2014 Q4 8-K Earnings Release
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 20, 2015
GRAHAM HOLDINGS COMPANY
(Exact name of registrant as specified in its charter)
 
 
 
 
 
Delaware
1-6714
53-0182885
(State or other jurisdiction of
incorporation or organization)
(Commission
File Number)
(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)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
[ ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


 
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Item 2.02          Results of Operations and Financial Condition.
 
On February 20, 2015, Graham Holdings Company issued a press release announcing the Company’s earnings for the fourth quarter and year ended December 31, 2014.  A copy of this press release is furnished with this report as an exhibit to this Form 8-K.
 
 
Item 9.01          Financial Statements and Exhibits
 
Exhibit 99.1 Graham Holdings Company Earnings Release Dated February 20, 2015.

 
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SIGNATURE
 
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
    Graham Holdings Company    
(Registrant)
 
 
 
Date February 20, 2015                           
            /s/ Hal S. Jones               
     Hal S. Jones
  Senior Vice President–Finance
(Principal Financial Officer)

 
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Exhibit Index
 
 
Exhibit 99.1   Graham Holdings Company Earnings Release dated February 20, 2015.


 
4
2014 Q4 Exhibit 99.1
Exhibit 99.1
 
Contact: 
 
Hal S. Jones
 
For Immediate Release 
 
 
(703) 345-6370
 
February 20, 2015
 
 
 
 
 
 
 
 
GRAHAM HOLDINGS COMPANY REPORTS
 
 
 
 
2014 AND FOURTH QUARTER EARNINGS
 
ARLINGTON VA—Graham Holdings Company (NYSE: GHC) today reported net income attributable to common shares of $1,293.0 million ($195.03 per share) for the year ended December 31, 2014, compared to $236.0 million ($32.05 per share) for the year ended December 31, 2013. Net income includes $372.2 million ($56.15 per share) and $64.0 million ($8.69 per share) in income from discontinued operations for 2014 and 2013, respectively. Income from continuing operations attributable to common shares was $920.7 million ($138.88 per share) for 2014, compared to $172.0 million ($23.36 per share) for 2013. For the fourth quarter of 2014, the Company reported net income attributable to common shares of $334.4 million ($57.41 per share), compared to $156.5 million ($21.14 per share) for the same period of 2013. Net income includes $2.3 million ($0.40 per share) and $106.3 million ($14.37 per share) in income from discontinued operations for the fourth quarter of 2014 and 2013, respectively. The Company reported income from continuing operations attributable to common shares of $332.1 million ($57.01 per share) for the fourth quarter of 2014, compared to $50.1 million ($6.77 per share) for the same period of 2013. (Refer to "Discontinued Operations" discussion below.)
In connection with the Berkshire exchange transaction that closed on June 30, 2014, the Company acquired 1,620,190 shares of its Class B common stock, resulting in 11% and 21% fewer diluted shares outstanding in 2014 and the fourth quarter of 2014, respectively, versus the same periods in 2013.
The results for 2014 and 2013 were affected by a number of items as described in the following paragraphs.  Excluding these items, income from continuing operations attributable to common shares was $254.4 million ($38.40 per share) for 2014, compared to $215.8 million ($29.34 per share) for 2013. Excluding these items, income from continuing operations attributable to common shares was $100.8 million ($17.31 per share) for the fourth quarter of 2014, compared to $74.8 million ($10.13 per share) for the fourth quarter of 2013. (Refer to the Non-GAAP Financial Information schedule attached to this release for additional details.)
Items included in the Company’s income from continuing operations for 2014 are listed below, and fourth quarter activity, if any, is highlighted for each item:
$31.6 million in early retirement program expense and related charges, restructuring charges and software asset write-offs at the education division and the corporate office (after-tax impact of $20.2 million, or $3.05 per share); $3.0 million of these charges were recorded in the fourth quarter (after-tax impact of $1.9 million, or $0.33 per share);
$17.3 million in fourth quarter noncash intangible and other long-lived assets impairment charges at Kaplan and Other Businesses (after-tax impact of $11.2 million, or $1.69 per share);
$396.6 million fourth quarter gain from the sale of Classified Ventures (after-tax impact of $249.8 million, or $37.68 per share);
$90.9 million gain from the Classified Ventures’ sale of apartments.com (after-tax impact of $58.2 million, or $8.78 per share);
$266.7 million gain from the Berkshire exchange transaction (after-tax impact of $266.7 million, or $40.23 per share);
$127.7 million gain on the sale of the corporate headquarters building (after-tax impact of $81.8 million, or $12.34 per share);
$75.2 million gain from the sale of wireless licenses at the cable division (after-tax impact of $48.2 million, or $7.27 per share); and
$11.1 million in non-operating unrealized foreign currency losses (after-tax impact of $7.1 million, or $1.08 per share); $8.5 million in losses were recorded in the fourth quarter (after-tax impact of $5.5 million, or $0.94 per share).

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Items included in the Company’s income from continuing operations for 2013 are listed below, and fourth quarter activity, if any, is highlighted for each item:
$36.4 million in severance and restructuring charges at the education division (after-tax impact of $25.3 million, or $3.46 per share); $18.1 million of these charges were recorded in the fourth quarter (after-tax impact of $12.2 million, or $1.66 per share);
a fourth quarter $3.3 million noncash intangible assets impairment charge at Kaplan (after-tax impact of $3.2 million, or $0.44 per share);
a fourth quarter $10.4 million write-down of a marketable equity security (after-tax impact of $6.7 million, or $0.91 per share); and
$13.4 million in non-operating unrealized foreign currency losses (after-tax impact of $8.6 million, or $1.17 per share); $4.0 million in losses were recorded in the fourth quarter (after-tax impact of $2.6 million, or $0.35 per share).
Revenue for 2014 was $3,535.2 million, up 4% from $3,407.9 million in 2013Revenues increased at the television broadcasting division and in other businesses, offset by a small decline at the cable and education divisions. Operating income for 2014 increased to $407.9 million, from $319.2 million in 2013Operating results improved at all reporting segments and benefited from an increase in the net pension credit.
For the fourth quarter of 2014, revenue was $925.3 million, up 7% from $867.2 million in 2013Revenues increased at the television broadcasting division and in other businesses, were flat at the education division and lower at the cable division. The Company reported operating income of $146.2 million in the fourth quarter of 2014, compared to $97.4 million in 2013. Operating results improved at all reporting segments.
On June 30, 2014, the Company and Berkshire Hathaway Inc. completed a transaction in which Berkshire acquired a wholly-owned subsidiary of the Company that included, among other things, WPLG, a Miami-based television station, 2,107 Class A Berkshire shares and 1,278 Class B Berkshire shares owned by Graham Holdings and $327.7 million in cash, in exchange for 1,620,190 shares of Graham Holdings Class B common stock owned by Berkshire Hathaway (Berkshire exchange transaction). As a result, income from continuing operations for 2014 includes a $266.7 million gain from the exchange of the Berkshire Hathaway shares, and income from discontinued operations for 2014 includes a $375.0 million gain from the WPLG exchange.
In November 2014, the Company announced that its Board of Directors authorized management to proceed with plans for the complete legal and structural separation of Cable ONE, Inc., a Graham Holdings subsidiary, from Graham Holdings. Following the proposed transaction, Cable ONE will be an independent, publicly traded company. The Company intends to complete the proposed transaction later in 2015. The proposed transaction will be structured as a tax-free spin-off of Cable ONE to the stockholders of the Company. The transaction is contingent on the satisfaction of a number of conditions, including completion of the review process by the Securities and Exchange Commission of required filings under applicable securities regulations, other applicable regulatory approvals and the final approval of transaction terms by the Company’s Board of Directors.
On February 12, 2015, Kaplan entered into a Purchase and Sale Agreement with Education Corporation of America (ECA) to sell substantially all of the assets of its KHE Campuses business, consisting of thirty-eight nationally accredited ground campuses, and certain related assets, in exchange for a preferred equity interest in ECA. The transaction is contingent upon certain regulatory and accrediting agency approvals and is expected to close in the second or third quarter of 2015.
Division Results
Education
Education division revenue in 2014 totaled $2,160.4 million, compared to revenue of $2,163.7 million in 2013. For the fourth quarter of 2014, education division revenue totaled $551.4 million, compared to revenue of $550.6 million for the same period of 2013.
Kaplan reported operating income of $65.5 million for 2014, compared to $51.0 million in 2013; Kaplan reported operating income for the fourth quarter of 2014 of $33.4 million, compared to $14.4 million in the fourth quarter of 2013. Kaplan’s 2014 operating results in comparison to 2013 benefited from improvement in Kaplan Higher Education (KHE) and Kaplan International results, offset by increased intangible and other long-lived asset impairment charges.
In recent years, Kaplan has formulated and implemented restructuring plans at its various businesses that have resulted in significant costs in 2014 and 2013, with the objective of establishing lower cost levels in future periods. Across all businesses, restructuring costs and software asset write-offs totaled $16.8 million in 2014 and $36.4 million in 2013. Restructuring costs totaled $3.0 million in the fourth quarter of 2014 and $18.1 million in the fourth quarter of 2013. (Refer to the Education Division Information, Summary of Restructuring Charges schedule attached to this release for additional details.)

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In the third quarter of 2014, Kaplan completed the sale of three of its schools in China that were previously part of Kaplan International. The sale of an additional school in China was completed in January 2015. Kaplan’s operating results exclude these schools, which have been reclassified to discontinued operations for all periods presented.
A summary of Kaplan’s operating results, including and excluding restructuring costs and software asset write-offs, is as follows:
 
 
Three Months Ended
 
 
 
Twelve Months Ended
 
 
 
 
December 31
 
 
 
December 31
 
 
(in thousands)
 
2014
 
2013
 
% Change
 
2014
 
2013
 
% Change
Revenue
 
 
 
 
 
 
 
 
 
 
 
 
Higher education
 
$
254,461

 
$
269,895

 
(6
)
 
$
1,010,058

 
$
1,080,908

 
(7
)
Test preparation
 
70,652

 
61,137

 
16

 
304,662

 
293,201

 
4

Kaplan international
 
225,408

 
218,883

 
3

 
840,915

 
783,588

 
7

Kaplan corporate and other
 
1,203

 
1,494

 
(19
)
 
6,094

 
7,990

 
(24
)
Intersegment elimination
 
(343
)
 
(791
)
 

 
(1,312
)
 
(1,953
)
 

  
 
$
551,381

 
$
550,618

 

 
$
2,160,417

 
$
2,163,734

 

Operating Income (Loss)
 
 

 
 

 
 

 
 

 
 

 
 

Higher education
 
$
43,582

 
$
29,230

 
49

 
$
83,069

 
$
71,584

 
16

Test preparation
 
(1,178
)
 
(3,188
)
 
63

 
(4,730
)
 
4,118

 

Kaplan international
 
28,544

 
27,952

 
2

 
69,153

 
51,653

 
34

Kaplan corporate and other
 
(18,134
)
 
(33,873
)
 
46

 
(57,093
)
 
(64,948
)
 
12

Amortization of intangible assets
 
(2,089
)
 
(2,422
)
 
14

 
(7,738
)
 
(8,503
)
 
9

Impairment of intangible and other long-lived assets
 
(17,203
)
 
(3,250
)
 

 
(17,203
)
 
(3,250
)
 

Intersegment elimination
 
(109
)
 
(46
)
 

 
5

 
335

 

 
 
$
33,413

 
$
14,403

 

 
$
65,463

 
$
50,989

 
28

Operating Income (Loss)
 
 

 
 

 
 

 
 

 
 

 
 

Restructuring Costs Excluded from Divisions
 
 

 
 

 
 

 
 

 
 

 
 

Higher education*
 
$
45,587

 
$
34,640

 
32

 
89,564

 
91,128

 
(2
)
Test preparation*
 
(328
)
 
(3,188
)
 
90

 
3,999

 
4,118

 
(3
)
Kaplan international*
 
28,622

 
29,617

 
(3
)
 
69,380

 
57,425

 
21

Kaplan corporate and other*
 
(18,099
)
 
(22,831
)
 
21

 
(55,738
)
 
(53,906
)
 
(3
)
 
 
55,782

 
38,238

 
46

 
107,205

 
98,765

 
9

Restructuring costs*
 
(2,968
)
 
(18,117
)
 
84

 
(16,806
)
 
(36,358
)
 
54

Amortization of intangible assets
 
(2,089
)
 
(2,422
)
 
14

 
(7,738
)
 
(8,503
)
 
9

Impairment of intangible and other long-lived assets
 
(17,203
)
 
(3,250
)
 

 
(17,203
)
 
(3,250
)
 

Intersegment elimination
 
(109
)
 
(46
)
 

 
5

 
335

 

 
 
$
33,413

 
$
14,403

 

 
65,463

 
50,989

 
28

 
 
 
 
 
 
 
 
 
 
 
 
 
*Non-GAAP Measure
 
 

 
 

 
 

 
 

 
 

 
 

KHE includes Kaplan’s domestic postsecondary education businesses, made up of fixed-facility colleges and online postsecondary and career programs. KHE also includes the domestic professional training and other continuing education businesses.
In 2012, KHE began implementing plans to close or merge 13 ground campuses, consolidate other facilities and reduce its workforce. The last two of these campus closures were completed in the second quarter of 2014. In April 2014, KHE announced plans to close two additional ground campuses, and in July 2014, KHE announced plans to close another three campuses. KHE is in the process of teaching out the current students, and the campus closures will be completed by the end of 2015. In July 2014, KHE also announced plans to further reduce its work force.
In February 2015, Kaplan entered into a Purchase and Sale Agreement with ECA to sell substantially all of the assets of its KHE Campuses business. The transaction is contingent upon certain regulatory and accrediting agency approvals and is expected to close in the second or third quarter of 2015. In addition, in the fourth quarter of 2014, Kaplan recorded a $13.6 million other long-lived asset impairment charge in connection with its KHE Campuses business. KHE results include revenue and operating income (loss) related to the KHE Campuses business as follows:
 
 
Three Months Ended
 
Twelve Months Ended
 
 
December 31
 
December 31
(in thousands)
 
2014
 
2013
 
2014
 
2013
Revenue
 
$
67,355

 
$
75,712

 
$
274,487

 
$
299,714

Operating income (loss)
 
$
1,330

 
$
(804
)
 
$
(12,500
)
 
$
(28,343
)
In connection with these and other plans, KHE incurred $6.5 million and $19.5 million in restructuring costs from severance, accelerated depreciation, lease obligations and other items in 2014 and 2013, respectively; $2.0 million and $5.4 million of these restructuring costs were recorded in the fourth quarter of 2014 and 2013, respectively.

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In 2014 and the fourth quarter of 2014, KHE revenue declined 7% and 6%, respectively, due largely to declines in average enrollments at KHE campuses and at Kaplan University that reflect weaker market demand over the past year and lower average tuition. The declines were most pronounced at KHE’s ground campuses due to the impact of campuses closed or in the process of closing, as well as weakness in demand for KHE’s non-degree vocational programs. KHE operating income improved in 2014 and the fourth quarter of 2014 due largely to expense reductions associated with lower enrollments and recent restructuring efforts and lower restructuring costs, partially offset by revenue declines and increased marketing spending at Kaplan University.
New student enrollments at KHE declined 3% in 2014 due to lower demand across KHE and the impact of campus closures. Total students at December 31, 2014, were down 6% and 8% compared to December 31, 2013, and September 30, 2014. Excluding campuses closed or planned for closure, total students at December 31, 2014, were down 4% and 8% compared to December 31, 2013, and September 30, 2014, respectively. A summary of student enrollments is as follows:
 
 
 
 
 
 
 
 
Excluding Campuses Closing
 
 
As of
 
As of
 
 
December 31,
 
September 30,
 
December 31,
 
December 31,
 
September 30,
 
December 31,
 
 
2014
 
2014
 
2013
 
2014
 
2014
 
2013
Kaplan University
 
42,469

 
46,342

 
42,816

 
42,469

 
46,342

 
42,816

Other Campuses
 
14,266

 
15,570

 
17,417

 
14,045

 
15,139

 
15,818

 
 
56,735

 
61,912

 
60,233

 
56,514

 
61,481

 
58,634

 
 
 
 
 
 
 
 
 
 
 
 
 
Kaplan University and Other Campuses enrollments by certificate and degree programs, are as follows:
 
 
As of December 31
 
 
2014
 
2013
Certificate
 
20.6
%
 
21.7
%
Associate’s
 
27.4
%
 
29.7
%
Bachelor’s
 
34.2
%
 
32.3
%
Master’s
 
17.8
%
 
16.3
%
 
 
100.0
%
 
100.0
%
KTP includes Kaplan’s standardized test preparation programs. KTP revenue increased 4% in 2014 and 16% for the fourth quarter of 2014. Excluding revenues from acquired businesses, KTP revenue increased 2% in 2014 and 11% for the fourth quarter of 2014. KTP recorded a $7.7 million software asset write-off in the second quarter of 2014 due to a decision to consolidate certain learning management systems. KTP operating results declined in 2014 due to the software asset write-off and increased costs for newly acquired businesses. Operating results in the fourth quarter of 2014 improved due to revenue growth.
Kaplan International includes English-language programs and postsecondary education and professional training businesses largely outside the United States. Kaplan International revenue increased 7% in 2014 due to enrollment growth in the pathways, English-language, Australia professional and Singapore higher education programs. Kaplan International revenue grew 3% in the fourth quarter of 2014 due to growth in the pathways, English-language, Australia Professional and Singapore higher education programs, offset by weaker currency exchange rates in Europe and Australia.
Kaplan International operating income increased 34% in 2014 due primarily to improved results from operations in Australia and Singapore, and lower restructuring costs in 2014. Restructuring costs at Kaplan International totaled $0.2 million and $5.8 million in 2014 and 2013, respectively. Operating results were up in the fourth quarter of 2014 due to improved results in Australia and lower restructuring costs, offset by higher costs to support growth in English-language programs. Restructuring costs were $0.1 million and $1.7 million in the fourth quarter of 2014 and 2013, respectively.
In the fourth quarter of 2014, Kaplan recorded $17.2 million in noncash intangible and other long-lived assets impairment charges in connection with businesses at KHE, KTP and Kaplan International. In 2013, Kaplan recorded $3.3 million in noncash intangible assets impairment charges primarily in connection with one of the businesses in Kaplan International.
Kaplan corporate represents unallocated expenses of Kaplan, Inc.’s corporate office, other minor businesses and certain shared activities. In the fourth quarter of 2013, $11.0 million in restructuring costs was recorded in connection with charges related to office space managed by Kaplan corporate.
Kaplan continues to evaluate its cost structure and is pursuing additional cost savings opportunities, including eliminating excess office capacity. This will likely result in additional restructuring plans and related costs in 2015.

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Cable
Cable division revenue for 2014 declined 1% to $798.1 million, from $807.3 million in 2013 due to 4% fewer customers and 8% fewer Primary Service Units (PSUs); revenue totaled $197.7 million for the fourth quarter of 2014, a 1% decline from $200.2 million for the fourth quarter of 2013. Operating expenses in 2014 declined 3%, from $637.6 million to $619.4 million in 2014; operating expenses declined 3% in the fourth quarter of 2014, from $151.5 million to $147.0 million. The expense declines are due to fewer customers and significantly reduced programming costs. Cable division operating income grew 5% to $178.7 million, from $169.7 million in 2013; operating income increased 4% from $48.7 million in the fourth quarter of 2013 to $50.7 million in the fourth quarter of 2014.
The cable division continues its focus on higher margin businesses, namely high-speed data and business sales. Residential high-speed data revenue increased 5.3% in 2014 on 2.5% customer growth, and business sales increased 18.5% on a 14.9% increase in business high-speed data customers. Overall, business sales comprised 8.9% of total revenue for 2014, compared with 7.4% of total revenue for 2013. Due to rapidly rising programming costs and shrinking margins, video sales now have less value and emphasis (video PSUs were down 16% from 2013) and programming costs have been reduced significantly. Effective April 1, 2014, the cable division elected not to renew its contract for Viacom networks.
The cable division also continues to focus on higher lifetime value customers who are less attracted by discounting, require less support and churn less. Operating income margins increased to 22.4% in 2014, from 21.0% in 2013.
A summary of PSUs and total customers is as follows:
 
 
As of December 31
 
 
2014
 
2013
Video
 
451,217

 
538,894

High-speed data
 
488,454

 
472,631

Voice
 
149,513

 
169,181

Total Primary Service Units (PSUs)
 
1,089,184

 
1,180,706

Total Customers
 
686,671

 
712,910

In July 2014, the cable division sold wireless spectrum licenses for $98.8 million; a pre-tax gain of $75.2 million was reported in the third quarter of 2014 in connection with these sales. The licenses had been purchased in the 2006 AWS auction.
Television Broadcasting
Revenue for the television broadcasting division increased 18% to $363.8 million in 2014, from $308.3 million in 2013; operating income for 2014 was up 29% to $187.8 million, from $145.2 million in 2013. The increase in revenue and operating income is due to a $31.8 million increase in political advertising revenue, $9.5 million in incremental winter Olympics-related advertising revenue at the Company’s NBC affiliates and $18.6 million in increased retransmission revenues.
For the fourth quarter of 2014, revenue increased 20% to $102.4 million, from $85.7 million in 2013; operating income for the fourth quarter of 2014 was up 24% to $54.4 million, from $44.0 million in the same period of 2013. The increase in revenue and operating income is due to a $15.4 million increase in political advertising revenue and $4.6 million in increased retransmission revenues.
In November 2014, the television broadcasting division acquired SocialNewsDesk, a market-leading software-based technology platform created by journalists to help newsroom and content producers publish, manage and monetize social media.
As a result of the Berkshire exchange transaction discussed above, the television broadcasting operating results exclude WPLG, the Company’s Miami-based television station, which has been reclassified to discontinued operations for all periods presented.
Other Businesses
Other businesses includes the operating results of The Slate Group and Foreign Policy Group, which publish online and print magazines and websites; SocialCode, a marketing solutions provider helping companies with marketing on social-media platforms; Celtic Healthcare, a provider of home health and hospice services; Forney, a global supplier of products and systems that control and monitor combustion processes in electric utility and industrial applications, acquired by the Company in August 2013; and Trove, a digital innovation team that builds products and technologies in the news space. Other businesses also includes a number of businesses acquired in 2014.

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In April 2014, Celtic Healthcare acquired the assets of VNA-TIP Healthcare of Bridgeton, MO. This acquisition has expanded Celtic’s home health and hospice service areas from Pennsylvania and Maryland to the Missouri and Illinois regions. The operating results of VNA-TIP are included in other businesses from the date of acquisition in the second quarter of 2014. In January 2015, Celtic Healthcare and Allegheny Health Network (AHN) closed on the formation of a joint venture to combine each other’s home health and hospice assets in the western Pennsylvania region. Although Celtic will manage the operations of the joint venture, Celtic holds a 40% interest in the joint venture, so the operating results of the joint venture will not be consolidated and the pro rata operating results will be included in the Company’s equity in earnings of affiliates in the future. Celtic's revenues from the western Pennsylvania region that now are part of the joint venture made up 29% of total Celtic revenues in 2014.
On May 30, 2014, the Company acquired Joyce/Dayton Corp., a Dayton, OH-based manufacturer of screw jacks and other linear motion systems. The operating results of Joyce/Dayton are included in other businesses from the date of acquisition in the second quarter of 2014.
On July 3, 2014, the Company acquired a majority interest in Residential Healthcare Group, Inc. (Residential), the parent company of Residential Home Health and Residential Hospice, leading providers of skilled home health and hospice services in Michigan and Illinois. The operating results of Residential are included in Other Businesses from the date of acquisition in the third quarter of 2014. Since Residential owns a minority interest in the Illinois operations it manages, the operating results of the Illinois operations are not being consolidated and the pro rata operating results are included in the Company’s equity in earnings of affiliates.
The increase in revenues for 2014 and the fourth quarter of 2014 is due primarily to the inclusion of revenues from the businesses acquired in 2014 and 2013. The improvement in operating results in 2014 and the fourth quarter of 2014 reflects the contribution of the acquired businesses, as well as improved results at SocialCode. These improvements were partially offset by acquisition-related costs and other integration expenses incurred in conjunction with the VNA-TIP Healthcare acquisition.
Corporate Office
Corporate office includes the expenses of the Company’s corporate office, the pension credit for the Company’s traditional defined benefit plan and certain continuing obligations related to prior business dispositions. In the first quarter of 2014, the corporate office implemented a Separation Incentive Program that resulted in early retirement program expense of $4.5 million, which is being funded from the assets of the Company’s pension plan. In the third quarter of 2014, the acceptance period for the Voluntary Retirement Incentive Program (VRIP) ended and the Company recorded $10.3 million in early retirement program expense and other related charges, a portion of which is being funded from the assets of the Company’s pension plan. Excluding early retirement program expense, the total pension credit for the Company’s traditional defined benefit plan was $91.2 million and $42.7 million for 2014 and 2013, respectively.
Excluding the pension credit, early retirement program expense and other related charges, corporate office expenses increased in 2014 due to higher compensation costs, expenses related to acquisitions, the Berkshire exchange transaction and the cable spin-off, and incremental costs associated with the corporate office headquarters move to Arlington, VA.
Equity in Earnings of Affiliates
At September 30, 2014, the Company held a 16.5% interest in Classified Ventures, LLC (CV) and interests in several other affiliates. On October 1, 2014, the Company and the remaining partners in CV completed the sale of their entire stakes in CV. Total proceeds to the Company, net of transaction costs, were $408.5 million, of which $16.5 million will be held in escrow until October 1, 2015. The Company recorded a pre-tax non-operating gain of $396.6 million in connection with the sale in the fourth quarter of 2014.
The Company’s equity in earnings of affiliates, net, for 2014 was $100.4 million, compared to $13.2 million in 2013. For the fourth quarter of 2014, the Company’s equity in earnings of affiliates was $0.2 million and was insignificant for the fourth quarter of 2013.
The 2014 results include a pre-tax gain of $90.9 million from Classified Ventures’ sale of apartments.com in the second quarter of 2014.
Other Non-Operating Income (Expense)
The Company recorded other non-operating income, net, of $853.3 million in 2014, compared to expense of $23.8 million in 2013. For the fourth quarter of 2014, the Company recorded other non-operating income, net, of $387.3 million, compared to expense of $14.9 million for the fourth quarter of 2013.

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The 2014 non-operating income, net, included a fourth quarter pre-tax gain of $396.6 million on the sale of Classified Ventures, the pre-tax gain of $266.7 million in connection with the Company’s exchange of Berkshire shares, a pre-tax gain of $127.7 million on the sale of the headquarters building, a $75.2 million pre-tax gain on the sale of wireless licenses, $11.1 million in unrealized foreign currency losses ($8.5 million in unrealized foreign currency losses in the fourth quarter) and other items. The 2013 non-operating expense, net, included a $10.4 million fourth quarter write-down of a marketable equity security, $13.4 million in unrealized foreign currency losses ($4.0 million in unrealized foreign currency losses in the fourth quarter) and other items.
Net Interest Expense and Related Balances
The Company incurred net interest expense of $34.5 million in 2014, compared to $33.8 million in 2013; net interest expense totaled $9.5 million and $8.2 million for the fourth quarters of 2014 and 2013, respectively. At December 31, 2014, the Company had $445.9 million in borrowings outstanding at an average interest rate of 7.1%, and cash, marketable securities and other investments of $1,024.4 millionAt December 31, 2013, the Company had $450.8 million in borrowings outstanding at an average interest rate of 7.0%, and cash, marketable securities and other investments of $1,175.8 million.
Provision for Income Taxes
The effective tax rate for income from continuing operations in 2014 was 30.6%. The lower effective tax rate in 2014 largely relates to the Berkshire exchange transaction. The pre-tax gain of $266.7 million related to the disposition of the Berkshire shares was not subject to income tax as the exchange qualifies as a tax-free transaction.
The effective tax rate for income from continuing operations in 2013 was 36.9%. This effective tax rate benefited from lower state taxes and lower rates in jurisdictions outside the United States, offset by $4.6 million in net state and non-U.S. valuation allowances provided against deferred income tax benefits where realization is doubtful.
Discontinued Operations
On June 30, 2014, the Company and Berkshire Hathaway Inc. completed the Berkshire exchange transaction discussed above. A gain of $375.0 million was recorded in discontinued operations in connection with the disposition of WPLG, a Miami-based television station. This gain is not subject to income tax.
In the third quarter of 2014, Kaplan completed the sale of three of its schools in China that were previously part of Kaplan International. An additional school in China was sold by Kaplan in January 2015.
On October 1, 2013, the Company completed the sale of its newspaper publishing businesses for $250.0 million. The related publishing businesses sold include The Washington Post, Express, The Gazette Newspapers, Southern Maryland Newspapers, Greater Washington Publishing, Fairfax County Times, El Tiempo Latino and related websites (Publishing Subsidiaries). In the fourth quarter of 2013, a pre-tax gain of $157.5 million was recorded in discontinued operations on the sale ($100.0 million after-tax gain).
In March 2013, the Company sold The Herald, a daily newspaper headquartered in Everett, WA.
As a result of these transactions, income from continuing operations excludes the operating results and related net gain on dispositions of these businesses, which have been reclassified to discontinued operations, net of tax, for all periods presented.
Earnings Per Share
The calculation of diluted earnings per share for 2014 and the fourth quarter of 2014 was based on 6,559,442 and 5,769,889 weighted average shares, respectively, compared to 7,332,508 and 7,347,267 weighted average shares, respectively, for 2013 and the fourth quarter of 2013. At December 31, 2014, there were 5,798,789 shares outstanding and the Company had remaining authorization from the Board of Directors to repurchase up to 159,219 shares of Class B common stock. The earnings per share computations for the year and fourth quarter of 2014 were favorably impacted by the 1,620,190 common shares repurchased as part of the Berkshire exchange transaction.
Forward-Looking Statements
This report 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.


-more-
7


GRAHAM HOLDINGS COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
 
 
 
Three Months Ended
 
 
December 31
%
(in thousands, except per share amounts)
2014
 
2013
Change
Operating revenues
$
925,343

 
$
867,242

7

Operating expenses
711,202

 
704,285

1

Depreciation of property, plant and equipment
45,366

 
58,924

(23
)
Amortization of intangible assets
5,251

 
3,359

56

Impairment of intangible and other long-lived assets
17,302

 
3,250


Operating income
146,222

 
97,424

50

Equity in earnings of affiliates, net
202

 
37


Interest income
367

 
590

(38
)
Interest expense
(9,879
)
 
(8,838
)
12

Other income (expense), net
387,346

 
(14,920
)

Income from continuing operations before income taxes
524,258

 
74,293


Provision for income taxes
191,900

 
24,100


Income from continuing operations
332,358

 
50,193


Income from discontinued operations, net of tax
2,308

 
106,335

(98
)
Net income
334,666

 
156,528


Net income attributable to noncontrolling interests
(256
)
 
(55
)

Net income attributable to Graham Holdings Company
334,410

 
156,473


Redeemable preferred stock dividends

 


Net Income Attributable to Graham Holdings Company Common Stockholders
$
334,410

 
$
156,473


Amounts Attributable to Graham Holdings Company Common Stockholders
 
 
 
 
Income from continuing operations
$
332,102

 
$
50,138


Income from discontinued operations, net of tax
2,308

 
106,335

(98
)
Net income
$
334,410

 
$
156,473


Per Share Information Attributable to Graham Holdings Company Common Stockholders
 
 
 
 
Basic income per common share from continuing operations
$
57.31

 
$
6.79


Basic income per common share from discontinued operations
0.40

 
14.41

(97
)
Basic net income per common share
$
57.71

 
$
21.20


Basic average number of common shares outstanding
5,678

 
7,266

 
Diluted income per common share from continuing operations
$
57.01

 
$
6.77


Diluted income per common share from discontinued operations
0.40

 
14.37

(97
)
Diluted net income per common share
$
57.41

 
$
21.14


Diluted average number of common shares outstanding
5,770

 
7,347

 

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8


GRAHAM HOLDINGS COMPANY
 
CONSOLIDATED STATEMENTS OF OPERATIONS
 
(Unaudited)
 
 
 
 
 
Twelve Months Ended
 
 
December 31
%
(in thousands, except per share amounts)
2014
 
2013
Change
Operating revenues
$
3,535,166

 
$
3,407,911

4

Operating expenses
2,887,918

 
2,843,998

2

Depreciation of property, plant and equipment
203,646

 
229,355

(11
)
Amortization of intangible assets
18,368

 
12,139

51

Impairment of intangible and other long-lived assets
17,302

 
3,250


Operating income
407,932

 
319,169

28

Equity in earnings of affiliates, net
100,370

 
13,215


Interest income
2,136

 
2,264

(6
)
Interest expense
(36,586
)
 
(36,067
)
1

Other income (expense), net
853,259

 
(23,751
)

Income from continuing operations before income taxes
1,327,111

 
274,830


Provision for income taxes
406,100

 
101,500


Income from continuing operations
921,011

 
173,330


Income from discontinued operations, net of tax
372,249

 
64,015


Net income
1,293,260

 
237,345


Net loss (income) attributable to noncontrolling interests
583

 
(480
)

Net income attributable to Graham Holdings Company
1,293,843

 
236,865


Redeemable preferred stock dividends
(847
)
 
(855
)
(1
)
Net Income Attributable to Graham Holdings Company Common Stockholders
$
1,292,996

 
$
236,010


Amounts Attributable to Graham Holdings Company Common Stockholders
 
 
 
 

Income from continuing operations
$
920,747

 
$
171,995


Income from discontinued operations, net of tax
372,249

 
64,015


Net income
$
1,292,996

 
$
236,010


Per Share Information Attributable to Graham Holdings Company Common Stockholders
 
 
 
 

Basic income per common share from continuing operations
$
139.44

 
$
23.39


Basic income per common share from discontinued operations
56.37

 
8.71


Basic net income per common share
$
195.81

 
$
32.10


Basic average number of common shares outstanding
6,470

 
7,238

 

Diluted income per common share from continuing operations
$
138.88

 
$
23.36


Diluted income per common share from discontinued operations
56.15

 
8.69


Diluted net income per common share
$
195.03

 
$
32.05


Diluted average number of common shares outstanding
6,559

 
7,333

 



-more-
9


GRAHAM HOLDINGS COMPANY
BUSINESS SEGMENT INFORMATION
(Unaudited)
 
 
 
 
 
 
 
 
 
  
 
Three Months Ended
 
 
 
Twelve Months Ended
 
 
 
 
December 31
 
%
 
December 31
 
%
(in thousands)
2014
 
2013
 
Change
 
2014
 
2013
 
Change
Operating Revenues
  
 
 
 
 
 
  
 
 
 
 
Education
 
$
551,381

 
$
550,618

 

 
$
2,160,417

 
$
2,163,734

 

Cable
 
197,718

 
200,240

 
(1
)
 
798,134

 
807,309

 
(1
)
Television broadcasting
 
102,446

 
85,688

 
20

 
363,836

 
308,306

 
18

Other businesses
 
73,798

 
30,735

 

 
212,907

 
128,803

 
65

Corporate office
 

 

 

 

 

 

Intersegment elimination
 

 
(39
)
 

 
(128
)
 
(241
)
 

 
 
$
925,343

 
$
867,242

 
7

 
$
3,535,166

 
$
3,407,911

 
4

Operating Expenses
 

 
 

 
 

 
 

 
 

 
 

Education
 
$
517,968

 
$
536,215

 
(3
)
 
$
2,094,954

 
$
2,112,745

 
(1
)
Cable
 
147,010

 
151,543

 
(3
)
 
619,412

 
637,574

 
(3
)
Television broadcasting
 
48,066

 
41,689

 
15

 
176,003

 
163,114

 
8

Other businesses
 
67,850

 
34,647

 
96

 
233,993

 
152,271

 
54

Corporate office
 
(1,773
)
 
5,763

 

 
3,000

 
23,279

 
(87
)
Intersegment elimination
 

 
(39
)
 

 
(128
)
 
(241
)
 

 
 
$
779,121

 
$
769,818

 
1

 
$
3,127,234

 
$
3,088,742

 
1

Operating Income (Loss)
 

 
 

 
 

 
 

 
 

 
 

Education
 
$
33,413

 
$
14,403

 

 
$
65,463

 
$
50,989

 
28

Cable
 
50,708

 
48,697

 
4

 
178,722

 
169,735

 
5

Television broadcasting
 
54,380

 
43,999

 
24

 
187,833

 
145,192

 
29

Other businesses
 
5,948

 
(3,912
)
 

 
(21,086
)
 
(23,468
)
 
10

Corporate office
 
1,773

 
(5,763
)
 

 
(3,000
)
 
(23,279
)
 
87

 
 
$
146,222

 
$
97,424

 
50

 
$
407,932

 
$
319,169

 
28

Depreciation
 

 
 

 
 

 
 

 
 

 
 

Education
 
$
14,713

 
$
28,104

 
(48
)
 
$
61,737

 
$
89,622

 
(31
)
Cable
 
26,748

 
27,541

 
(3
)
 
128,733

 
128,184

 

Television broadcasting
 
2,228

 
2,142

 
4

 
8,409

 
8,746

 
(4
)
Other businesses
 
1,430

 
616

 

 
3,931

 
2,177

 
81

Corporate office
 
247

 
521

 
(53
)
 
836

 
626

 
34

 
 
$
45,366

 
$
58,924

 
(23
)
 
$
203,646

 
$
229,355

 
(11
)
Amortization of Intangible Assets and Impairment of Intangible and Other Long-Lived Assets
 
 
 
 

 
 

 
 

 
 

 
 

Education
 
$
19,292

 
$
5,672

 

 
$
24,941

 
$
11,753

 

Cable
 
36

 
52

 
(31
)
 
181

 
220

 
(18
)
Television broadcasting
 
32

 

 

 
32

 

 

Other businesses
 
3,193

 
885

 

 
10,516

 
3,416

 

Corporate office
 

 

 

 

 

 

 
 
$
22,553

 
$
6,609

 

 
$
35,670

 
$
15,389

 

Pension Expense (Credit)
 

 
 

 
 

 
 

 
 

 
 

Education
 
$
3,855

 
$
4,032

 
(4
)
 
$
15,418

 
$
16,538

 
(7
)
Cable
 
916

 
940

 
(3
)
 
3,585

 
3,708

 
(3
)
Television broadcasting
 
338

 
70

 

 
1,355

 
3,961

 
(66
)
Other businesses
 
191

 
187

 
2

 
748

 
610

 
23

Corporate office
 
(23,070
)
 
(14,287
)
 
61

 
(82,301
)
 
(41,836
)
 
97

 
 
$
(17,770
)
 
$
(9,058
)
 
96

 
$
(61,195
)
 
$
(17,019
)
 


-more-
10


GRAHAM HOLDINGS COMPANY
EDUCATION DIVISION INFORMATION
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
 
Twelve Months Ended
 
 
 
 
December 31
 
%
 
December 31
 
%
(in thousands)
 
2014
 
2013
 
Change
 
2014
 
2013
 
Change
Operating Revenues
 
  
 
 
 
 
 
  
 
 
 
 

Higher education
 
$
254,461

 
$
269,895

 
(6
)
 
$
1,010,058

 
$
1,080,908

 
(7
)
Test preparation
 
70,652

 
61,137

 
16

 
304,662

 
293,201

 
4

Kaplan international
 
225,408

 
218,883

 
3

 
840,915

 
783,588

 
7

Kaplan corporate and other
 
1,203

 
1,494

 
(19
)
 
6,094

 
7,990

 
(24
)
Intersegment elimination
 
(343
)
 
(791
)
 

 
(1,312
)
 
(1,953
)
 

 
 
$
551,381

 
$
550,618

 

 
$
2,160,417

 
$
2,163,734

 

Operating Expenses
 
  

 
  

 
 

 
  

 
  

 
 

Higher education
 
$
210,879

 
$
240,665

 
(12
)
 
$
926,989

 
$
1,009,324

 
(8
)
Test preparation
 
71,830

 
64,325

 
12

 
309,392

 
289,083

 
7

Kaplan international
 
196,864

 
190,931

 
3

 
771,762

 
731,935

 
5

Kaplan corporate and other
 
19,337

 
35,367

 
(45
)
 
63,187

 
72,938

 
(13
)
Amortization of intangible assets
 
2,089

 
2,422

 
(14
)
 
7,738

 
8,503

 
(9
)
Impairment of intangible and other long-lived assets
 
17,203

 
3,250

 

 
17,203

 
3,250

 

Intersegment elimination
 
(234
)
 
(745
)
 

 
(1,317
)
 
(2,288
)
 

 
 
$
517,968

 
$
536,215

 
(3
)
 
$
2,094,954

 
$
2,112,745

 
(1
)
Operating Income (Loss)
 
  

 
  

 
 

 
  

 
  

 
 

Higher education
 
$
43,582

 
$
29,230

 
49

 
$
83,069

 
$
71,584

 
16

Test preparation
 
(1,178
)
 
(3,188
)
 
63

 
(4,730
)
 
4,118

 

Kaplan international
 
28,544

 
27,952

 
2

 
69,153

 
51,653

 
34

Kaplan corporate and other
 
(18,134
)
 
(33,873
)
 
46

 
(57,093
)
 
(64,948
)
 
12

Amortization of intangible assets
 
(2,089
)
 
(2,422
)
 
14

 
(7,738
)
 
(8,503
)
 
9

Impairment of intangible and other long-lived assets
 
(17,203
)
 
(3,250
)
 

 
(17,203
)
 
(3,250
)
 

Intersegment elimination
 
(109
)
 
(46
)
 

 
5

 
335

 

 
 
$
33,413

 
$
14,403

 

 
$
65,463

 
$
50,989

 
28

Depreciation
 
  

 
  

 
 

 
  

 
  

 
 

Higher education
 
$
7,047

 
$
9,973

 
(29
)
 
$
29,187

 
$
43,892

 
(34
)
Test preparation
 
2,826

 
4,536

 
(38
)
 
12,547

 
19,194

 
(35
)
Kaplan international
 
4,751

 
4,251

 
12

 
19,297

 
16,154

 
19

Kaplan corporate and other
 
89

 
9,344

 
(99
)
 
706

 
10,382

 
(93
)
 
 
$
14,713

 
$
28,104

 
(48
)
 
$
61,737

 
$
89,622

 
(31
)
Pension Expense
 
 
 
  

 
 

 
  

 
 
 
 

Higher education
 
$
2,629

 
$
2,899

 
(9
)
 
$
10,514

 
$
11,714

 
(10
)
Test preparation
 
722

 
662

 
9

 
2,888

 
2,674

 
8

Kaplan international
 
89

 
90

 
(1
)
 
356

 
363

 
(2
)
Kaplan corporate and other
 
415

 
381

 
9

 
1,660

 
1,787

 
(7
)
 
 
$
3,855

 
$
4,032

 
(4
)
 
$
15,418

 
$
16,538

 
(7
)


-more-
11


GRAHAM HOLDINGS COMPANY
EDUCATION DIVISION INFORMATION
SUMMARY OF RESTRUCTURING CHARGES
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
(in thousands)
Severance
 
Accelerated Depreciation
 
Lease Obligation Losses
 
Software Asset Write-offs
 
Other
 
Total
Three Months Ended December 31
 
 
 
 
 
 
 
 
 
 
 
2014
 
 
 
 
 
 
 
 
 
 
 
Higher education
$
511

 
$
855

 
$
639

 
$

 
$

 
$
2,005

Test preparation
850

 

 

 

 

 
850

Kaplan international
78

 

 

 

 

 
78

Kaplan corporate and other
35

 

 

 

 

 
35

 
$
1,474

 
$
855

 
$
639

 
$

 
$

 
$
2,968

2013
 
 
 
 
 
 
 
 
 
 
 
Higher education
$
1,217

 
$
1,728

 
$
2,290

 
$

 
$
175

 
$
5,410

Test preparation

 

 

 

 

 

Kaplan international
580

 
536

 
318

 

 
231

 
1,665

Kaplan corporate and other
341

 
9,107

 
1,594

 

 

 
11,042

 
$
2,138

 
$
11,371

 
$
4,202

 
$

 
$
406

 
$
18,117

Twelve Months Ended December 31
 
 
 
 
 
 
 
 
 
 
 
2014
 
 
 
 
 
 
 
 
 
 
 
Higher education
$
3,478

 
$
2,062

 
$
725

 
$

 
$
230

 
$
6,495

Test preparation
1,040

 

 

 
7,689

 

 
8,729

Kaplan international
227

 

 

 

 

 
227

Kaplan corporate and other
330

 

 
1,025

 

 

 
1,355

 
$
5,075

 
$
2,062

 
$
1,750

 
$
7,689

 
$
230

 
$
16,806

2013
 
 
 
 
 
 
 
 
 
 
 
Higher education
$
4,264

 
$
7,489

 
$
6,627

 
$

 
$
1,164

 
$
19,544

Test preparation

 

 

 

 

 

Kaplan international
1,684

 
260

 
1,130

 

 
2,698

 
5,772

Kaplan corporate and other
341

 
9,107

 
1,594

 

 

 
11,042

 
$
6,289

 
$
16,856

 
$
9,351

 
$

 
$
3,862

 
$
36,358



-more-
12



NON-GAAP FINANCIAL INFORMATION
GRAHAM HOLDINGS COMPANY
(Unaudited)
 
In addition to the results reported in accordance with accounting principles generally accepted in the United States (GAAP) included in this press release, the Company has provided information regarding income from continuing operations excluding certain items described below reconciled to the most directly comparable GAAP measures. Management believes that these non-GAAP measures, when read in conjunction with the Company’s GAAP financials, provide useful information to investors by offering:
the ability to make meaningful period-to-period comparisons of the Company’s ongoing results;
the ability to identify trends in the Company’s underlying business; and
a better understanding of how management plans and measures the Company’s underlying business.
Income from continuing operations 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
 
Twelve Months Ended
 
December 31
 
December 31
(in thousands, except per share amounts)
2014
 
2013
 
2014
 
2013
Amounts Attributable to Graham Holdings Company Common Stockholders
 
 
 
 
 
 
 
Income from continuing operations, as reported
$
332,102

 
$
50,138

 
$
920,747

 
$
171,995

 Adjustments:
 
 
 
 
 
 
 
Early retirement, restructuring charges, and software asset write-offs
1,902

 
12,194

 
20,225

 
25,347

Intangible and other long-lived assets impairment charges
11,213

 
3,210

 
11,213

 
3,210

Gain on sale of Classified Ventures
(249,828
)
 

 
(249,828
)
 

Classified Ventures' sale of apartments.com

 

 
(58,242
)
 

Gain from exchange of Berkshire shares

 

 
(266,733
)
 

Sale of headquarters building

 

 
(81,836
)
 

Sale of wireless licenses

 

 
(48,235
)
 

Marketable equity securities write-down

 
6,680

 

 
6,680

Foreign currency loss
5,455

 
2,580

 
7,134

 
8,564

Income from continuing operations, adjusted (non-GAAP)
$
100,844

 
$
74,802

 
$
254,445

 
$
215,796

Per Share Information Attributable to Graham Holdings Company Common Stockholders
 
 
 
 
 
 
 
Diluted income per common share from continuing operations, as reported
$
57.01

 
$
6.77

 
$
138.88

 
$
23.36

Adjustments:
 
 
 
 
 
 
 
Early retirement, restructuring charges, and software asset write-offs
0.33

 
1.66

 
3.05

 
3.46

Intangible and other long-lived assets impairment charges
1.92

 
0.44

 
1.69

 
0.44

Gain on sale of Classified Ventures
(42.89
)
 

 
(37.68
)
 

Classified Ventures' sale of apartments.com

 

 
(8.78
)
 

Gain from exchange of Berkshire shares

 

 
(40.23
)
 

Sale of headquarters building

 

 
(12.34
)
 

Sale of wireless licenses

 

 
(7.27
)
 

Marketable equity securities write-down

 
0.91

 

 
0.91

Foreign currency loss
0.94

 
0.35

 
1.08

 
1.17

Diluted income per common share from continuing operations, adjusted (non-GAAP)
$
17.31

 
$
10.13

 
$
38.40

 
$
29.34

The adjusted diluted per share amounts may not compute due to rounding.


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