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SEC Filings

10-Q
GRAHAM HOLDINGS CO filed this Form 10-Q on 11/01/2017
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 September 30, 2017
  
 
  
 
  
As Reported
$
44,571

 
$

 
$
38,244

Adjustment
(17,621
)
 
17,621

 

Upon Adoption
26,950

 
17,621

 
38,244

 
 
 
 
 
 
Three Months Ended September 30, 2016
 
 
 
 
 
As Reported
$
68,033

 
$

 
$
40,926

Adjustment
(15,705
)
 
15,705

 

Upon Adoption
52,328

 
15,705

 
40,926

 
 
 
 
 
 
Nine Months Ended September 30, 2017
 
 
 
 
 
As Reported
$
141,986

 
$

 
$
127,929

Adjustment
(55,042
)
 
55,042

 

Upon Adoption
86,944

 
55,042

 
127,929

 
 
 
 
 
 
Nine Months Ended September 30, 2016
 
 
 
 
 
As Reported
$
194,045

 
$

 
$
186,540

Adjustment
(46,966
)
 
46,966

 

Upon Adoption
147,079

 
46,966

 
186,540

 
 
 
 
 
 
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 September 30, 2017 and December 31, 2016, the Company had commercial paper and money market investments of $205.8 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
  
September 30,
2017
 
December 31,
2016
(in thousands)
 
Total cost
$
269,343

 
$
269,343

Gross unrealized gains
226,256

 
154,886

Total Fair Value
$
495,599

 
$
424,229

There were no purchases of marketable equity securities during the first nine months of 2017. The Company settled on $48.3 million of marketable equity securities purchases during the first nine months of 2016, of which $47.9 million was purchased in the first nine months of 2016.
There were no sales of marketable equity securities for the first nine months of 2017. The total proceeds from the sales of marketable equity securities for the first nine months of 2016 were $22.8 million, with realized gains of $6.3 million.
In September 2017, the Company acquired approximately 10% of Intersection Holdings, LLC, a company that provides digital marketing and advertising services and products for cities, transit systems, airports, and other public and private spaces, which is accounted for as an investment in affiliate. As of September 30, 2017, the Company held interests in several affiliates; Residential Healthcare (Residential) held a 40% interest in Residential Home

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