FORM 10-Q |
GRAHAM HOLDINGS COMPANY |
(Exact name of registrant as specified in its charter) |
Delaware | 53-0182885 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
1300 North 17th Street, Arlington, Virginia | 22209 |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | ý | Accelerated filer | ¨ | Non-accelerated filer | ¨ | Smaller reporting company | ¨ | Emerging growth company | ¨ |
PART I. FINANCIAL INFORMATION | ||
Item 1. | Financial Statements | |
a. Condensed Consolidated Statements of Operations (Unaudited) for the Three Months Ended March 31, 2017 and 2016 | ||
b. Condensed Consolidated Statements of Comprehensive Income (Unaudited) for the Three Months Ended March 31, 2017 and 2016 | ||
c. Condensed Consolidated Balance Sheets at March 31, 2017 (Unaudited) and December 31, 2016 | ||
d. Condensed Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended March 31, 2017 and 2016 | ||
e. Notes to Condensed Consolidated Financial Statements (Unaudited) | ||
Item 2. | Management’s Discussion and Analysis of Results of Operations and Financial Condition | |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk | |
Item 4. | Controls and Procedures | |
PART II. OTHER INFORMATION | ||
Item 1A. | Risk Factors | |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | |
Item 6. | Exhibits | |
Signatures |
Three Months Ended March 31 | |||||||
(in thousands, except per share amounts) | 2017 | 2016 | |||||
Operating Revenues | |||||||
Education | $ | 372,975 | $ | 401,006 | |||
Advertising | 64,116 | 68,158 | |||||
Other | 145,626 | 132,576 | |||||
582,717 | 601,740 | ||||||
Operating Costs and Expenses | |||||||
Operating | 300,666 | 291,632 | |||||
Selling, general and administrative | 231,509 | 235,213 | |||||
Depreciation of property, plant and equipment | 14,652 | 16,761 | |||||
Amortization of intangible assets | 6,836 | 6,262 | |||||
553,663 | 549,868 | ||||||
Income from Operations | 29,054 | 51,872 | |||||
Equity in earnings of affiliates, net | 649 | 1,004 | |||||
Interest income | 1,363 | 591 | |||||
Interest expense | (8,129 | ) | (7,948 | ) | |||
Other income, net | 849 | 15,096 | |||||
Income Before Income Taxes | 23,786 | 60,615 | |||||
Provision for Income Taxes | 2,700 | 22,400 | |||||
Net Income | 21,086 | 38,215 | |||||
Net Income Attributable to Noncontrolling Interests | — | (435 | ) | ||||
Net Income Attributable to Graham Holdings Company Common Stockholders | $ | 21,086 | $ | 37,780 | |||
Per Share Information Attributable to Graham Holdings Company Common Stockholders | |||||||
Basic net income per common share | $ | 3.77 | $ | 6.63 | |||
Basic average number of common shares outstanding | 5,535 | 5,623 | |||||
Diluted net income per common share | $ | 3.75 | $ | 6.59 | |||
Diluted average number of common shares outstanding | 5,569 | 5,652 |
Three Months Ended March 31 | |||||||
(in thousands) | 2017 | 2016 | |||||
Net Income | $ | 21,086 | $ | 38,215 | |||
Other Comprehensive Income, Before Tax | |||||||
Foreign currency translation adjustments: | |||||||
Translation adjustments arising during the period | 13,668 | 3,845 | |||||
Unrealized gains (losses) on available-for-sale securities: | |||||||
Unrealized gains for the period, net | 9,558 | 343 | |||||
Reclassification of realized gain on sale of available-for-sale securities included in net income | — | (1,754 | ) | ||||
9,558 | (1,411 | ) | |||||
Pension and other postretirement plans: | |||||||
Amortization of net prior service cost included in net income | 120 | 104 | |||||
Amortization of net actuarial (gain) loss included in net income | (1,823 | ) | 290 | ||||
(1,703 | ) | 394 | |||||
Cash flow hedge loss | (124 | ) | — | ||||
Other Comprehensive Income, Before Tax | 21,399 | 2,828 | |||||
Income tax (expense) benefit related to items of other comprehensive income | (3,117 | ) | 407 | ||||
Other Comprehensive Income, Net of Tax | 18,282 | 3,235 | |||||
Comprehensive Income | 39,368 | 41,450 | |||||
Comprehensive income attributable to noncontrolling interests | — | (435 | ) | ||||
Total Comprehensive Income Attributable to Graham Holdings Company | $ | 39,368 | $ | 41,015 |
As of | |||||||
(in thousands) | March 31, 2017 | December 31, 2016 | |||||
(Unaudited) | |||||||
Assets | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 632,787 | $ | 648,885 | |||
Restricted cash | 24,555 | 21,931 | |||||
Investments in marketable equity securities and other investments | 456,558 | 448,241 | |||||
Accounts receivable, net | 493,804 | 615,101 | |||||
Income taxes receivable | 47,734 | 41,635 | |||||
Inventories and contracts in progress | 35,736 | 34,818 | |||||
Other current assets | 68,717 | 60,735 | |||||
Total Current Assets | 1,759,891 | 1,871,346 | |||||
Property, Plant and Equipment, Net | 243,330 | 233,664 | |||||
Investments in Affiliates | 60,287 | 58,806 | |||||
Goodwill, Net | 1,179,431 | 1,122,954 | |||||
Indefinite-Lived Intangible Assets, Net | 93,203 | 66,026 | |||||
Amortized Intangible Assets, Net | 153,924 | 107,939 | |||||
Prepaid Pension Cost | 836,430 | 881,593 | |||||
Deferred Income Taxes | 15,818 | 17,246 | |||||
Deferred Charges and Other Assets | 73,791 | 73,096 | |||||
Total Assets | $ | 4,416,105 | $ | 4,432,670 | |||
Liabilities and Equity | |||||||
Current Liabilities | |||||||
Accounts payable and accrued liabilities | $ | 444,677 | $ | 500,726 | |||
Deferred revenue | 321,058 | 312,107 | |||||
Current portion of long-term debt | 6,158 | 6,128 | |||||
Dividends declared | 7,100 | — | |||||
Total Current Liabilities | 778,993 | 818,961 | |||||
Postretirement Benefits Other Than Pensions | 22,270 | 21,859 | |||||
Accrued Compensation and Related Benefits | 193,060 | 195,910 | |||||
Other Liabilities | 67,850 | 65,554 | |||||
Deferred Income Taxes | 373,534 | 379,092 | |||||
Mandatorily Redeemable Noncontrolling Interest | 12,584 | 12,584 | |||||
Long-Term Debt | 487,186 | 485,719 | |||||
Total Liabilities | 1,935,477 | 1,979,679 | |||||
Redeemable Noncontrolling Interest | 50 | 50 | |||||
Preferred Stock | — | — | |||||
Common Stockholders’ Equity | |||||||
Common stock | 20,000 | 20,000 | |||||
Capital in excess of par value | 363,361 | 364,363 | |||||
Retained earnings | 5,595,826 | 5,588,942 | |||||
Accumulated other comprehensive income (loss), net of tax | |||||||
Cumulative foreign currency translation adjustment | (13,330 | ) | (26,998 | ) | |||
Unrealized gain on available-for-sale securities | 98,666 | 92,931 | |||||
Unrealized gain on pensions and other postretirement plans | 169,808 | 170,830 | |||||
Cash flow hedge | (376 | ) | (277 | ) | |||
Cost of Class B common stock held in treasury | (3,753,377 | ) | (3,756,850 | ) | |||
Total Equity | 2,480,578 | 2,452,941 | |||||
Total Liabilities and Equity | $ | 4,416,105 | $ | 4,432,670 |
Three Months Ended March 31 | |||||||
(in thousands) | 2017 | 2016 | |||||
Cash Flows from Operating Activities | |||||||
Net Income | $ | 21,086 | $ | 38,215 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 21,488 | 23,023 | |||||
Net pension benefit | (14,688 | ) | (12,059 | ) | |||
Stock-based compensation expense, net | 2,866 | 3,254 | |||||
Loss (gain) on disposition of businesses, property, plant and equipment, investments and other assets, net | 335 | (20,449 | ) | ||||
Foreign exchange (gain) loss | (1,728 | ) | 5,443 | ||||
Equity in earnings of affiliates, net of distributions | (649 | ) | (1,004 | ) | |||
Provision for deferred income taxes | 7,443 | 2,037 | |||||
Change in operating assets and liabilities: | |||||||
Accounts receivable, net | 122,605 | 41,749 | |||||
Accounts payable and accrued liabilities | (55,584 | ) | (45,930 | ) | |||
Deferred revenue | 4,603 | 17,695 | |||||
Income taxes receivable | (6,490 | ) | 17,926 | ||||
Other assets and other liabilities, net | (9,489 | ) | (9,187 | ) | |||
Other | 103 | 169 | |||||
Net Cash Provided by Operating Activities | 91,901 | 60,882 | |||||
Cash Flows from Investing Activities | |||||||
Investments in certain businesses, net of cash acquired | (85,415 | ) | (198,179 | ) | |||
Purchases of property, plant and equipment | (15,664 | ) | (10,690 | ) | |||
Net proceeds from disposition of businesses, property, plant and equipment, investments and other assets | 1,748 | 21,285 | |||||
Proceeds from sales of marketable equity securities | — | 4,392 | |||||
Purchases of marketable equity securities | — | (13,271 | ) | ||||
Investments in equity affiliates and cost method investments | (865 | ) | (389 | ) | |||
Return of investment in equity affiliate | 200 | — | |||||
Net Cash Used in Investing Activities | (99,996 | ) | (196,852 | ) | |||
Cash Flows from Financing Activities | |||||||
Dividends paid | (7,102 | ) | (6,938 | ) | |||
Common shares repurchased | (395 | ) | (81,346 | ) | |||
Other | (2,092 | ) | 13,427 | ||||
Net Cash Used in Financing Activities | (9,589 | ) | (74,857 | ) | |||
Effect of Currency Exchange Rate Change | 4,210 | 1,095 | |||||
Net Decrease in Cash and Cash Equivalents and Restricted Cash | (13,474 | ) | (209,732 | ) | |||
Beginning Cash and Cash Equivalents and Restricted Cash | 670,816 | 774,952 | |||||
Ending Cash and Cash Equivalents and Restricted Cash | $ | 657,342 | $ | 565,220 |
Three Months Ended March 31, 2016 | |||||||||||
As | |||||||||||
Previously | As | ||||||||||
(in thousands) | Reported | Adjustment | Adopted | ||||||||
Cash Flows from Operating Activities | |||||||||||
Decrease in Restricted Cash | $ | (13,888 | ) | $ | 13,888 | $ | — | ||||
Net Cash Provided by Operating Activities | 46,994 | 13,888 | 60,882 | ||||||||
Net Decrease in Cash and Cash Equivalents and Restricted Cash | (223,620 | ) | 13,888 | (209,732 | ) | ||||||
Cash and Cash Equivalents and Restricted Cash at Beginning of Year | 754,207 | 20,745 | 774,952 | ||||||||
Cash and Cash Equivalents and Restricted Cash at End of Year | 530,587 | 34,633 | 565,220 |
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 |
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 |
Purchase Price Allocation | |||||||
As of | |||||||
(in thousands) | March 31, 2017 | December 31, 2016 | |||||
Accounts receivable | $ | 386 | $ | 8,538 | |||
Other current assets | 130 | 2,298 | |||||
Property, plant and equipment | 8,960 | 3,940 | |||||
Goodwill | 42,632 | 184,118 | |||||
Indefinite-lived intangible assets | 26,600 | 53,110 | |||||
Amortized intangible assets | 53,307 | 28,267 | |||||
Pension and other postretirement benefits liabilities | (59,116 | ) | — | ||||
Other liabilities | (1,217 | ) | (21,892 | ) | |||
Deferred income taxes | 13,733 | (11,009 | ) | ||||
Aggregate purchase price, net of cash acquired | $ | 85,415 | $ | 247,370 |
Three Months Ended March 31 | |||||||
(in thousands) | 2017 | 2016 | |||||
Operating revenues | $ | 584,152 | $ | 614,753 | |||
Net income | 21,099 | 39,567 |
(in thousands) | Education | Television Broadcasting | Other Businesses | Total | |||||||||||
Balance as of December 31, 2016 | |||||||||||||||
Goodwill | $ | 1,111,003 | $ | 168,345 | $ | 202,141 | $ | 1,481,489 | |||||||
Accumulated impairment losses | (350,850 | ) | — | (7,685 | ) | (358,535 | ) | ||||||||
760,153 | 168,345 | 194,456 | 1,122,954 | ||||||||||||
Acquisitions | 20,851 | 21,781 | — | 42,632 | |||||||||||
Dispositions | — | — | (412 | ) | (412 | ) | |||||||||
Foreign currency exchange rate changes | 14,257 | — | — | 14,257 | |||||||||||
Balance as of March 31, 2017 | |||||||||||||||
Goodwill | 1,146,111 | 190,126 | 201,729 | 1,537,966 | |||||||||||
Accumulated impairment losses | (350,850 | ) | — | (7,685 | ) | (358,535 | ) | ||||||||
$ | 795,261 | $ | 190,126 | $ | 194,044 | $ | 1,179,431 |
(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 | — | — | 20,851 | 20,851 | |||||||||||
Foreign currency exchange rate changes | 28 | — | 14,229 | 14,257 | |||||||||||
Balance as of March 31, 2017 | |||||||||||||||
Goodwill | 389,748 | 166,098 | 590,265 | 1,146,111 | |||||||||||
Accumulated impairment losses | (248,591 | ) | (102,259 | ) | — | (350,850 | ) | ||||||||
$ | 141,157 | $ | 63,839 | $ | 590,265 | $ | 795,261 |
As of March 31, 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) | $ | 131,975 | $ | 60,389 | $ | 71,586 | $ | 129,616 | $ | 55,863 | $ | 73,753 | ||||||||||||
Trade names and trademarks | 2–10 years | 56,270 | 30,654 | 25,616 | 55,240 | 29,670 | 25,570 | ||||||||||||||||||
Network affiliation agreements | 15 years | 45,900 | 638 | 45,262 | — | — | — | ||||||||||||||||||
Databases and technology | 3–5 years | 9,051 | 4,565 | 4,486 | 5,601 | 4,368 | 1,233 | ||||||||||||||||||
Noncompete agreements | 2–5 years | 1,730 | 1,464 | 266 | 1,730 | 1,404 | 326 | ||||||||||||||||||
Other | 1–8 years | 12,030 | 5,322 | 6,708 | 12,030 | 4,973 | 7,057 | ||||||||||||||||||
$ | 256,956 | $ | 103,032 | $ | 153,924 | $ | 204,217 | $ | 96,278 | $ | 107,939 | ||||||||||||||
Indefinite-Lived Intangible Assets | |||||||||||||||||||||||||
Trade names and trademarks | $ | 65,953 | $ | 65,192 | |||||||||||||||||||||
FCC licenses | 26,600 | — | |||||||||||||||||||||||
Licensure and accreditation | 650 | 834 | |||||||||||||||||||||||
$ | 93,203 | $ | 66,026 |
(1) | The Company's student and customer relationships’ minimum useful life was 2 years as of December 31, 2016. |
As of | |||||||
March 31, 2017 | December 31, 2016 | ||||||
(in thousands) | |||||||
7.25% unsecured notes due February 1, 2019 (1) | $ | 399,166 | $ | 399,052 | |||
UK Credit facility (2) | 92,856 | 91,316 | |||||
Other indebtedness | 1,322 | 1,479 | |||||
Total Debt | $ | 493,344 | $ | 491,847 | |||
Less: current portion | (6,158 | ) | (6,128 | ) | |||
Total Long-Term Debt | $ | 487,186 | $ | 485,719 |
(1) | The carrying value is net of $0.1 million of unamortized debt issuance costs as of March 31, 2017 and December 31, 2016, respectively. |
(2) | The carrying value is net of $0.5 million of unamortized debt issuance costs as of March 31, 2017 and December 31, 2016, respectively. |
As of March 31, 2017 | |||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||
Assets | |||||||||||||||
Money market investments (1) | $ | — | $ | 442,864 | $ | — | $ | 442,864 | |||||||
Marketable equity securities (3) | 433,787 | — | — | 433,787 | |||||||||||
Other current investments (4) | 5,702 | 17,069 | — | 22,771 | |||||||||||
Total Financial Assets | $ | 439,489 | $ | 459,933 | $ | — | $ | 899,422 | |||||||
Liabilities | |||||||||||||||
Deferred compensation plan liabilities (5) | $ | — | $ | 43,949 | $ | — | $ | 43,949 | |||||||
Interest rate swap (6) | — | 488 | — | 488 | |||||||||||
Mandatorily redeemable noncontrolling interest (7) | — | — | 12,584 | 12,584 | |||||||||||
Total Financial Liabilities | $ | — | $ | 44,437 | $ | 12,584 | $ | 57,021 |
As of December 31, 2016 | |||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||
Assets | |||||||||||||||
Money market investments (1) | $ | — | $ | 435,258 | $ | — | $ | 435,258 | |||||||
Commercial paper (2) | 49,882 | — | — | 49,882 | |||||||||||
Marketable equity securities (3) | 424,229 | — | — | 424,229 | |||||||||||
Other current investments (4) | 6,957 | 17,055 | — | 24,012 | |||||||||||
Total Financial Assets | $ | 481,068 | $ | 452,313 | $ | — | $ | 933,381 | |||||||
Liabilities | |||||||||||||||
Deferred compensation plan liabilities (5) | $ | — | $ | 46,300 | $ | — | $ | 46,300 | |||||||
Interest rate swap (6) | — | 365 | — | 365 | |||||||||||
Mandatorily redeemable noncontrolling interest (7) | — | — | 12,584 | 12,584 | |||||||||||
Total Financial Liabilities | $ | — | $ | 46,665 | $ | 12,584 | $ | 59,249 |
(1) | The Company’s money market investments are included in cash, cash equivalents and restricted cash and the value considers the liquidity of the counterparty. |
(2) | The Company's commercial paper investments with original maturities of three months or less are included in cash and cash equivalents. |
(3) | The Company’s investments in marketable equity securities are classified as available-for-sale. |
(4) | Includes U.S. Government Securities, corporate bonds, mutual funds and time deposits. These investments are valued using a market approach based on the quoted market prices of the security or inputs that include quoted market prices for similar instruments and are classified as either Level 1 or Level 2 in the valuation hierarchy. |
(5) | Includes Graham Holdings Company's Deferred Compensation Plan and supplemental savings plan benefits under the Graham Holdings Company's Supplemental Executive Retirement Plan, which are included in accrued compensation and related benefits. These plans measure the market value of a participant's balance in a notional investment account that is comprised primarily of mutual funds, which are based on observable market prices. However, since the deferred compensation obligations are not exchanged in an active market, they are classified as Level 2 in the fair value hierarchy. Realized and unrealized gains (losses) on deferred compensation are included in operating income. |
(6) | Included in Other Liabilities. The Company utilized a market approach model using the notional amount of the interest rate swap multiplied by the observable inputs of time to maturity and market interest rates. |
(7) | The fair value of the mandatorily redeemable noncontrolling interest is based on an EBITDA multiple, adjusted for working capital and other items, which approximates fair value. |
Three Months Ended March 31 | |||||||
(in thousands, except per share amounts) | 2017 | 2016 | |||||
Numerator: | |||||||
Numerator for basic earnings per share: | |||||||
Net income attributable to Graham Holdings Company common stockholders | $ | 21,086 | $ | 37,780 | |||
Less: Dividends paid-common stock outstanding and unvested restricted shares | (14,202 | ) | (13,758 | ) | |||
Undistributed earnings | 6,884 | 24,022 | |||||
Percent allocated to common stockholders | 99.04 | % | 98.64 | % | |||
6,818 | 23,695 | ||||||
Add: Dividends paid-common stock outstanding | 14,066 | 13,574 | |||||
Numerator for basic earnings per share | $ | 20,884 | $ | 37,269 | |||
Add: Additional undistributed earnings due to dilutive stock options | — | 2 | |||||
Numerator for diluted earnings per share | $ | 20,884 | $ | 37,271 | |||
Denominator: | |||||||
Denominator for basic earnings per share: | |||||||
Weighted average shares outstanding | 5,535 | 5,623 | |||||
Add: Effect of dilutive stock options | 34 | 29 | |||||
Denominator for diluted earnings per share | 5,569 | 5,652 | |||||
Graham Holdings Company Common Stockholders: | |||||||
Basic earnings per share | $ | 3.77 | $ | 6.63 | |||
Diluted earnings per share | $ | 3.75 | $ | 6.59 |
Three Months Ended March 31 | |||||
(in thousands) | 2017 | 2016 | |||
Weighted average restricted stock | 28 | 38 |
Three Months Ended March 31 | |||||||
(in thousands) | 2017 | 2016 | |||||
Service cost | $ | 4,914 | $ | 5,342 | |||
Interest cost | 11,986 | 13,073 | |||||
Expected return on assets | (30,337 | ) | (30,548 | ) | |||
Amortization of prior service cost | 43 | 74 | |||||
Recognized actuarial gain | (1,294 | ) | — | ||||
Net Periodic Benefit | $ | (14,688 | ) | $ | (12,059 | ) |
Three Months Ended March 31 | |||||||
(in thousands) | 2017 | 2016 | |||||
Service cost | $ | 214 | $ | 246 | |||
Interest cost | 1,058 | 1,096 | |||||
Amortization of prior service cost | 114 | 114 | |||||
Recognized actuarial loss | 444 | 665 | |||||
Net Periodic Cost | $ | 1,830 | $ | 2,121 |
As of | |||||
March 31, 2017 | December 31, 2016 | ||||
U.S. equities | 50 | % | 53 | % | |
U.S. stock index fund | 31 | % | 30 | % | |
U.S. fixed income | 13 | % | 11 | % | |
International equities | 6 | % | 6 | % | |
100 | % | 100 | % |
Three Months Ended March 31 | |||||||
(in thousands) | 2017 | 2016 | |||||
Service cost | $ | 257 | $ | 346 | |||
Interest cost | 195 | 308 | |||||
Amortization of prior service credit | (37 | ) | (84 | ) | |||
Recognized actuarial gain | (973 | ) | (375 | ) | |||
Net Periodic (Benefit) Cost | $ | (558 | ) | $ | 195 |
Three Months Ended March 31 | ||||||||
(in thousands) | 2017 | 2016 | ||||||
Foreign currency gain (loss), net | 1,728 | (5,443 | ) | |||||
(Loss) gain on sales of businesses | (342 | ) | 18,931 | |||||
Gain on sales of marketable equity securities | — | 1,754 | ||||||
Other, net | (537 | ) | (146 | ) | ||||
Total Other Non-Operating Income | $ | 849 | $ | 15,096 |
Three Months Ended March 31 | |||||||||||||||||||||||
2017 | 2016 | ||||||||||||||||||||||
Before-Tax | Income | After-Tax | Before-Tax | Income | After-Tax | ||||||||||||||||||
(in thousands) | Amount | Tax | Amount | Amount | Tax | Amount | |||||||||||||||||
Foreign currency translation adjustments: | |||||||||||||||||||||||
Translation adjustments arising during the period | $ | 13,668 | $ | — | $ | 13,668 | $ | 3,845 | $ | — | $ | 3,845 | |||||||||||
Unrealized gains (losses) on available-for-sale securities: | |||||||||||||||||||||||
Unrealized gains for the period, net | 9,558 | (3,823 | ) | 5,735 | 343 | (137 | ) | 206 | |||||||||||||||
Reclassification of realized gain on sale of available-for-sale securities included in net income | — | — | — | (1,754 | ) | 701 | (1,053 | ) | |||||||||||||||
9,558 | (3,823 | ) | 5,735 | (1,411 | ) | 564 | (847 | ) | |||||||||||||||
Pension and other postretirement plans: | |||||||||||||||||||||||
Amortization of net prior service cost included in net income | 120 | (48 | ) | 72 | 104 | (41 | ) | 63 | |||||||||||||||
Amortization of net actuarial (gain) loss included in net income | (1,823 | ) | 729 | (1,094 | ) | 290 | (116 | ) | 174 | ||||||||||||||
(1,703 | ) | 681 | (1,022 | ) | 394 | (157 | ) | 237 | |||||||||||||||
Cash flow hedge: | |||||||||||||||||||||||
Loss for the period | (124 | ) | 25 | (99 | ) | — | — | — | |||||||||||||||
Other Comprehensive Income | $ | 21,399 | $ | (3,117 | ) | $ | 18,282 | $ | 2,828 | $ | 407 | $ | 3,235 |
(in thousands, net of taxes) | Cumulative Foreign Currency Translation Adjustment | Unrealized Gain on Available-for- Sale Securities | Unrealized Gain on Pensions and Other Postretirement Plans | Cash Flow Hedge | Accumulated Other Comprehensive Income | ||||||||||||||
Balance as of December 31, 2016 | $ | (26,998 | ) | $ | 92,931 | $ | 170,830 | $ | (277 | ) | $ | 236,486 | |||||||
Other comprehensive income (loss) before reclassifications | 13,668 | 5,735 | — | (124 | ) | 19,279 | |||||||||||||
Net amount reclassified from accumulated other comprehensive income (loss) | — | — | (1,022 | ) | 25 | (997 | ) | ||||||||||||
Other comprehensive income (loss), net of tax | 13,668 | 5,735 | (1,022 | ) | (99 | ) | 18,282 | ||||||||||||
Balance as of March 31, 2017 | $ | (13,330 | ) | $ | 98,666 | $ | 169,808 | $ | (376 | ) | $ | 254,768 |
Three Months Ended March 31 | Affected Line Item in the Condensed Consolidated Statement of Operations | ||||||||
(in thousands) | 2017 | 2016 | |||||||
Unrealized Gains on Available-for-sale Securities: | |||||||||
Realized gain for the period | $ | — | $ | (1,754 | ) | Other income, net | |||
— | 701 | Provision for Income Taxes | |||||||
— | (1,053 | ) | Net of Tax | ||||||
Pension and Other Postretirement Plans: | |||||||||
Amortization of net prior service cost | 120 | 104 | (1) | ||||||
Amortization of net actuarial (gain) loss | (1,823 | ) | 290 | (1) | |||||
(1,703 | ) | 394 | Before tax | ||||||
681 | (157 | ) | Provision for Income Taxes | ||||||
(1,022 | ) | 237 | Net of Tax | ||||||
Cash Flow Hedge | |||||||||
31 | — | Interest expense | |||||||
(6 | ) | — | Provision for Income Taxes | ||||||
25 | — | Net of Tax | |||||||
Total reclassification for the period | $ | (997 | ) | $ | (816 | ) | Net of Tax |
(1) | These accumulated other comprehensive income components are included in the computation of net periodic pension and postretirement plan cost (see Note 8). |
Three Months Ended March 31 | |||||||
(in thousands) | 2017 | 2016 | |||||
Operating Revenues | |||||||
Education | $ | 372,897 | $ | 401,076 | |||
Television broadcasting | 91,496 | 92,018 | |||||
Other businesses | 118,324 | 108,716 | |||||
Corporate office | — | — | |||||
Intersegment elimination | — | (70 | ) | ||||
$ | 582,717 | $ | 601,740 | ||||
Income (Loss) from Operations | |||||||
Education | $ | 9,031 | $ | 14,488 | |||
Television broadcasting | 25,969 | 41,220 | |||||
Other businesses | (10,564 | ) | (5,730 | ) | |||
Corporate office | 4,618 | 1,894 | |||||
$ | 29,054 | $ | 51,872 | ||||
Equity in Earnings of Affiliates, Net | 649 | 1,004 | |||||
Interest Expense, Net | (6,766 | ) | (7,357 | ) | |||
Other Income, Net | 849 | 15,096 | |||||
Income Before Income Taxes | $ | 23,786 | $ | 60,615 | |||
Depreciation of Property, Plant and Equipment | |||||||
Education | $ | 8,584 | $ | 11,103 | |||
Television broadcasting | 2,594 | 2,377 | |||||
Other businesses | 3,184 | 3,027 | |||||
Corporate office | 290 | 254 | |||||
$ | 14,652 | $ | 16,761 | ||||
Amortization of Intangible Assets | |||||||
Education | $ | 1,120 | $ | 1,681 | |||
Television broadcasting | 902 | 63 | |||||
Other businesses | 4,814 | 4,518 | |||||
Corporate office | — | — | |||||
$ | 6,836 | $ | 6,262 | ||||
Net Pension (Credit) Expense | |||||||
Education | $ | 2,706 | $ | 3,109 | |||
Television broadcasting | 493 | 439 | |||||
Other businesses | 483 | 254 | |||||
Corporate office | (18,370 | ) | (15,861 | ) | |||
$ | (14,688 | ) | $ | (12,059 | ) |
As of | |||||||
(in thousands) | March 31, 2017 | December 31, 2016 | |||||
Identifiable Assets | |||||||
Education | $ | 1,475,285 | $ | 1,479,267 | |||
Television broadcasting | 445,278 | 336,631 | |||||
Other businesses | 698,908 | 796,935 | |||||
Corporate office | 466,130 | 455,209 | |||||
$ | 3,085,601 | $ | 3,068,042 | ||||
Investments in Marketable Equity Securities | 433,787 | 424,229 | |||||
Investments in Affiliates | 60,287 | 58,806 | |||||
Prepaid Pension Cost | 836,430 | 881,593 | |||||
Total Assets | $ | 4,416,105 | $ | 4,432,670 |
Three Months Ended | |||||||
March 31 | |||||||
(in thousands) | 2017 | 2016 | |||||
Operating Revenues | |||||||
Higher education | $ | 144,310 | $ | 165,549 | |||
Test preparation | 64,568 | 66,462 | |||||
Kaplan international | 164,562 | 169,287 | |||||
Kaplan corporate and other | 14 | 125 | |||||
Intersegment elimination | (557 | ) | (347 | ) | |||
$ | 372,897 | $ | 401,076 | ||||
Income (Loss) from Operations | |||||||
Higher education | $ | 12,604 | $ | 21,306 | |||
Test preparation | (2,864 | ) | (2,310 | ) | |||
Kaplan international | 7,707 | 4,897 | |||||
Kaplan corporate and other | (8,469 | ) | (9,405 | ) | |||
Intersegment elimination | 53 | — | |||||
$ | 9,031 | $ | 14,488 | ||||
Depreciation of Property, Plant and Equipment | |||||||
Higher education | $ | 3,431 | $ | 4,175 | |||
Test preparation | 1,341 | 1,781 | |||||
Kaplan international | 3,682 | 5,060 | |||||
Kaplan corporate and other | 130 | 87 | |||||
$ | 8,584 | $ | 11,103 | ||||
Amortization of Intangible Assets | $ | 1,120 | $ | 1,681 | |||
Pension Expense | |||||||
Higher education | $ | 2,044 | $ | 1,905 | |||
Test preparation | 911 | 768 | |||||
Kaplan international | 87 | 67 | |||||
Kaplan corporate and other | (336 | ) | 369 | ||||
$ | 2,706 | $ | 3,109 |
As of | |||||||
(in thousands) | March 31, 2017 | December 31, 2016 | |||||
Identifiable assets | |||||||
Higher education | $ | 321,573 | $ | 373,127 | |||
Test preparation | 133,061 | 133,709 | |||||
Kaplan international | 1,000,432 | 950,922 | |||||
Kaplan corporate and other | 20,219 | 21,509 | |||||
$ | 1,475,285 | $ | 1,479,267 |
• | $1.7 million in non-operating foreign currency gains (after-tax impact of $1.1 million, or $0.19 per share); and |
• | $5.9 million in income tax benefits related to stock compensation ($1.06 per share). |
• | an $18.9 million non-operating gain arising from the sale of a business (after-tax impact of $11.9 million, or $2.08 per share); |
• | a $1.8 million gain on sale of marketable equity securities (after-tax impact of $1.1 million, or $0.19 per share); and |
• | $5.4 million in non-operating foreign currency losses (after-tax impact of $3.4 million, or $0.60 per share). |
Three Months Ended | ||||||||||
March 31 | ||||||||||
(in thousands) | 2017 | 2016 | % Change | |||||||
Revenue | ||||||||||
Higher education | $ | 144,310 | $ | 165,549 | (13 | ) | ||||
Test preparation | 64,568 | 66,462 | (3 | ) | ||||||
Kaplan international | 164,562 | 169,287 | (3 | ) | ||||||
Kaplan corporate and other | 14 | 125 | (89 | ) | ||||||
Intersegment elimination | (557 | ) | (347 | ) | — | |||||
$ | 372,897 | $ | 401,076 | (7 | ) | |||||
Operating Income (Loss) | ||||||||||
Higher education | $ | 12,604 | $ | 21,306 | (41 | ) | ||||
Test preparation | (2,864 | ) | (2,310 | ) | (24 | ) | ||||
Kaplan international | 7,707 | 4,897 | 57 | |||||||
Kaplan corporate and other | (7,349 | ) | (7,724 | ) | 5 | |||||
Amortization of intangible assets | (1,120 | ) | (1,681 | ) | 33 | |||||
Intersegment elimination | 53 | — | — | |||||||
$ | 9,031 | $ | 14,488 | (38 | ) |
As of March 31 | |||||
2017 | 2016 | ||||
Certificate | 8.7 | % | 5.8 | % | |
Associate’s | 17.7 | % | 22.1 | % | |
Bachelor’s | 51.0 | % | 50.5 | % | |
Master’s | 22.6 | % | 21.6 | % | |
100.0 | % | 100.0 | % |
Three Months Ended | ||||||||||
March 31 | % | |||||||||
(in thousands) | 2017 | 2016 | Change | |||||||
Operating Revenues | ||||||||||
Manufacturing | $ | 61,898 | $ | 56,675 | 9 | |||||
Healthcare | 36,899 | 35,880 | 3 | |||||||
SocialCode | 12,574 | 10,655 | 18 | |||||||
Other | 6,953 | 5,506 | 26 | |||||||
$ | 118,324 | $ | 108,716 | 9 | ||||||
Operating Expenses | ||||||||||
Manufacturing | $ | 58,233 | $ | 55,538 | 5 | |||||
Healthcare | 37,825 | 33,361 | 13 | |||||||
SocialCode | 17,082 | 13,625 | 25 | |||||||
Other | 15,748 | 11,922 | 32 | |||||||
$ | 128,888 | $ | 114,446 | 13 | ||||||
Operating Income (Loss) | ||||||||||
Manufacturing | $ | 3,665 | $ | 1,137 | — | |||||
Healthcare | (926 | ) | 2,519 | — | ||||||
SocialCode | (4,508 | ) | (2,970 | ) | (52 | ) | ||||
Other | (8,795 | ) | (6,416 | ) | (37 | ) | ||||
$ | (10,564 | ) | $ | (5,730 | ) | (84 | ) | |||
Depreciation | ||||||||||
Manufacturing | $ | 1,508 | $ | 1,873 | (19 | ) | ||||
Healthcare | 1,069 | 737 | 45 | |||||||
SocialCode | 246 | 229 | 7 | |||||||
Other | 361 | 188 | 92 | |||||||
$ | 3,184 | $ | 3,027 | 5 | ||||||
Amortization of Intangible Assets | ||||||||||
Manufacturing | $ | 3,077 | $ | 2,817 | 9 | |||||
Healthcare | 1,654 | 1,681 | (2 | ) | ||||||
SocialCode | 83 | — | — | |||||||
Other | — | 20 | — | |||||||
$ | 4,814 | $ | 4,518 | 7 | ||||||
Pension Expense | ||||||||||
Manufacturing | $ | 25 | $ | 18 | 39 | |||||
Healthcare | 166 | — | — | |||||||
SocialCode | 154 | 124 | 24 | |||||||
Other | 138 | 112 | 23 | |||||||
$ | 483 | $ | 254 | 90 |
• | The Proposed Transfer of Kaplan University is Subject to Receipt of Regulatory Approvals, that if not Obtained, Could Delay or Prevent Consummation of the Proposed Transaction and Could Disrupt the Business of Kaplan University During the Pendency of the Transaction |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plan* | Maximum Number of Shares that May Yet Be Purchased Under the Plan* | |||||||||
January | — | $ | — | — | 224,276 | ||||||||
February | 750 | 526.90 | — | 223,526 | |||||||||
March | — | — | — | 223,526 | |||||||||
750 | $ | 526.90 | — |
Exhibit Number | Description |
3.1 | Restated Certificate of Incorporation of the Company dated November 13, 2003 (incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2003). |
3.2 | Certificate of Amendment, effective November 29, 2013, to the Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s current Report on Form 8-K dated November 29, 2013). |
3.3 | By-Laws of the Company as amended and restated through November 29, 2013 (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K dated November 29, 2013). |
4.1 | Second Supplemental Indenture dated January 30, 2009, between the Company and The Bank of New York Mellon Trust Company, N.A., as successor to The First National Bank of Chicago, as Trustee (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated January 30, 2009). |
4.2 | Five Year Credit Agreement, dated as of June 29, 2015, among the Company, and certain of its domestic subsidiaries as guarantors, the several lenders from time to time party thereto, Wells Fargo Bank, National Association, as Administrative Agent and JPMorgan Chase Bank, N.A., as Syndication Agent. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated June 29, 2015). |
31.1 | Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer. |
31.2 | Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer. |
32 | Section 1350 Certification of the Chief Executive Officer and the Chief Financial Officer. * |
101 | The following financial information from Graham Holdings Company Quarterly Report on Form 10-Q for the period ended March 31, 2017, formatted in Extensible Business Reporting Language (XBRL): (i) Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2107 and 2016, (ii) Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2017 and 2016, (iii) Condensed Consolidated Balance Sheets as of March 31, 2017 and December 31, 2016, (iv) Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2017 and 2016, and (v) Notes to Condensed Consolidated Financial Statements. Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed “furnished” and not “filed” or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, are deemed “furnished” and not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise are not subject to liability under these sections. |
GRAHAM HOLDINGS COMPANY | ||
(Registrant) | ||
Date: May 3, 2017 | /s/ Timothy J. O'Shaughnessy | |
Timothy J. O’Shaughnessy, President & Chief Executive Officer (Principal Executive Officer) | ||
Date: May 3, 2017 | /s/ Wallace R. Cooney | |
Wallace R. Cooney, Senior Vice President-Finance (Principal Financial Officer) |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
/s/ Timothy J. O'Shaughnessy |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
/s/ Wallace R. Cooney |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Timothy J. O'Shaughnessy |
/s/ Wallace R. Cooney |
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Apr. 28, 2017 |
|
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | ghc | |
Entity Registrant Name | GRAHAM HOLDINGS CO | |
Entity Central Index Key | 0000104889 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Class A Common Stock [Member] | ||
Entity Common Stock, Shares Outstanding | 964,001 | |
Class B Common Stock [Member] | ||
Entity Common Stock, Shares Outstanding | 4,626,753 |
Organization, Basis of Presentation and Recent Accounting Pronouncements |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Basis of Presentation and Recent Accounting Pronouncements | ORGANIZATION, BASIS OF PRESENTATION AND RECENT ACCOUNTING PRONOUNCEMENTS Graham Holdings Company (the Company), is a diversified education and media company. The Company’s Kaplan subsidiary provides a wide variety of educational services, both domestically and outside the United States. The Company’s media operations comprise the ownership and operation of seven television broadcasting stations. The Company's other business operations include home health and hospice services and manufacturing. Basis of Presentation – The accompanying condensed consolidated financial statements have been prepared in accordance with: (i) generally accepted accounting principles in the United States of America (GAAP) for interim financial information; (ii) the instructions to Form 10-Q; and (iii) the guidance of Rule 10-01 of Regulation S-X under the Securities and Exchange Act of 1934, as amended, for financial statements required to be filed with the Securities and Exchange Commission (SEC). They include the assets, liabilities, results of operations and cash flows of the Company, including its domestic and foreign subsidiaries that are more than 50% owned or otherwise controlled by the Company. As permitted under such rules, certain notes and other financial information normally required by GAAP have been condensed or omitted. Management believes the accompanying condensed consolidated financial statements reflect all normal and recurring adjustments necessary for a fair statement of the Company’s financial position, results of operations, and cash flows as of and for the periods presented herein. The Company’s results of operations for the three months ended March 31, 2017 and 2016 may not be indicative of the Company’s future results. These condensed consolidated financial statements are unaudited and should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. Use of Estimates in the Preparation of the Condensed Consolidated Financial Statements – The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and judgments that affect the amounts reported herein. Management bases its estimates and assumptions on historical experience and on various other factors that are believed to be reasonable under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in those estimates. Recently Adopted and Issued Accounting Pronouncements – In May 2014, the Financial Accounting Standards Board (FASB) issued comprehensive new guidance that supersedes all existing revenue recognition guidance. In August 2015, the FASB issued an amendment to the guidance that defers the effective date by one year. The new guidance requires revenue to be recognized when the Company transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The new guidance also significantly expands the disclosure requirements for revenue recognition. The guidance is effective for interim and fiscal years beginning after December 15, 2017. Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016. The standard permits two implementation approaches, full retrospective, requiring retrospective application of the new guidance with a restatement of prior years, or modified retrospective, requiring prospective application of the new guidance with disclosure of results under the old guidance in the first year of adoption. The Company anticipates adopting the standard using the modified retrospective approach. The Company is in the process of evaluating the impact of this new guidance on its Condensed Consolidated Financial Statements and believes such evaluation will extend over several future periods because of the significance of the changes to the Company’s policies and business processes. In January 2016, the FASB issued new guidance that substantially revises the recognition, measurement and presentation of financial assets and financial liabilities. The new guidance, among other things, requires, (i) equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, with some exceptions, (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, (iii) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, (iv) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements, and (v) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. The guidance is effective for interim and fiscal years beginning after December 15, 2017. Early adoption is not permitted. The Company is in the process of evaluating the impact of this new guidance on its Condensed Consolidated Financial Statements. In February 2016, the FASB issued new guidance that requires, among other things, a lessee to recognize a right-of-use asset representing an entity's right to use the underlying asset for the lease term and a liability for lease payments on its balance sheet, regardless of classification of a lease as operating or financing. For leases with a term of twelve months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and liabilities and account for the lease similar to existing guidance for operating leases today. This new guidance supersedes all prior guidance. The guidance is effective for interim and fiscal years beginning after December 15, 2018. Early adoption is permitted. The standard requires lessees and lessors to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The Company is in the process of evaluating the impact of this new guidance on its Condensed Consolidated Financial Statements. In March 2016, the FASB issued new guidance that simplifies the accounting for stock-based compensation. The new guidance (i) requires all excess tax benefits and tax deficiencies to be recognized in the income statement with the tax effects of vested or exercised awards treated as discrete items. Additionally, excess tax benefits will be recognized regardless of whether the benefit reduces taxes payable in the current period, effectively eliminating the APIC pool, (ii) concludes excess tax benefits should be classified as an operating activity in the statement of cash flows, (iii) requires an entity to make an entity-wide accounting policy election to either estimate a forfeiture rate for awards or account for forfeitures as they occur, (iv) changes the threshold for equity classification for cash settlements of awards for withholding requirements to the maximum statutory tax rate in the applicable jurisdiction and (v) concludes cash paid by an employer when directly withholding shares for tax-withholding purposes should be classified as a financing activity in the statement of cash flows. The guidance is effective for interim and fiscal years beginning after December 15, 2016. The Company adopted the new guidance as of January 1, 2017. As a result of adoption, the Company recognized a $5.9 million excess tax benefit as a discrete item in its tax provision related to the vesting of restricted stock awards in the first quarter of 2017. This tax benefit is classified as an operating activity on the Condensed Consolidated Statement of Cash Flows. Additionally, the Company elected to account for forfeitures of stock awards as they occur and not estimate a forfeiture rate. The Company does not expect this election to have a material impact on its financial statements. In November 2016, the FASB issued new guidance that clarifies how restricted cash and restricted cash equivalents should be presented in the statement of cash flows. The guidance requires the cash flow statement to show changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents, which eliminates the presentation of transfers between cash and cash equivalents and restricted cash and cash equivalents. The guidance is effective for interim and fiscal years beginning after December 15, 2017, with early adoption permitted. The Company adopted the new guidance retrospectively as of December 31, 2016. The prior period has been adjusted to reflect this adoption, as detailed below:
In January 2017, the FASB issued new guidance which simplifies the subsequent measurement of goodwill. The new guidance eliminates Step 2 from the goodwill impairment test, which required entities to determine the implied fair value of goodwill as of the test date to measure a goodwill impairment charge. Instead, an entity should continue to test goodwill for impairment by comparing the fair value of a reporting unit with its carrying amount (Step 1), and an impairment charge will be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value. The guidance is effective for interim and fiscal years beginning after December 15, 2019. Early adoption is permitted. The Company is in the process of evaluating the impact of this new guidance on its Consolidated Financial Statements. 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:
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Investments |
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Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | 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:
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. |
Acquisitions and Dispositions of Businesses |
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Acqusitions and Dispositions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions and Dispositions of Businesses | ACQUISITIONS AND DISPOSITIONS OF BUSINESSES Acquisitions. In April 2017, the Company acquired Hoover Treated Wood Products, Inc., a Thomson, GA-based supplier of pressure impregnated kiln-dried lumber and plywood products for fire retardant and preservative applications for approximately $205 million, net of cash acquired. In the first three months of 2017, the Company acquired four businesses, two in its television broadcasting division and two in its education division for $86.5 million in cash and contingent consideration, and the assumption of $59.1 million in certain pension and postretirement obligations. On January 17, 2017, the Company closed on its agreement with Nexstar Broadcasting Group, Inc. and Media General, Inc. to acquire the assets of WCWJ, a CW affiliate television station in Jacksonville, FL and WSLS, an NBC affiliate television station in Roanoke, VA for cash and the assumption of certain pension obligations. The acquisition of WCWJ and WSLS will complement the other stations that GMG operates. In February 2017, Kaplan acquired a 100% interest in Genesis Training Institute, a Dubai-based provider of professional development training in the United Arab Emirates, by purchasing all of its issued and outstanding shares. Additionally, Kaplan acquired a 100% interest in Red Marker Pty Ltd, an Australia-based regulatory technology company by purchasing all of its outstanding shares. These acquisitions are expected to provide certain strategic benefits in the future. During 2016, the Company acquired five businesses, three businesses included in its education division and two businesses in other businesses. In January 2016, Kaplan acquired a 100% interest in Mander Portman Woodward, a leading provider of high-quality, bespoke education to UK and international students in London, Cambridge and Birmingham, by purchasing all of its issued and outstanding shares. In February 2016, Kaplan acquired a 100% interest in Osborne Books, an educational publisher of learning resources for accounting qualifications in the UK, by purchasing all of its issued and outstanding shares. The primary reason for these acquisitions is based on several strategic benefits expected to be realized in the future. Both of these acquisitions are included in Kaplan International. In September 2016, Group Dekko, Inc. (Dekko) acquired a 100% interest in Electri-Cable Assemblies (ECA), a Shelton, CT-based manufacturer of power, data and electrical solutions for the office furniture industry, by purchasing all of its issued and outstanding shares. Dekko's primary reasons for the acquisition were to complement existing product offerings and provide opportunities for synergies across the businesses. Dekko is included in other businesses. Acquisition-related costs of $1.1 million related to these 2017 acquisitions were expensed as incurred. The aggregate purchase price of the 2017 and 2016 acquisitions was allocated as follows (2017 on a preliminary basis):
The 2017 fair values recorded were based upon preliminary valuations and the estimates and assumptions used in such valuations are subject to change, which could be significant, within the measurement period (up to one year from the acquisition date). The recording of deferred tax assets or liabilities, working capital and the final amount of residual goodwill and other intangibles are not yet finalized. Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The goodwill recorded due to these acquisitions is attributable to the assembled workforces of the acquired companies and expected synergies. No goodwill is expected to be deducted for the acquisitions completed in 2017. The Company expects to deduct $22.2 million of goodwill for income tax purposes for the acquisitions completed in 2016. The acquired companies were consolidated into the Company’s financial statements starting on their respective acquisition dates. The Company’s Condensed Consolidated Statements of Operations include aggregate revenues and operating loss for the companies acquired in 2017 of $5.5 million and $0.2 million, respectively, for the first three months of 2017. The following unaudited pro forma financial information presents the Company’s results as if the 2017 acquisitions had occurred at the beginning of 2016. The unaudited pro forma information also includes the 2016 acquisitions as if they occurred at the beginning of 2015:
These pro forma results were based on estimates and assumptions, which the Company believes are reasonable, and include the historical results of operations of the acquired companies and adjustments for depreciation and amortization of identified assets and the effect of pre-acquisition transaction related expenses incurred by the Company and the acquired entities. The pro forma information does not include efficiencies, cost reductions and synergies expected to result from the acquisitions. They are not the results that would have been realized had these entities been part of the Company during the periods presented and are not necessarily indicative of the Company’s consolidated results of operations in future periods. Sale of Businesses. In February 2017, Graham Healthcare Group (GHG) completed the sale of Celtic Healthcare of Maryland. The results of GHG are included in other businesses. In January 2016, Kaplan completed the sale of Colloquy, which was included in Kaplan Corporate and Other. Other. In June 2016, Residential and a Michigan hospital formed a joint venture to provide home health services to patients in western Michigan. In connection with this transaction, Residential contributed its western Michigan home health operations to the joint venture and then sold 60% of the newly formed venture to its Michigan hospital partner. Although Residential manages the operations of the joint venture, Residential holds a 40% interest in the joint venture, so the operating results of the joint venture are not consolidated and the pro rata operating results are included in the Company's equity in earnings of affiliates. In June 2016, the Company purchased the outstanding 20% redeemable noncontrolling interest in Residential. At that time, the Company recorded an increase to redeemable noncontrolling interest of $3.0 million, with a corresponding decrease to capital in excess of par value, to reflect the redemption value of the redeemable noncontrolling interest at $24.0 million. Following this transaction, Celtic and Residential combined their business operations to form GHG. The redeemable noncontrolling interest shareholders in Celtic exchanged their 20% interest in Celtic for a 10% mandatorily redeemable noncontrolling interest in the combined entity and the Company recorded a $4.1 million net increase to the mandatorily redeemable noncontrolling interest to reflect the estimated fair value of the mandatorily redeemable noncontrolling interest. The minority shareholders have an option to put their shares to the Company starting in 2020, and are required to put a percentage of their shares in 2022 and 2024, with the remaining shares required to be put by the minority shareholders in 2026. The redemption value is based on an EBITDA multiple, adjusted for working capital and other items, computed annually, with no limit on the amount payable. The Company now owns 90% of GHG. Because the noncontrolling interest is now mandatorily redeemable by the Company by 2026, it is reported as a noncurrent liability at March 31, 2017. |
Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | GOODWILL AND OTHER INTANGIBLE ASSETS Amortization of intangible assets for the three months ended March 31, 2017 and 2016 was $6.8 million and $6.3 million, respectively. Amortization of intangible assets is estimated to be approximately $22 million for the remainder of 2017, $26 million in 2018, $23 million in 2019, $21 million in 2020, $15 million in 2021 and $47 million thereafter. The changes in the carrying amount of goodwill, by segment, were as follows:
The changes in carrying amount of goodwill at the Company’s education division were as follows:
Other intangible assets consist of the following:
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | DEBT The Company’s borrowings consist of the following:
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The Company’s other indebtedness at March 31, 2017 is at interest rates from 2% and 6% and matures from 2019 to 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 based upon the Company's total leverage ratio. The Kaplan Credit Agreement requires that 6.66% of the amount of the loan be repaid on the first three anniversaries of funding, with the remaining balance due on July 1, 2020. The Kaplan Credit Agreement contains terms and conditions, including remedies in the event of a default by the Company, typical of facilities of this type and requires the Company to maintain a leverage ratio of not greater than 3.5 to 1.0 and a consolidated interest coverage ratio of at least 3.5 to 1.0 based upon the ratio of consolidated adjusted EBITDA to consolidated interest expense as determined pursuant to the Kaplan Credit Agreement. As of March 31, 2017, the Company is in compliance with all financial covenants. On July 25, 2016, Kaplan borrowed £75 million under the Kaplan Credit Agreement. On the same date, Kaplan entered into an interest rate swap agreement with a total notional value of £75 million and a maturity date of July 1, 2020. The interest rate swap agreement will pay Kaplan variable interest on the £75 million notional amount at the three-month LIBOR, and Kaplan will pay the counterparties a fixed rate of 0.51%, effectively resulting in a total fixed interest rate of 2.01% on the outstanding borrowings at the current applicable margin of 1.50%. The interest rate swap agreement was entered into to convert the variable rate British pound borrowing under the Kaplan Credit Agreement into a fixed rate borrowing. The Company provided a guarantee on any borrowings under the Kaplan Credit Agreement. Based on the terms of the interest rate swap agreement and the underlying borrowing, the interest rate swap agreement was determined to be effective, and thus qualifies as a cash flow hedge. As such, changes in the fair value of the interest rate swap are recorded in other comprehensive income on the accompanying Condensed Consolidated Balance Sheets until earnings are affected by the variability of cash flows. During the three months ended March 31, 2017 and 2016, the Company had average borrowings outstanding of approximately $493.0 million and $399.9 million, respectively, at average annual interest rates of approximately 6.3% and 7.2%, respectively. During the three months ended March 31, 2017 and 2016, the Company incurred net interest expense of $6.8 million and $7.4 million, respectively. At March 31, 2017, the fair value of the Company’s 7.25% unsecured notes, based on quoted market prices (Level 2 fair value assessment), totaled $431.8 million, compared with the carrying amount of $399.2 million. At December 31, 2016, the fair value of the Company’s 7.25% unsecured notes, based on quoted market prices (Level 2 fair value assessment), totaled $438.7 million, compared with the carrying amount of $399.1 million. The carrying value of the Company’s other unsecured debt at March 31, 2017 approximates fair value. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | FAIR VALUE MEASUREMENTS The Company’s financial assets and liabilities measured at fair value on a recurring basis were as follows:
____________
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Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | EARNINGS PER SHARE The Company's unvested restricted stock awards contain nonforfeitable rights to dividends and, therefore, are considered participating securities for purposes of computing earnings per share pursuant to the two-class method. The diluted earnings per share computed under the two-class method is lower than the diluted earnings per share computed under the treasury stock method, resulting in the presentation of the lower amount in diluted earnings per share. The computation of the earnings per share under the two-class method excludes the income attributable to the unvested restricted stock awards from the numerator and excludes the dilutive impact of those underlying shares from the denominator. The following reflects the Company's net income and share data used in the basic and diluted earnings per share computations using the two-class method:
Diluted earnings per share excludes the following weighted average potential common shares, as the effect would be antidilutive, as computed under the treasury stock method:
The diluted earnings per share amounts for the three months ended March 31, 2017 and March 31, 2016 exclude the effects of 102,000 stock options outstanding, as their inclusion would have been antidilutive due to a market condition. The diluted earnings per share amounts for the three months ended March 31, 2017 and March 31, 2016 exclude the effects of 5,450 and 6,100 restricted stock awards, respectively, as their inclusion would have been antidilutive due to a performance condition. In the three months ended March 31, 2017, and March 31, 2016, the Company declared regular dividends totaling $2.54, and $2.42 respectively. |
Pension and Postretirement Plans |
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General Discussion of Pension and Other Postretirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and Postretirement Plans | PENSION AND POSTRETIREMENT PLANS Defined Benefit Plans. The total benefit arising from the Company’s defined benefit pension plans consists of the following components:
The total cost arising from the Company’s Supplemental Executive Retirement Plan (SERP) consists of the following components:
Defined Benefit Plan Assets. The Company’s defined benefit pension obligations are funded by a portfolio made up of a U.S. stock index fund, a relatively small number of stocks and high-quality fixed-income securities that are held by a third-party trustee. The assets of the Company’s pension plan were allocated as follows:
The Company manages approximately 45% of the pension assets internally, of which the majority is invested in a U.S. stock index fund with the remaining investments in Berkshire Hathaway stock and short-term fixed income securities. The remaining 55% of plan assets are still managed by two investment companies. The goal for the investments is to produce moderate long-term growth in the value of these assets, while protecting them against large decreases in value. Both investment managers may invest in a combination of equity and fixed-income securities and cash. The managers are not permitted to invest in securities of the Company or in alternative investments. The investment managers cannot invest more than 20% of the assets at the time of purchase in the stock of Berkshire Hathaway or more than 10% of the assets in the securities of any other single issuer, except for obligations of the U.S. Government, without receiving prior approval from the Plan administrator. As of March 31, 2017, the investment managers can invest no more than 23% of the assets they manage in specified international exchanges, at the time the investment is made, and no less than 10% of the assets could be invested in fixed-income securities. In determining the expected rate of return on plan assets, the Company considers the relative weighting of plan assets, the historical performance of total plan assets and individual asset classes and economic and other indicators of future performance. In addition, the Company may consult with and consider the input of financial and other professionals in developing appropriate return benchmarks. The Company evaluated its defined benefit pension plan asset portfolio for the existence of significant concentrations (defined as greater than 10% of plan assets) of credit risk as of March 31, 2017. Types of concentrations that were evaluated include, but are not limited to, investment concentrations in a single entity, type of industry, foreign country and individual fund. At March 31, 2017 and December 31, 2016, the pension plan held investments in one common stock and one U.S. stock index fund that exceeded 10% of total plan assets. These investments were valued at $990.9 million and $978.8 million at March 31, 2017 and December 31, 2016, respectively, or approximately 47% and 48%, respectively, of total plan assets. Other Postretirement Plans. The total cost arising from the Company’s other postretirement plans consists of the following components:
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Other Non-Operating Income |
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Other Nonoperating Income (Expense) [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Non-Operating Income | OTHER NON-OPERATING INCOME A summary of non-operating income is as follows:
In the first quarter of 2016, Kaplan sold Colloquy, which was a part of Kaplan corporate and other, for a gain of $18.9 million. |
Accumulated Other Comprehensive Income (Loss) |
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Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The other comprehensive income consists of the following components:
The accumulated balances related to each component of other comprehensive income (loss) are as follows:
The amounts and line items of reclassifications out of Accumulated Other Comprehensive Income (Loss) are as follows:
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Contingencies |
3 Months Ended |
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Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | CONTINGENCIES Litigation, Legal and Other Matters. The Company and its subsidiaries are involved in various legal, regulatory and other proceedings that arise in the ordinary course of its business. Although the outcomes of these proceedings against the Company cannot be predicted with certainty, based on currently available information, management believes that there are no existing claims or proceedings that are likely to have a material effect on the Company's business, financial condition, results of operations or cash flows. However, based on currently available information, management believes it is reasonably possible that future losses from existing legal, regulatory and other proceedings in excess of the amounts accrued could reach approximately $20 million. ED Program Reviews. ED has undertaken program reviews at various KHE locations. Currently, there are five open program reviews, four of which are at campuses that were formerly a part of the KHE Campuses business, including the ED’s final reports on the program reviews at former KHE Hammond, IN, San Antonio, TX, Broomall, PA, and Pittsburgh, PA, locations. Kaplan retains responsibility for any financial obligation resulting from the ED program reviews at the KHE Campuses business that were open at the time of sale. On February 23, 2015, the ED began a review of Kaplan University. The review will assess Kaplan’s administration of its Title IV, HEA programs and will initially focus on the 2013 to 2014 and 2014 to 2015 award years. On December 17, 2015, Kaplan University received a notice from the ED that it had been placed on provisional certification status until September 30, 2018, in connection with the open and ongoing ED program review. The ED has not notified Kaplan University of any negative findings. However, at this time, Kaplan cannot predict the outcome of this review, when it will be completed or any liability or other limitations that the ED may place on Kaplan University as a result of this review. During the period of provisional certification, Kaplan University must obtain prior ED approval to open a new location, add an educational program, acquire another school or make any other significant change. The Company does not expect the open program reviews to have a material impact on KHE; however, the results of open program reviews and their impact on Kaplan’s operations are uncertain. |
Business Segments |
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Segments | BUSINESS SEGMENTS The Company has four reportable segments: Kaplan Higher Education, Kaplan Test Preparation, Kaplan International and television broadcasting. The following table summarizes financial information related to each of the Company's business segments:
Asset information for the Company’s business segments are as follows:
The Company’s education division comprises the following operating segments:
Asset information for the Company's education division is as follows:
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Organization, Basis of Presentation And Recent Accounting Pronouncements (Policies) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation – The accompanying condensed consolidated financial statements have been prepared in accordance with: (i) generally accepted accounting principles in the United States of America (GAAP) for interim financial information; (ii) the instructions to Form 10-Q; and (iii) the guidance of Rule 10-01 of Regulation S-X under the Securities and Exchange Act of 1934, as amended, for financial statements required to be filed with the Securities and Exchange Commission (SEC). They include the assets, liabilities, results of operations and cash flows of the Company, including its domestic and foreign subsidiaries that are more than 50% owned or otherwise controlled by the Company. As permitted under such rules, certain notes and other financial information normally required by GAAP have been condensed or omitted. Management believes the accompanying condensed consolidated financial statements reflect all normal and recurring adjustments necessary for a fair statement of the Company’s financial position, results of operations, and cash flows as of and for the periods presented herein. The Company’s results of operations for the three months ended March 31, 2017 and 2016 may not be indicative of the Company’s future results. These condensed consolidated financial statements are unaudited and should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. |
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Use of Estimates in the Preparation of the Condensed Consolidated Financial Statements | Use of Estimates in the Preparation of the Condensed Consolidated Financial Statements – The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and judgments that affect the amounts reported herein. Management bases its estimates and assumptions on historical experience and on various other factors that are believed to be reasonable under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in those estimates. |
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Recently Adopted and Issued Accounting Pronouncements | Recently Adopted and Issued Accounting Pronouncements – In May 2014, the Financial Accounting Standards Board (FASB) issued comprehensive new guidance that supersedes all existing revenue recognition guidance. In August 2015, the FASB issued an amendment to the guidance that defers the effective date by one year. The new guidance requires revenue to be recognized when the Company transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The new guidance also significantly expands the disclosure requirements for revenue recognition. The guidance is effective for interim and fiscal years beginning after December 15, 2017. Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016. The standard permits two implementation approaches, full retrospective, requiring retrospective application of the new guidance with a restatement of prior years, or modified retrospective, requiring prospective application of the new guidance with disclosure of results under the old guidance in the first year of adoption. The Company anticipates adopting the standard using the modified retrospective approach. The Company is in the process of evaluating the impact of this new guidance on its Condensed Consolidated Financial Statements and believes such evaluation will extend over several future periods because of the significance of the changes to the Company’s policies and business processes. In January 2016, the FASB issued new guidance that substantially revises the recognition, measurement and presentation of financial assets and financial liabilities. The new guidance, among other things, requires, (i) equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, with some exceptions, (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, (iii) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, (iv) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements, and (v) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. The guidance is effective for interim and fiscal years beginning after December 15, 2017. Early adoption is not permitted. The Company is in the process of evaluating the impact of this new guidance on its Condensed Consolidated Financial Statements. In February 2016, the FASB issued new guidance that requires, among other things, a lessee to recognize a right-of-use asset representing an entity's right to use the underlying asset for the lease term and a liability for lease payments on its balance sheet, regardless of classification of a lease as operating or financing. For leases with a term of twelve months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and liabilities and account for the lease similar to existing guidance for operating leases today. This new guidance supersedes all prior guidance. The guidance is effective for interim and fiscal years beginning after December 15, 2018. Early adoption is permitted. The standard requires lessees and lessors to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The Company is in the process of evaluating the impact of this new guidance on its Condensed Consolidated Financial Statements. In March 2016, the FASB issued new guidance that simplifies the accounting for stock-based compensation. The new guidance (i) requires all excess tax benefits and tax deficiencies to be recognized in the income statement with the tax effects of vested or exercised awards treated as discrete items. Additionally, excess tax benefits will be recognized regardless of whether the benefit reduces taxes payable in the current period, effectively eliminating the APIC pool, (ii) concludes excess tax benefits should be classified as an operating activity in the statement of cash flows, (iii) requires an entity to make an entity-wide accounting policy election to either estimate a forfeiture rate for awards or account for forfeitures as they occur, (iv) changes the threshold for equity classification for cash settlements of awards for withholding requirements to the maximum statutory tax rate in the applicable jurisdiction and (v) concludes cash paid by an employer when directly withholding shares for tax-withholding purposes should be classified as a financing activity in the statement of cash flows. The guidance is effective for interim and fiscal years beginning after December 15, 2016. The Company adopted the new guidance as of January 1, 2017. As a result of adoption, the Company recognized a $5.9 million excess tax benefit as a discrete item in its tax provision related to the vesting of restricted stock awards in the first quarter of 2017. This tax benefit is classified as an operating activity on the Condensed Consolidated Statement of Cash Flows. Additionally, the Company elected to account for forfeitures of stock awards as they occur and not estimate a forfeiture rate. The Company does not expect this election to have a material impact on its financial statements. In November 2016, the FASB issued new guidance that clarifies how restricted cash and restricted cash equivalents should be presented in the statement of cash flows. The guidance requires the cash flow statement to show changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents, which eliminates the presentation of transfers between cash and cash equivalents and restricted cash and cash equivalents. The guidance is effective for interim and fiscal years beginning after December 15, 2017, with early adoption permitted. The Company adopted the new guidance retrospectively as of December 31, 2016. The prior period has been adjusted to reflect this adoption, as detailed below:
In January 2017, the FASB issued new guidance which simplifies the subsequent measurement of goodwill. The new guidance eliminates Step 2 from the goodwill impairment test, which required entities to determine the implied fair value of goodwill as of the test date to measure a goodwill impairment charge. Instead, an entity should continue to test goodwill for impairment by comparing the fair value of a reporting unit with its carrying amount (Step 1), and an impairment charge will be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value. The guidance is effective for interim and fiscal years beginning after December 15, 2019. Early adoption is permitted. The Company is in the process of evaluating the impact of this new guidance on its Consolidated Financial Statements. 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:
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Organization, Basis of Presentation and Recent Accounting Pronouncements (Tables) |
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New Accounting Pronouncement, Early Adoption | The prior period has been adjusted to reflect this adoption, as detailed below:
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Schedule of Prospective Adoption of New Accounting Pronouncements | 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:
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Investments (Tables) |
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments in Marketable Equity Securities | Investments in marketable equity securities comprised the following:
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Acquisitions and Dispositions of Businesses (Tables) |
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Acqusitions and Dispositions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of assets acquired and liabilities assumed | The aggregate purchase price of the 2017 and 2016 acquisitions was allocated as follows (2017 on a preliminary basis):
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Acquisition Pro Forma Financial Information | The following unaudited pro forma financial information presents the Company’s results as if the 2017 acquisitions had occurred at the beginning of 2016. The unaudited pro forma information also includes the 2016 acquisitions as if they occurred at the beginning of 2015:
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Goodwill and Other Intangible Assets (Tables) |
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Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill, by segment, were as follows:
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Other Intangible Assets | Other intangible assets consist of the following:
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Education [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Carrying Amount of Goodwill | The changes in carrying amount of goodwill at the Company’s education division were as follows:
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Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Debt | The Company’s borrowings consist of the following:
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The Company’s financial assets and liabilities measured at fair value on a recurring basis were as follows:
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Earnings Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Earnings Per Share, Basic and Diluted | The following reflects the Company's net income and share data used in the basic and diluted earnings per share computations using the two-class method:
|
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Antidilutive Weighted Average Restricted Stock and Options | Diluted earnings per share excludes the following weighted average potential common shares, as the effect would be antidilutive, as computed under the treasury stock method:
|
Pension and Postretirement Plans (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Pension Plan [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Benefit Costs | Defined Benefit Plans. The total benefit arising from the Company’s defined benefit pension plans consists of the following components:
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Schedule of Allocation of Plan Assets | The assets of the Company’s pension plan were allocated as follows:
|
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Supplemental Executive Retirement Plan (SERP) [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Benefit Costs | The total cost arising from the Company’s Supplemental Executive Retirement Plan (SERP) consists of the following components:
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Other Postretirement Benefit Plan, Defined Benefit [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Benefit Costs | Other Postretirement Plans. The total cost arising from the Company’s other postretirement plans consists of the following components:
|
Other Non-Operating Income (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Nonoperating Income (Expense) [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of non-operating income | A summary of non-operating income is as follows:
|
Accumulated Other Comprehensive Income (Loss) (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Other Comprehensive (Loss) Income | The other comprehensive income consists of the following components:
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Summary of Changes in Accumulated Other Comprehensive (Loss) Income | The accumulated balances related to each component of other comprehensive income (loss) are as follows:
|
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Summary of Amounts and Line Items of reclassifications Out of Accumulated Other Comprehensive (Loss) Income | The amounts and line items of reclassifications out of Accumulated Other Comprehensive Income (Loss) are as follows:
|
Business Segments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Segment Reporting Information, by Operating Segment | The following table summarizes financial information related to each of the Company's business segments:
Asset information for the Company’s business segments are as follows:
|
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Education [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Segment Reporting Information, by Operating Segment | The Company’s education division comprises the following operating segments:
Asset information for the Company's education division is as follows:
|
Organization, Basis of Presentation and Recent Accounting Pronouncements (Organization and Basis of Presentation) (Narrative) (Details) |
3 Months Ended |
---|---|
Mar. 31, 2017
TelevisionStation
| |
Percentage of ownership indicating control for consolidation purposes | more than 50% |
Television Broadcasting [Member] | |
Number of television broadcast stations | 7 |
Organization, Basis of Presentation and Recent Accounting Pronouncements (Recent Accounting Pronouncements) (Narrative) (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2017
USD ($)
| |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Excess tax benefit recognized | $ 5.9 |
Organization, Basis of Presentation and Recent Accounting Pronouncements (Recent Accounting Pronouncements)(Details 2) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Dec. 31, 2016 |
|
Item Effected [Line Items] | |||
Income from Operations | $ 29,054 | $ 51,872 | |
Income before income taxes | 23,786 | 60,615 | |
As reported [Member] | |||
Item Effected [Line Items] | |||
Income from Operations | 29,054 | 51,872 | $ 303,534 |
Non-operating pension and postretirement income | 0 | 0 | 0 |
Income before income taxes | 23,786 | 60,615 | 250,658 |
Adjustment [Member] | |||
Item Effected [Line Items] | |||
Income from Operations | (18,801) | (15,677) | (80,665) |
Non-operating pension and postretirement income | 18,801 | 15,677 | 80,665 |
Income before income taxes | 0 | 0 | 0 |
Upon Adoption [Member] | |||
Item Effected [Line Items] | |||
Income from Operations | 10,253 | 36,195 | 222,869 |
Non-operating pension and postretirement income | 18,801 | 15,677 | 80,665 |
Income before income taxes | $ 23,786 | $ 60,615 | $ 250,658 |
Investments (Investments in Marketable Equity Securities) (Details 1) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Investments [Abstract] | ||
Total cost | $ 269,343 | $ 269,343 |
Gross unrealized gains | 164,444 | 154,886 |
Total Fair Value | $ 433,787 | $ 424,229 |
Acquisitions and Dispositions of Businesses (Assets Acquired and Liabilities Assumed) (Details 1) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Business Acquisition [Line Items] | ||
Goodwill | $ 1,179,431 | $ 1,122,954 |
Pension and other post retirement benefits liabilities | (59,100) | |
Series of Individually Immaterial Business Acquisitions [Member] | ||
Business Acquisition [Line Items] | ||
Accounts receivable | 386 | 8,538 |
Other current assets | 130 | 2,298 |
Property, plant and equipment | 8,960 | 3,940 |
Goodwill | 42,632 | 184,118 |
Indefinite-lived intangible assets | 26,600 | 53,110 |
Amortized intangible assets | 53,307 | 28,267 |
Pension and other post retirement benefits liabilities | (59,116) | 0 |
Other liabilities | (1,217) | (21,892) |
Deferred income tax asset | 13,733 | |
Deferred income tax liability | (11,009) | |
Aggregate purchase price, net of cash acquired | $ 85,415 | $ 247,370 |
Acquisitions and Dispositions of Businesses (Pro Forma Financials) (Details 2) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Acquisitions And Dispositions [Abstract] | ||
Pro Forma Operating Revenues | $ 584,152 | $ 614,753 |
Pro Forma Net Income | $ 21,099 | $ 39,567 |
Goodwill and Other Intangible Assets (Intangible Assets) (Narrative) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Amortization of Intangible Assets | ||
Amortization of intangible assets | $ 6,836 | $ 6,262 |
Estimated amortization of intangible assets, remainder of 2017 | 22,000 | |
Estimated amortization of intangible assets, 2018 | 26,000 | |
Estimated amortization of intangible assets, 2019 | 23,000 | |
Estimated amortization of intangible assets, 2020 | 21,000 | |
Estimated amortization of intangible assets, 2021 | 15,000 | |
Estimated amortization of intangible assets, after 2021 | $ 47,000 |
Debt (Narrative) (Details) $ in Thousands |
3 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Jul. 25, 2016
GBP (£)
|
Jul. 14, 2016
GBP (£)
|
Mar. 31, 2017
USD ($)
|
Mar. 31, 2016
USD ($)
|
Dec. 31, 2016
USD ($)
|
||||||
Debt Instrument [Line Items] | ||||||||||
Average borrowings outstanding | $ 493,000 | $ 399,900 | ||||||||
Weighted average interest rate of borrowings | 6.30% | 7.20% | ||||||||
Net interest expense incurred | $ 6,800 | $ 7,400 | ||||||||
7.25% Unsecured Notes due February 1, 2019 [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Unamortized debt issuance costs | $ 100 | $ 100 | ||||||||
Debt Instrument, Interest Rate, Stated Percentage | 7.25% | |||||||||
Fair value of debt instrument | $ 431,800 | 438,700 | ||||||||
Carrying value of debt instrument | [1] | $ 399,166 | 399,052 | |||||||
Other Indebtedness [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt Instrument, Maturity year, start | Jan. 01, 2019 | |||||||||
Debt Instrument, Maturity year, end | Dec. 31, 2025 | |||||||||
Other Indebtedness [Member] | Minimum [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 2.00% | |||||||||
Other Indebtedness [Member] | Maximum [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.00% | |||||||||
Kaplan Four-Year Credit Agreement dated July 14, 2016 [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Unamortized debt issuance costs | $ 500 | |||||||||
Borrowings outstanding | [2] | $ 92,856 | 91,316 | |||||||
Education [Member] | Interest Rate Swap [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt Instrument, Basis Spread on Variable Rate | 1.50% | |||||||||
Derivative, Notional Amount | £ | £ 75,000,000 | |||||||||
Derivative, Fixed Interest Rate | 0.51% | |||||||||
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 2.01% | |||||||||
Education [Member] | Kaplan Four-Year Credit Agreement dated July 14, 2016 [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Unamortized debt issuance costs | $ 500 | |||||||||
Line of Credit Facility, Current Borrowing Capacity | £ | £ 75,000,000 | |||||||||
Borrowings outstanding | £ | £ 75,000,000 | |||||||||
Debt Instrument, Term | 4 years | |||||||||
Education [Member] | Kaplan Four-Year Credit Agreement dated July 14, 2016 [Member] | Debt Instrument, Redemption, first anniversary [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt Instrument, Redemption Price, Percentage of Principal Amount Redeemed | 6.66% | |||||||||
Debt Instrument, Covenant, Leverage Ratio, Maximum | 3.5 | |||||||||
Debt Instrument, Covenant, Interest Coverage Ratio, Minimum | 3.5 | |||||||||
Education [Member] | Kaplan Four-Year Credit Agreement dated July 14, 2016 [Member] | Debt Instrument, Redemption, second anniversary [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt Instrument Price Percentage Of Outstanding Balance Redeemed | 6.66% | |||||||||
Education [Member] | Kaplan Four-Year Credit Agreement dated July 14, 2016 [Member] | Debt Instrument, Redemption, third anniversary [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt Instrument Price Percentage Of Outstanding Balance Redeemed | 6.66% | |||||||||
Education [Member] | Kaplan Four-Year Credit Agreement dated July 14, 2016 [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt Instrument, Basis Spread on Variable Rate | 1.25% | |||||||||
Education [Member] | Kaplan Four-Year Credit Agreement dated July 14, 2016 [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt Instrument, Basis Spread on Variable Rate | 1.75% | |||||||||
|
Debt (Details 1) $ in Thousands |
Mar. 31, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
Jul. 25, 2016
GBP (£)
|
|||||
---|---|---|---|---|---|---|---|---|
Debt Instrument [Line Items] | ||||||||
Other indebtedness | $ 1,322 | $ 1,479 | ||||||
Total Debt | 493,344 | 491,847 | ||||||
Less: current portion | (6,158) | (6,128) | ||||||
Total Long-Term Debt | 487,186 | 485,719 | ||||||
7.25% Unsecured Notes due February 1, 2019 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Unsecured notes | [1] | $ 399,166 | 399,052 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 7.25% | |||||||
Unamortized debt issuance costs | $ 100 | 100 | ||||||
Kaplan Four-Year Credit Agreement dated July 14, 2016 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
UK Credit Facility | [2] | 92,856 | 91,316 | |||||
Unamortized debt issuance costs | $ 500 | |||||||
Education [Member] | Kaplan Four-Year Credit Agreement dated July 14, 2016 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
UK Credit Facility | £ | £ 75,000,000 | |||||||
Unamortized debt issuance costs | $ 500 | |||||||
|
Fair Value Measurements (Details 1) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Assets | |||||||||||||||||
Marketable equity securities | $ 433,787 | $ 424,229 | |||||||||||||||
7.25% Unsecured Notes due February 1, 2019 [Member] | |||||||||||||||||
Liabilities | |||||||||||||||||
Debt instrument | 431,800 | 438,700 | |||||||||||||||
Fair Value, Measurements, Recurring [Member] | |||||||||||||||||
Assets | |||||||||||||||||
Money market investments | [1] | 442,864 | 435,258 | ||||||||||||||
Commercial paper | [2] | 49,882 | |||||||||||||||
Marketable equity securities | [3] | 433,787 | 424,229 | ||||||||||||||
Other current investments | [4] | 22,771 | 24,012 | ||||||||||||||
Total Financial Assets | 899,422 | 933,381 | |||||||||||||||
Liabilities | |||||||||||||||||
Deferred compensation plan liabilities | [5] | 43,949 | 46,300 | ||||||||||||||
Interest rate swap | [6] | 488 | 365 | ||||||||||||||
Mandatorily redeemable noncontrolling interest | [7] | 12,584 | 12,584 | ||||||||||||||
Total Financial Liabilities | 57,021 | 59,249 | |||||||||||||||
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | |||||||||||||||||
Assets | |||||||||||||||||
Money market investments | [1] | 0 | 0 | ||||||||||||||
Commercial paper | [2] | 49,882 | |||||||||||||||
Marketable equity securities | [3] | 433,787 | 424,229 | ||||||||||||||
Other current investments | [4] | 5,702 | 6,957 | ||||||||||||||
Total Financial Assets | 439,489 | 481,068 | |||||||||||||||
Liabilities | |||||||||||||||||
Deferred compensation plan liabilities | [5] | 0 | 0 | ||||||||||||||
Interest rate swap | [6] | 0 | 0 | ||||||||||||||
Mandatorily redeemable noncontrolling interest | [7] | 0 | 0 | ||||||||||||||
Total Financial Liabilities | 0 | 0 | |||||||||||||||
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | |||||||||||||||||
Assets | |||||||||||||||||
Money market investments | [1] | 442,864 | 435,258 | ||||||||||||||
Commercial paper | [2] | 0 | |||||||||||||||
Marketable equity securities | [3] | 0 | 0 | ||||||||||||||
Other current investments | [4] | 17,069 | 17,055 | ||||||||||||||
Total Financial Assets | 459,933 | 452,313 | |||||||||||||||
Liabilities | |||||||||||||||||
Deferred compensation plan liabilities | [5] | 43,949 | 46,300 | ||||||||||||||
Interest rate swap | [6] | 488 | 365 | ||||||||||||||
Mandatorily redeemable noncontrolling interest | [7] | 0 | 0 | ||||||||||||||
Total Financial Liabilities | 44,437 | 46,665 | |||||||||||||||
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | |||||||||||||||||
Assets | |||||||||||||||||
Money market investments | [1] | 0 | 0 | ||||||||||||||
Commercial paper | [2] | 0 | |||||||||||||||
Marketable equity securities | [3] | 0 | 0 | ||||||||||||||
Other current investments | [4] | 0 | 0 | ||||||||||||||
Total Financial Assets | 0 | 0 | |||||||||||||||
Liabilities | |||||||||||||||||
Deferred compensation plan liabilities | [5] | 0 | 0 | ||||||||||||||
Interest rate swap | [6] | 0 | 0 | ||||||||||||||
Mandatorily redeemable noncontrolling interest | [7] | 12,584 | 12,584 | ||||||||||||||
Total Financial Liabilities | $ 12,584 | $ 12,584 | |||||||||||||||
|
Earnings Per Share (Narrative) (Details) - $ / shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Dividends declared per common share | $ 2.54 | $ 2.42 |
Stock Option Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Antidilutive securities, shares | 102,000 | 102,000 |
Restricted Stock Awards [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Antidilutive securities, shares | 5,450 | 6,100 |
Earnings Per Share (Details 1) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Schedule of Earnings Per Share, Basic and Diluted, Including Two Class Method [Line Items] | ||
Net income attributable to Graham Holdings Company common stockholders | $ 21,086 | $ 37,780 |
Less: Dividends paid-common stock outstanding and unvested restricted shares | (14,202) | (13,758) |
Undistributed earnings | $ 6,884 | $ 24,022 |
Percent allocated to common stockholders | 99.04% | 98.64% |
Undistributed Earnings Allocated To Common Stockholders | $ 6,818 | $ 23,695 |
Add: Dividends paid-common stock outstanding | 14,066 | 13,574 |
Numerator for basic earnings per share | 20,884 | 37,269 |
Add: Additional undistributed earnings due to dilutive stock options | 0 | 2 |
Numerator for diluted earnings per share | $ 20,884 | $ 37,271 |
Weighted average shares outstanding (shares) | 5,535 | 5,623 |
Denominator for diluted earnings per share (shares) | 5,569 | 5,652 |
Graham Holdings Company Common Stockholders: | ||
Basic income per common share in dollars per share | $ 3.77 | $ 6.63 |
Diluted income per common share in dollars per share | $ 3.75 | $ 6.59 |
Stock Option Plan [Member] | ||
Schedule of Earnings Per Share, Basic and Diluted, Including Two Class Method [Line Items] | ||
Add: Effect of dilutive stock options (shares) | 34 | 29 |
Earnings Per Share (Details 2) - shares shares in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Earnings Per Share [Abstract] | ||
Weighted average restricted stock | 28 | 38 |
Pension and Postretirement Plans (Narrative) (Details) - Defined Benefit Pension Plan [Member] $ in Millions |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2017
USD ($)
Investment
companies
|
Dec. 31, 2016
USD ($)
Investment
|
|
Retirement Benefits Disclosure [Line Items] | ||
Percent of plan assets managed internally by the company | 45.00% | |
Percent of plan assets managed by investment companies | 55.00% | |
Number of investment companies actively managing plan assets | companies | 2 | |
Percentage of total plan assets | 100.00% | 100.00% |
Berkshire Hathaway Common Stock [Member] | ||
Retirement Benefits Disclosure [Line Items] | ||
Defined benefit plan, target allocation maximum percentage of assets, singular equity security, without prior approval by plan administrator | 20.00% | |
Foreign Investments [Member] | ||
Retirement Benefits Disclosure [Line Items] | ||
Defined benefit plan, target allocation maximum percentage of assets, equity securities | 23.00% | |
Fixed income securities [Member] | ||
Retirement Benefits Disclosure [Line Items] | ||
Defined benefit plan, target allocation percentage of assets, fixed-income securities, range minimum | 10.00% | |
Single Equity Concentration [Member] | ||
Retirement Benefits Disclosure [Line Items] | ||
Defined benefit plan, target allocation maximum percentage of assets, singular equity security, without prior approval by plan administrator | 10.00% | |
Value of investments | $ | $ 990.9 | $ 978.8 |
Percentage of total plan assets | 47.00% | 48.00% |
Single Equity Concentration [Member] | Equity Securities [Member] | ||
Retirement Benefits Disclosure [Line Items] | ||
Number of investments the company's pension plan held which individually exceed 10% of total plan assets | 1 | 1 |
Single Equity Concentration [Member] | Equity Funds [Member] | ||
Retirement Benefits Disclosure [Line Items] | ||
Number of investments the company's pension plan held which individually exceed 10% of total plan assets | 1 | 1 |
Concentration In Single Entity, Type Of Industry, Foreign Country Or Individual Fund [Member] | Defined Benefit Plan Assets Total [Member] | ||
Retirement Benefits Disclosure [Line Items] | ||
Minimum percentage of plan assets considered as significant concentrations in pension plans | 10.00% | 10.00% |
Pension and Postretirement Plans (Total Benefit/Cost) (Details 1) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Defined Benefit Plan Disclosure [Line Items] | ||
Net Periodic Cost (Benefit) | $ (14,688) | $ (12,059) |
Defined Benefit Pension Plan [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 4,914 | 5,342 |
Interest cost | 11,986 | 13,073 |
Expected return on assets | (30,337) | (30,548) |
Amortization of prior service cost (credit) | 43 | 74 |
Recognized actuarial loss (gain) | (1,294) | 0 |
Net Periodic Cost (Benefit) | (14,688) | (12,059) |
Supplemental Executive Retirement Plan (SERP) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 214 | 246 |
Interest cost | 1,058 | 1,096 |
Amortization of prior service cost (credit) | 114 | 114 |
Recognized actuarial loss (gain) | 444 | 665 |
Net Periodic Cost (Benefit) | 1,830 | 2,121 |
Other Postretirement Plans [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 257 | 346 |
Interest cost | 195 | 308 |
Amortization of prior service cost (credit) | (37) | (84) |
Recognized actuarial loss (gain) | (973) | (375) |
Net Periodic Cost (Benefit) | $ (558) | $ 195 |
Pension and Postretirement Plans (Asset Allocation) (Details 2) - Defined Benefit Pension Plans [Member] |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan Assets Allocation (Percent) | 100.00% | 100.00% |
U.S. [Member] | Equity Securities [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan Assets Allocation (Percent) | 50.00% | 53.00% |
U.S. [Member] | Equity Funds [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan Assets Allocation (Percent) | 31.00% | 30.00% |
U.S. [Member] | Fixed income securities [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan Assets Allocation (Percent) | 13.00% | 11.00% |
International [Member] | Equity Securities [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan Assets Allocation (Percent) | 6.00% | 6.00% |
Other Non-Operating Income (Narrative) (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Jun. 30, 2016 |
|
Schedule of Non-Operating Income (Expense) [Line Items] | |||
Document Fiscal Year Focus | 2017 | ||
(Loss) gain on sales of businesses | $ (342) | $ 18,931 | |
Residential Healthcare [Member] | Residential Healthcare Michigan hospital joint venture [Member] | |||
Schedule of Non-Operating Income (Expense) [Line Items] | |||
Equity Method Investment, Ownership Percentage | 40.00% | ||
Celtic Healthcare Allegheny Health Network Joint Venture [Member] | Celtic Healthcare Inc [Member] | |||
Schedule of Non-Operating Income (Expense) [Line Items] | |||
Equity Method Investment, Ownership Percentage | 40.00% | ||
Residential Healthcare Michigan hospital joint venture [Member] | Residential Healthcare [Member] | |||
Schedule of Non-Operating Income (Expense) [Line Items] | |||
Equity Method Investment, Ownership Percentage | 40.00% | ||
Kaplan Corporate and Other [Member] | Education [Member] | Colloquy [Member] | |||
Schedule of Non-Operating Income (Expense) [Line Items] | |||
(Loss) gain on sales of businesses | $ 18,900 |
Other Non-Operating Income (Details 1) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Schedule of Non-Operating Income (Expense) [Line Items] | ||
Foreign currency gain (loss), net | $ 1,728 | $ (5,443) |
(Loss) gain on sales of businesses | (342) | 18,931 |
Gain on sales of marketable equity securities | 0 | 1,754 |
Other, net | (537) | (146) |
Total Other Non-Operating Income | $ 849 | 15,096 |
Kaplan Corporate and Other [Member] | Education [Member] | Colloquy [Member] | ||
Schedule of Non-Operating Income (Expense) [Line Items] | ||
(Loss) gain on sales of businesses | $ 18,900 |
Accumulated Other Comprehensive Income (Loss) (Components of OCI) (Details 1) - USD ($) $ in Thousands |
3 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
||||
Other Comprehensive Income (Loss) [Line Items] | |||||
Other Comprehensive Income (Loss), before tax | $ 21,399 | $ 2,828 | |||
Other Comprehensive Income (Loss), income tax | (3,117) | 407 | |||
Other Comprehensive Income (Loss), Net of Tax | 18,282 | 3,235 | |||
Foreign Currency Translation Adjustment [Member] | |||||
Other Comprehensive Income (Loss) [Line Items] | |||||
Other Comprehensive Income (Loss), before Reclassifications, before Tax | 13,668 | 3,845 | |||
Other Comprehensive Income (Loss) before Reclassifications, Tax | 0 | 0 | |||
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | 13,668 | 3,845 | |||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 0 | ||||
Other Comprehensive Income (Loss), Net of Tax | 13,668 | ||||
Unrealized Gains (Losses) on Available-for-Sale Securities [Member] | |||||
Other Comprehensive Income (Loss) [Line Items] | |||||
Other Comprehensive Income (Loss), before Reclassifications, before Tax | 9,558 | 343 | |||
Other Comprehensive Income (Loss) before Reclassifications, Tax | (3,823) | (137) | |||
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | 5,735 | 206 | |||
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | 0 | (1,754) | |||
Reclassification from AOCI, Current Period, Tax | 0 | 701 | |||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 0 | (1,053) | |||
Other Comprehensive Income (Loss), before tax | 9,558 | (1,411) | |||
Other Comprehensive Income (Loss), income tax | (3,823) | 564 | |||
Other Comprehensive Income (Loss), Net of Tax | 5,735 | (847) | |||
Pension and Other Postretirement Plans [Member] | |||||
Other Comprehensive Income (Loss) [Line Items] | |||||
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | 0 | ||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | (1,703) | 394 | |||
Reclassification from AOCI, Current Period, Tax | 681 | (157) | |||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | (1,022) | 237 | |||
Other Comprehensive Income (Loss), before tax | (1,703) | 394 | |||
Other Comprehensive Income (Loss), income tax | 681 | (157) | |||
Other Comprehensive Income (Loss), Net of Tax | (1,022) | 237 | |||
Net Prior Service Cost [Member] | |||||
Other Comprehensive Income (Loss) [Line Items] | |||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | [1] | 120 | 104 | ||
Reclassification from AOCI, Current Period, Tax | (48) | (41) | |||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 72 | 63 | |||
Net Actuarial (Gain) Loss [Member] | |||||
Other Comprehensive Income (Loss) [Line Items] | |||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | [1] | (1,823) | 290 | ||
Reclassification from AOCI, Current Period, Tax | 729 | (116) | |||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | (1,094) | 174 | |||
Cash Flow Hedge [Member] | |||||
Other Comprehensive Income (Loss) [Line Items] | |||||
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | (124) | ||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 25 | ||||
Other Comprehensive Income (Loss), before tax | (124) | 0 | |||
Other Comprehensive Income (Loss), income tax | 25 | 0 | |||
Other Comprehensive Income (Loss), Net of Tax | $ (99) | $ 0 | |||
|
Accumulated Other Comprehensive Income (Loss) (AOCI balances) (Details 2) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Accumulated Other Comprehensive Income, beginning balance | $ 2,452,941 | |
Other Comprehensive Income, Net of Tax | 18,282 | $ 3,235 |
Accumulated Other Comprehensive Income, ending balance | 2,480,578 | |
AOCI Including Portion Attributable to Noncontrolling Interest [Member] | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Accumulated Other Comprehensive Income, beginning balance | 236,486 | |
Other comprehensive (loss) income before reclassifications | 19,279 | |
Net amount reclassified from accumulated other comprehensive income | (997) | |
Other Comprehensive Income, Net of Tax | 18,282 | |
Accumulated Other Comprehensive Income, ending balance | 254,768 | |
Cumulative Foreign Currency Translation Adjustment [Member] | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Accumulated Other Comprehensive Income, beginning balance | (26,998) | |
Other comprehensive (loss) income before reclassifications | 13,668 | 3,845 |
Net amount reclassified from accumulated other comprehensive income | 0 | |
Other Comprehensive Income, Net of Tax | 13,668 | |
Accumulated Other Comprehensive Income, ending balance | (13,330) | |
Unrealized Gain on Available-for-Sale Securities [Member] | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Accumulated Other Comprehensive Income, beginning balance | 92,931 | |
Other comprehensive (loss) income before reclassifications | 5,735 | 206 |
Net amount reclassified from accumulated other comprehensive income | 0 | (1,053) |
Other Comprehensive Income, Net of Tax | 5,735 | (847) |
Accumulated Other Comprehensive Income, ending balance | 98,666 | |
Unrealized Gain on Pensions and Other Postretirement Plans [Member] | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Accumulated Other Comprehensive Income, beginning balance | 170,830 | |
Other comprehensive (loss) income before reclassifications | 0 | |
Net amount reclassified from accumulated other comprehensive income | (1,022) | 237 |
Other Comprehensive Income, Net of Tax | (1,022) | 237 |
Accumulated Other Comprehensive Income, ending balance | 169,808 | |
Cash Flow Hedge [Member] | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Accumulated Other Comprehensive Income, beginning balance | (277) | |
Other comprehensive (loss) income before reclassifications | (124) | |
Net amount reclassified from accumulated other comprehensive income | 25 | |
Other Comprehensive Income, Net of Tax | (99) | $ 0 |
Accumulated Other Comprehensive Income, ending balance | $ (376) |
Accumulated Other Comprehensive Income (Loss) (Reclassifications out of AOCI) (Details 3) - USD ($) $ in Thousands |
3 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||||
Other (expense) income, net | $ (849) | $ (15,096) | |||
Interest expense | 8,129 | 7,948 | |||
Provision for Income Taxes | 2,700 | 22,400 | |||
Reclassification out of Accumulated Other Comprehensive Income [Member] | |||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||||
Income Net of Tax | (997) | (816) | |||
Foreign Currency Translation Adjustment [Member] | |||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||||
Reclassifications, net of tax | 0 | ||||
Unrealized Gain on Available-for-Sale Securities [Member] | |||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||||
Reclassifications, before tax | 0 | (1,754) | |||
Provision (Benefit) for Income Tax | 0 | 701 | |||
Reclassifications, net of tax | 0 | (1,053) | |||
Unrealized Gain on Available-for-Sale Securities [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | |||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||||
Other (expense) income, net | 0 | (1,754) | |||
Provision for Income Taxes | 0 | 701 | |||
Income Net of Tax | 0 | (1,053) | |||
Pension and Other Postretirement Plans [Member] | |||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||||
Reclassifications, before tax | (1,703) | 394 | |||
Provision (Benefit) for Income Tax | 681 | (157) | |||
Reclassifications, net of tax | (1,022) | 237 | |||
Net Prior Service Cost [Member] | |||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||||
Reclassifications, before tax | [1] | 120 | 104 | ||
Provision (Benefit) for Income Tax | (48) | (41) | |||
Reclassifications, net of tax | 72 | 63 | |||
Net Actuarial (Gain) Loss [Member] | |||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||||
Reclassifications, before tax | [1] | (1,823) | 290 | ||
Provision (Benefit) for Income Tax | 729 | (116) | |||
Reclassifications, net of tax | (1,094) | 174 | |||
Cash Flow Hedge [Member] | |||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||||
Reclassifications, net of tax | 25 | ||||
Cash Flow Hedge [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | |||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||||
Interest expense | 31 | 0 | |||
Provision for Income Taxes | (6) | 0 | |||
Income Net of Tax | $ 25 | $ 0 | |||
|
Contingencies (Details) $ in Millions |
Mar. 31, 2017
USD ($)
claim
program_review
|
---|---|
Loss Contingencies [Line Items] | |
Number of existing legal claims or proceedings that are likely to have a material effect on the Company's business | claim | 0 |
Maximum [Member] | |
Loss Contingencies [Line Items] | |
Loss contingency, estimate of possible loss | $ | $ 20 |
Education [Member] | Sale of KHE Campuses business [Member] | Higher Education [Member] | |
Loss Contingencies [Line Items] | |
Number of pending program reviews | 4 |
Title IV participating institutions including Broomall PA and Pittsburgh PA [Member] | Education [Member] | Higher Education [Member] | |
Loss Contingencies [Line Items] | |
Number of pending program reviews | 5 |
Business Segments (Narrative) (Details) |
3 Months Ended |
---|---|
Mar. 31, 2017
Segment
| |
Business Segments [Line Items] | |
Number of reportable segments | 4 |
Business Segments (Information by Operating Segment) (Details 1) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Dec. 31, 2016 |
|
Segment Reporting Information [Line Items] | |||
Operating Revenues | $ 582,717 | $ 601,740 | |
Income (Loss) from Operations | 29,054 | 51,872 | |
Equity in earnings of affiliates, net | 649 | 1,004 | |
Interest Expense, Net | (6,766) | (7,357) | |
Other income, net | 849 | 15,096 | |
Income Before Income Taxes | 23,786 | 60,615 | |
Depreciation of property, plant and equipment | 14,652 | 16,761 | |
Amortization of intangible assets | 6,836 | 6,262 | |
Net Pension (Credit) Expense | (14,688) | (12,059) | |
Identifiable Assets | 3,085,601 | $ 3,068,042 | |
Investments in Marketable Equity Securities | 433,787 | 424,229 | |
Investments in Affiliates | 60,287 | 58,806 | |
Prepaid Pension Cost | 836,430 | 881,593 | |
Total Assets | 4,416,105 | 4,432,670 | |
Operating Segments [Member] | Education [Member] | |||
Segment Reporting Information [Line Items] | |||
Operating Revenues | 372,897 | 401,076 | |
Income (Loss) from Operations | 9,031 | 14,488 | |
Depreciation of property, plant and equipment | 8,584 | 11,103 | |
Amortization of intangible assets | 1,120 | 1,681 | |
Net Pension (Credit) Expense | 2,706 | 3,109 | |
Identifiable Assets | 1,475,285 | 1,479,267 | |
Operating Segments [Member] | Education [Member] | Kaplan Corporate and Other [Member] | |||
Segment Reporting Information [Line Items] | |||
Operating Revenues | 14 | 125 | |
Income (Loss) from Operations | (8,469) | ||
Depreciation of property, plant and equipment | 130 | 87 | |
Net Pension (Credit) Expense | (336) | 369 | |
Identifiable Assets | 20,219 | 21,509 | |
Operating Segments [Member] | Education [Member] | Reportable Subsegments [Member] | Higher Education [Member] | |||
Segment Reporting Information [Line Items] | |||
Operating Revenues | 144,310 | 165,549 | |
Income (Loss) from Operations | 12,604 | 21,306 | |
Depreciation of property, plant and equipment | 3,431 | 4,175 | |
Net Pension (Credit) Expense | 2,044 | 1,905 | |
Identifiable Assets | 321,573 | 373,127 | |
Operating Segments [Member] | Education [Member] | Reportable Subsegments [Member] | Test Preparation [Member] | |||
Segment Reporting Information [Line Items] | |||
Operating Revenues | 64,568 | 66,462 | |
Income (Loss) from Operations | (2,864) | (2,310) | |
Depreciation of property, plant and equipment | 1,341 | 1,781 | |
Net Pension (Credit) Expense | 911 | 768 | |
Identifiable Assets | 133,061 | 133,709 | |
Operating Segments [Member] | Education [Member] | Reportable Subsegments [Member] | Kaplan International [Member] | |||
Segment Reporting Information [Line Items] | |||
Operating Revenues | 164,562 | 169,287 | |
Income (Loss) from Operations | 7,707 | 4,897 | |
Depreciation of property, plant and equipment | 3,682 | 5,060 | |
Net Pension (Credit) Expense | 87 | 67 | |
Identifiable Assets | 1,000,432 | 950,922 | |
Operating Segments [Member] | Education [Member] | Reportable Subsegments [Member] | Kaplan Corporate and Other [Member] | |||
Segment Reporting Information [Line Items] | |||
Income (Loss) from Operations | (9,405) | ||
Operating Segments [Member] | Education [Member] | Intersubsegment Eliminations [Member] | |||
Segment Reporting Information [Line Items] | |||
Operating Revenues | (557) | (347) | |
Income (Loss) from Operations | 53 | 0 | |
Operating Segments [Member] | Television Broadcasting [Member] | |||
Segment Reporting Information [Line Items] | |||
Operating Revenues | 91,496 | 92,018 | |
Income (Loss) from Operations | 25,969 | 41,220 | |
Depreciation of property, plant and equipment | 2,594 | 2,377 | |
Amortization of intangible assets | 902 | 63 | |
Net Pension (Credit) Expense | 493 | 439 | |
Identifiable Assets | 445,278 | 336,631 | |
Operating Segments [Member] | Other Businesses [Member] | |||
Segment Reporting Information [Line Items] | |||
Operating Revenues | 118,324 | 108,716 | |
Income (Loss) from Operations | (10,564) | (5,730) | |
Depreciation of property, plant and equipment | 3,184 | 3,027 | |
Amortization of intangible assets | 4,814 | 4,518 | |
Net Pension (Credit) Expense | 483 | 254 | |
Identifiable Assets | 698,908 | 796,935 | |
Corporate Office [Member] | |||
Segment Reporting Information [Line Items] | |||
Operating Revenues | 0 | 0 | |
Income (Loss) from Operations | 4,618 | 1,894 | |
Depreciation of property, plant and equipment | 290 | 254 | |
Amortization of intangible assets | 0 | 0 | |
Net Pension (Credit) Expense | (18,370) | (15,861) | |
Identifiable Assets | 466,130 | $ 455,209 | |
Intersegment Elimination [Member] | |||
Segment Reporting Information [Line Items] | |||
Operating Revenues | $ 0 | $ (70) |
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