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8-K
GRAHAM HOLDINGS CO filed this Form 8-K on 02/23/2018
Entire Document
 
Exhibit
Exhibit 99.1
 
Contact: 
 
Wallace R. Cooney
 
For Immediate Release 
 
 
(703) 345-6470
 
February 23, 2018
 
 
 
 
 
 
 
 
GRAHAM HOLDINGS COMPANY REPORTS
 
 
 
 
2017 AND FOURTH QUARTER EARNINGS
 
ARLINGTON, VA - Graham Holdings Company (NYSE: GHC) today reported net income attributable to common shares of $302.0 million ($53.89 per share) for the year ended December 31, 2017, compared to $168.6 million ($29.80 per share) for the year ended December 31, 2016. For the fourth quarter of 2017, the Company reported net income attributable to common shares of $214.2 million ($38.52 per share), compared to $36.9 million ($6.57 per share) for the same period of 2016. The Company’s results for 2017 and the fourth quarter of 2017 include a significant net deferred income tax benefit related to the Tax Cuts and Jobs Act legislation enacted in December 2017.
The results for 2017 and 2016 were affected by a number of items as described in the following paragraphs. Excluding these items, net income attributable to common shares was $128.6 million ($22.93 per share) for 2017, compared to $167.6 million ($29.66 per share) for 2016. Excluding these items, net income attributable to common shares was $43.2 million ($7.77 per share) for the fourth quarter of 2017, compared to $54.4 million ($9.68 per share) for the fourth quarter of 2016. (Refer to the Non-GAAP Financial Information schedule attached to this release for additional details.)
Items included in the Company’s net income for 2017 are listed below, and fourth quarter activity, if any, is highlighted for each item:
$10.0 million in restructuring charges at the education division (after-tax impact of $6.3 million, or $1.12 per share); $7.2 million of these charges were recorded in the fourth quarter (after-tax impact of $4.5 million, or $0.81 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);
$3.3 million in non-operating foreign currency gains (after-tax impact of $2.1 million, or $0.37 per share); $3.3 million in losses were recorded in the fourth quarter (after-tax impact of $2.1 million or $0.37 per share);
$177.5 million in fourth quarter net deferred tax benefits related to the enactment of the Tax Cuts and Jobs Act in December 2017 ($31.68 per share); and
$5.9 million in income tax benefits related to stock compensation ($1.06 per share).
Items included in the Company’s net income for 2016 are listed below, and fourth quarter activity, if any, is highlighted for each item:
an $18.0 million fourth quarter gain related to a bulk lump sum pension program offering (after-tax impact of $10.8 million, or $1.92 per share);
$11.9 million in restructuring charges at the education division (after-tax impact of $7.7 million, or $1.36 per share); $7.0 million of these charges were recorded in the fourth quarter (after-tax impact of $4.5 million, or $0.81 per share);
$16.8 million in net non-operating gains from the sales of assets and write-downs of cost and equity method investments (after tax impact of $9.5 million, or $1.62 per share); $30.7 million in losses were recorded in the fourth quarter (after-tax impact of $19.5 million, or $3.47 per share);
$39.9 million in non-operating foreign currency losses (after-tax impact of $25.5 million, or $4.51 per share); $6.6 million in losses were recorded in the fourth quarter (after-tax impact of $4.2 million, or $0.75 per share); and
a net nonrecurring $13.9 million deferred tax benefit related to Kaplan ($2.47 per share).
Revenue for 2017 was $2,591.8 million, up 4% from $2,481.9 million in 2016Revenues increased in other businesses, offset by a decline at the education division. The Company reported operating income for 2017 of $209.1 million, a decrease of 31%, from $303.5 million in 2016. Operating results declined at the television broadcasting and education divisions and in other businesses.
For the fourth quarter of 2017, revenue was $675.8 million, up 7% from $629.6 million in 2016Revenues increased in other businesses and at the television broadcasting division, offset by a decline at the education division. The Company reported operating income of $67.1 million in the fourth quarter of 2017, compared to $109.5 million in

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