30
|
|
Nine Months Ended September 30
|
||||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Service cost
|
$
|
257
|
|
|
$
|
346
|
|
|
$
|
771
|
|
|
$
|
1,039
|
|
Interest cost
|
195
|
|
|
308
|
|
|
584
|
|
|
923
|
|
||||
Amortization of prior service credit
|
(38
|
)
|
|
(83
|
)
|
|
(112
|
)
|
|
(251
|
)
|
||||
Recognized actuarial gain
|
(972
|
)
|
|
(376
|
)
|
|
(2,917
|
)
|
|
(1,127
|
)
|
||||
Net Periodic (Benefit) Cost
|
$
|
(558
|
)
|
|
$
|
195
|
|
|
$
|
(1,674
|
)
|
|
$
|
584
|
|
|
Three Months Ended
September 30 |
|
Nine Months Ended
September 30 |
||||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Foreign currency gain (loss), net
|
$
|
1,414
|
|
|
$
|
(3,797
|
)
|
|
$
|
6,608
|
|
|
$
|
(33,324
|
)
|
(Loss) gain on sales of businesses
|
—
|
|
|
—
|
|
|
(342
|
)
|
|
18,931
|
|
||||
Loss on write-downs of cost method investments
|
(200
|
)
|
|
(15,000
|
)
|
|
(200
|
)
|
|
(15,161
|
)
|
||||
Gain on sale of land
|
—
|
|
|
—
|
|
|
—
|
|
|
34,072
|
|
||||
Gain on sales of marketable equity securities (see Note 2)
|
—
|
|
|
—
|
|
|
—
|
|
|
6,256
|
|
||||
Gain on the formation of a joint venture
|
—
|
|
|
—
|
|
|
—
|
|
|
3,232
|
|
||||
Other, net
|
749
|
|
|
572
|
|
|
815
|
|
|
1,865
|
|
||||
Total Other Non-Operating Income (Expense)
|
$
|
1,963
|
|
|
$
|
(18,225
|
)
|
|
$
|
6,881
|
|
|
$
|
15,871
|
|
|
Three Months Ended September 30
|
||||||||||||||||||||||
|
2017
|
|
2016
|
||||||||||||||||||||
|
Before-Tax
|
|
Income
|
|
After-Tax
|
|
Before-Tax
|
|
Income
|
|
After-Tax
|
||||||||||||
(in thousands)
|
Amount
|
|
Tax
|
|
Amount
|
|
Amount
|
|
Tax
|
|
Amount
|
||||||||||||
Foreign currency translation adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Translation adjustments arising during the period
|
$
|
11,470
|
|
|
$
|
—
|
|
|
$
|
11,470
|
|
|
$
|
(353
|
)
|
|
$
|
—
|
|
|
$
|
(353
|
)
|
Unrealized gains on available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized gains for the period, net
|
47,836
|
|
|
(19,134
|
)
|
|
28,702
|
|
|
12,154
|
|
|
(4,862
|
)
|
|
7,292
|
|
||||||
Pension and other postretirement plans:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Amortization of net prior service cost included in net income
|
118
|
|
|
(47
|
)
|
|
71
|
|
|
105
|
|
|
(41
|
)
|
|
64
|
|
||||||
Amortization of net actuarial (gain) loss included in net income
|
(1,567
|
)
|
|
627
|
|
|
(940
|
)
|
|
289
|
|
|
(116
|
)
|
|
173
|
|
||||||
|
(1,449
|
)
|
|
580
|
|
|
(869
|
)
|
|
394
|
|
|
(157
|
)
|
|
237
|
|
||||||
Cash flow hedge:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(Loss) gain for the period
|
(72
|
)
|
|
14
|
|
|
(58
|
)
|
|
49
|
|
|
(20
|
)
|
|
29
|
|
||||||
Other Comprehensive Income
|
$
|
57,785
|
|
|
$
|
(18,540
|
)
|
|
$
|
39,245
|
|
|
$
|
12,244
|
|
|
$
|
(5,039
|
)
|
|
$
|
7,205
|
|
|
Nine Months Ended September 30
|
||||||||||||||||||||||
|
2017
|
|
2016
|
||||||||||||||||||||
|
Before-Tax
|
|
Income
|
|
After-Tax
|
|
Before-Tax
|
|
Income
|
|
After-Tax
|
||||||||||||
(in thousands)
|
Amount
|
|
Tax
|
|
Amount
|
|
Amount
|
|
Tax
|
|
Amount
|
||||||||||||
Foreign currency translation adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Translation adjustments arising during the period
|
$
|
34,776
|
|
|
$
|
—
|
|
|
$
|
34,776
|
|
|
$
|
(1,629
|
)
|
|
$
|
—
|
|
|
$
|
(1,629
|
)
|
Unrealized gains on available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized gains for the period, net
|
71,370
|
|
|
(28,548
|
)
|
|
42,822
|
|
|
7,190
|
|
|
(2,876
|
)
|
|
4,314
|
|
||||||
Reclassification of realized gain on sale of available-for-sale securities included in net income
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,256
|
)
|
|
2,502
|
|
|
(3,754
|
)
|
||||||
|
71,370
|
|
|
(28,548
|
)
|
|
42,822
|
|
|
934
|
|
|
(374
|
)
|
|
560
|
|
||||||
Pension and other postretirement plans:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Amortization of net prior service cost included in net income
|
358
|
|
|
(143
|
)
|
|
215
|
|
|
314
|
|
|
(125
|
)
|
|
189
|
|
||||||
Amortization of net actuarial (gain) loss included in net income
|
(4,958
|
)
|
|
1,983
|
|
|
(2,975
|
)
|
|
868
|
|
|
(347
|
)
|
|
521
|
|
||||||
|
(4,600
|
)
|
|
1,840
|
|
|
(2,760
|
)
|
|
1,182
|
|
|
(472
|
)
|
|
710
|
|
||||||
Cash flow hedge:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(Loss) gain for the period
|
(215
|
)
|
|
43
|
|
|
(172
|
)
|
|
49
|
|
|
(20
|
)
|
|
29
|
|
||||||
Other Comprehensive Income
|
$
|
101,331
|
|
|
$
|
(26,665
|
)
|
|
$
|
74,666
|
|
|
$
|
536
|
|
|
$
|
(866
|
)
|
|
$
|
(330
|
)
|
(in thousands, net of taxes)
|
Cumulative
Foreign
Currency
Translation
Adjustment
|
|
Unrealized Gain
on Available-for- Sale Securities
|
|
Unrealized Gain
on Pensions
and Other
Postretirement
Plans
|
|
Cash Flow
Hedge
|
|
Accumulated
Other
Comprehensive
Income
|
||||||||||
Balance as of December 31, 2016
|
$
|
(26,998
|
)
|
|
$
|
92,931
|
|
|
$
|
170,830
|
|
|
$
|
(277
|
)
|
|
$
|
236,486
|
|
Other comprehensive income (loss) before reclassifications
|
34,776
|
|
|
42,822
|
|
|
—
|
|
|
(270
|
)
|
|
77,328
|
|
|||||
Net amount reclassified from accumulated other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
(2,760
|
)
|
|
98
|
|
|
(2,662
|
)
|
|||||
Other comprehensive income (loss), net of tax
|
34,776
|
|
|
42,822
|
|
|
(2,760
|
)
|
|
(172
|
)
|
|
74,666
|
|
|||||
Balance as of September 30, 2017
|
$
|
7,778
|
|
|
$
|
135,753
|
|
|
$
|
168,070
|
|
|
$
|
(449
|
)
|
|
$
|
311,152
|
|
|
Three Months Ended
September 30 |
|
Nine Months Ended
September 30 |
|
Affected Line Item in the Condensed Consolidated Statement of Operations
|
||||||||||||
|
|
|
|||||||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|||||||||
Unrealized Gains on Available-for-sale Securities:
|
|
|
|
|
|
|
|
|
|
||||||||
Realized gain for the period
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(6,256
|
)
|
|
Other income (expense), net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,502
|
|
|
Provision for Income Taxes
|
||||
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,754
|
)
|
|
Net of Tax
|
||||
Pension and Other Postretirement Plans:
|
|
|
|
|
|
|
|
|
|
||||||||
Amortization of net prior service cost
|
118
|
|
|
105
|
|
|
358
|
|
|
314
|
|
|
(1)
|
||||
Amortization of net actuarial (gain) loss
|
(1,567
|
)
|
|
289
|
|
|
(4,958
|
)
|
|
868
|
|
|
(1)
|
||||
|
(1,449
|
)
|
|
394
|
|
|
(4,600
|
)
|
|
1,182
|
|
|
Before tax
|
||||
|
580
|
|
|
(157
|
)
|
|
1,840
|
|
|
(472
|
)
|
|
Provision for Income Taxes
|
||||
|
(869
|
)
|
|
237
|
|
|
(2,760
|
)
|
|
710
|
|
|
Net of Tax
|
||||
Cash Flow Hedge
|
|
|
|
|
|
|
|
|
|
||||||||
|
51
|
|
|
(3
|
)
|
|
123
|
|
|
(3
|
)
|
|
Interest expense
|
||||
|
(11
|
)
|
|
1
|
|
|
(25
|
)
|
|
1
|
|
|
Provision for Income Taxes
|
||||
|
40
|
|
|
(2
|
)
|
|
98
|
|
|
(2
|
)
|
|
Net of Tax
|
||||
Total reclassification for the period
|
$
|
(829
|
)
|
|
$
|
235
|
|
|
$
|
(2,662
|
)
|
|
$
|
(3,046
|
)
|
|
Net of Tax
|
(1)
|
These accumulated other comprehensive income components are included in the computation of net periodic pension and postretirement plan cost (see Note 8).
|
|
Three Months Ended September 30
|
|
Nine Months Ended September 30
|
||||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Operating Revenues
|
|
|
|
|
|
|
|
||||||||
Education
|
$
|
376,805
|
|
|
$
|
386,936
|
|
|
$
|
1,136,201
|
|
|
$
|
1,207,225
|
|
Television broadcasting
|
101,295
|
|
|
112,389
|
|
|
298,893
|
|
|
300,927
|
|
||||
Other businesses
|
179,125
|
|
|
122,313
|
|
|
480,935
|
|
|
344,298
|
|
||||
Corporate office
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Intersegment elimination
|
—
|
|
|
—
|
|
|
—
|
|
|
(139
|
)
|
||||
|
$
|
657,225
|
|
|
$
|
621,638
|
|
|
$
|
1,916,029
|
|
|
$
|
1,852,311
|
|
Income (Loss) from Operations
|
|
|
|
|
|
|
|
||||||||
Education
|
$
|
13,391
|
|
|
$
|
16,333
|
|
|
$
|
55,347
|
|
|
$
|
63,713
|
|
Television broadcasting
|
32,948
|
|
|
59,159
|
|
|
98,181
|
|
|
144,594
|
|
||||
Other businesses
|
(7,033
|
)
|
|
(10,801
|
)
|
|
(26,515
|
)
|
|
(21,593
|
)
|
||||
Corporate office
|
5,265
|
|
|
3,342
|
|
|
14,973
|
|
|
7,331
|
|
||||
|
$
|
44,571
|
|
|
$
|
68,033
|
|
|
$
|
141,986
|
|
|
$
|
194,045
|
|
Equity in Earnings (Losses) of Affiliates, Net
|
(532
|
)
|
|
(1,008
|
)
|
|
1,448
|
|
|
(895
|
)
|
||||
Interest Expense, Net
|
(7,758
|
)
|
|
(7,874
|
)
|
|
(22,386
|
)
|
|
(22,481
|
)
|
||||
Other Income (Expense), Net
|
1,963
|
|
|
(18,225
|
)
|
|
6,881
|
|
|
15,871
|
|
||||
Income Before Income Taxes
|
$
|
38,244
|
|
|
$
|
40,926
|
|
|
$
|
127,929
|
|
|
$
|
186,540
|
|
Depreciation of Property, Plant and Equipment
|
|
|
|
|
|
|
|
||||||||
Education
|
$
|
8,085
|
|
|
$
|
9,977
|
|
|
$
|
24,994
|
|
|
$
|
31,322
|
|
Television broadcasting
|
3,118
|
|
|
2,540
|
|
|
8,703
|
|
|
7,367
|
|
||||
Other businesses
|
4,520
|
|
|
3,289
|
|
|
11,968
|
|
|
9,389
|
|
||||
Corporate office
|
279
|
|
|
291
|
|
|
860
|
|
|
825
|
|
||||
|
$
|
16,002
|
|
|
$
|
16,097
|
|
|
$
|
46,525
|
|
|
$
|
48,903
|
|
Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets
|
|
|
|
|
|
|
|
|
|
||||||
Education
|
$
|
1,355
|
|
|
$
|
1,773
|
|
|
$
|
3,798
|
|
|
$
|
5,158
|
|
Television broadcasting
|
1,071
|
|
|
63
|
|
|
2,943
|
|
|
189
|
|
||||
Other businesses
|
8,809
|
|
|
4,784
|
|
|
31,085
|
|
|
13,813
|
|
||||
Corporate office
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
11,235
|
|
|
$
|
6,620
|
|
|
$
|
37,826
|
|
|
$
|
19,160
|
|
Net Pension (Credit) Expense
|
|
|
|
|
|
|
|
|
|
||||||
Education
|
$
|
2,430
|
|
|
$
|
2,838
|
|
|
$
|
7,289
|
|
|
$
|
8,965
|
|
Television broadcasting
|
485
|
|
|
428
|
|
|
1,457
|
|
|
1,285
|
|
||||
Other businesses
|
1,375
|
|
|
279
|
|
|
2,273
|
|
|
839
|
|
||||
Corporate office
|
(18,122
|
)
|
|
(15,934
|
)
|
|
(54,368
|
)
|
|
(47,803
|
)
|
||||
|
$
|
(13,832
|
)
|
|
$
|
(12,389
|
)
|
|
$
|
(43,349
|
)
|
|
$
|
(36,714
|
)
|
|
As of
|
||||||
(in thousands)
|
September 30,
2017 |
|
December 31,
2016 |
||||
Identifiable Assets
|
|
|
|
||||
Education
|
$
|
1,615,116
|
|
|
$
|
1,479,267
|
|
Television broadcasting
|
447,702
|
|
|
336,631
|
|
||
Other businesses
|
918,684
|
|
|
796,935
|
|
||
Corporate office
|
157,550
|
|
|
455,209
|
|
||
|
$
|
3,139,052
|
|
|
$
|
3,068,042
|
|
Investments in Marketable Equity Securities
|
495,599
|
|
|
424,229
|
|
||
Investments in Affiliates
|
122,166
|
|
|
58,806
|
|
||
Prepaid Pension Cost
|
863,098
|
|
|
881,593
|
|
||
Total Assets
|
$
|
4,619,915
|
|
|
$
|
4,432,670
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30
|
|
September 30
|
||||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Operating Revenues
|
|
|
|
|
|
|
|
||||||||
Higher education
|
$
|
133,459
|
|
|
$
|
148,602
|
|
|
$
|
416,973
|
|
|
$
|
472,131
|
|
Test preparation
|
72,680
|
|
|
78,291
|
|
|
212,978
|
|
|
224,102
|
|
||||
Kaplan international
|
171,259
|
|
|
160,456
|
|
|
507,568
|
|
|
512,068
|
|
||||
Kaplan corporate and other
|
49
|
|
|
47
|
|
|
120
|
|
|
190
|
|
||||
Intersegment elimination
|
(642
|
)
|
|
(460
|
)
|
|
(1,438
|
)
|
|
(1,266
|
)
|
||||
|
$
|
376,805
|
|
|
$
|
386,936
|
|
|
$
|
1,136,201
|
|
|
$
|
1,207,225
|
|
Income (Loss) from Operations
|
|
|
|
|
|
|
|
|
|
|
|||||
Higher education
|
$
|
8,809
|
|
|
$
|
11,494
|
|
|
$
|
39,124
|
|
|
$
|
50,037
|
|
Test preparation
|
7,330
|
|
|
8,588
|
|
|
10,207
|
|
|
13,314
|
|
||||
Kaplan international
|
5,348
|
|
|
1,561
|
|
|
29,009
|
|
|
22,937
|
|
||||
Kaplan corporate and other
|
(8,037
|
)
|
|
(5,310
|
)
|
|
(22,957
|
)
|
|
(22,526
|
)
|
||||
Intersegment elimination
|
(59
|
)
|
|
—
|
|
|
(36
|
)
|
|
(49
|
)
|
||||
|
$
|
13,391
|
|
|
$
|
16,333
|
|
|
$
|
55,347
|
|
|
$
|
63,713
|
|
Depreciation of Property, Plant and Equipment
|
|
|
|
|
|
|
|
|
|
|
|
||||
Higher education
|
$
|
2,768
|
|
|
$
|
4,157
|
|
|
$
|
9,448
|
|
|
$
|
12,325
|
|
Test preparation
|
1,407
|
|
|
1,441
|
|
|
4,080
|
|
|
4,837
|
|
||||
Kaplan international
|
3,780
|
|
|
4,360
|
|
|
11,071
|
|
|
13,739
|
|
||||
Kaplan corporate and other
|
130
|
|
|
19
|
|
|
395
|
|
|
421
|
|
||||
|
$
|
8,085
|
|
|
$
|
9,977
|
|
|
$
|
24,994
|
|
|
$
|
31,322
|
|
Amortization of Intangible Assets
|
$
|
1,355
|
|
|
$
|
1,773
|
|
|
$
|
3,798
|
|
|
$
|
5,158
|
|
Pension Expense
|
|
|
|
|
|
|
|
|
|
|
|
||||
Higher education
|
$
|
548
|
|
|
$
|
1,905
|
|
|
$
|
4,636
|
|
|
$
|
5,715
|
|
Test preparation
|
244
|
|
|
768
|
|
|
2,066
|
|
|
2,304
|
|
||||
Kaplan international
|
24
|
|
|
67
|
|
|
198
|
|
|
201
|
|
||||
Kaplan corporate and other
|
1,614
|
|
|
98
|
|
|
389
|
|
|
745
|
|
||||
|
$
|
2,430
|
|
|
$
|
2,838
|
|
|
$
|
7,289
|
|
|
$
|
8,965
|
|
|
As of
|
||||||
(in thousands)
|
September 30,
2017 |
|
December 31,
2016 |
||||
Identifiable assets
|
|
|
|
||||
Higher education
|
$
|
349,756
|
|
|
$
|
373,127
|
|
Test preparation
|
135,442
|
|
|
133,709
|
|
||
Kaplan international
|
1,110,596
|
|
|
950,922
|
|
||
Kaplan corporate and other
|
19,322
|
|
|
21,509
|
|
||
|
$
|
1,615,116
|
|
|
$
|
1,479,267
|
|
•
|
$1.4 million
in non-operating foreign currency gains (after-tax impact of
$0.9 million
, or
$0.16
per share)
.
|
•
|
a
$15.0 million
non-operating expense from the write-down of a cost method investment (after-tax impact of
$9.6 million
, or
$1.70
per share);
|
•
|
$3.8 million
in non-operating foreign currency losses (after-tax impact of
$2.4 million
, or
$0.43
per share); and
|
•
|
a net nonrecurring
$8.3 million
deferred tax benefit related to Kaplan's international operations (
$1.47
per share).
|
•
|
a
$9.2 million
goodwill and other long-lived asset impairment charge in other businesses (after-tax impact of
$5.8 million
, or
$1.03
per share);
|
•
|
$6.6 million
in non-operating foreign currency gains (after-tax impact of
$4.2 million
, or
$0.74
per share); and
|
•
|
$5.9 million
in income tax benefits related to stock compensation (
$1.06
per share).
|
•
|
a
$40.3 million
non-operating gain from the sales of land and marketable equity securities (after-tax impact of
$25.0 million
, or
$4.42
per share);
|
•
|
a
$22.2 million
non-operating gain arising from the sale of a business and the formation of a joint venture (after-tax impact of
$13.6 million
, or
$2.37
per share);
|
•
|
a
$15.0 million
non-operating expense from the write-down of a cost method investment (after-tax impact of
$9.6 million
, or
$1.70
per share);
|
•
|
$33.3 million
in non-operating foreign currency losses (after-tax impact of
$21.3 million
, or
$3.76
per share);
|
•
|
a net nonrecurring
$8.3 million
deferred tax benefit related to Kaplan's international operations (
$1.47
per share); and
|
•
|
a favorable
$5.6 million
out of period deferred tax adjustment related to the KHE goodwill impairment recorded in the third quarter of 2015 (
$1.00
per share).
|
|
Three Months Ended
|
|
|
|
Nine Months Ended
|
|
|
||||||||||||||
|
September 30
|
|
|
|
September 30
|
|
|
||||||||||||||
(in thousands)
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
||||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Higher education
|
$
|
133,459
|
|
|
$
|
148,602
|
|
|
(10
|
)
|
|
$
|
416,973
|
|
|
$
|
472,131
|
|
|
(12
|
)
|
Test preparation
|
72,680
|
|
|
78,291
|
|
|
(7
|
)
|
|
212,978
|
|
|
224,102
|
|
|
(5
|
)
|
||||
Kaplan international
|
171,259
|
|
|
160,456
|
|
|
7
|
|
|
507,568
|
|
|
512,068
|
|
|
(1
|
)
|
||||
Kaplan corporate and other
|
49
|
|
|
47
|
|
|
4
|
|
|
120
|
|
|
190
|
|
|
(37
|
)
|
||||
Intersegment elimination
|
(642
|
)
|
|
(460
|
)
|
|
—
|
|
|
(1,438
|
)
|
|
(1,266
|
)
|
|
—
|
|
||||
|
$
|
376,805
|
|
|
$
|
386,936
|
|
|
(3
|
)
|
|
$
|
1,136,201
|
|
|
$
|
1,207,225
|
|
|
(6
|
)
|
Operating Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Higher education
|
$
|
8,809
|
|
|
$
|
11,494
|
|
|
(23
|
)
|
|
$
|
39,124
|
|
|
$
|
50,037
|
|
|
(22
|
)
|
Test preparation
|
7,330
|
|
|
8,588
|
|
|
(15
|
)
|
|
10,207
|
|
|
13,314
|
|
|
(23
|
)
|
||||
Kaplan international
|
5,348
|
|
|
1,561
|
|
|
—
|
|
|
29,009
|
|
|
22,937
|
|
|
26
|
|
||||
Kaplan corporate and other
|
(6,682
|
)
|
|
(3,537
|
)
|
|
(89
|
)
|
|
(19,159
|
)
|
|
(17,368
|
)
|
|
(10
|
)
|
||||
Amortization of intangible assets
|
(1,355
|
)
|
|
(1,773
|
)
|
|
24
|
|
|
(3,798
|
)
|
|
(5,158
|
)
|
|
26
|
|
||||
Intersegment elimination
|
(59
|
)
|
|
—
|
|
|
—
|
|
|
(36
|
)
|
|
(49
|
)
|
|
—
|
|
||||
|
$
|
13,391
|
|
|
$
|
16,333
|
|
|
(18
|
)
|
|
$
|
55,347
|
|
|
$
|
63,713
|
|
|
(13
|
)
|
|
|
Three Months Ended
|
|
|
|
Nine Months Ended
|
|
|
||||||||||||||
|
|
September 30
|
|
%
|
|
September 30
|
|
%
|
||||||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
Change
|
|
2017
|
|
2016
|
|
Change
|
||||||||||
Operating Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Manufacturing
|
|
$
|
115,594
|
|
|
$
|
62,207
|
|
|
86
|
|
|
$
|
298,164
|
|
|
$
|
176,908
|
|
|
69
|
|
Healthcare
|
|
40,473
|
|
|
37,690
|
|
|
7
|
|
|
115,592
|
|
|
110,068
|
|
|
5
|
|
||||
SocialCode
|
|
14,497
|
|
|
15,180
|
|
|
(4
|
)
|
|
41,926
|
|
|
38,961
|
|
|
8
|
|
||||
Other
|
|
8,561
|
|
|
7,236
|
|
|
18
|
|
|
25,253
|
|
|
18,361
|
|
|
38
|
|
||||
|
|
$
|
179,125
|
|
|
$
|
122,313
|
|
|
46
|
|
|
$
|
480,935
|
|
|
$
|
344,298
|
|
|
40
|
|
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Manufacturing
|
|
$
|
109,813
|
|
|
$
|
58,430
|
|
|
88
|
|
|
$
|
292,893
|
|
|
$
|
169,145
|
|
|
73
|
|
Healthcare
|
|
39,553
|
|
|
36,383
|
|
|
9
|
|
|
115,214
|
|
|
107,288
|
|
|
7
|
|
||||
SocialCode
|
|
20,745
|
|
|
26,017
|
|
|
(20
|
)
|
|
50,078
|
|
|
54,223
|
|
|
(8
|
)
|
||||
Other
|
|
16,047
|
|
|
12,284
|
|
|
31
|
|
|
49,265
|
|
|
35,235
|
|
|
40
|
|
||||
|
|
$
|
186,158
|
|
|
$
|
133,114
|
|
|
40
|
|
|
$
|
507,450
|
|
|
$
|
365,891
|
|
|
39
|
|
Operating Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Manufacturing
|
|
$
|
5,781
|
|
|
$
|
3,777
|
|
|
53
|
|
|
$
|
5,271
|
|
|
$
|
7,763
|
|
|
(32
|
)
|
Healthcare
|
|
920
|
|
|
1,307
|
|
|
(30
|
)
|
|
378
|
|
|
2,780
|
|
|
(86
|
)
|
||||
SocialCode
|
|
(6,248
|
)
|
|
(10,837
|
)
|
|
42
|
|
|
(8,152
|
)
|
|
(15,262
|
)
|
|
47
|
|
||||
Other
|
|
(7,486
|
)
|
|
(5,048
|
)
|
|
(48
|
)
|
|
(24,012
|
)
|
|
(16,874
|
)
|
|
(42
|
)
|
||||
|
|
$
|
(7,033
|
)
|
|
$
|
(10,801
|
)
|
|
35
|
|
|
$
|
(26,515
|
)
|
|
$
|
(21,593
|
)
|
|
(23
|
)
|
Depreciation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Manufacturing
|
|
$
|
2,717
|
|
|
$
|
1,809
|
|
|
50
|
|
|
$
|
6,629
|
|
|
$
|
5,588
|
|
|
19
|
|
Healthcare
|
|
1,166
|
|
|
686
|
|
|
70
|
|
|
3,429
|
|
|
2,090
|
|
|
64
|
|
||||
SocialCode
|
|
256
|
|
|
241
|
|
|
6
|
|
|
753
|
|
|
683
|
|
|
10
|
|
||||
Other
|
|
381
|
|
|
553
|
|
|
(31
|
)
|
|
1,157
|
|
|
1,028
|
|
|
13
|
|
||||
|
|
$
|
4,520
|
|
|
$
|
3,289
|
|
|
37
|
|
|
$
|
11,968
|
|
|
$
|
9,389
|
|
|
27
|
|
Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Manufacturing
|
|
$
|
6,306
|
|
|
$
|
3,089
|
|
|
—
|
|
|
$
|
25,117
|
|
|
$
|
8,722
|
|
|
—
|
|
Healthcare
|
|
2,420
|
|
|
1,674
|
|
|
45
|
|
|
5,718
|
|
|
5,028
|
|
|
14
|
|
||||
SocialCode
|
|
83
|
|
|
—
|
|
|
—
|
|
|
250
|
|
|
—
|
|
|
—
|
|
||||
Other
|
|
—
|
|
|
21
|
|
|
—
|
|
|
—
|
|
|
63
|
|
|
—
|
|
||||
|
|
$
|
8,809
|
|
|
$
|
4,784
|
|
|
84
|
|
|
$
|
31,085
|
|
|
$
|
13,813
|
|
|
—
|
|
Pension Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Manufacturing
|
|
$
|
947
|
|
|
$
|
24
|
|
|
—
|
|
|
$
|
994
|
|
|
$
|
62
|
|
|
—
|
|
Healthcare
|
|
166
|
|
|
—
|
|
|
—
|
|
|
498
|
|
|
—
|
|
|
—
|
|
||||
SocialCode
|
|
149
|
|
|
135
|
|
|
10
|
|
|
445
|
|
|
406
|
|
|
10
|
|
||||
Other
|
|
113
|
|
|
120
|
|
|
(6
|
)
|
|
336
|
|
|
371
|
|
|
(9
|
)
|
||||
|
|
$
|
1,375
|
|
|
$
|
279
|
|
|
—
|
|
|
$
|
2,273
|
|
|
$
|
839
|
|
|
—
|
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plan*
|
|
Maximum Number of Shares that May Yet Be Purchased Under the Plan*
|
|||||
July
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
223,526
|
|
August
|
|
41,258
|
|
|
586.17
|
|
|
41,258
|
|
|
182,268
|
|
|
September
|
|
19,031
|
|
|
568.28
|
|
|
19,031
|
|
|
163,237
|
|
|
|
|
60,289
|
|
|
$
|
580.52
|
|
|
60,289
|
|
|
|
Exhibit
Number
|
Description
|
|
|
2.1
|
|
|
|
3.1
|
|
|
|
3.2
|
|
|
|
3.3
|
|
|
|
4.1
|
|
|
|
4.2
|
|
|
|
31.1
|
|
|
|
31.2
|
|
|
|
32
|
|
|
|
101
|
The following financial information from Graham Holdings Company Quarterly Report on Form 10-Q for the period ended September 30, 2017, formatted in Extensible Business Reporting Language (XBRL): (i) Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2017 and 2016, (ii) Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2017 and 2016, (iii) Condensed Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016, (iv) Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2017 and 2016, and (v) Notes to Condensed Consolidated Financial Statements. Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed "furnished" and not "filed" or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, are deemed "furnished" and not "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise are not subject to liability under these sections.
|
*
|
Graham Holdings Company hereby undertakes to furnish supplementally a copy of any omitted exhibit or schedule to such agreement to the U.S. Securities and Exchange Commission upon request.
|
**
|
Furnished herewith.
|
|
|
GRAHAM HOLDINGS COMPANY
|
|
|
(Registrant)
|
|
|
|
Date: November 1, 2017
|
|
/s/ Timothy J. O’Shaughnessy
|
|
|
Timothy J. O’Shaughnessy,
President & Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
Date: November 1, 2017
|
|
/s/ Wallace R. Cooney
|
|
|
Wallace R. Cooney,
Senior Vice President-Finance
(Principal Financial Officer)
|
1 Year Graham Chart |
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