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Investor Relations

SEC Filings

10-Q
GRAHAM HOLDINGS CO filed this Form 10-Q on 08/02/2017
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 June 30, 2017
  
 
  
 
  
As Reported
$
68,361

 
$

 
$
65,899

Adjustment
(18,620
)
 
18,620

 

Upon Adoption
49,741

 
18,620

 
65,899

 
 
 
 
 
 
Three Months Ended June 30, 2016
 
 
 
 
 
As Reported
$
74,140

 
$

 
$
84,999

Adjustment
(15,584
)
 
15,584

 

Upon Adoption
58,556

 
15,584

 
84,999

 
 
 
 
 
 
Six Months Ended June 30, 2017
 
 
 
 
 
As Reported
$
97,415

 
$

 
$
89,685

Adjustment
(37,421
)
 
37,421

 

Upon Adoption
59,994

 
37,421

 
89,685

 
 
 
 
 
 
Six Months Ended June 30, 2016
 
 
 
 
 
As Reported
$
126,012

 
$

 
$
145,614

Adjustment
(31,261
)
 
31,261

 

Upon Adoption
94,751

 
31,261

 
145,614

 
 
 
 
 
 
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 June 30, 2017 and December 31, 2016, the Company had commercial paper and money market investments of $262.8 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
  
June 30,
2017
 
December 31,
2016
(in thousands)
 
Total cost
$
269,343

 
$
269,343

Gross unrealized gains
178,420

 
154,886

Total Fair Value
$
447,763

 
$
424,229

There were no purchases of marketable equity securities during the first six months of 2017. The Company settled on $18.3 million of marketable equity securities purchases during the first six months of 2016, of which $17.9 million were purchased in the first six months.
There were no sales of marketable equity securities for the first six months of 2017. The total proceeds from the sales of marketable equity securities for the first six months of 2016 were $22.8 million, with realized gains of $6.3 million.
As of June 30, 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

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