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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Quarterly Period Ended September 30, 2020
or
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Commission File Number 001-06714
GRAHAM HOLDINGS COMPANY
(Exact name of registrant as specified in its charter)
Delaware53-0182885
(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)
(703) 345-6300
(Registrant’s telephone number, including area code)
Securities Registered Pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class B Common Stock, par value $1.00 per share GHCNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes  .    No  .
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  .    No  .  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer
Accelerated
filer
Non-accelerated
filer
Smaller reporting
company
Emerging growth
company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  .    No  .  
Shares outstanding at October 30, 2020:
Class A Common Stock – 964,001 Shares
Class B Common Stock – 4,042,472 Shares



GRAHAM HOLDINGS COMPANY
Index to Form 10-Q
 
PART I. FINANCIAL INFORMATION
 
 
 
 
Item 1.
Financial Statements
 
   
 
Condensed Consolidated Statements of Operations
 
 
 
 
Condensed Consolidated Statements of Comprehensive Income
 
 
 
 
Condensed Consolidated Balance Sheets
 
 
 
 
Condensed Consolidated Statements of Cash Flows




Condensed Consolidated Statements of Changes in Common Stockholders' Equity
 
 
 
 
Notes to Condensed Consolidated Financial Statements




Organization, Basis of Presentation and Recent Accounting Pronouncements

Acquisitions and Dispositions of Businesses

Investments

Accounts Receivable

Inventories, Contracts in Progress and Vehicle Floor Plan Payable

Goodwill and Other Intangible Assets

Debt

Fair Value Measurements

Income Taxes

Revenue From Contracts With Customers

Earnings Per Share

Pension and Postretirement Plans

Other Non-Operating Income

Accumulated Other Comprehensive Income (Loss)

Contingencies

Business Segments



Item 2.
Management’s Discussion and Analysis of Results of Operations and Financial Condition
 
 
 
Item 3.
Quantitative and Qualitative Disclosures about Market Risk
 
 
 
Item 4.
Controls and Procedures
 
 
PART II. OTHER INFORMATION
 



Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds



Item 6.
Exhibits
 
 
Signatures



PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
GRAHAM HOLDINGS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
  Three Months Ended 
 September 30
Nine Months Ended 
 September 30
  
(in thousands, except per share amounts)2020201920202019
Operating Revenues$716,982 $738,820 $2,102,110 $2,168,621 
Operating Costs and Expenses    
Operating477,960 518,207 1,418,267 1,454,776 
Selling, general and administrative164,231 175,050 499,069 516,276 
Depreciation of property, plant and equipment18,481 15,351 58,098 42,758 
Amortization of intangible assets14,150 13,572 42,642 39,512 
Impairment of goodwill and other long-lived assets1,916 372 29,828 1,065 
  676,738 722,552 2,047,904 2,054,387 
Income from Operations40,244 16,268 54,206 114,234 
Equity in earnings of affiliates, net4,092 4,683 3,727 7,829 
Interest income890 1,474 2,995 4,753 
Interest expense(7,247)(6,776)(22,302)(22,587)
Non-operating pension and postretirement benefit income, net10,489 19,556 41,028 51,737 
Gain (loss) on marketable equity securities, net59,364 17,404 (1,139)49,261 
Other income, net222 5,556 11,010 36,135 
Income Before Income Taxes108,054 58,165 89,525 241,362 
Provision for Income Taxes30,000 15,200 26,500 59,500 
Net Income78,054 42,965 63,025 181,862 
Net (Income) Loss Attributable to Noncontrolling Interests(439)180 199 112 
Net Income Attributable to Graham Holdings Company Common Stockholders
$77,615 $43,145 $63,224 $181,974 
Per Share Information Attributable to Graham Holdings Company Common Stockholders
      
Basic net income per common share$15.25 $8.12 $12.15 $34.24 
Basic average number of common shares outstanding5,060 5,285 5,176 5,285 
Diluted net income per common share$15.22 $8.05 $12.11 $33.96 
Diluted average number of common shares outstanding5,072 5,329 5,192 5,328 
See accompanying Notes to Condensed Consolidated Financial Statements.
1


GRAHAM HOLDINGS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
  Three Months Ended 
 September 30
Nine Months Ended 
 September 30
(in thousands)2020201920202019
Net Income$78,054 $42,965 $63,025 $181,862 
Other Comprehensive Income (Loss), Before Tax      
Foreign currency translation adjustments:      
Translation adjustments arising during the period20,430 (16,684)(541)(17,755)
Pension and other postretirement plans:        
Amortization of net prior service cost (credit) included in net income
671 (932)2,010 (3,210)
Amortization of net actuarial loss (gain) included in net income
304 (511)914 (1,534)
  975 (1,443)2,924 (4,744)
Cash flow hedges gain (loss)157 (477)(1,564)(904)
Other Comprehensive Income (Loss), Before Tax21,562 (18,604)819 (23,403)
Income tax (expense) benefit related to items of other comprehensive income (loss)
(299)518 (431)1,512 
Other Comprehensive Income (Loss), Net of Tax21,263 (18,086)388 (21,891)
Comprehensive Income99,317 24,879 63,413 159,971 
Comprehensive (income) loss attributable to noncontrolling interests
(439)180 199 112 
Total Comprehensive Income Attributable to Graham Holdings Company$98,878 $25,059 $63,612 $160,083 

See accompanying Notes to Condensed Consolidated Financial Statements.
2


GRAHAM HOLDINGS COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
As of
(in thousands)September 30,
2020
December 31,
2019
  (Unaudited)  
Assets    
Current Assets    
Cash and cash equivalents$295,672 $200,165 
Restricted cash11,072 13,879 
Investments in marketable equity securities and other investments506,246 599,967 
Accounts receivable, net474,256 624,216 
Inventories and contracts in progress124,258 120,834 
Prepaid expenses73,426 92,289 
Income taxes receivable33,115 10,735 
Other current assets976 1,400 
Total Current Assets1,519,021 1,663,485 
Property, Plant and Equipment, Net379,010 384,670 
Lease Right-of-Use Assets486,691 526,417 
Investments in Affiliates157,529 162,249 
Goodwill, Net1,458,194 1,388,279 
Indefinite-Lived Intangible Assets117,841 140,197 
Amortized Intangible Assets, Net218,125 233,481 
Prepaid Pension Cost1,322,151 1,292,350 
Deferred Income Taxes5,362 11,629 
Deferred Charges and Other Assets (includes $4,509 and $0 of restricted cash)
147,589 128,479 
Total Assets$5,811,513 $5,931,236 
Liabilities and Equity    
Current Liabilities    
Accounts payable and accrued liabilities$500,335 $507,701 
Deferred revenue309,142 355,156 
Income taxes payable4,401 4,121 
Current portion of lease liabilities88,218 92,714 
Current portion of long-term debt6,104 82,179 
Dividends declared7,259  
Total Current Liabilities915,459 1,041,871 
Accrued Compensation and Related Benefits202,647 193,836 
Other Liabilities62,471 27,223 
Deferred Income Taxes407,429 427,372 
Mandatorily Redeemable Noncontrolling Interest768 829 
Lease Liabilities454,902 477,004 
Long-Term Debt509,282 430,650 
Total Liabilities2,552,958 2,598,785 
Redeemable Noncontrolling Interest11,897 5,655 
Preferred Stock  
Common Stockholders’ Equity    
Common stock20,000 20,000 
Capital in excess of par value386,506 381,669 
Retained earnings6,567,676 6,534,427 
Accumulated other comprehensive income, net of tax  
Cumulative foreign currency translation adjustment(22,429)(21,888)
Unrealized gain on pensions and other postretirement plans328,056 325,921 
Cash flow hedges(1,944)(738)
Cost of Class B common stock held in treasury(4,038,052)(3,920,152)
Total Common Stockholders’ Equity3,239,813 3,319,239 
Noncontrolling Interest6,845 7,557 
Total Equity3,246,658 3,326,796 
Total Liabilities and Equity$5,811,513 $5,931,236 

See accompanying Notes to Condensed Consolidated Financial Statements.
3


GRAHAM HOLDINGS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
  Nine Months Ended 
 September 30
(in thousands)20202019
Cash Flows from Operating Activities    
Net Income$63,025 $181,862 
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation, amortization and goodwill and other long-lived asset impairments130,568 83,335 
Amortization of lease right-of-use asset70,214 61,797 
Net pension benefit and special separation benefit expense(27,669)(33,061)
Gain on marketable equity securities and cost method investments, net(493)(54,341)
Gain on disposition of businesses, property, plant and equipment and investments, net(5,918)(28,871)
Provision for doubtful trade and other receivables8,229 21,532 
Stock-based compensation expense, net4,758 4,752 
Foreign exchange gain(877)(1,284)
Equity in losses (earnings) of affiliates, net of distributions2,784 (3,882)
(Benefit from) provision for deferred income taxes(733)26,310 
Change in operating assets and liabilities:
Accounts receivable, net139,306 (47,308)
Inventories51 (11,969)
Accounts payable and accrued liabilities(65,708)(60,708)
Deferred revenue(26,094)24,920 
Income taxes receivable(190)5,526 
Other assets and other liabilities, net(50,508)(96,913)
Other145 587 
Net Cash Provided by Operating Activities240,890 72,284 
Cash Flows from Investing Activities    
Proceeds from sales of marketable equity securities93,775 17,586 
Purchases of property, plant and equipment(56,121)(75,712)
Investments in certain businesses, net of cash acquired(20,080)(162,060)
Investments in equity affiliates, cost method and other investments
(8,298)(25,836)
Net proceeds from disposition of businesses, property, plant and equipment, investments and other assets
1,570 53,785 
Return of investment in equity affiliates314 786 
Purchases of marketable equity securities (7,499)
Loan to related party (3,500)
Other 1,562  
Net Cash Provided by (Used in) Investing Activities12,722 (202,450)
Cash Flows from Financing Activities    
Common shares repurchased(123,155) 
Net borrowing under revolving credit facilities75,905 5,000 
Repayments of borrowings(75,841)(7,901)
Dividends paid(22,870)(22,167)
Net (payments) proceeds from vehicle floor plan payable(16,300)15,106 
Proceeds from exercise of stock options5,335  
Deferred payments of acquisition(5,010) 
Proceeds from (repayments of) bank overdrafts6,454 (2,611)
Issuance of borrowings2,084 30,000 
Issuance of noncontrolling interest 6,536 
Other(276)1,672 
Net Cash (Used in) Provided by Financing Activities(153,674)25,635 
Effect of Currency Exchange Rate Change(2,729)(2,177)
Net Increase (Decrease) in Cash and Cash Equivalents and Restricted Cash97,209 (106,708)
Beginning Cash and Cash Equivalents and Restricted Cash214,044 264,115 
Ending Cash and Cash Equivalents and Restricted Cash$311,253 $157,407 


See accompanying Notes to Condensed Consolidated Financial Statements.
4


GRAHAM HOLDINGS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN COMMON STOCKHOLDERS’ EQUITY (UNAUDITED)
(in thousands)Common
Stock
Capital in
Excess of
Par Value
Retained
Earnings
Accumulated Other Comprehensive IncomeTreasury
Stock
Noncontrolling
Interest
Total EquityRedeemable Noncontrolling Interest
As of December 31, 2019$20,000 $381,669 $6,534,427 $303,295 $(3,920,152)$7,557 $3,326,796 $5,655 
Net loss for the period(33,891)(33,891)
Net loss attributable to noncontrolling interests772 (772) 
Net income attributable to redeemable noncontrolling interests
(126)(126)126 
Dividends on common stock(15,289)(15,289)
Repurchase of Class B common stock(33,610)(33,610)
Issuance of Class B common stock5,335 5,335 
Amortization of unearned stock compensation and stock option expense
1,568 1,568 
Other comprehensive loss, net of income taxes(37,943)(37,943)
As of March 31, 2020$20,000 $383,237 $6,485,893 $265,352 $(3,948,427)$6,785 $3,212,840 $5,781 
Net income for the period
18,862 18,862 
Net loss attributable to noncontrolling interests
37 (37) 
Acquisition of redeemable noncontrolling interest
 6,005 
Net income attributable to redeemable noncontrolling interests
(45)(45)45 
Dividends on common stock(7,581)(7,581)
Repurchase of Class B common stock(29,295)(29,295)
Amortization of unearned stock compensation and stock option expense
1,567 1,567 
Other comprehensive income, net of income taxes
17,068 17,068 
As of June 30, 2020$20,000 $384,804 $6,497,166 $282,420 $(3,977,722)$6,748 $3,213,416 $11,831 
Net income for the period78,054 78,054 
Net income attributable to noncontrolling interest(373)373  
Net income attributable to redeemable noncontrolling interests(66)(66)66 
Distribution to noncontrolling interest(276)(276)
Dividends on common stock(7,100)(7,100)
Repurchase of Class B common stock(60,250)(60,250)
Forfeiture of restricted stock awards, net Class B common stock issuances(66)(80)(146)
Amortization of unearned stock compensation and stock option expense1,768 1,768 
Other comprehensive income, net of income taxes21,263 21,263 
Other(5)(5)
As of September 30, 2020$20,000 $386,506 $6,567,676 $303,683 $(4,038,052)$6,845 $3,246,658 $11,897 
5


(in thousands)Common
Stock
Capital in
Excess of
Par Value
Retained
Earnings
Accumulated Other Comprehensive IncomeTreasury
Stock
Noncontrolling
Interest
Total EquityRedeemable Noncontrolling Interest
As of December 31, 2018$20,000 $378,837 $6,236,125 $203,829 $(3,922,009)$ $2,916,782 $4,346 
Net income for the period81,702 81,702 
Issuance of noncontrolling interest6,000 6,000 
Net loss attributable to noncontrolling interest62 (62) 
Net income attributable to redeemable noncontrolling interests
(16)(16)16 
Change in redemption value of redeemable noncontrolling interests
(54)(54)54 
Dividends on common stock(14,779)(14,779)
Issuance of Class B common stock, net of restricted stock award forfeitures
(3,783)3,755 (28)
Amortization of unearned stock compensation and stock option expense
1,639 1,639 
Other comprehensive income, net of income taxes
8,290 8,290 
Purchase of redeemable noncontrolling interest (550)
As of March 31, 2019$20,000 $376,639 $6,303,094 $212,119 $(3,918,254)$5,938 $2,999,536 $3,866 
Net income for the period57,195 57,195 
Net income attributable to noncontrolling interests
(104)104  
Net income attributable to redeemable noncontrolling interests
(10)(10)10 
Dividends on common stock(7,388)(7,388)
Amortization of unearned stock compensation and stock option expense
1,616 1,616 
Other comprehensive loss, net of income taxes(12,095)(12,095)
As of June 30, 2019$20,000 $378,255 $6,352,787 $200,024 $(3,918,254)$6,042 $3,038,854 $3,876 
Net income for the period42,965 42,965 
Issuance of noncontrolling interest536 536 
Net loss attributable to noncontrolling interest207 (207) 
Acquisition of noncontrolling interest530 530 
Net income attributable to redeemable noncontrolling interests(27)(27)27 
Dividends on common stock(7,386)(7,386)
Issuance of Class B common stock, net of restricted stock award forfeitures(1)(143)(144)
Amortization of unearned stock compensation and stock option expense1,669 1,669 
Other comprehensive loss, net of income taxes(18,086)(18,086)
As of September 30, 2019$20,000 $379,923 $6,388,546 $181,938 $(3,918,397)$6,901 $3,058,911 $3,903 

See accompanying Notes to Condensed Consolidated Financial Statements.
6


GRAHAM HOLDINGS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. ORGANIZATION, BASIS OF PRESENTATION AND RECENT ACCOUNTING PRONOUNCEMENTS
Graham Holdings Company (the Company), is a diversified education and media company. The Company’s Kaplan subsidiary provides a wide variety of educational services, both domestically and outside the United States. The Company’s media operations comprise the ownership and operation of seven television broadcasting stations, several websites and print publications, and a marketing solutions provider. The Company’s other business operations include manufacturing, automotive dealerships, restaurants and entertainment venues, custom framing services and home health and hospice services.
Basis of Presentation – The accompanying condensed consolidated financial statements have been prepared in accordance with: (i) generally accepted accounting principles in the United States of America (GAAP) for interim financial information; (ii) the instructions to Form 10-Q; and (iii) the guidance of Rule 10-01 of Regulation S-X under the Securities and Exchange Act of 1934, as amended, for financial statements required to be filed with the Securities and Exchange Commission (SEC). They include the assets, liabilities, results of operations and cash flows of the Company, including its domestic and foreign subsidiaries that are more than 50% owned or otherwise controlled by the Company. As permitted under such rules, certain notes and other financial information normally required by GAAP have been condensed or omitted. Management believes the accompanying condensed consolidated financial statements reflect all normal and recurring adjustments necessary for a fair statement of the Company’s financial position, results of operations, and cash flows as of and for the periods presented herein. The Company’s results of operations for the three and nine months ended September 30, 2020 and 2019 may not be indicative of the Company’s future results. These condensed consolidated financial statements are unaudited and should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019.
The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP.
Use of Estimates in the Preparation of the Condensed Consolidated Financial Statements – The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and judgments that affect the amounts reported herein. Management bases its estimates and assumptions on historical experience and on various other factors that are believed to be reasonable under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in those estimates.
The Company assessed certain accounting matters that generally require consideration of forecasted financial information, in context with the information reasonably available to the Company and the unknown future impacts of the novel coronavirus (COVID-19) pandemic as of September 30, 2020 and through the date of this filing. The accounting matters assessed included, but were not limited to, the Company’s carrying value of goodwill and other long-lived assets, allowance for doubtful accounts, inventory valuation and related reserves, fair value of financial assets, valuation allowances for tax assets and revenue recognition. Other than the goodwill, indefinite-lived asset and other long-lived asset impairment charges (see Notes 6, 8 and 16), there were no other impacts to the Company’s condensed consolidated financial statements as of and for the nine months ended September 30, 2020 resulting from our assessments. The Company’s future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in material impacts to the Company’s condensed consolidated financial statements in future reporting periods.
Reclassifications – Certain amounts in previously issued condensed consolidated financial statements have been reclassified to conform with the presentation for the period ended September 30, 2020. This includes the reclassification of $0.2 million from selling, general and administrative to operating in the Condensed Consolidated Statement of Operations for the three months ended September 30, 2020 and $44.2 million from operating to selling, general and administrative in the Condensed Consolidated Statements of Operations for the nine months ended September 30, 2019, respectively.
Recently Adopted and Issued Accounting Pronouncements – In June 2016, the FASB issued new guidance that requires financial assets measured at amortized cost, including accounts receivable, to be measured using the current expected credit losses model (CECL). CECL requires current expected credit losses to be measured upon the initial recognition of a financial asset by considering all available relevant information, including information about past events, current conditions and reasonable and supportable forecasts of future economic conditions. The standard was adopted by the Company in the first quarter of 2020 and did not have a significant impact on its Condensed Consolidated Financial Statements.
7


2. ACQUISITIONS AND DISPOSITIONS OF BUSINESSES
Acquisitions. During 2020, the Company acquired three businesses: two in education, and one in other businesses for $96.8 million in cash and contingent consideration. The assets and liabilities of the companies acquired were recorded at their estimated fair values at the date of acquisition.
In the first three months of 2020, Kaplan acquired two small businesses; one in its professional (U.S.) division and one in its international division.
In May 2020, the Company acquired an additional interest in Framebridge, Inc. for cash and contingent consideration that resulted in the Company obtaining control of the investee. Following the acquisition, the Company owns 93.4% of Framebridge. The Company previously accounted for Framebridge under the equity method, and included it in Investments in Affiliates on the Condensed Consolidated Balance Sheet (see Note 3). The contingent consideration is primarily based on Framebridge achieving revenue milestones within a specific time period. The fair value of the contingent consideration at the acquisition date was $50.6 million, determined using a Monte Carlo simulation. The fair value of the redeemable noncontrolling interest in Framebridge was $6.0 million as of the acquisition date, determined using a market approach. The minority shareholder has an option to put 20% of the minority shares annually starting in 2024. The acquisition is expected to provide benefits in the future by diversifying the Company’s business operations and is included in other businesses.
During 2019, the Company acquired eight businesses, one in education, three in healthcare, one in manufacturing, and three in other businesses for $211.8 million in cash and contingent consideration and the assumption of $25.8 million in floor plan payables. The assets and liabilities of the companies acquired were recorded at their estimated fair values at the date of acquisition.
On January 31, 2019, the Company acquired an interest in two automotive dealerships for cash and the assumption of floor plan payables (see Note 5). In connection with the acquisition, the automotive subsidiary of the Company borrowed $30 million to finance the acquisition and entered into an interest rate swap to fix the interest rate on the debt at 4.7% per annum (see Note 7). The Company has a 90% interest in the automotive subsidiary. The Company also entered into a management services agreement with an entity affiliated with Christopher J. Ourisman, a member of the Ourisman Automotive Group family of dealerships. Mr. Ourisman and his team operate and manage the dealerships. The Company paid a fee of $2.3 million for the year ended December 31, 2019 in connection with the management services provided under this agreement. In addition, the Company advanced $3.5 million to the minority shareholder, an entity controlled by Mr. Ourisman, at an interest rate of 6% per annum. The minority shareholder has the option to acquire up to an additional 10% interest in the automotive subsidiary. The acquisition is expected to provide benefits in the future by diversifying the Company’s business operations and is included in other businesses.
In July 2019, Graham Healthcare Group (GHG) acquired a 100% interest in a small business which is expected to provide certain strategic benefits in the future and is included in healthcare. On July 11, 2019, Kaplan acquired a 100% interest in Heverald, the owner of ESL Education, Europe’s largest language-travel agency and Alpadia, a chain of German and French language schools and junior summer camps. The acquisition is expected to provide synergies within Kaplan’s International English business and is included in Kaplan’s international division.
On July 31, 2019, the Company announced the closing of its acquisition of Clyde’s Restaurant Group (CRG). CRG owns and operates 12 restaurants and entertainment venues in the Washington, DC metropolitan area, including Old Ebbitt Grill and The Hamilton. In connection with the acquisition, the Company entered into several leases with an entity affiliated with some of CRG’s senior managers. The acquisition is expected to provide benefits in the future by diversifying the Company’s business operations and is included in other businesses.
In September 2019, Joyce/Dayton Corp. acquired the assets of a small business. The acquisition is expected to complement current product offerings and is included in manufacturing.
On December 1, 2019, GHG acquired 75% of the preferred shares of CSI Pharmacy Holding Company, LLC, (CSI). In connection with the acquisition, CSI entered into an $11.25 million Term Loan (see Note 7) to finance the acquisition. CSI is a specialty and home infusion pharmacy which provides intravenous immunoglobulin therapies to patients. The minority shareholders may put up to 50% of their preferred shares to GHG and the first put period begins in 2022. A second put period for another tranche of preferred shares begins in 2024. The fair value of the redeemable noncontrolling interest in CSI was $1.7 million at the acquisition date, determined using an income approach. The acquisition is expected to expand the product offerings of the healthcare division.

8


Acquisition-related costs for acquisitions that closed during the first nine months of 2020 and 2019 were $1.1 million and $2.3 million, respectively, and were expensed as incurred. The aggregate purchase price of the 2020 and 2019 acquisitions was allocated as follows (2020 on a preliminary basis), based on acquisition date fair values to the following assets and liabilities:
Purchase Price Allocation
Nine Months EndedYear Ended
(in thousands)September 30, 2020December 31, 2019
Accounts receivable$745 $6,762 
Inventory3,496 34,134 
Property, plant and equipment3,346 56,391 
Lease right-of-use assets6,580 98,505 
Goodwill76,609 84,669 
Indefinite-lived intangible assets 46,900 
Amortized intangible assets14,589 21,291 
Other assets975 8,308 
Deferred income taxes13,476 (2,703)
Floor plan payables (25,755)
Other liabilities(15,093)(42,555)
Current and noncurrent lease liabilities(6,593)(99,131)
Redeemable noncontrolling interest(6,005)(1,715)
Noncontrolling interest (1,154)
Aggregate purchase price, net of cash acquired$92,125 $183,947 
The 2020 fair values recorded were based upon preliminary valuations and the estimates and assumptions used in such valuations are subject to change within the measurement period (up to one year from the acquisition date). The recording of deferred tax assets or liabilities and the final amounts of residual goodwill and other intangibles are not yet finalized. The 2019 values above reflect a measurement period adjustment related to the lease right-of-use assets, current and noncurrent lease liabilities and the finalization of working capital. Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The goodwill recorded due to these acquisitions is attributable to the assembled workforces of the acquired companies and expected synergies. The Company expects to deduct $3.2 million and $70.7 million of goodwill for income tax purposes for the acquisitions completed in 2020 and 2019, respectively.
The acquired companies were consolidated into the Company’s financial statements starting on their respective acquisition dates. The Company’s Condensed Consolidated Statements of Operations for the third quarter of 2020 include aggregate revenues and operating losses for the companies acquired in 2020 of $9.2 million and $4.2 million, respectively. The Company’s Condensed Consolidated Statements of Operations include aggregate revenues and operating losses of $14.2 million and $