Releases
Graham Holdings Company Reports Second Quarter Earnings
The results for the second quarter of 2018 and 2017 were affected by a
number of items as described in the following paragraphs. Excluding
these items, net income attributable to common shares was
Items included in the Company’s net income for the second quarter of 2018:
-
$6.2 million in interest expense related to the settlement of a mandatorily redeemable noncontrolling interest ($1.14 per share); -
$11.4 million in debt extinguishment costs (after-tax impact of$8.6 million , or$1.60 per share); -
$2.6 million in net losses on marketable equity securities (after-tax impact of$1.9 million or$0.36 per share); and -
$2.3 million in non-operating foreign currency losses (after-tax impact of$1.7 million , or$0.32 per share).
Items included in the Company’s net income for the second quarter of 2017:
-
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); and -
$3.5 million in non-operating foreign currency gains (after-tax impact of$2.2 million , or$0.39 per share).
Revenue for the second quarter of 2018 was
For the first six months of 2018, the Company reported net income
attributable to common shares of
Items included in the Company’s net income for the first six months of 2018:
-
$6.2 million in interest expense related to the settlement of a mandatorily redeemable noncontrolling interest ($1.14 per share); -
$11.4 million in debt extinguishment costs (after-tax impact of$8.6 million , or$1.60 per share); -
$16.7 million in net losses on marketable equity securities (after-tax impact of$12.7 million , or$2.30 per share); -
a
$4.3 million gain on the Kaplan University Transaction (after-tax impact of$1.8 million , or$0.33 per share); -
$2.1 million in non-operating foreign currency losses (after-tax impact of$1.6 million , or$0.30 per share); and -
$1.8 million in income tax benefits related to stock compensation ($0.33 per share).
Items included in the Company’s net income for the first six months of 2017:
-
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); -
$5.2 million in non-operating foreign currency gains (after-tax impact of$3.3 million , or$0.58 per share); and -
$5.9 million in income tax benefits related to stock compensation ($1.06 per share).
Revenue for the first six months of 2018 was
On
Division Results
Education
Education division revenue totaled
For the first six months of 2018, education division revenue totaled
As a result of the KU Transaction that closed on
A summary of Kaplan’s operating results is as follows:
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
June 30 | June 30 | ||||||||||||||||||||||||||||
(in thousands) | 2018 | 2017 | % Change | 2018 | 2017 | % Change | |||||||||||||||||||||||
Revenue | |||||||||||||||||||||||||||||
Kaplan international | $ | 184,303 | $ | 171,747 | 7 | $ | 367,885 | $ | 336,309 | 9 | |||||||||||||||||||
Higher education | 85,981 | 111,840 | (23 | ) | 185,811 | 222,951 | (17 | ) | |||||||||||||||||||||
Test preparation | 68,604 | 75,730 | (9 | ) | 127,755 | 140,298 | (9 | ) | |||||||||||||||||||||
Professional (U.S.) | 31,057 | 27,364 | 13 | 64,413 | 60,563 | 6 | |||||||||||||||||||||||
Kaplan corporate and other | 442 | 57 | — | 727 | 71 | — | |||||||||||||||||||||||
Intersegment elimination | (382 | ) | (239 | ) | — | (1,087 | ) | (796 | ) | — | |||||||||||||||||||
$ | 370,005 | $ | 386,499 | (4 | ) | $ | 745,504 | $ | 759,396 | (2 | ) | ||||||||||||||||||
Operating Income (Loss) | |||||||||||||||||||||||||||||
Kaplan international | $ | 24,187 | $ | 15,954 | 52 | $ | 44,591 | $ | 23,661 | 88 | |||||||||||||||||||
Higher education | 11,219 | 13,140 | (15 | ) | 12,574 | 15,586 | (19 | ) | |||||||||||||||||||||
Test preparation | 6,120 | 5,741 | 7 | 6,641 | 2,877 | — | |||||||||||||||||||||||
Professional (U.S.) | 4,780 | 4,571 | 5 | 14,095 | 14,729 | (4 | ) | ||||||||||||||||||||||
Kaplan corporate and other | (7,100 | ) | (4,722 | ) | (50 | ) | (14,846 | ) | (11,665 | ) | (27 | ) | |||||||||||||||||
Amortization of intangible assets | (1,663 | ) | (1,323 | ) | (26 | ) | (2,812 | ) | (2,443 | ) | (15 | ) | |||||||||||||||||
Intersegment elimination | 11 | (30 | ) | — | 11 | 23 | — | ||||||||||||||||||||||
$ | 37,554 | $ | 33,331 | 13 | $ | 60,254 | $ | 42,768 | 41 | ||||||||||||||||||||
Prior to the KU Transaction closing on
In the second quarter and first six months of 2018, Higher Education
revenue was down 23% and 17%, respectively, and operating results
declined, due largely to the sale of KU on
Kaplan Test Preparation (KTP) includes Kaplan’s standardized test
preparation programs. KTP revenue declined 9% for the second quarter and
first six months of 2018 due to soft enrollments in certain test
preparation programs and the disposition of Dev Bootcamp, which made up
the majority of KTP’s new economy skills training programs. KTP
operating results improved in the second quarter and first six months of
2018, due primarily to decreased losses from the new economy skills
training programs. Operating losses for the new economy skills training
programs were
Kaplan Professional (U.S.) includes the domestic professional and other
continuing education businesses. In the second quarter of 2018, Kaplan
Professional (U.S.) revenue was up 13% and operating results improved
5%, due partly to the
Kaplan corporate and other represents unallocated expenses of Kaplan, Inc.’s corporate office, other minor businesses and certain shared activities, with increased healthcare and pension expense in 2018.
Revenue at the television broadcasting division increased 8% to
Revenue at the television broadcasting division increased 13% to
Manufacturing
Manufacturing includes four businesses: Dekko, a manufacturer of
electrical workspace solutions, architectural lighting and electrical
components and assemblies;
Manufacturing revenues and operating income increased in the second quarter and first six months of 2018 due primarily to the Hoover acquisition.
In the second quarter of 2017, the Company recorded a
Healthcare
SocialCode
SocialCode is a provider of marketing solutions on social, mobile and
video platforms. SocialCode revenue increased 2% for the first six
months of 2018, due to modest growth in digital advertising service
revenues. SocialCode reported operating losses of
Other Businesses
Other businesses include Slate and Foreign Policy, which publish online and print magazines and websites; and two investment stage businesses, Panoply and CyberVista. Losses from each of these businesses in the first half of 2018 adversely affected operating results.
Corporate Office
Corporate office includes the expenses of the Company’s corporate office and certain continuing obligations related to prior business dispositions.
Equity in Earnings (Losses) of Affiliates
At June 30, 2018, the Company held interests in a number of home health
and hospice joint ventures, and interests in several other affiliates.
In the second half of 2017, the Company acquired approximately 11% of
Net Interest Expense, Debt Extinguishment Costs and Related Balances
On
The Company incurred net interest expense of
At June 30, 2018, the Company had
Non-operating Pension and Postretirement Benefit Income, net
In the first quarter of 2018, the Company adopted new accounting guidance that changes the income statement classification of net periodic pension and postretirement pension cost. Under the new guidance, service cost is included in operating income, while the other components (including expected return on assets) are included in non-operating income. The new guidance was required to be applied retrospectively, with prior period financial information revised to reflect the reclassification. From a segment reporting perspective, this change had a significant impact on Corporate office reporting, with minimal impact on the television broadcasting and Kaplan corporate reporting.
The Company recorded net non-operating pension and postretirement
benefit income of
Loss on
In the first quarter of 2018, the Company adopted new guidance that
requires changes in the fair value of marketable equity securities to be
included in non-operating income (expense) on a prospective basis.
Overall, the Company recognized
Other Non-Operating Income (Expense)
The Company recorded total other non-operating income, net, of
The Company recorded total other non-operating income, net, of
Provision for Income Taxes
The Company’s effective tax rate for the first six months of 2018 was
24.9%. The Tax Cuts and Jobs Act was enacted in
The Company's effective tax rate for the first six months of 2017 was
29.7%. This low effective tax rate is due to a
Earnings Per Share
The calculation of diluted earnings per share for the second quarter and
first six months of 2018 was based on 5,362,277 and 5,417,162 weighted
average shares outstanding, compared to 5,577,275 and 5,573,167 for the
second quarter and first six months of 2017. At June 30, 2018, there
were 5,346,550 shares outstanding. On
Adoption of Revenue Recognition Standard
On
Forward-Looking Statements
This press release 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 | |||||||||||||||
June 30 | % | ||||||||||||||
(in thousands, except per share amounts) | 2018 | 2017 | Change | ||||||||||||
Operating revenues | $ | 672,677 | $ | 676,087 | (1 | ) | |||||||||
Operating expenses | 582,033 | 590,720 | (1 | ) | |||||||||||
Depreciation of property, plant and equipment | 13,619 | 15,871 | (14 | ) | |||||||||||
Amortization of intangible assets | 11,399 | 10,531 | 8 | ||||||||||||
Impairment of goodwill and other long-lived assets | — | 9,224 | — | ||||||||||||
Operating income | 65,626 | 49,741 | 32 | ||||||||||||
Equity in earnings of affiliates, net | 931 | 1,331 | (30 | ) | |||||||||||
Interest income | 1,901 | 1,173 | 62 | ||||||||||||
Interest expense | (17,165 | ) | (9,035 | ) | 90 | ||||||||||
Debt extinguishment costs | (11,378 | ) | — | — | |||||||||||
Non-operating pension and postretirement benefit income, net | 23,041 | 18,620 | 24 | ||||||||||||
Loss on marketable equity securities, net | (2,554 | ) | — | — | |||||||||||
Other income, net | 2,333 | 4,069 | (43 | ) | |||||||||||
Income before income taxes | 62,735 | 65,899 | (5 | ) | |||||||||||
Provision for income taxes | 16,100 | 23,900 | (33 | ) | |||||||||||
Net income | 46,635 | 41,999 | 11 | ||||||||||||
Net income attributable to noncontrolling interests | (69 | ) | (3 | ) | — | ||||||||||
Net Income Attributable to Graham Holdings Company Common Stockholders | $ | 46,566 | $ | 41,996 | 11 | ||||||||||
Per Share Information Attributable to Graham Holdings Company Common Stockholders |
|||||||||||||||
Basic net income per common share | $ | 8.69 | $ | 7.51 | 16 | ||||||||||
Basic average number of common shares outstanding | 5,325 | 5,539 | |||||||||||||
Diluted net income per common share | $ | 8.63 | $ | 7.46 | 16 | ||||||||||
Diluted average number of common shares outstanding | 5,362 | 5,577 | |||||||||||||
GRAHAM HOLDINGS COMPANY | ||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||
(Unaudited) | ||||||||||||||
Six Months Ended | ||||||||||||||
June 30 | % | |||||||||||||
(in thousands, except per share amounts) | 2018 | 2017 | Change | |||||||||||
Operating revenues | $ | 1,332,113 | $ | 1,258,804 | 6 | |||||||||
Operating expenses | 1,172,229 | 1,141,696 | 3 | |||||||||||
Depreciation of property, plant and equipment | 28,261 | 30,523 | (7 | ) | ||||||||||
Amortization of intangible assets | 21,783 | 17,367 | 25 | |||||||||||
Impairment of goodwill and other long-lived assets | — | 9,224 | — | |||||||||||
Operating income | 109,840 | 59,994 | 83 | |||||||||||
Equity in earnings of affiliates, net | 3,510 | 1,980 | 77 | |||||||||||
Interest income | 3,273 | 2,536 | 29 | |||||||||||
Interest expense | (25,236 | ) | (17,164 | ) | 47 | |||||||||
Debt extinguishment costs | (11,378 | ) | — | — | ||||||||||
Non-operating pension and postretirement benefit income, net | 44,427 | 37,421 | 19 | |||||||||||
Loss on marketable equity securities, net | (16,656 | ) | — | — | ||||||||||
Other income, net | 11,520 | 4,918 | — | |||||||||||
Income before income taxes | 119,300 | 89,685 | 33 | |||||||||||
Provision for income taxes | 29,700 | 26,600 | 12 | |||||||||||
Net income | 89,600 | 63,085 | 42 | |||||||||||
Net income attributable to noncontrolling interests | (143 | ) | (3 | ) | — | |||||||||
Net Income Attributable to Graham Holdings Company Common Stockholders | $ | 89,457 | $ | 63,082 | 42 | |||||||||
Per Share Information Attributable to Graham Holdings Company Common Stockholders | ||||||||||||||
Basic net income per common share | $ | 16.52 | $ | 11.29 | 46 | |||||||||
Basic average number of common shares outstanding | 5,380 | 5,537 | ||||||||||||
Diluted net income per common share | $ | 16.40 | $ | 11.21 | 46 | |||||||||
Diluted average number of common shares outstanding | 5,417 | 5,573 | ||||||||||||
GRAHAM HOLDINGS COMPANY | |||||||||||||||||||||||||||||
BUSINESS DIVISION INFORMATION | |||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
June 30 | % | June 30 | % | ||||||||||||||||||||||||||
(in thousands) | 2018 | 2017 | Change | 2018 | 2017 | Change | |||||||||||||||||||||||
Operating Revenues | |||||||||||||||||||||||||||||
Education | $ | 370,005 | $ | 386,499 | (4 | ) | $ | 745,504 | $ | 759,396 | (2 | ) | |||||||||||||||||
Television broadcasting | 114,086 | 106,102 | 8 | 222,888 | 197,598 | 13 | |||||||||||||||||||||||
Manufacturing | 126,462 | 120,672 | 5 | 243,868 | 182,570 | 34 | |||||||||||||||||||||||
Healthcare | 38,208 | 38,220 | — | 75,829 | 75,119 | 1 | |||||||||||||||||||||||
SocialCode | 14,770 | 14,855 | (1 | ) | 28,069 | 27,429 | 2 | ||||||||||||||||||||||
Other businesses | 9,167 | 9,739 | (6 | ) | 16,000 | 16,692 | (4 | ) | |||||||||||||||||||||
Corporate office | — | — | — | — | — | — | |||||||||||||||||||||||
Intersegment elimination | (21 | ) | — | — | (45 | ) | — | — | |||||||||||||||||||||
$ | 672,677 | $ | 676,087 | (1 | ) | $ | 1,332,113 | $ | 1,258,804 | 6 | |||||||||||||||||||
Operating Expenses | |||||||||||||||||||||||||||||
Education | $ | 332,451 | $ | 353,168 | (6 | ) | $ | 685,250 | $ | 716,628 | (4 | ) | |||||||||||||||||
Television broadcasting | 72,968 | 66,325 | 10 | 141,228 | 131,338 | 8 | |||||||||||||||||||||||
Manufacturing | 117,797 | 124,847 | (6 | ) | 226,575 | 183,080 | 24 | ||||||||||||||||||||||
Healthcare | 37,444 | 37,836 | (1 | ) | 76,456 | 75,661 | 1 | ||||||||||||||||||||||
SocialCode | 16,512 | 12,251 | 35 | 33,592 | 29,333 | 15 | |||||||||||||||||||||||
Other businesses | 17,144 | 17,470 | (2 | ) | 32,519 | 33,218 | (2 | ) | |||||||||||||||||||||
Corporate office | 12,756 | 14,449 | (12 | ) | 26,698 | 29,552 | (10 | ) | |||||||||||||||||||||
Intersegment elimination | (21 | ) | — | — | (45 | ) | — | — | |||||||||||||||||||||
$ | 607,051 | $ | 626,346 | (3 | ) | $ | 1,222,273 | $ | 1,198,810 | 2 | |||||||||||||||||||
Operating Income (Loss) | |||||||||||||||||||||||||||||
Education | $ | 37,554 | $ | 33,331 | 13 | $ | 60,254 | $ | 42,768 | 41 | |||||||||||||||||||
Television broadcasting | 41,118 | 39,777 | 3 | 81,660 | 66,260 | 23 | |||||||||||||||||||||||
Manufacturing | 8,665 | (4,175 | ) | — | 17,293 | (510 | ) | — | |||||||||||||||||||||
Healthcare | 764 | 384 | 99 | (627 | ) | (542 | ) | (16 | ) | ||||||||||||||||||||
SocialCode | (1,742 | ) | 2,604 | — | (5,523 | ) | (1,904 | ) | — | ||||||||||||||||||||
Other businesses | (7,977 | ) | (7,731 | ) | (3 | ) | (16,519 | ) | (16,526 | ) | — | ||||||||||||||||||
Corporate office | (12,756 | ) | (14,449 | ) | 12 | (26,698 | ) | (29,552 | ) | 10 | |||||||||||||||||||
$ | 65,626 | $ | 49,741 | 32 | $ | 109,840 | $ | 59,994 | 83 | ||||||||||||||||||||
Depreciation | |||||||||||||||||||||||||||||
Education | $ | 6,839 | $ | 8,325 | (18 | ) | $ | 14,445 | $ | 16,909 | (15 | ) | |||||||||||||||||
Television broadcasting | 2,974 | 2,991 | (1 | ) | 6,045 | 5,585 | 8 | ||||||||||||||||||||||
Manufacturing | 2,331 | 2,404 | (3 | ) | 4,782 | 3,912 | 22 | ||||||||||||||||||||||
Healthcare | 647 | 1,194 | (46 | ) | 1,300 | 2,263 | (43 | ) | |||||||||||||||||||||
SocialCode | 200 | 251 | (20 | ) | 433 | 497 | (13 | ) | |||||||||||||||||||||
Other businesses | 375 | 415 | (10 | ) | 750 | 776 | (3 | ) | |||||||||||||||||||||
Corporate office | 253 | 291 | (13 | ) | 506 | 581 | (13 | ) | |||||||||||||||||||||
$ | 13,619 | $ | 15,871 | (14 | ) | $ | 28,261 | $ | 30,523 | (7 | ) | ||||||||||||||||||
Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets | |||||||||||||||||||||||||||||
Education | $ | 1,663 | $ | 1,323 | 26 | $ | 2,812 | $ | 2,443 | 15 | |||||||||||||||||||
Television broadcasting | 1,408 | 970 | 45 | 2,816 | 1,872 | 50 | |||||||||||||||||||||||
Manufacturing | 5,935 | 15,734 | (62 | ) | 11,871 | 18,811 | (37 | ) | |||||||||||||||||||||
Healthcare | 1,809 | 1,644 | 10 | 3,617 | 3,298 | 10 | |||||||||||||||||||||||
SocialCode | 584 | 84 | — | 667 | 167 | — | |||||||||||||||||||||||
Other businesses | — | — | — | — | — | — | |||||||||||||||||||||||
Corporate office | — | — | — | — | — | — | |||||||||||||||||||||||
$ | 11,399 | $ | 19,755 | (42 | ) | $ | 21,783 | $ | 26,591 | (18 | ) | ||||||||||||||||||
Pension Expense | |||||||||||||||||||||||||||||
Education | $ | 1,878 | $ | 2,153 | (13 | ) | $ | 4,542 | $ | 4,859 | (7 | ) | |||||||||||||||||
Television broadcasting | 601 | 479 | 25 | 1,094 | 972 | 13 | |||||||||||||||||||||||
Manufacturing | 19 | 22 | (14 | ) | 36 | 47 | (23 | ) | |||||||||||||||||||||
Healthcare | 165 | 166 | (1 | ) | 287 | 332 | (14 | ) | |||||||||||||||||||||
SocialCode | 205 | 142 | 44 | 361 | 296 | 22 | |||||||||||||||||||||||
Other businesses | 154 | 85 | 81 | 270 | 223 | 21 | |||||||||||||||||||||||
Corporate office | 1,295 | 1,544 | (16 | ) | 2,667 | 2,776 | (4 | ) | |||||||||||||||||||||
$ | 4,317 | $ | 4,591 | (6 | ) | $ | 9,257 | $ | 9,505 | (3 | ) | ||||||||||||||||||
GRAHAM HOLDINGS COMPANY | |||||||||||||||||||||||||||||
EDUCATION DIVISION INFORMATION | |||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
June 30 |
% |
June 30 | % | ||||||||||||||||||||||||||
(in thousands) | 2018 | 2017 | Change | 2018 | 2017 | Change | |||||||||||||||||||||||
Operating Revenues | |||||||||||||||||||||||||||||
Kaplan international | $ | 184,303 | $ | 171,747 | 7 | $ | 367,885 | $ | 336,309 | 9 | |||||||||||||||||||
Higher education | 85,981 | 111,840 | (23 | ) | 185,811 | 222,951 | (17 | ) | |||||||||||||||||||||
Test preparation | 68,604 | 75,730 | (9 | ) | 127,755 | 140,298 | (9 | ) | |||||||||||||||||||||
Professional (U.S.) | 31,057 | 27,364 | 13 | 64,413 | 60,563 | 6 | |||||||||||||||||||||||
Kaplan corporate and other | 442 | 57 | — | 727 | 71 | — | |||||||||||||||||||||||
Intersegment elimination | (382 | ) | (239 | ) | — | (1,087 | ) | (796 | ) | — | |||||||||||||||||||
$ | 370,005 | $ | 386,499 | (4 | ) | $ | 745,504 | $ | 759,396 | (2 | ) | ||||||||||||||||||
Operating Expenses | |||||||||||||||||||||||||||||
Kaplan international | $ | 160,116 | $ | 155,793 | 3 | $ | 323,294 | $ | 312,648 | 3 | |||||||||||||||||||
Higher education | 74,762 | 98,700 | (24 | ) | 173,237 | 207,365 | (16 | ) | |||||||||||||||||||||
Test preparation | 62,484 | 69,989 | (11 | ) | 121,114 | 137,421 | (12 | ) | |||||||||||||||||||||
Professional (U.S.) | 26,277 | 22,793 | 15 | 50,318 | 45,834 | 10 | |||||||||||||||||||||||
Kaplan corporate and other | 7,542 | 4,779 | 58 | 15,573 | 11,736 | 33 | |||||||||||||||||||||||
Amortization of intangible assets | 1,663 | 1,323 | 26 | 2,812 | 2,443 | 15 | |||||||||||||||||||||||
Intersegment elimination | (393 | ) | (209 | ) | — | (1,098 | ) | (819 | ) | — | |||||||||||||||||||
$ | 332,451 | $ | 353,168 | (6 | ) | $ | 685,250 | $ | 716,628 | (4 | ) | ||||||||||||||||||
Operating Income (Loss) | |||||||||||||||||||||||||||||
Kaplan international | $ | 24,187 | $ | 15,954 | 52 | $ | 44,591 | $ | 23,661 | 88 | |||||||||||||||||||
Higher education | 11,219 | 13,140 | (15 | ) | 12,574 | 15,586 | (19 | ) | |||||||||||||||||||||
Test preparation | 6,120 | 5,741 | 7 | 6,641 | 2,877 | — | |||||||||||||||||||||||
Professional (U.S.) | 4,780 | 4,571 | 5 | 14,095 | 14,729 | (4 | ) | ||||||||||||||||||||||
Kaplan corporate and other | (7,100 | ) | (4,722 | ) | (50 | ) | (14,846 | ) | (11,665 | ) | (27 | ) | |||||||||||||||||
Amortization of intangible assets | (1,663 | ) | (1,323 | ) | (26 | ) | (2,812 | ) | (2,443 | ) | (15 | ) | |||||||||||||||||
Intersegment elimination | 11 | (30 | ) | — | 11 | 23 | — | ||||||||||||||||||||||
$ | 37,554 | $ | 33,331 | 13 | $ | 60,254 | $ | 42,768 | 41 | ||||||||||||||||||||
Depreciation | |||||||||||||||||||||||||||||
Kaplan international | $ | 3,764 | $ | 3,609 | 4 | $ | 7,738 | $ | 7,291 | 6 | |||||||||||||||||||
Higher education | 1,274 | 2,484 | (49 | ) | 3,132 | 5,132 | (39 | ) | |||||||||||||||||||||
Test preparation | 973 | 1,332 | (27 | ) | 1,951 | 2,673 | (27 | ) | |||||||||||||||||||||
Professional (U.S.) | 670 | 765 | (12 | ) | 1,312 | 1,548 | (15 | ) | |||||||||||||||||||||
Kaplan corporate and other | 158 | 135 | 17 | 312 | 265 | 18 | |||||||||||||||||||||||
$ | 6,839 | $ | 8,325 | (18 | ) | $ | 14,445 | $ | 16,909 | (15 | ) | ||||||||||||||||||
Pension Expense | |||||||||||||||||||||||||||||
Kaplan international | $ | 84 | $ | 87 | (3 | ) | $ | 167 | $ | 174 | (4 | ) | |||||||||||||||||
Higher education | 804 | 1,742 | (54 | ) | 2,210 | 3,484 | (37 | ) | |||||||||||||||||||||
Test preparation | 729 | 911 | (20 | ) | 1,458 | 1,822 | (20 | ) | |||||||||||||||||||||
Professional (U.S.) | 290 | 302 | (4 | ) | 580 | 604 | (4 | ) | |||||||||||||||||||||
Kaplan corporate and other | (29 | ) | (889 | ) | (97 | ) | 127 | (1,225 | ) | — | |||||||||||||||||||
$ | 1,878 | $ | 2,153 | (13 | ) | $ | 4,542 | $ | 4,859 | (7 | ) | ||||||||||||||||||
NON-GAAP FINANCIAL INFORMATION
(Unaudited)
In addition to the results reported in accordance with accounting
principles generally accepted in
- 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.
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 following table reconciles the non-GAAP financial measures to the most directly comparable GAAP measures:
Three Months Ended June 30 | |||||||||||||||||||||||||||||||
2018 | 2017 | ||||||||||||||||||||||||||||||
(in thousands, except per share amounts) |
Income |
Income |
Net |
Income |
Income |
Net |
|||||||||||||||||||||||||
Amounts attributable to Graham Holdings Company Common Stockholders | |||||||||||||||||||||||||||||||
As reported | $ | 62,735 | $ | 16,100 | $ | 46,635 | $ | 65,899 | $ | 23,900 | $ | 41,999 | |||||||||||||||||||
Attributable to noncontrolling interests | (69 | ) | (3 | ) | |||||||||||||||||||||||||||
Attributable to Graham Holdings Company Stockholders | 46,566 | 41,996 | |||||||||||||||||||||||||||||
Adjustments: | |||||||||||||||||||||||||||||||
Goodwill and other long-lived asset impairment charge | — | — | — | 9,224 | 3,413 | 5,811 | |||||||||||||||||||||||||
Interest expense related to the settlement of a mandatorily redeemable noncontrolling interest | 6,169 | — | 6,169 |
— |
— | — | |||||||||||||||||||||||||
Debt extinguishment costs | 11,378 | 2,731 | 8,647 |
— |
— | — | |||||||||||||||||||||||||
Net losses on marketable equity securities | 2,554 | 613 | 1,941 |
— |
— |
— |
|||||||||||||||||||||||||
Foreign currency loss (gain) | 2,266 | 544 | 1,722 | (3,466 | ) | (1,283 | ) | (2,183 | ) | ||||||||||||||||||||||
Net Income, adjusted (non-GAAP) | $ | 65,045 | $ | 45,624 | |||||||||||||||||||||||||||
Per share information attributable to Graham Holdings Company Common Stockholders | |||||||||||||||||||||||||||||||
Diluted income per common share, as reported | $ | 8.63 | $ | 7.46 | |||||||||||||||||||||||||||
Adjustments: | |||||||||||||||||||||||||||||||
Goodwill and other long-lived asset impairment charge | — | 1.03 | |||||||||||||||||||||||||||||
Interest expense related to the settlement of a mandatorily redeemable noncontrolling interest | 1.14 | — | |||||||||||||||||||||||||||||
Debt extinguishment costs | 1.60 | — | |||||||||||||||||||||||||||||
Net losses on marketable equity securities | 0.36 | — | |||||||||||||||||||||||||||||
Foreign currency loss (gain) | 0.32 | (0.39 | ) | ||||||||||||||||||||||||||||
Diluted income per common share, adjusted (non-GAAP) | $ | 12.05 | $ | 8.10 | |||||||||||||||||||||||||||
The adjusted diluted per share amounts may not compute due to rounding.
Six Months Ended June 30 | |||||||||||||||||||||||||||||||
2018 | 2017 | ||||||||||||||||||||||||||||||
(in thousands, except per share amounts) |
Income |
Income |
Net |
Income |
Income |
Net |
|||||||||||||||||||||||||
Amounts attributable to Graham Holdings Company Common Stockholders | |||||||||||||||||||||||||||||||
As reported | $ | 119,300 | $ | 29,700 | $ | 89,600 | $ | 89,685 | $ | 26,600 | $ | 63,085 | |||||||||||||||||||
Attributable to noncontrolling interests | (143 | ) | (3 | ) | |||||||||||||||||||||||||||
Attributable to Graham Holdings Company Stockholders | $ | 89,457 | $ | 63,082 | |||||||||||||||||||||||||||
Adjustments: | |||||||||||||||||||||||||||||||
Goodwill and other long-lived asset impairment charge | — | — | — | 9,224 | 3,413 | 5,811 | |||||||||||||||||||||||||
Interest expense related to the settlement of a mandatorily redeemable noncontrolling interest | 6,169 | — | 6,169 | — | — | — | |||||||||||||||||||||||||
Debt extinguishment costs | 11,378 | 2,731 | 8,647 | — | — | — | |||||||||||||||||||||||||
Net losses on marketable equity securities | 16,656 | 3,997 | 12,659 |
— |
— |
— |
|||||||||||||||||||||||||
Gain on Kaplan University Transaction | (4,315 | ) | (2,472 | ) | (1,843 | ) | — | — | — | ||||||||||||||||||||||
Foreign currency loss (gain) | 2,089 | 502 | 1,587 | (5,194 | ) | (1,922 | ) | (3,272 | ) | ||||||||||||||||||||||
Tax benefit related to stock compensation | — | 1,810 | (1,810 | ) | — | 5,933 | (5,933 | ) | |||||||||||||||||||||||
Net Income, adjusted (non-GAAP) | $ | 114,866 | $ | 59,688 | |||||||||||||||||||||||||||
Per share information attributable to Graham Holdings Company Common Stockholders | |||||||||||||||||||||||||||||||
Diluted income per common share, as reported | $ | 16.40 | $ | 11.21 | |||||||||||||||||||||||||||
Adjustments: | |||||||||||||||||||||||||||||||
Goodwill and other long-lived asset impairment charge | — | 1.03 | |||||||||||||||||||||||||||||
Interest expense related to the settlement of a mandatorily redeemable noncontrolling interest | 1.14 | — | |||||||||||||||||||||||||||||
Debt extinguishment costs | 1.60 | — | |||||||||||||||||||||||||||||
Net losses on marketable equity securities | 2.30 |
— |
|||||||||||||||||||||||||||||
Gain on Kaplan University Transaction | (0.33 | ) | — | ||||||||||||||||||||||||||||
Foreign currency loss (gain) | 0.30 | (0.58 | ) | ||||||||||||||||||||||||||||
Tax benefit related to stock compensation | (0.33 | ) | (1.06 | ) | |||||||||||||||||||||||||||
Diluted income per common share, adjusted (non-GAAP) | $ | 21.08 | $ | 10.60 | |||||||||||||||||||||||||||
The adjusted diluted per share amounts may not compute due to rounding.
View source version on businesswire.com: https://www.businesswire.com/news/home/20180801005143/en/
Source:
Graham Holdings Company
Wallace R. Cooney, 703-345-6470