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8-K
GRAHAM HOLDINGS CO filed this Form 8-K on 08/02/2017
Entire Document
 


months of 2017, compared to $73.2 million ($12.87 per share) for the first six months of 2016. (Refer to the Non-GAAP Financial Information schedule at the end of this release for additional details.)
Items included in the Company’s net income for the first six months of 2017:
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);
$5.2 million in non-operating foreign currency gains (after-tax impact of $3.3 million, or $0.58 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 the first six months of 2016:
a $40.3 million non-operating gain from the sales of land and marketable equity securities (after-tax impact of $25.0 million, or $4.42 per share);
a $22.2 million non-operating gain arising from the sale of a business and the formation of a joint venture (after-tax impact of $13.6 million, or $2.37 per share);
$29.5 million in non-operating foreign currency losses (after-tax impact of $18.9 million, or $3.33 per share); and
a favorable $5.6 million out of period deferred tax adjustment related to the KHE goodwill impairment recorded in the third quarter of 2015 ($1.00 per share).
Revenue for the first six months of 2017 was $1,258.8 million, up 2% from $1,230.7 million in the first six months of 2016. Revenues increased at the television broadcasting division and in other businesses, offset by a decline at the education division. The Company reported operating income of $97.4 million for the first six months of 2017, compared to $126.0 million for first six months of 2016. Operating results declined at the education and television broadcasting divisions and in other businesses.
Division Results
Education  
Education division revenue totaled $386.5 million for the second quarter of 2017, down 8% from revenue of $419.2 million for the same period of 2016. Kaplan reported operating income of $32.9 million for each of the second quarters of 2017 and 2016.
For the first six months of 2017, education division revenue totaled $759.4 million, down 7% from revenue of $820.3 million for the same period of 2016. Kaplan reported operating income of $42.0 million for the first six months of 2017, compared to $47.4 million for the first six months of 2016.
A summary of Kaplan’s operating results is as follows:
 
 
Three Months Ended
 
 
 
Six Months Ended
 
 
  
 
June 30
 
  
 
June 30
 
  
(in thousands)
 
2017
 
2016
 
% Change
 
2017
 
2016
 
% Change
Revenue
 
  
 
  
 
  
 
  
 
  
 
  
Higher education
 
$
139,204

 
$
157,980

 
(12
)
 
$
283,514

 
$
323,529

 
(12
)
Test preparation
 
75,730

 
79,349

 
(5
)
 
140,298

 
145,811

 
(4
)
Kaplan international
 
171,747

 
182,325

 
(6
)
 
336,309

 
351,612

 
(4
)
Kaplan corporate and other
 
57

 
18

 

 
71

 
143

 
(50
)
Intersegment elimination
 
(239
)
 
(459
)
 

 
(796
)
 
(806
)
 

  
 
$
386,499

 
$
419,213

 
(8
)
 
$
759,396

 
$
820,289

 
(7
)
Operating Income (Loss)
 
  

 
  

 
  

 
  

 
  

 
  

Higher education
 
$
17,711

 
$
17,237

 
3

 
$
30,315

 
$
38,543

 
(21
)
Test preparation
 
5,741

 
7,036

 
(18
)
 
2,877

 
4,726

 
(39
)
Kaplan international
 
15,954

 
16,479

 
(3
)
 
23,661

 
21,376

 
11

Kaplan corporate and other
 
(5,128
)
 
(6,107
)
 
16

 
(12,477
)
 
(13,831
)
 
10

Amortization of intangible assets
 
(1,323
)
 
(1,704
)
 
22

 
(2,443
)
 
(3,385
)
 
28

Intersegment elimination
 
(30
)
 
(49
)
 

 
23

 
(49
)
 

  
 
$
32,925

 
$
32,892

 

 
$
41,956

 
$
47,380

 
(11
)
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 and other continuing education businesses.

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