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Investor Relations

SEC Filings

10-Q
GRAHAM HOLDINGS CO filed this Form 10-Q on 05/03/2017
Entire Document
 


In March 2017, the FASB issued new guidance that changes the presentation of net periodic pension cost and net periodic postretirement benefit cost for defined benefit plans. The guidance requires an issuer to disaggregate the service cost component of net periodic pension and postretirement benefit cost from other components. Under the new guidance, service cost will be included in the same line item(s) as other compensation costs arising from services rendered by employees during the period, while the other components will be recognized after income from operations. The guidance is effective for interim and fiscal years beginning after December 15, 2017. The guidance must be applied retrospectively; however, a practical expedient is available which permits an employer to use amounts previously disclosed in its pension and postretirement plans footnote for the prior comparative periods. The Company will adopt the new standard in the first quarter of 2018, and expects the following changes to its financial statements upon adoption, as detailed below:
 
Income from Operations
 
Non-operating pension and postretirement benefit income
 
Income Before Income Taxes
(in thousands)
 
 
Three Months Ended March 31, 2017
  
 
  
 
  
As Reported
$
29,054

 
$

 
$
23,786

Adjustment
(18,801
)
 
18,801

 

Upon Adoption
10,253

 
18,801

 
23,786

 
 
 
 
 
 
Three Months Ended March 31, 2016
 
 
 
 
 
As Reported
$
51,872

 
$

 
$
60,615

Adjustment
(15,677
)
 
15,677

 

Upon Adoption
36,195

 
15,677

 
60,615

 
 
 
 
 
 
Twelve Months Ended December 31, 2016
 
 
 
 
 
As Reported
$
303,534

 
$

 
$
250,658

Adjustment
(80,665
)
 
80,665

 

Upon Adoption
222,869

 
80,665

 
250,658

2. INVESTMENTS
As of March 31, 2017 and December 31, 2016, the Company had commercial paper and money market investments of $442.9 million and $485.1 million, respectively, that are classified as cash, cash equivalents and restricted cash in the Company's Condensed Consolidated Balance Sheets.
Investments in marketable equity securities comprised the following:
  
As of
  
March 31,
2017
 
December 31,
2016
(in thousands)
 
Total cost
$
269,343

 
$
269,343

Gross unrealized gains
164,444

 
154,886

Total Fair Value
$
433,787

 
$
424,229

There were no purchases of marketable equity securities during the first three months of 2017. The Company settled on $13.3 million of marketable equity securities during the first three months of 2016, of which $12.9 million were purchased in the first quarter.
There were no sales of marketable equity securities for the first three months of 2017. During the first three months of 2016, the net realized gains from the sales of marketable equity securities were $1.8 million. The total proceeds from such sales were $6.0 million, of which $1.6 million settled in April 2016.
As of March 31, 2017, the Company held interests in several affiliates; Residential Healthcare (Residential) held a 40% interest in Residential Home Health Illinois, a 42.5% interest in Residential Hospice Illinois and a 40% interest in the joint venture formed between Residential and a Michigan hospital; and Celtic Healthcare (Celtic) held a 40% interest in the joint venture formed between Celtic Healthcare and Allegheny Health Network (AHN). For the three months ended March 31, 2017, the Company recorded $4.6 million in revenue for services provided to the affiliates of Celtic and Residential.
Additionally, Kaplan International Holdings Limited (KIHL) held a 45% interest in a joint venture formed with York University. KIHL agreed to loan the joint venture £25 million, of which, £11.0 million was advanced in 2016. The loan will be repayable over 25 years at an interest rate of 7% and the loan is guaranteed by the University of York.


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