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SEC Filings

10-Q
GRAHAM HOLDINGS CO filed this Form 10-Q on 11/01/2017
Entire Document
 


The changes in carrying amount of goodwill at the Company’s education division were as follows:
(in thousands)
Higher
Education
 
Test
Preparation
 
Kaplan
International
 
Total
Balance as of December 31, 2016
  
 
  
 
  
 
  
Goodwill
$
389,720

 
$
166,098

 
$
555,185

 
$
1,111,003

Accumulated impairment losses
(248,591
)
 
(102,259
)
 

 
(350,850
)
 
141,129

 
63,839

 
555,185

 
760,153

Acquisitions

 

 
18,986

 
18,986

Foreign currency exchange rate changes
154

 

 
40,713

 
40,867

Balance as of September 30, 2017
  

 
  

 
  

 
  

Goodwill
389,874

 
166,098

 
614,884

 
1,170,856

Accumulated impairment losses
(248,591
)
 
(102,259
)
 

 
(350,850
)
 
$
141,283

 
$
63,839

 
$
614,884

 
$
820,006

Other intangible assets consist of the following:
 
 
 
As of September 30, 2017
 
As of December 31, 2016
(in thousands)
Useful Life
Range
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net Carrying
Amount
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
Amortized Intangible Assets
  
 
  
 
  
 
  
 
  
 
  
 
  
Student and customer relationships
1–10 years (1)
 
$
224,872

 
$
74,304

 
$
150,568

 
$
129,616

 
$
55,863

 
$
73,753

Trade names and trademarks
2–10 years
 
58,917

 
33,143

 
25,774

 
55,240

 
29,670

 
25,570

Network affiliation agreements
15 years
 
42,600

 
2,067

 
40,533

 

 

 

Databases and technology
3–6 years (1)
 
19,583

 
4,173

 
15,410

 
5,601

 
4,368

 
1,233

Noncompete agreements
2–5 years
 
2,080

 
1,549

 
531

 
1,730

 
1,404

 
326

Other
1–8 years
 
13,430

 
7,094

 
6,336

 
12,030

 
4,973

 
7,057

  
  
 
$
361,482

 
$
122,330

 
$
239,152

 
$
204,217

 
$
96,278

 
$
107,939

Indefinite-Lived Intangible Assets
  
 
  
 
  

 
  

 
  
 
  

 
  

Trade names and trademarks
  
 
$
82,651

 
  

 
  

 
$
65,192

 
  

 
  

FCC licenses
 
 
26,600

 
 
 
 
 

 
 
 
 
Licensure and accreditation
  
 
650

 
  

 
  

 
834

 
  

 
  

 
  
 
$
109,901

 
 
 
 
 
$
66,026

 
 
 
 
____________
(1)
As of December 31, 2016, the student and customer relationships’ minimum useful life was 2 years and the databases and technology’s maximum useful life was 5 years.
5. DEBT
The Company’s borrowings consist of the following:
  
As of
  
September 30,
2017
 
December 31,
2016
(in thousands)
 
7.25% unsecured notes due February 1, 2019 (1)
$
399,393

 
$
399,052

UK Credit facility (2)
93,450

 
91,316

Other indebtedness
112

 
1,479

Total Debt
$
492,955

 
$
491,847

Less: current portion
(6,713
)
 
(6,128
)
Total Long-Term Debt
$
486,242

 
$
485,719

____________
(1)
The carrying value is net of $0.1 million of unamortized debt issuance costs as of September 30, 2017 and December 31, 2016, respectively.
(2)
The carrying value is net of $0.4 million and $0.5 million of unamortized debt issuance costs as of September 30, 2017 and December 31, 2016, respectively.
The Company’s other indebtedness at September 30, 2017 is at an interest rate of 2% and matures in 2025.
On July 14, 2016, Kaplan entered into a Facility Agreement (the Kaplan Credit Agreement) among Kaplan International Holdings Limited, as borrower, the lenders party thereto, HSBC BANK PLC as Facility Agent, and other agents party thereto. The Kaplan Credit Agreement provides for a four-year credit facility in an aggregate principal amount of £75 million. Borrowings bear interest at a rate per annum of LIBOR plus an applicable interest rate margin between 1.25% and 1.75%, in each case determined on a quarterly basis by reference to a pricing grid

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