Releases
Graham Holdings Company Reports 2017 and Fourth Quarter Earnings
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
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 inDecember 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
For the fourth quarter of 2017, revenue was
On
Consummation of the transactions contemplated by the Transfer Agreement
is subject to various closing conditions, including, among others,
regulatory approvals from the
Division Results
Education
Education division revenue in 2017 totaled
Kaplan reported operating income of
In recent years, Kaplan has formulated and implemented restructuring
plans at its various businesses that have resulted in restructuring
costs in 2017 and 2016, with the objective of establishing lower cost
levels in future periods. Across all businesses, restructuring costs
totaled
A summary of Kaplan’s operating results is as follows:
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||||
December 31 | December 31 | ||||||||||||||||||||||||||||
(in thousands) | 2017 | 2016 | % Change | 2017 | 2016 | % Change | |||||||||||||||||||||||
Revenue | |||||||||||||||||||||||||||||
Higher education | $ | 130,291 | $ | 144,916 | (10 | ) | $ | 547,264 | $ | 617,047 | (11 | ) | |||||||||||||||||
Test preparation | 60,320 | 62,454 | (3 | ) | 273,298 | 286,556 | (5 | ) | |||||||||||||||||||||
Kaplan international | 190,431 | 184,294 | 3 | 697,999 | 696,362 | — | |||||||||||||||||||||||
Kaplan corporate and other | 174 | 24 | — | 294 | 214 | 37 | |||||||||||||||||||||||
Intersegment elimination | (641 | ) | (452 | ) | — | (2,079 | ) | (1,718 | ) | — | |||||||||||||||||||
$ | 380,575 | $ | 391,236 | (3 | ) | $ | 1,516,776 | $ | 1,598,461 | (5 | ) | ||||||||||||||||||
Operating Income (Loss) | |||||||||||||||||||||||||||||
Higher education | $ | 5,153 | $ | 16,595 | (69 | ) | $ | 44,277 | $ | 66,632 | (34 | ) | |||||||||||||||||
Test preparation | 1,300 | (3,715 | ) | — | 11,507 | 9,599 | 20 | ||||||||||||||||||||||
Kaplan international | 21,721 | 25,461 | (15 | ) | 50,730 | 48,398 | 5 | ||||||||||||||||||||||
Kaplan corporate and other | (7,167 | ) | (6,084 | ) | (18 | ) | (26,326 | ) | (23,452 | ) | (12 | ) | |||||||||||||||||
Amortization of intangible assets | (1,364 | ) | (2,358 | ) | 42 | (5,162 | ) | (7,516 | ) | 31 | |||||||||||||||||||
Intersegment elimination | 179 | 20 | — | 143 | (29 | ) | — | ||||||||||||||||||||||
$ | 19,822 | $ | 29,919 | (34 | ) | $ | 75,169 | $ | 93,632 | (20 | ) | ||||||||||||||||||
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 2017 and the fourth quarter of 2017, KHE revenue declined 11% and
10%, respectively, due to declines in average enrollments at
New higher education student enrollments at
As of December 31 | ||||||||||
2017 | 2016 | |||||||||
Certificate | 9.5 | % | 7.7 | % | ||||||
Associate’s | 16.5 | % | 18.1 | % | ||||||
Bachelor’s | 50.9 | % | 50.9 | % | ||||||
Master’s | 23.1 | % | 23.3 | % | ||||||
100.0 | % | 100.0 | % | |||||||
KTP includes Kaplan’s standardized test preparation and new economy
skills training programs. KTP revenue declined 5% in 2017 and 3% for the
fourth quarter of 2017. Enrollments, excluding the new economy skills
training offerings, were up 4% in 2017; however, unit prices were
generally lower. In comparison to 2016, KTP operating results improved
in 2017 due primarily to operating cost efficiencies. Operating losses
for the new economy skills training programs were
Kaplan corporate and other represents unallocated expenses of Kaplan, Inc.’s corporate office, other minor businesses and certain shared activities.
On
Revenue at the television broadcasting division increased slightly to
For the fourth quarter of 2017, revenue increased 2% to
Other Businesses
Manufacturing includes four businesses: Dekko, a manufacturer of
electrical workspace solutions, architectural lighting and electrical
components and assemblies;
In the second quarter of 2017, the Company recorded a
In
SocialCode is a provider of marketing solutions on social, mobile and
video platforms. SocialCode revenue increased 5% in 2017 and 1% in the
fourth quarter of 2017, due to continued growth in digital advertising
service revenues. SocialCode reported an operating loss of
Other businesses also 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 2017 adversely affected operating results.
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 fourth quarter of 2016, the Company recorded an
Excluding the pension gain, the total pension credit for the Company’s
traditional defined benefit plan was
Excluding the pension credit, corporate office expenses increased slightly in 2017 due primarily to higher professional services costs.
Equity in Losses of Affiliates
At December 31, 2017, the Company held interests in a number of home
health and hospice joint ventures, and interests in several other
affiliates. During 2017, the Company acquired approximately 11% of
Other Non-Operating Income (Expense)
The Company recorded total other non-operating income, net, of
The 2017 non-operating income, net, included
Net Interest Expense and Related Balances
The Company incurred net interest expense of
(Benefit from) Provision for Income Taxes
The Company is reporting an income tax benefit of
The Company’s effective tax rate for 2016 was 32.4%. In the third
quarter of 2016, a net nonrecurring
Earnings Per Share
The calculation of diluted earnings per share for 2017 and the fourth
quarter of 2017 was based on 5,552,163 and 5,508,530 weighted average
shares, respectively, compared to 5,588,733 and 5,555,510 weighted
average shares, respectively, for 2016 and the fourth quarter of 2016.
At December 31, 2017, there were 5,504,494 shares outstanding. On
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.
GRAHAM HOLDINGS COMPANY | ||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||
(Unaudited) | ||||||||||||||
Three Months Ended | ||||||||||||||
December 31 | % | |||||||||||||
(in thousands, except per share amounts) | 2017 | 2016 | Change | |||||||||||
Operating revenues | $ | 675,817 | $ | 629,579 | 7 | |||||||||
Operating expenses | 579,742 | 495,259 | 17 | |||||||||||
Depreciation of property, plant and equipment | 15,984 | 15,717 | 2 | |||||||||||
Amortization of intangible assets | 12,897 | 7,511 | 72 | |||||||||||
Impairment of goodwill and other long-lived assets | 78 | 1,603 | (95 | ) | ||||||||||
Operating income | 67,116 | 109,489 | (39 | ) | ||||||||||
Equity in losses of affiliates, net | (4,697 | ) | (7,042 | ) | (33 | ) | ||||||||
Interest income | 3,184 | 1,041 | — | |||||||||||
Interest expense | (8,103 | ) | (10,857 | ) | (25 | ) | ||||||||
Other expense, net | (2,640 | ) | (28,513 | ) | (91 | ) | ||||||||
Income from operations before income taxes | 54,860 | 64,118 | (14 | ) | ||||||||||
(Benefit from) provision for income taxes | (159,700 | ) | 27,200 | — | ||||||||||
Net income | 214,560 | 36,918 | — | |||||||||||
Net income attributable to noncontrolling interests | (382 | ) | — | — | ||||||||||
Net Income Attributable to Graham Holdings Company Common Stockholders | $ | 214,178 | $ | 36,918 | — | |||||||||
Per Share Information Attributable to Graham Holdings Company Common Stockholders | ||||||||||||||
Basic net income per common share | $ | 38.76 | $ | 6.60 | — | |||||||||
Basic average number of common shares outstanding | 5,473 | 5,527 | ||||||||||||
Diluted net income per common share | $ | 38.52 | $ | 6.57 | — | |||||||||
Diluted average number of common shares outstanding | 5,509 | 5,556 | ||||||||||||
GRAHAM HOLDINGS COMPANY | ||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||
(Unaudited) | ||||||||||||||
Twelve Months Ended | ||||||||||||||
December 31 | % | |||||||||||||
(in thousands, except per share amounts) | 2017 | 2016 | Change | |||||||||||
Operating revenues | $ | 2,591,846 | $ | 2,481,890 | 4 | |||||||||
Operating expenses | 2,269,434 | 2,085,462 | 9 | |||||||||||
Depreciation of property, plant and equipment | 62,509 | 64,620 | (3 | ) | ||||||||||
Amortization of intangible assets | 41,187 | 26,671 | 54 | |||||||||||
Impairment of intangible and other long-lived assets | 9,614 | 1,603 | — | |||||||||||
Operating income | 209,102 | 303,534 | (31 | ) | ||||||||||
Equity in losses of affiliates, net | (3,249 | ) | (7,937 | ) | (59 | ) | ||||||||
Interest income | 6,581 | 3,093 | — | |||||||||||
Interest expense | (33,886 | ) | (35,390 | ) | (4 | ) | ||||||||
Other income (expense), net | 4,241 | (12,642 | ) | — | ||||||||||
Income from operations before income taxes | 182,789 | 250,658 | (27 | ) | ||||||||||
(Benefit from) provision for income taxes | (119,700 | ) | 81,200 | — | ||||||||||
Net income | 302,489 | 169,458 | 79 | |||||||||||
Net income attributable to noncontrolling interests | (445 | ) | (868 | ) | (49 | ) | ||||||||
Net Income Attributable to Graham Holdings Company Common Stockholders | $ | 302,044 | $ | 168,590 | 79 | |||||||||
Per Share Information Attributable to Graham Holdings Company Common Stockholders | ||||||||||||||
Basic net income per common share | $ | 54.24 | $ | 29.95 | 81 | |||||||||
Basic average number of common shares outstanding | 5,516 | 5,559 | ||||||||||||
Diluted net income per common share | $ | 53.89 | $ | 29.80 | 81 | |||||||||
Diluted average number of common shares outstanding | 5,552 | 5,589 | ||||||||||||
GRAHAM HOLDINGS COMPANY | ||||||||||||||||||||||||||||
BUSINESS SEGMENT INFORMATION |
||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||||
December 31 | % | December 31 | % | |||||||||||||||||||||||||
(in thousands) | 2017 | 2016 | Change | 2017 | 2016 | Change | ||||||||||||||||||||||
Operating Revenues | ||||||||||||||||||||||||||||
Education | $ | 380,575 | $ | 391,236 | (3 | ) | $ | 1,516,776 | $ | 1,598,461 | (5 | ) | ||||||||||||||||
Television broadcasting | 111,023 | 108,791 | 2 | 409,916 | 409,718 | — | ||||||||||||||||||||||
Other businesses | 184,270 | 129,552 | 42 | 665,205 | 473,850 | 40 | ||||||||||||||||||||||
Corporate office | — | — | — | — | — | — | ||||||||||||||||||||||
Intersegment elimination | (51 | ) | — | — | (51 | ) | (139 | ) | — | |||||||||||||||||||
$ | 675,817 | $ | 629,579 | 7 |
|
$ | 2,591,846 | $ | 2,481,890 | 4 | ||||||||||||||||||
Operating Expenses | ||||||||||||||||||||||||||||
Education | $ | 360,753 | $ | 361,317 | — | $ | 1,441,607 | $ | 1,504,829 | (4 | ) | |||||||||||||||||
Television broadcasting | 72,001 | 52,915 | 36 |
272,713 |
209,248 | 30 | ||||||||||||||||||||||
Other businesses | 180,519 | 130,061 | 39 | 687,969 | 495,952 | 39 | ||||||||||||||||||||||
Corporate office | (4,521 | ) | (24,203 | ) | (81 | ) | (19,494 | ) | (31,534 | ) | (38 | ) | ||||||||||||||||
Intersegment elimination | (51 | ) | — | — | (51 | ) | (139 | ) | — | |||||||||||||||||||
$ | 608,701 | $ | 520,090 | 17 | $ | 2,382,744 | $ | 2,178,356 | 9 | |||||||||||||||||||
Operating Income (Loss) | ||||||||||||||||||||||||||||
Education | $ | 19,822 | $ | 29,919 | (34 | ) | $ | 75,169 | $ | 93,632 | (20 | ) | ||||||||||||||||
Television broadcasting | 39,022 | 55,876 | (30 | ) | 137,203 | 200,470 | (32 | ) | ||||||||||||||||||||
Other businesses | 3,751 | (509 | ) | — | (22,764 | ) | (22,102 | ) | (3 | ) | ||||||||||||||||||
Corporate office | 4,521 | 24,203 | (81 | ) | 19,494 | 31,534 | (38 | ) | ||||||||||||||||||||
$ | 67,116 | $ | 109,489 | (39 | ) | $ | 209,102 | $ | 303,534 | (31 | ) | |||||||||||||||||
Depreciation | ||||||||||||||||||||||||||||
Education | $ | 7,912 | $ | 9,865 | (20 | ) | $ | 32,906 | $ | 41,187 | (20 | ) | ||||||||||||||||
Television broadcasting | 3,476 | 2,575 | 35 | 12,179 | 9,942 | 23 | ||||||||||||||||||||||
Other businesses | 4,338 | 2,986 | 45 | 16,306 | 12,375 | 32 | ||||||||||||||||||||||
Corporate office | 258 | 291 | (11 | ) | 1,118 | 1,116 | — | |||||||||||||||||||||
$ | 15,984 | $ | 15,717 | 2 | $ | 62,509 | $ | 64,620 | (3 | ) | ||||||||||||||||||
Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets | ||||||||||||||||||||||||||||
Education | $ | 1,364 | $ | 2,358 | (42 | ) | $ | 5,162 | $ | 7,516 | (31 | ) | ||||||||||||||||
Television broadcasting | 3,406 | 62 | — | 6,349 | 251 | — | ||||||||||||||||||||||
Other businesses | 8,205 | 6,694 | 23 | 39,290 | 20,507 | 92 | ||||||||||||||||||||||
Corporate office | — | — | — | — | — | — | ||||||||||||||||||||||
$ | 12,975 | $ | 9,114 | 42 | $ | 50,801 | $ | 28,274 | 80 | |||||||||||||||||||
Pension Expense (Credit) | ||||||||||||||||||||||||||||
Education | $ | 3,324 | $ | 2,838 | 17 | $ | 10,613 | $ | 11,803 | (10 | ) | |||||||||||||||||
Television broadcasting | 485 | 429 | 13 | 1,942 | 1,714 | 13 | ||||||||||||||||||||||
Other businesses | 449 | 279 | 61 | 2,722 | 1,118 | — | ||||||||||||||||||||||
Corporate office | (18,123 | ) | (33,929 | ) | (47 | ) | (72,491 | ) | (81,732 | ) | (11 | ) | ||||||||||||||||
$ | (13,865 | ) | $ | (30,383 | ) | (54 | ) | $ | (57,214 | ) | $ | (67,097 | ) | (15 | ) | |||||||||||||
GRAHAM HOLDINGS COMPANY | ||||||||||||||||||||||||||||
EDUCATION DIVISION INFORMATION |
||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||||
December 31 | % | December 31 | % | |||||||||||||||||||||||||
(in thousands) | 2017 | 2016 | Change | 2017 | 2016 | Change | ||||||||||||||||||||||
Operating Revenues | ||||||||||||||||||||||||||||
Higher education | $ | 130,291 | $ | 144,916 | (10 | ) | $ | 547,264 | $ | 617,047 | (11 | ) | ||||||||||||||||
Test preparation | 60,320 | 62,454 | (3 | ) | 273,298 | 286,556 | (5 | ) | ||||||||||||||||||||
Kaplan international | 190,431 | 184,294 | 3 | 697,999 | 696,362 | — | ||||||||||||||||||||||
Kaplan corporate and other | 174 | 24 | — | 294 | 214 | 37 | ||||||||||||||||||||||
Intersegment elimination | (641 | ) | (452 | ) | — | (2,079 | ) | (1,718 | ) | — | ||||||||||||||||||
$ | 380,575 | $ | 391,236 | (3 | ) | $ | 1,516,776 | $ | 1,598,461 | (5 | ) | |||||||||||||||||
Operating Expenses | ||||||||||||||||||||||||||||
Higher education | $ | 125,138 | $ | 128,321 | (2 | ) | $ | 502,987 | $ | 550,415 | (9 | ) | ||||||||||||||||
Test preparation | 59,020 | 66,169 | (11 | ) | 261,791 | 276,957 | (5 | ) | ||||||||||||||||||||
Kaplan international | 168,710 | 158,833 | 6 | 647,269 | 647,964 | — | ||||||||||||||||||||||
Kaplan corporate and other | 7,341 | 6,108 | 20 | 26,620 | 23,666 | 12 | ||||||||||||||||||||||
Amortization of intangible assets | 1,364 | 2,358 | (42 | ) | 5,162 | 7,516 | (31 | ) | ||||||||||||||||||||
Intersegment elimination | (820 | ) | (472 | ) | — | (2,222 | ) | (1,689 | ) | — | ||||||||||||||||||
$ | 360,753 | $ | 361,317 | — | $ | 1,441,607 | $ | 1,504,829 | (4 | ) | ||||||||||||||||||
Operating Income (Loss) | ||||||||||||||||||||||||||||
Higher education | $ | 5,153 | $ | 16,595 | (69 | ) | $ | 44,277 | $ | 66,632 | (34 | ) | ||||||||||||||||
Test preparation | 1,300 | (3,715 | ) | — | 11,507 | 9,599 | 20 | |||||||||||||||||||||
Kaplan international | 21,721 | 25,461 | (15 | ) | 50,730 | 48,398 | 5 | |||||||||||||||||||||
Kaplan corporate and other | (7,167 | ) | (6,084 | ) | (18 | ) | (26,326 | ) | (23,452 | ) | (12 | ) | ||||||||||||||||
Amortization of intangible assets | (1,364 | ) | (2,358 | ) | 42 | (5,162 | ) | (7,516 | ) | 31 | ||||||||||||||||||
Intersegment elimination | 179 | 20 | — | 143 | (29 | ) | — | |||||||||||||||||||||
$ | 19,822 | $ | 29,919 | (34 | ) | $ | 75,169 | $ | 93,632 | (20 | ) | |||||||||||||||||
Depreciation | ||||||||||||||||||||||||||||
Higher education | $ | 2,710 | $ | 4,497 | (40 | ) | $ | 12,158 | $ | 16,822 | (28 | ) | ||||||||||||||||
Test preparation | 1,206 | 1,450 | (17 | ) | 5,286 | 6,287 | (16 | ) | ||||||||||||||||||||
Kaplan international | 3,821 | 3,784 | 1 | 14,892 | 17,523 | (15 | ) | |||||||||||||||||||||
Kaplan corporate and other | 175 | 134 | 31 | 570 | 555 | 3 | ||||||||||||||||||||||
$ | 7,912 | $ | 9,865 | (20 | ) | $ | 32,906 | $ | 41,187 | (20 | ) | |||||||||||||||||
Pension Expense | ||||||||||||||||||||||||||||
Higher education | $ | 1,546 | $ | 1,905 | (19 | ) | $ | 6,182 | $ | 7,620 | (19 | ) | ||||||||||||||||
Test preparation | 689 | 768 | (10 | ) | 2,755 | 3,072 | (10 | ) | ||||||||||||||||||||
Kaplan international | 959 | 67 | — | 1,157 | 268 | — | ||||||||||||||||||||||
Kaplan corporate and other | 130 | 98 | 33 | 519 | 843 | (38 | ) | |||||||||||||||||||||
$ | 3,324 | $ | 2,838 | 17 | $ | 10,613 | $ | 11,803 | (10 | ) | ||||||||||||||||||
GRAHAM HOLDINGS COMPANY | ||||||||||||||||||||||||||||
OTHER BUSINESSES INFORMATION |
||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||||
December 31 | % | December 31 | % | |||||||||||||||||||||||||
(in thousands) | 2017 | 2016 | Change | 2017 | 2016 | Change | ||||||||||||||||||||||
Operating Revenues | ||||||||||||||||||||||||||||
Manufacturing | $ | 116,029 | $ | 64,696 | 79 | $ | 414,193 | $ | 241,604 | 71 | ||||||||||||||||||
Healthcare | 38,610 | 36,894 | 5 | 154,202 | 146,962 | 5 | ||||||||||||||||||||||
SocialCode | 20,151 | 19,890 | 1 | 62,077 | 58,851 | 5 | ||||||||||||||||||||||
Other | 9,480 | 8,072 | 17 | 34,733 | 26,433 | 31 | ||||||||||||||||||||||
$ | 184,270 | $ | 129,552 | 42 | $ | 665,205 | $ | 473,850 | 40 | |||||||||||||||||||
Operating Expenses | ||||||||||||||||||||||||||||
Manufacturing | $ | 107,285 | $ | 59,742 | 80 | $ | 400,178 | $ | 228,887 | 75 | ||||||||||||||||||
Healthcare | 41,557 | 36,875 | 13 | 156,771 | 144,163 | 9 | ||||||||||||||||||||||
SocialCode | 15,673 | 17,035 | (8 | ) | 65,751 | 71,258 | (8 | ) | ||||||||||||||||||||
Other | 16,004 | 16,409 | (2 | ) | 65,269 | 51,644 | 26 | |||||||||||||||||||||
$ | 180,519 | $ | 130,061 | 39 | $ | 687,969 | $ | 495,952 | 39 | |||||||||||||||||||
Operating Income (Loss) | ||||||||||||||||||||||||||||
Manufacturing | $ | 8,744 | $ | 4,954 | 77 | $ | 14,015 | $ | 12,717 | 10 | ||||||||||||||||||
Healthcare | (2,947 | ) | 19 | — | (2,569 | ) | 2,799 | — | ||||||||||||||||||||
SocialCode | 4,478 | 2,855 | 57 | (3,674 | ) | (12,407 | ) | 70 | ||||||||||||||||||||
Other | (6,524 | ) | (8,337 | ) | 22 | (30,536 | ) | (25,211 | ) | (21 | ) | |||||||||||||||||
$ | 3,751 | $ | (509 | ) | — | $ | (22,764 | ) | $ | (22,102 | ) | (3 | ) | |||||||||||||||
Depreciation | ||||||||||||||||||||||||||||
Manufacturing | $ | 2,544 | $ | 1,663 | 53 | $ | 9,173 | $ | 7,251 | 27 | ||||||||||||||||||
Healthcare | 1,154 | 715 | 61 | 4,583 | 2,805 | 63 | ||||||||||||||||||||||
SocialCode | 251 | 246 | 2 | 1,004 | 929 | 8 | ||||||||||||||||||||||
Other | 389 | 362 | 7 | 1,546 | 1,390 | 11 | ||||||||||||||||||||||
$ | 4,338 | $ | 2,986 | 45 | $ | 16,306 | $ | 12,375 | 32 | |||||||||||||||||||
Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets | ||||||||||||||||||||||||||||
Manufacturing | $ | 5,935 | $ | 3,397 | 75 | $ | 31,052 | $ | 12,119 | — | ||||||||||||||||||
Healthcare | 2,187 | 1,673 | 31 | 7,905 | 6,701 | 18 | ||||||||||||||||||||||
SocialCode | 83 | — | — | 333 | — | — | ||||||||||||||||||||||
Other | — | 1,624 | — | — | 1,687 | — | ||||||||||||||||||||||
$ | 8,205 | $ | 6,694 | 23 | $ | 39,290 | $ | 20,507 | 92 | |||||||||||||||||||
Pension Expense | ||||||||||||||||||||||||||||
Manufacturing | $ | 17 | $ | 24 | (29 | ) | $ | 1,011 | $ | 86 | — | |||||||||||||||||
Healthcare | 167 | — | — | 665 | — | — | ||||||||||||||||||||||
SocialCode | 148 | 135 | 10 | 593 | 541 | 10 | ||||||||||||||||||||||
Other | 117 | 120 | (3 | ) | 453 | 491 | (8 | ) | ||||||||||||||||||||
$ | 449 | $ | 279 | 61 | $ | 2,722 | $ | 1,118 | — | |||||||||||||||||||
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.
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 December 31 | ||||||||||||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||||||||||||
(in thousands, except per share amounts) |
Income |
Income |
Net |
Income |
Income |
Net |
||||||||||||||||||||||||
Amounts attributable to Graham Holdings Company Common Stockholders | ||||||||||||||||||||||||||||||
As reported | $ | 54,860 | $ | (159,700 | ) | $ | 214,560 | $ | 64,118 | $ | 27,200 | $ | 36,918 | |||||||||||||||||
Attributable to noncontrolling interests | (382 | ) | — | |||||||||||||||||||||||||||
Attributable to Graham Holdings Company Stockholders | 214,178 | 36,918 | ||||||||||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||||
Restructuring charges | 7,181 | 2,657 | 4,524 | 6,973 | 2,441 | 4,532 | ||||||||||||||||||||||||
Settlement gain related to a bulk lump sum pension offering | — | — | — | (17,993 | ) | (7,197 | ) | (10,796 | ) | |||||||||||||||||||||
Loss from the sales of marketable securities |
— |
— | — | 8,135 | 3,091 | 5,044 | ||||||||||||||||||||||||
Write-downs of cost method and equity method investments |
— |
— |
— | 22,592 | 8,133 | 14,459 | ||||||||||||||||||||||||
Foreign currency loss | 3,298 | 1,220 | 2,078 | 6,567 | 2,364 | 4,203 | ||||||||||||||||||||||||
Net deferred tax benefits related to the enactment of the Tax Cuts and Jobs Act | — | 177,532 | (177,532 | ) | — | — | — | |||||||||||||||||||||||
Net Income, adjusted (non-GAAP) | $ | 43,248 | $ | 54,360 | ||||||||||||||||||||||||||
Per share information attributable to Graham Holdings Company Common Stockholders | ||||||||||||||||||||||||||||||
Diluted income per common share, as reported | $ | 38.52 | $ | 6.57 | ||||||||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||||
Restructuring charges | 0.81 | 0.81 | ||||||||||||||||||||||||||||
Settlement gain related to a bulk lump sum pension offering | — | (1.92 | ) | |||||||||||||||||||||||||||
Loss from the sales of marketable securities | — | 0.90 | ||||||||||||||||||||||||||||
Write-downs of cost method and equity method investments | — | 2.57 | ||||||||||||||||||||||||||||
Foreign currency loss | 0.37 | 0.75 | ||||||||||||||||||||||||||||
Net deferred tax benefits related to the enactment of the Tax Cuts and Jobs Act | (31.93 | ) | — | |||||||||||||||||||||||||||
Diluted income per common share, adjusted (non-GAAP) | $ | 7.77 | $ | 9.68 | ||||||||||||||||||||||||||
The adjusted diluted per share amounts may not compute due to rounding. | ||||||||||||||||||||||||||||||
Twelve Months Ended December 31 | |||||||||||||||||||||||||||||
2017 | 2016 | ||||||||||||||||||||||||||||
(in thousands, except per share amounts) |
Income |
Income |
Net |
Income |
Income |
Net |
|||||||||||||||||||||||
Amounts attributable to Graham Holdings Company Common Stockholders | |||||||||||||||||||||||||||||
As reported | $ | 182,789 | (119,700 | ) | $ | 302,489 | $ | 250,658 | $ | 81,200 | $ | 169,458 | |||||||||||||||||
Attributable to noncontrolling interests | (445 | ) | (868 | ) | |||||||||||||||||||||||||
Attributable to Graham Holdings Company Stockholders | $ | 302,044 | $ | 168,590 | |||||||||||||||||||||||||
Adjustments: | |||||||||||||||||||||||||||||
Restructuring charges | 9,958 | 3,684 | 6,274 | 11,852 | 4,148 | 7,704 | |||||||||||||||||||||||
Impairment of goodwill and other long-lived assets | 9,224 | 3,413 | 5,811 | — | — | — | |||||||||||||||||||||||
Settlement gain related to a bulk lump sum pension offering | — | — | — | (17,993 | ) | (7,197 | ) | (10,796 | ) | ||||||||||||||||||||
Net gain from the sales of land and marketable securities | — | — | — | (32,193 | ) | (12,233 | ) | (19,960 | ) | ||||||||||||||||||||
Gains from the sale of a business and the formation of a joint venture | — | — | — | (22,163 | ) | (8,582 | ) | (13,581 | ) | ||||||||||||||||||||
Write-downs of cost method and equity method investment | — | — | — | 37,592 | 13,533 | 24,059 | |||||||||||||||||||||||
Foreign currency (gain) loss | (3,310 | ) | (1,225 | ) | (2,085 | ) | 39,890 | 14,360 | 25,530 | ||||||||||||||||||||
Net deferred tax benefits related to the enactment of the Tax Cuts and Jobs Act | — | 177,532 | (177,532 | ) | — | — | — | ||||||||||||||||||||||
Tax benefit related to stock compensation | — | 5,933 | (5,933 | ) | — | — | — | ||||||||||||||||||||||
Nonrecurring deferred tax benefit | — | — | — | — | 8,286 | (8,286 | ) | ||||||||||||||||||||||
Favorable out of period deferred tax adjustment | — | — | — | — | 5,631 | (5,631 | ) | ||||||||||||||||||||||
Net Income, adjusted (non-GAAP) | $ | 128,579 | $ | 167,629 | |||||||||||||||||||||||||
Per share information attributable to Graham Holdings Company Common Stockholders | |||||||||||||||||||||||||||||
Diluted income per common share, as reported | $ | 53.89 | $ | 29.80 | |||||||||||||||||||||||||
Adjustments: | |||||||||||||||||||||||||||||
Restructuring charges | 1.12 | 1.36 | |||||||||||||||||||||||||||
Impairment of goodwill and other long-lived assets | 1.03 | — | |||||||||||||||||||||||||||
Settlement gain related to a bulk lump sum pension offering | — | (1.92 | ) | ||||||||||||||||||||||||||
Net gain from the sales of land and marketable securities | — | (3.52 | ) | ||||||||||||||||||||||||||
Gains from the sale of a business and the formation of a joint venture | — | (2.37 | ) | ||||||||||||||||||||||||||
Write-downs of cost method and equity method investment | — | 4.27 | |||||||||||||||||||||||||||
Foreign currency (gain) loss | (0.37 | ) | 4.51 | ||||||||||||||||||||||||||
Net deferred tax benefits related to the enactment of the Tax Cuts and Jobs Act | (31.68 | ) | — | ||||||||||||||||||||||||||
Tax benefit related to stock compensation | (1.06 | ) | — | ||||||||||||||||||||||||||
Nonrecurring deferred tax benefit | — | (1.47 | ) | ||||||||||||||||||||||||||
Favorable out of period deferred tax adjustment | — | (1.00 | ) | ||||||||||||||||||||||||||
Diluted income per common share, adjusted (non-GAAP) | $ | 22.93 | $ | 29.66 | |||||||||||||||||||||||||
The adjusted diluted per share amounts may not compute due to rounding. |
View source version on businesswire.com: http://www.businesswire.com/news/home/20180223005832/en/
Source:
Graham Holdings Company
Wallace R. Cooney, 703-345-6470