10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

ý Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended June 30, 2017

or

¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number 1-671

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)

(703) 345-6300

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes  ý.    No  ¨.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý.    No  ¨.  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “small reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ý Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ¨ Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ¨.    No  ý.  

Shares outstanding at July 28, 2017:

Class A Common Stock – 964,001 Shares

Class B Common Stock – 4,628,229 Shares

GRAHAM HOLDINGS COMPANY

Index to Form 10-Q

PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	a. Condensed Consolidated Statements of Operations (Unaudited) for the Three and Six Months Ended June 30, 2017 and 2016	1
	b. Condensed Consolidated Statements of Comprehensive Income (Unaudited) for the Three and Six Months Ended June 30, 2017 and 2016	2
	c. Condensed Consolidated Balance Sheets at June 30, 2017 (Unaudited) and December 31, 2016	3
	d. Condensed Consolidated Statements of Cash Flows (Unaudited) for the Six Months Ended June 30, 2017 and 2016	4
	e. Notes to Condensed Consolidated Financial Statements (Unaudited)	5
Item 2.	Management’s Discussion and Analysis of Results of Operations and Financial Condition	21
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	30
Item 4.	Controls and Procedures	30
PART II. OTHER INFORMATION
Item 6.	Exhibits	31
Signatures		32

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

GRAHAM HOLDINGS COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

	Three Months Ended   June 30						Six Months Ended   June 30
(in thousands, except per share amounts)	2017			2016			2017			2016
Operating Revenues
Education	$	386,698		$	419,144		$	759,673		$	820,150
Advertising	73,532			70,901			137,648			139,059
Other	215,857			138,888			361,483			271,464
	676,087			628,933			1,258,804			1,230,673
Operating Costs and Expenses
Operating	358,252			296,033			658,918			587,665
Selling, general and administrative	213,848			236,437			445,357			471,650
Depreciation of property, plant and equipment	15,871			16,045			30,523			32,806
Amortization of intangible assets	10,531			6,278			17,367			12,540
Impairment of goodwill and other long-lived assets	9,224			—			9,224			—
	607,726			554,793			1,161,389			1,104,661
Income from Operations	68,361			74,140			97,415			126,012
Equity in earnings (losses) of affiliates, net	1,331			(891		)	1,980			113
Interest income	1,173			721			2,536			1,312
Interest expense	(9,035		)	(7,971		)	(17,164		)	(15,919		)
Other income, net	4,069			19,000			4,918			34,096
Income Before Income Taxes	65,899			84,999			89,685			145,614
Provision for Income Taxes	23,900			23,800			26,600			46,200
Net Income	41,999			61,199			63,085			99,414
Net Income Attributable to Noncontrolling Interests	(3		)	(433		)	(3		)	(868		)
Net Income Attributable to Graham Holdings Company Common Stockholders	$	41,996		$	60,766		$	63,082		$	98,546
Per Share Information Attributable to Graham Holdings Company Common Stockholders
Basic net income per common share	$	7.51		$	10.82		$	11.29		$	17.42
Basic average number of common shares outstanding	5,539			5,544			5,537			5,584
Diluted net income per common share	$	7.46		$	10.76		$	11.21		$	17.33
Diluted average number of common shares outstanding	5,577			5,574			5,573			5,613

See accompanying Notes to Condensed Consolidated Financial Statements.

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GRAHAM HOLDINGS COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

	Three Months Ended   June 30						Six Months Ended   June 30
(in thousands)	2017			2016			2017			2016
Net Income	$	41,999		$	61,199		$	63,085		$	99,414
Other Comprehensive Income, Before Tax
Foreign currency translation adjustments:
Translation adjustments arising during the period	9,638			(5,121		)	23,306			(1,276		)
Unrealized gains (losses) on available-for-sale securities:
Unrealized gains (losses) for the period, net	13,976			(5,307		)	23,534			(4,964		)
Reclassification of realized gain on sale of available-for-sale securities included in net income	—			(4,502		)	—			(6,256		)
	13,976			(9,809		)	23,534			(11,220		)
Pension and other postretirement plans:
Amortization of net prior service cost included in net income	120			105			240			209
Amortization of net actuarial (gain) loss included in net income	(1,568		)	289			(3,391		)	579
	(1,448		)	394			(3,151		)	788
Cash flow hedge loss	(19		)	—			(143		)	—
Other Comprehensive Income (Loss), Before Tax	22,147			(14,536		)	43,546			(11,708		)
Income tax (expense) benefit related to items of other comprehensive income (loss)	(5,008		)	3,766			(8,125		)	4,173
Other Comprehensive Income (Loss), Net of Tax	17,139			(10,770		)	35,421			(7,535		)
Comprehensive Income	59,138			50,429			98,506			91,879
Comprehensive income attributable to noncontrolling interests	(3		)	(433		)	(3		)	(868		)
Total Comprehensive Income Attributable to Graham Holdings Company	$	59,135		$	49,996		$	98,503		$	91,011

See accompanying Notes to Condensed Consolidated Financial Statements.

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GRAHAM HOLDINGS COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

	As of
(in thousands)	June 30, 2017			December 31, 2016
	(Unaudited)
Assets
Current Assets
Cash and cash equivalents	$	432,147		$	648,885
Restricted cash	22,999			21,931
Investments in marketable equity securities and other investments	469,993			448,241
Accounts receivable, net	509,380			615,101
Income taxes receivable	36,131			41,635
Inventories and contracts in progress	58,760			34,818
Other current assets	68,015			60,735
Total Current Assets	1,597,425			1,871,346
Property, Plant and Equipment, Net	263,100			233,664
Investments in Affiliates	67,812			58,806
Goodwill, Net	1,279,894			1,122,954
Indefinite-Lived Intangible Assets, Net	110,060			66,026
Amortized Intangible Assets, Net	248,337			107,939
Prepaid Pension Cost	850,262			881,593
Deferred Income Taxes	15,817			17,246
Deferred Charges and Other Assets	75,732			73,096
Total Assets	$	4,508,439		$	4,432,670
Liabilities and Equity
Current Liabilities
Accounts payable and accrued liabilities	$	451,476		$	500,726
Deferred revenue	290,175			312,107
Current portion of long-term debt	6,492			6,128
Dividends declared	7,081			—
Total Current Liabilities	755,224			818,961
Postretirement Benefits Other Than Pensions	22,625			21,859
Accrued Compensation and Related Benefits	192,837			195,910
Other Liabilities	64,956			65,554
Deferred Income Taxes	430,406			379,092
Mandatorily Redeemable Noncontrolling Interest	12,584			12,584
Long-Term Debt	489,717			485,719
Total Liabilities	1,968,349			1,979,679
Redeemable Noncontrolling Interest	3,718			50
Preferred Stock	—			—
Common Stockholders’ Equity
Common stock	20,000			20,000
Capital in excess of par value	365,942			364,363
Retained earnings	5,630,743			5,588,942
Accumulated other comprehensive income (loss), net of tax
Cumulative foreign currency translation adjustment	(3,692		)	(26,998		)
Unrealized gain on available-for-sale securities	107,051			92,931
Unrealized gain on pensions and other postretirement plans	168,939			170,830
Cash flow hedge	(391		)	(277		)
Cost of Class B common stock held in treasury	(3,752,220		)	(3,756,850		)
Total Equity	2,536,372			2,452,941
Total Liabilities and Equity	$	4,508,439		$	4,432,670

See accompanying Notes to Condensed Consolidated Financial Statements.

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GRAHAM HOLDINGS COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Six Months Ended   June 30
(in thousands)	2017			2016
Cash Flows from Operating Activities
Net Income	$	63,085		$	99,414
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and goodwill and other long-lived asset impairment	57,113			45,346
Net pension benefit	(29,517		)	(24,325		)
Stock-based compensation expense, net	5,204			7,152
Loss (gain) on disposition of businesses, property, plant and equipment, investments and other assets, net	402			(62,273		)
Foreign exchange (gain) loss	(5,194		)	29,527
Equity in earnings of affiliates, net of distributions	(1,966		)	(113		)
Provision (benefit) for deferred income taxes	14,370			(6,806		)
Change in operating assets and liabilities:
Accounts receivable, net	122,122			49,786
Accounts payable and accrued liabilities	(63,654		)	4,612
Deferred revenue	(29,706		)	(19,751		)
Income taxes receivable	6,374			38,989
Other assets and other liabilities, net	(7,425		)	(15,459		)
Other	360			502
Net Cash Provided by Operating Activities	131,568			146,601
Cash Flows from Investing Activities
Investments in certain businesses, net of cash acquired	(299,938		)	(200,336		)
Purchases of property, plant and equipment	(29,947		)	(22,202		)
Investments in equity affiliates and cost method investments	(10,527		)	(2,387		)
Return of investment in equity affiliate	3,527			—
Net proceeds from disposition of businesses, property, plant and equipment, investments and other assets	1,760			36,771
Proceeds from sales of marketable equity securities	—			22,837
Purchases of marketable equity securities	—			(18,274		)
Net Cash Used in Investing Activities	(335,125		)	(183,591		)
Cash Flows from Financing Activities
Dividends paid	(14,201		)	(13,736		)
Common shares repurchased	(395		)	(89,062		)
Purchase of noncontrolling interest	—			(21,000		)
Other	(4,543		)	19,896
Net Cash Used in Financing Activities	(19,139		)	(103,902		)
Effect of Currency Exchange Rate Change	7,026			(1,842		)
Net Decrease in Cash and Cash Equivalents and Restricted Cash	(215,670		)	(142,734		)
Beginning Cash and Cash Equivalents and Restricted Cash	670,816			774,952
Ending Cash and Cash Equivalents and Restricted Cash	$	455,146		$	632,218

See accompanying Notes to Condensed Consolidated Financial Statements.

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GRAHAM HOLDINGS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. 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, several websites and print publications, and a marketing solutions provider. The Company’s other business operations include manufacturing and home health and hospice services.

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 and six months ended June 30, 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.

Out of Period Adjustment – In the second quarter of 2016, the Company benefited from a favorable $5.6 million out of period adjustment to the provision for deferred income taxes related to the $248.6 million goodwill impairment at the KHE reporting unit in the third quarter of 2015. With respect to this error, the Company has concluded that it was not material to the Company’s financial position or results of operations for 2016 and the related interim periods, based on its consideration of quantitative and qualitative factors.

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 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

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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 the forfeiture rate 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:

	Six Months Ended June 30, 2016
	As
	Previously					As
(in thousands)	Reported			Adjustment		Adopted
Cash Flows from Operating Activities
Increase in Restricted Cash	$	(11,133	)	$	11,133	$	—
Net Cash Provided by Operating Activities	135,468			11,133		146,601
Net Decrease in Cash and Cash Equivalents and Restricted Cash	(153,867		)	11,133		(142,734		)
Cash and Cash Equivalents and Restricted Cash at Beginning of Period	754,207			20,745		774,952
Cash and Cash Equivalents and Restricted Cash at End of Period	600,340			31,878		632,218

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, with early adoption permitted. The Company early adopted this guidance in the second quarter of 2017.

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In March 2017, the FASB issued new guidance that changes the presentation of net periodic pension cost and net periodic postretirement benefit cost for defined benefit plans. The guidance requires an issuer to disaggregate the service cost component of net periodic pension and postretirement benefit cost from other components. Under the new guidance, service cost will be included in the same line item(s) as other compensation costs arising from services rendered by employees during the period, while the other components will be recognized after income from operations. The guidance is effective for interim and fiscal years beginning after December 15, 2017. The guidance must be applied retrospectively; however, a practical expedient is available which permits an employer to use amounts previously disclosed in its pension and postretirement plans footnote for the prior comparative periods. The Company will adopt the new standard in the first quarter of 2018, and expects the following changes to its financial statements upon adoption, as detailed below:

	Income from Operations			Non-operating pension and postretirement benefit income		Income Before Income Taxes
(in thousands)
Three Months Ended June 30, 2017
As Reported	$	68,361		$	—	$	65,899
Adjustment	(18,620		)	18,620		—
Upon Adoption	49,741			18,620		65,899
Three Months Ended June 30, 2016
As Reported	$	74,140		$	—	$	84,999
Adjustment	(15,584		)	15,584		—
Upon Adoption	58,556			15,584		84,999
Six Months Ended June 30, 2017
As Reported	$	97,415		$	—	$	89,685
Adjustment	(37,421		)	37,421		—
Upon Adoption	59,994			37,421		89,685
Six Months Ended June 30, 2016
As Reported	$	126,012		$	—	$	145,614
Adjustment	(31,261		)	31,261		—
Upon Adoption	94,751			31,261		145,614
Twelve Months Ended December 31, 2016
As Reported	$	303,534		$	—	$	250,658
Adjustment	(80,665		)	80,665		—
Upon Adoption	222,869			80,665		250,658

2. INVESTMENTS

As of June 30, 2017 and December 31, 2016, the Company had commercial paper and money market investments of $262.8 million and $485.1 million, respectively, that are classified as cash, cash equivalents and restricted cash in the Company’s Condensed Consolidated Balance Sheets.

Investments in marketable equity securities comprised the following:

	As of
	June 30, 2017		December 31, 2016
(in thousands)
Total cost	$	269,343	$	269,343
Gross unrealized gains	178,420		154,886
Total Fair Value	$	447,763	$	424,229

There were no purchases of marketable equity securities during the first six months of 2017. The Company settled on $18.3 million of marketable equity securities purchases during the first six months of 2016, of which $17.9 million were purchased in the first six months.

There were no sales of marketable equity securities for the first six months of 2017. The total proceeds from the sales of marketable equity securities for the first six months of 2016 were $22.8 million, with realized gains of $6.3 million.

As of June 30, 2017, the Company held interests in several affiliates; Residential Healthcare (Residential) held a 40% interest in Residential Home Health Illinois, a 42.5% interest in Residential Hospice Illinois and a 40% interest in the joint venture formed between Residential and a Michigan hospital; and Celtic Healthcare (Celtic) held a 40% interest in the joint venture formed between Celtic Healthcare and Allegheny Health Network (AHN). For the three

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and six months ended June 30, 2017, the Company recorded $5.0 million and $9.6 million, respectively, 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.

3. ACQUISITIONS AND DISPOSITIONS OF BUSINESSES

Acquisitions.  In the first six months of 2017, the Company acquired six businesses, two in its education division, two in its television broadcasting division and two in other businesses for $318.7 million in cash and contingent consideration, and the assumption of $59.1 million in certain pension and postretirement obligations.

At the end of June 2017, Graham Healthcare Group (GHG) acquired a 100% interest in Hometown Home Health and Hospice, a Lapeer, MI-based healthcare services provider by purchasing all of its issued and outstanding shares. This acquisition expands GHG’s service area in Michigan. GHG is included in other businesses.

In April 2017, the Company acquired 97.72% of the issued and outstanding shares of 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 $206.8 million, net of cash acquired. The fair value of the redeemable noncontrolling interest in Hoover was $3.7 million at the acquisition date, determined using a market approach. This acquisition is consistent with the Company’s ongoing strategy of investing in companies with a history of profitability and strong management. Hoover is included in other businesses.

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.

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.

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 rationale for these acquisitions was 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.

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Acquisition-related costs of $3.5 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):

	Purchase Price Allocation
	As of
(in thousands)	June 30, 2017			December 31, 2016
Accounts receivable	$	13,074		$	8,538
Inventory	25,754			878
Other current assets	593			1,420
Property, plant and equipment	30,961			3,940
Goodwill	138,000			184,118
Indefinite-lived intangible assets	41,600			53,110
Amortized intangible assets	159,107			28,267
Pension and other postretirement benefits liabilities	(59,116		)	—
Other liabilities	(10,614		)	(21,892		)
Deferred income taxes	(30,923		)	(11,009		)
Redeemable noncontrolling interest	(3,666		)	—
Aggregate purchase price, net of cash acquired	$	304,770		$	247,370

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. The Company expects to deduct $10.0 million and $22.2 million of goodwill for income tax purposes for the acquisitions completed in 2017 and 2016, respectively.

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 for the companies acquired in 2017 of $63.4 million and a nominal operating loss for the second quarter of 2017, and aggregate revenues and an operating loss of $68.9 million and $0.2 million, respectively, for the first six 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:

	Three Months Ended   June 30				Six Months Ended   June 30
(in thousands)	2017		2016		2017		2016
Operating revenues	$	680,759	$	695,357	$	1,322,559	$	1,361,804
Net income	46,718		62,638		71,330		101,717

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, GHG completed the sale of Celtic Healthcare of Maryland.

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.

9

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 June 30, 2017.

Kaplan University Transaction. On April 27, 2017, certain Kaplan subsidiaries entered into a Contribution and Transfer Agreement (Transfer Agreement) to contribute Kaplan University (KU), its institutional assets and operations to a new, nonprofit, public-benefit corporation (New University) affiliated with Purdue University (Purdue) in exchange for a Transition and Operations Support Agreement (TOSA) to provide key non-academic operations support to New University for an initial term of 30 years with a buy-out option after six years. The transfer does not include any of the assets of Kaplan University School of Professional and Continuing Education (KU-PACE), which provides professional training and exam preparation for professional certifications and licensures, nor does it include the transfer of other Kaplan businesses such as Kaplan Test Preparation and Kaplan International.

Consummation of the transactions contemplated by the Transfer Agreement is subject to various closing conditions, including, among others, regulatory approvals from the U.S. Department of Education, the Indiana Commission for Higher Education and HLC, which is the regional accreditor of both Purdue and KU, and certain other state educational agencies and accreditors of programs. Kaplan is unable to predict with certainty when and if such approvals will be obtained; however, all approvals may not be received until the first quarter of 2018. If the transaction is not consummated by April 30, 2018, either party may terminate the Transfer Agreement.

4. GOODWILL AND OTHER INTANGIBLE ASSETS

In the second quarter of 2017, as a result of a challenging operating environment, the Forney reporting unit recorded a goodwill and other long-lived asset impairment charge of $9.2 million. The Company performed an interim review of the goodwill and other long-lived assets of the reporting unit by utilizing a discounted cash flow model to estimate the fair value. The carrying value of the reporting unit exceeded the estimated fair value, resulting in a goodwill impairment charge for the amount by which the carrying value exceeded the reporting unit’s estimated fair value.

Amortization of intangible assets for the three months ended June 30, 2017 and 2016 was $10.5 million and $6.3 million, respectively. Amortization of intangible assets for the six months ended June 30, 2017 and 2016 was $17.4 million and $12.5 million, respectively. Amortization of intangible assets is estimated to be approximately $22 million for the remainder of 2017, $37 million in 2018, $36 million in 2019, $33 million in 2020, $27 million in 2021 and $93 million thereafter.

10

The changes in the carrying amount of goodwill, by segment, were as follows:

(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	18,986			24,256		94,758			138,000
Impairment	—			—		(7,616		)	(7,616		)
Dispositions	—			—		(412		)	(412		)
Foreign currency exchange rate changes	26,968			—		—			26,968
Balance as of June 30, 2017
Goodwill	1,156,957			192,601		296,487			1,646,045
Accumulated impairment losses	(350,850		)	—		(15,301		)	(366,151		)
	$	806,107		$	192,601	$	281,186		$	1,279,894

The changes in carrying amount of goodwill at the Company’s education division were as follows:

(in thousands)	Higher Education			Test Preparation			Kaplan International		Total
Balance as of December 31, 2016
Goodwill	$	389,720		$	166,098		$	555,185	$	1,111,003
Accumulated impairment losses	(248,591		)	(102,259		)	—		(350,850		)
	141,129			63,839			555,185		760,153
Acquisitions	—			—			18,986		18,986
Foreign currency exchange rate changes	70			—			26,898		26,968
Balance as of June 30, 2017
Goodwill	389,790			166,098			601,069		1,156,957
Accumulated impairment losses	(248,591		)	(102,259		)	—		(350,850		)
	$	141,199		$	63,839		$	601,069	$	806,107

Other intangible assets consist of the following:

		As of June 30, 2017						As of December 31, 2016
(in thousands)	Useful Life Range	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Amortized Intangible Assets
Student and customer relationships	1–10 years (1)	$	224,280	$	66,780	$	157,500	$	129,616	$	55,863	$	73,753
Trade names and trademarks	2–10 years	56,995		31,920		25,075		55,240		29,670		25,570
Network affiliation agreements	15 years	42,600		1,302		41,298		—		—		—
Databases and technology	3–6 years (1)	19,505		3,321		16,184		5,601		4,368		1,233
Noncompete agreements	2–5 years	2,180		1,480		700		1,730		1,404		326
Other	1–8 years	13,730		6,150		7,580		12,030		4,973		7,057
		$	359,290	$	110,953	$	248,337	$	204,217	$	96,278	$	107,939
Indefinite-Lived Intangible Assets
Trade names and trademarks		$	82,810					$	65,192
FCC licenses		26,600						—
Licensure and accreditation		650						834
		$	110,060					$	66,026

____________

(1) As of December 31, 2016, the student and customer relationships’ minimum useful life was 2 years and the databases and technology’s maximum useful life was 5 years.

11

5. DEBT

The Company’s borrowings consist of the following:

	As of
	June 30, 2017			December 31, 2016
(in thousands)
7.25% unsecured notes due February 1, 2019 (1)	$	399,279		$	399,052
UK Credit facility (2)	96,815			91,316
Other indebtedness	115			1,479
Total Debt	$	496,209		$	491,847
Less: current portion	(6,492		)	(6,128		)
Total Long-Term Debt	$	489,717		$	485,719

____________

(1) The carrying value is net of $0.1 million of unamortized debt issuance costs as of June 30, 2017 and December 31, 2016, respectively.

(2) The carrying value is net of $0.5 million of unamortized debt issuance costs as of June 30, 2017 and December 31, 2016, respectively.

The Company’s other indebtedness at June 30, 2017 is at an interest rate of 2% and matures in 2025.

On July 14, 2016, Kaplan entered into a Facility Agreement (the Kaplan Credit Agreement) among Kaplan International Holdings Limited, as borrower, the lenders party thereto, HSBC BANK PLC as Facility Agent, and other agents party thereto. The Kaplan Credit Agreement provides for a four-year credit facility in an aggregate principal amount of £75 million. Borrowings bear interest at a rate per annum of LIBOR plus an applicable interest rate margin between 1.25% and 1.75%, in each case determined on a quarterly basis by reference to a pricing grid 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 June 30, 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 June 30, 2017 and 2016, the Company had average borrowings outstanding of approximately $495.6 million and $400.0 million, respectively, at average annual interest rates of approximately 6.2% and 7.2%, respectively. During the three months ended June 30, 2017 and 2016, the Company incurred net interest expense of $7.9 million and $7.3 million, respectively.

During the six months ended June 30, 2017 and 2016, the Company had average borrowings outstanding of approximately $494.5 million and $399.9 million, respectively, at average annual interest rates of approximately 6.2% and 7.2%, respectively. During the six months ended June 30, 2017 and 2016, the Company incurred net interest expense of $14.6 million.

At June 30, 2017, the fair value of the Company’s 7.25% unsecured notes, based on quoted market prices (Level 2 fair value assessment), totaled $431.0 million, compared with the carrying amount of $399.3 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 June 30, 2017 approximates fair value.

12

6. FAIR VALUE MEASUREMENTS

The Company’s financial assets and liabilities measured at fair value on a recurring basis were as follows:

	As of June 30, 2017
(in thousands)	Level 1		Level 2		Level 3		Total
Assets
Money market investments (1)	$	—	$	262,797	$	—	$	262,797
Marketable equity securities (3)	447,763		—		—		447,763
Other current investments (4)	6,207		16,023		—		22,230
Total Financial Assets	$	453,970	$	278,820	$	—	$	732,790
Liabilities
Deferred compensation plan liabilities (5)	$	—	$	44,840	$	—	$	44,840
Interest rate swap (6)	—		515		—		515
Mandatorily redeemable noncontrolling interest (7)	—		—		12,584		12,584
Total Financial Liabilities	$	—	$	45,355	$	12,584	$	57,939

	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.

In the second quarter of 2017, the Company recorded a goodwill and other long-lived asset impairment charge of $9.2 million. The remeasurement of the goodwill and other long-lived assets is classified as a Level 3 fair value assessment due to the significance of unobservable inputs developed in the determination of the fair value. The Company used a discounted cash flow model to determine the estimated fair value of the reporting unit and made estimates and assumptions regarding future cash flows, discount rates and long-term growth rates.

7. 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.

13

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:

	Three Months Ended   June 30						Six Months Ended   June 30
(in thousands, except per share amounts)	2017			2016			2017			2016
Numerator:
Numerator for basic earnings per share:
Net income attributable to Graham Holdings Company common stockholders	$	41,996		$	60,766		$	63,082		$	98,546
Less: Dividends paid-common stock outstanding and unvested restricted shares	(7,080		)	(6,775		)	(21,282		)	(20,533		)
Undistributed earnings	34,916			53,991			41,800			78,013
Percent allocated to common stockholders	99.06		%	98.68		%	99.06		%	98.68		%
	34,588			53,277			41,407			76,981
Add: Dividends paid-common stock outstanding	7,013			6,685			21,082			20,264
Numerator for basic earnings per share	$	41,601		$	59,962		$	62,489		$	97,245
Add: Additional undistributed earnings due to dilutive stock options	3			4			3			5
Numerator for diluted earnings per share	$	41,604		$	59,966		$	62,492		$	97,250
Denominator:
Denominator for basic earnings per share:
Weighted average shares outstanding	5,539			5,544			5,537			5,584
Add: Effect of dilutive stock options	38			30			36			29
Denominator for diluted earnings per share	5,577			5,574			5,573			5,613
Graham Holdings Company Common Stockholders:
Basic earnings per share	$	7.51		$	10.82		$	11.29		$	17.42
Diluted earnings per share	$	7.46		$	10.76		$	11.21		$	17.33

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:

	Three Months Ended   June 30		Six Months Ended   June 30
(in thousands)	2017	2016	2017	2016
Weighted average restricted stock	29	41	28	39

The diluted earnings per share amounts for the three and six months ended June 30, 2017 and June 30, 2016 exclude the effects of 104,000 and 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 and six months ended June 30, 2017 and June 30, 2016 exclude the effects of 5,250 and 6,100 restricted stock awards, respectively, as their inclusion would have been antidilutive due to a performance condition.

In the three and six months ended June 30, 2017, the Company declared regular dividends totaling $1.27 and $3.81, respectively. In the three and six months ended June 30, 2016, the Company declared regular dividends totaling $1.21, and $3.63 respectively.

8. PENSION AND POSTRETIREMENT PLANS

Defined Benefit Plans. The total benefit arising from the Company’s defined benefit pension plans consists of the following components:

	Three Months Ended June 30						Six Months Ended June 30
(in thousands)	2017			2016			2017			2016
Service cost	$	4,591		$	5,040		$	9,505		$	10,382
Interest cost	11,979			12,845			23,965			25,918
Expected return on assets	(30,403		)	(30,226		)	(60,740		)	(60,774		)
Amortization of prior service cost	43			75			86			149
Recognized actuarial gain	(1,039		)	—			(2,333		)	—
Net Periodic Benefit	$	(14,829	)	$	(12,266	)	$	(29,517	)	$	(24,325	)

14

The total cost arising from the Company’s Supplemental Executive Retirement Plan (SERP) consists of the following components:

	Three Months Ended June 30				Six Months Ended June 30
(in thousands)	2017		2016		2017		2016
Service cost	$	215	$	246	$	429	$	492
Interest cost	1,058		1,096		2,116		2,192
Amortization of prior service cost	114		114		228		228
Recognized actuarial loss	443		665		887		1,330
Net Periodic Cost	$	1,830	$	2,121	$	3,660	$	4,242

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:

	As of
	June 30, 2017		December 31, 2016
U.S. equities	52	%	53	%
U.S. stock index fund	31	%	30	%
U.S. fixed income	10	%	11	%
International equities	7	%	6	%
	100	%	100	%

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 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 June 30, 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 June 30, 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 June 30, 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 $1,008.9 million and $978.8 million at June 30, 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:

	Three Months Ended June 30						Six Months Ended June 30
(in thousands)	2017			2016			2017			2016
Service cost	$	257		$	347		$	514		$	693
Interest cost	194			307			389			615
Amortization of prior service credit	(37		)	(84		)	(74		)	(168		)
Recognized actuarial gain	(972		)	(376		)	(1,945		)	(751		)
Net Periodic (Benefit) Cost	$	(558	)	$	194		$	(1,116	)	$	389

15

9. OTHER NON-OPERATING INCOME

A summary of non-operating income is as follows:

	Three Months Ended   June 30					Six Months Ended   June 30
(in thousands)	2017		2016			2017			2016
Foreign currency gain (loss), net	$	3,466	$	(24,084	)	$	5,194		$	(29,527	)
(Loss) gain on sales of businesses	—		—			(342		)	18,931
Gain on sale of land	—		34,072			—			34,072
Gain on sales of marketable equity securities (see Note 2)	—		4,502			—			6,256
Gain on the formation of a joint venture	—		3,232			—			3,232
Other, net	603		1,278			66			1,132
Total Other Non-Operating Income	$	4,069	$	19,000		$	4,918		$	34,096

In the second quarter of 2016, the Company sold the remaining portion of the Robinson Terminal real estate retained from the sale of the Publishing Subsidiaries, for a gain of $34.1 million.

In June 2016, Residential contributed assets to a joint venture entered into with a Michigan hospital in exchange for a 40% equity interest and other assets, resulting in a $3.2 million gain (see Note 3). The Company used an income and market approach to value the equity interest. The measurement of the equity interest in the joint venture is classified as a Level 3 fair value assessment due to the significance of unobservable inputs developed in the determination of the fair value.

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.

10. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The other comprehensive income (loss) consists of the following components:

	Three Months Ended June 30
	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	$	9,638		$	—		$	9,638		$	(5,121	)	$	—		$	(5,121	)
Unrealized gains (losses) on available-for-sale securities:
Unrealized gains (losses) for the period, net	13,976			(5,591		)	8,385			(5,307		)	2,123			(3,184		)
Reclassification of realized gain on sale of available-for-sale securities included in net income	—			—			—			(4,502		)	1,801			(2,701		)
	13,976			(5,591		)	8,385			(9,809		)	3,924			(5,885		)
Pension and other postretirement plans:
Amortization of net prior service cost included in net income	120			(48		)	72			105			(43		)	62
Amortization of net actuarial (gain) loss included in net income	(1,568		)	627			(941		)	289			(115		)	174
	(1,448		)	579			(869		)	394			(158		)	236
Cash flow hedge:
Loss for the period	(19		)	4			(15		)	—			—			—
Other Comprehensive Income (Loss)	$	22,147		$	(5,008	)	$	17,139		$	(14,536	)	$	3,766		$	(10,770	)

16

	Six Months Ended June 30
	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	$	23,306		$	—		$	23,306		$	(1,276	)	$	—		$	(1,276	)
Unrealized gains (losses) on available-for-sale securities:
Unrealized gains (losses) for the period, net	23,534			(9,414		)	14,120			(4,964		)	1,986			(2,978		)
Reclassification of realized gain on sale of available-for-sale securities included in net income	—			—			—			(6,256		)	2,502			(3,754		)
	23,534			(9,414		)	14,120			(11,220		)	4,488			(6,732		)
Pension and other postretirement plans:
Amortization of net prior service cost included in net income	240			(96		)	144			209			(84		)	125
Amortization of net actuarial (gain) loss included in net income	(3,391		)	1,356			(2,035		)	579			(231		)	348
	(3,151		)	1,260			(1,891		)	788			(315		)	473
Cash flow hedge:
Loss for the period	(143		)	29			(114		)	—			—			—
Other Comprehensive Income (Loss)	$	43,546		$	(8,125	)	$	35,421		$	(11,708	)	$	4,173		$	(7,535	)

The accumulated balances related to each component of other comprehensive income (loss) are as follows:

(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	23,306			14,120		—			(172		)	37,254
Net amount reclassified from accumulated other comprehensive income (loss)	—			—		(1,891		)	58			(1,833		)
Other comprehensive income (loss), net of tax	23,306			14,120		(1,891		)	(114		)	35,421
Balance as of June 30, 2017	$	(3,692	)	$	107,051	$	168,939		$	(391	)	$	271,907

The amounts and line items of reclassifications out of Accumulated Other Comprehensive Income (Loss) are as follows:

	Three Months Ended   June 30						Six Months Ended   June 30						Affected Line Item in the Condensed Consolidated Statement of Operations
(in thousands)	2017			2016			2017			2016
Unrealized Gains on Available-for-sale Securities:
Realized gain for the period	$	—		$	(4,502	)	$	—		$	(6,256	)	Other income, net
	—			1,801			—			2,502			Provision for Income Taxes
	—			(2,701		)	—			(3,754		)	Net of Tax
Pension and Other Postretirement Plans:
Amortization of net prior service cost	120			105			240			209			(1)
Amortization of net actuarial (gain) loss	(1,568		)	289			(3,391		)	579			(1)
	(1,448		)	394			(3,151		)	788			Before tax
	579			(158		)	1,260			(315		)	Provision for Income Taxes
	(869		)	236			(1,891		)	473			Net of Tax
Cash Flow Hedge
	41			—			72			—			Interest expense
	(8		)	—			(14		)	—			Provision for Income Taxes
	33			—			58			—			Net of Tax
Total reclassification for the period	$	(836	)	$	(2,465	)	$	(1,833	)	$	(3,281	)	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).

17

11. 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.

Kaplan subsidiaries were subject to two unsealed cases filed by former employees that include, among other allegations, claims under the False Claims Act relating to eligibility for Title IV funding. The U.S. Government declined to intervene in all cases, and, as previously reported, court decisions either dismissed the cases in their entirety or narrowed the scope of their allegations. The two cases are captioned: United States of America ex rel. Carlos Urquilla-Diaz et al. v. Kaplan University et al. (“Diaz”, unsealed March 25, 2008) and United States of America ex rel. Charles Jajdelski v. Kaplan Higher Education Corp. et al. (“Jajdelski”, unsealed January 6, 2009).

On August 17, 2011, the U.S. District Court for the Southern District of Florida issued a series of rulings in the Diaz case, which actually included three separate complainants: Diaz, Wilcox and Gillespie. The court dismissed the Wilcox complaint in its entirety; dismissed all False Claims Act allegations in the Diaz complaint, leaving only an individual employment claim; and dismissed in part the Gillespie complaint limiting the scope and time frame of its False Claims Act allegations regarding compliance with the U.S. Federal Rehabilitation Act. On July 16, 2013, the court entered summary judgment in favor of the Company on all remaining claims in the Gillespie complaint and on March 11, 2015, the U.S. Court of Appeals for the Eleventh Judicial Circuit affirmed that dismissal ending the Gillespie claims in Kaplan’s favor. On October 31, 2012, the court entered summary judgment in favor of the Company as to the sole remaining employment claim in the Diaz complaint. And, on March 11, 2015, the appellate court affirmed the summary judgment on all issues in the Diaz case except the court reversed and remanded Diaz’s claim that incentive compensation for admissions representatives was improperly based solely on enrollments in violation of the Title IV regulations. On July 13, 2017, the District Court again granted summary judgment on this final issue in the Diaz case in Kaplan’s favor, ending the case at the U.S. District Court level. The plaintiff has 60 days to appeal.

On July 7, 2011, the U.S. District Court for the District of Nevada dismissed the Jajdelski complaint in its entirety and entered a final judgment in favor of Kaplan. On February 13, 2013, the U.S. Circuit Court for the Ninth Judicial Circuit affirmed the dismissal in part and reversed the dismissal on one allegation under the False Claims Act relating to eligibility for Title IV funding based on claims of false attendance. The surviving claim was remanded to the District Court, where Kaplan was again granted summary judgment on March 9, 2015. Plaintiff has appealed this judgment and briefing is complete. In March 2017, the Appellate Court denied the appeal and ruled fully in Kaplan’s favor and Jajdelski filed a motion to re-hear the matter. On May 12, 2017, the Court of Appeals issued its Mandate ending the case and relinquishing jurisdiction.

Despite the sale of the nationally accredited Kaplan Higher Education Campuses business, Kaplan retains liability for these claims.

Department of Education (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.

18

12. 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:

	Three Months Ended June 30						Six Months Ended June 30
(in thousands)	2017			2016			2017			2016
Operating Revenues
Education	$	386,499		$	419,213		$	759,396		$	820,289
Television broadcasting	106,102			96,520			197,598			188,538
Other businesses	183,486			113,269			301,810			221,985
Corporate office	—			—			—			—
Intersegment elimination	—			(69		)	—			(139		)
	$	676,087		$	628,933		$	1,258,804		$	1,230,673
Income (Loss) from Operations
Education	$	32,925		$	32,892		$	41,956		$	47,380
Television broadcasting	39,264			44,215			65,233			85,435
Other businesses	(8,918		)	(5,062		)	(19,482		)	(10,792		)
Corporate office	5,090			2,095			9,708			3,989
	$	68,361		$	74,140		$	97,415		$	126,012
Equity in Earnings (Losses) of Affiliates, Net	1,331			(891		)	1,980			113
Interest Expense, Net	(7,862		)	(7,250		)	(14,628		)	(14,607		)
Other Income, Net	4,069			19,000			4,918			34,096
Income Before Income Taxes	$	65,899		$	84,999		$	89,685		$	145,614
Depreciation of Property, Plant and Equipment
Education	$	8,325		$	10,242		$	16,909		$	21,345
Television broadcasting	2,991			2,450			5,585			4,827
Other businesses	4,264			3,073			7,448			6,100
Corporate office	291			280			581			534
	$	15,871		$	16,045		$	30,523		$	32,806
Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets
Education	$	1,323		$	1,704		$	2,443		$	3,385
Television broadcasting	970			63			1,872			126
Other businesses	17,462			4,511			22,276			9,029
Corporate office	—			—			—			—
	$	19,755		$	6,278		$	26,591		$	12,540
Net Pension (Credit) Expense
Education	$	2,153		$	3,018		$	4,859		$	6,127
Television broadcasting	479			418			972			857
Other businesses	415			306			898			560
Corporate office	(17,876		)	(16,008		)	(36,246		)	(31,869		)
	$	(14,829	)	$	(12,266	)	$	(29,517	)	$	(24,325	)

Asset information for the Company’s business segments are as follows:

	As of
(in thousands)	June 30, 2017		December 31, 2016
Identifiable Assets
Education	$	1,494,736	$	1,479,267
Television broadcasting	451,296		336,631
Other businesses	946,499		796,935
Corporate office	250,071		455,209
	$	3,142,602	$	3,068,042
Investments in Marketable Equity Securities	447,763		424,229
Investments in Affiliates	67,812		58,806
Prepaid Pension Cost	850,262		881,593
Total Assets	$	4,508,439	$	4,432,670

19

The Company’s education division comprises the following operating segments:

	Three Months Ended						Six Months Ended
	June 30						June 30
(in thousands)	2017			2016			2017			2016
Operating Revenues
Higher education	$	139,204		$	157,980		$	283,514		$	323,529
Test preparation	75,730			79,349			140,298			145,811
Kaplan international	171,747			182,325			336,309			351,612
Kaplan corporate and other	57			18			71			143
Intersegment elimination	(239		)	(459		)	(796		)	(806		)
	$	386,499		$	419,213		$	759,396		$	820,289
Income (Loss) from Operations
Higher education	$	17,711		$	17,237		$	30,315		$	38,543
Test preparation	5,741			7,036			2,877			4,726
Kaplan international	15,954			16,479			23,661			21,376
Kaplan corporate and other	(6,451		)	(7,811		)	(14,920		)	(17,216		)
Intersegment elimination	(30		)	(49		)	23			(49		)
	$	32,925		$	32,892		$	41,956		$	47,380
Depreciation of Property, Plant and Equipment
Higher education	$	3,249		$	3,993		$	6,680		$	8,168
Test preparation	1,332			1,615			2,673			3,396
Kaplan international	3,609			4,319			7,291			9,379
Kaplan corporate and other	135			315			265			402
	$	8,325		$	10,242		$	16,909		$	21,345
Amortization of Intangible Assets	$	1,323		$	1,704		$	2,443		$	3,385
Pension Expense
Higher education	$	2,044		$	1,905		$	4,088		$	3,810
Test preparation	911			768			1,822			1,536
Kaplan international	87			67			174			134
Kaplan corporate and other	(889		)	278			(1,225		)	647
	$	2,153		$	3,018		$	4,859		$	6,127

Asset information for the Company’s education division is as follows:

	As of
(in thousands)	June 30, 2017		December 31, 2016
Identifiable assets
Higher education	$	339,304	$	373,127
Test preparation	133,482		133,709
Kaplan international	1,000,943		950,922
Kaplan corporate and other	21,007		21,509
	$	1,494,736	$	1,479,267

20

Item 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition.

This analysis should be read in conjunction with the condensed consolidated financial statements and the notes thereto.

Results of Operations

The Company reported income attributable to common shares of $42.0 million ($7.46 per share) for the second quarter of 2017, compared to $60.8 million ($10.76 per share) for the second quarter of 2016.

Items included in the Company’s net income for the second quarter of 2017:

• a $9.2 million goodwill and other long-lived asset impairment charge in other businesses (after-tax impact of $5.8 million, or $1.03 per share); and

• $3.5 million in non-operating foreign currency gains (after-tax impact of $2.2 million, or $0.39 per share).

Items included in the Company’s net income for the second quarter of 2016:

• a $38.6 million non-operating gain from the sales of land and marketable equity securities (after-tax impact of$23.9 million or $4.23 per share);

• a $3.2 million non-operating gain arising from the formation of a joint venture (after-tax impact of $1.7 million, or$0.29per share);

• $24.1 million in non-operating foreign currency losses (after-tax impact of $15.4 million, or $2.73 per share); and

• a favorable $5.6 million out of period deferred tax adjustment related to the Kaplan Higher Education (KHE) goodwill impairment recorded in the third quarter of 2015 ($1.00 per share).

Revenue for the second quarter of 2017 was $676.1 million, up 7% from $628.9 million in the second quarter of 2016. Revenues increased at the television broadcasting division and in other businesses, offset by a decline at the education division. The Company reported operating income of $68.4 million for the second quarter of 2017, compared to $74.1 million for the second quarter of 2016. The operating income decline is driven by lower earnings at the television broadcasting division and in other businesses.

On April 27, 2017, certain Kaplan subsidiaries entered into a Contribution and Transfer Agreement (Transfer Agreement) to contribute Kaplan University (KU), its institutional assets and operations to a new, nonprofit, public-benefit corporation (New University) affiliated with Purdue University (Purdue) in exchange for a Transition and Operations Support Agreement (TOSA) to provide key non-academic operations support to New University for an initial term of 30 years with a buy-out option after six years. The transfer does not include any of the assets of Kaplan University School of Professional and Continuing Education (KU-PACE), which provides professional training and exam preparation for professional certifications and licensures, nor does it include the transfer of other Kaplan businesses such as Kaplan Test Preparation and Kaplan International.

Consummation of the transactions contemplated by the Transfer Agreement is subject to various closing conditions, including, among others, regulatory approvals from the U.S. Department of Education, the Indiana Commission for Higher Education and HLC, which is the regional accreditor of both Purdue and KU, and certain other state educational agencies and accreditors of programs. Kaplan is unable to predict with certainty when and if such approvals will be obtained; however, all approvals may not be received until the first quarter of 2018. If the transaction is not consummated by April 30, 2018, either party may terminate the Transfer Agreement.

For the first six months of 2017, the company reported income attributable to common shares of $63.1 million ($11.21 per share), compared to $98.5 million ($17.33 per share) for the first six months of 2016.

Items included in the Company’s net income for the first six months of 2017:

• a $9.2 million goodwill and other long-lived asset impairment charge in other businesses (after-tax impact of $5.8 million, or $1.03 per share);

• $5.2 million in non-operating foreign currency gains (after-tax impact of $3.3 million, or $0.58 per share); and

• $5.9 million in income tax benefits related to stock compensation ($1.06 per share).

21

Items included in the Company’s net income for the first six months of 2016:

• a $40.3 million non-operating gain from the sales of land and marketable equity securities (after-tax impact of$25.0 million, or $4.42 per share);

• a $22.2 million non-operating gain arising from the sale of a business and the formation of a joint venture (after-tax impact of $13.6 million, or $2.37 per share);

• $29.5 million in non-operating foreign currency losses (after-tax impact of $18.9 million, or $3.33 per share); and

• a favorable $5.6 million out of period deferred tax adjustment related to the KHE goodwill impairment recorded in the third quarter of 2015 ($1.00 per share).

Revenue for the first six months of 2017 was $1,258.8 million, up 2% from $1,230.7 million in the first six months of 2016. Revenues increased at the television broadcasting division and in other businesses, offset by a decline at the education division. The Company reported operating income of $97.4 million for the first six months of 2017, compared to $126.0 million for first six months of 2016. Operating results declined at the education and television broadcasting divisions and in other businesses.

Division Results

Education  

Education division revenue totaled $386.5 million for the second quarter of 2017, down 8% from revenue of $419.2 million for the same period of 2016. Kaplan reported operating income of $32.9 million for each of the second quarters of 2017 and 2016.

For the first six months of 2017, education division revenue totaled $759.4 million, down 7% from revenue of $820.3 million for the same period of 2016. Kaplan reported operating income of $42.0 million for the first six months of2017, compared to $47.4 million for the first six months of 2016.

A summary of Kaplan’s operating results is as follows:

	Three Months Ended								Six Months Ended
	June 30								June 30
(in thousands)	2017			2016			% Change		2017			2016			% Change
Revenue
Higher education	$	139,204		$	157,980		(12	)	$	283,514		$	323,529		(12	)
Test preparation	75,730			79,349			(5	)	140,298			145,811			(4	)
Kaplan international	171,747			182,325			(6	)	336,309			351,612			(4	)
Kaplan corporate and other	57			18			—		71			143			(50	)
Intersegment elimination	(239		)	(459		)	—		(796		)	(806		)	—
	$	386,499		$	419,213		(8	)	$	759,396		$	820,289		(7	)
Operating Income (Loss)
Higher education	$	17,711		$	17,237		3		$	30,315		$	38,543		(21	)
Test preparation	5,741			7,036			(18	)	2,877			4,726			(39	)
Kaplan international	15,954			16,479			(3	)	23,661			21,376			11
Kaplan corporate and other	(5,128		)	(6,107		)	16		(12,477		)	(13,831		)	10
Amortization of intangible assets	(1,323		)	(1,704		)	22		(2,443		)	(3,385		)	28
Intersegment elimination	(30		)	(49		)	—		23			(49		)	—
	$	32,925		$	32,892		—		$	41,956		$	47,380		(11	)

KHE includes Kaplan’s domestic postsecondary education businesses, made up of fixed-facility colleges and online postsecondary and career programs. KHE also includes the domestic professional and other continuing education businesses.

In the second quarter and first six months of 2017, KHE revenue was down 12%, due to declines in average enrollments at Kaplan University, offset by increased revenues at the domestic professional and other continuing education businesses. KHE operating results declined in the first half of 2017 due primarily to lower enrollment at Kaplan University.

New higher education student enrollments at Kaplan University declined 5%in the second quarter of 2017 and 1%for the first six months of 2017; total students at Kaplan University were 29,193 at June 30, 2017, down 13% from June 30, 2016.

22

Kaplan University enrollments at June 30, 2017 and 2016, by degree and certificate programs, are as follows:

	As of June 30
	2017		2016
Certificate	9.4	%	6.6	%
Associate’s	16.9	%	20.4	%
Bachelor’s	50.3	%	50.4	%
Master’s	23.4	%	22.6	%
	100.0	%	100.0	%

Kaplan Test Preparation (KTP) includes Kaplan’s standardized test preparation programs. KTP revenue declined 5% and 4%for the second quarter and first six months of 2017, respectively. Enrollments, excluding the new economy skills training offerings, were up 3% in the second quarter and were flat for the first six months of 2017; however, unit prices were generally lower. In comparison to 2016, KTP operating results were down 18% and 39%in the second quarter and first six months of2017, respectively, due to lower revenues. Operating losses for thenew economy skills training programs were $7.2 million and $6.9 million for the first six months of 2017 and 2016, respectively. In July 2017, Kaplan announced that Dev Bootcamp, which makes up the majority of KTP’s new economy skills training programs, will be closing operations by the end of 2017.

Kaplan International includes English-language programs, and postsecondary education and professional training businesses largely outside the United States. Kaplan International revenue declined 6% and 4% for the second quarter and first six months of 2017, respectively.On a constant currency basis, revenue was flat for the second quarter and increased 2% for the first six months of 2017, respectively, primarily due to growth in Pathways enrollments. Operating income increased 11% in the first six months of 2017, due largely to the improved Pathways and English-language results, partially offset by a decline in Singapore. Operating income declined 3% in the second quarter of 2017, due largely to a decline in Singapore.

Kaplan corporate and other represents unallocated expenses of Kaplan, Inc.’s corporate office, other minor businesses and certain shared activities.

Television Broadcasting

On January 17, 2017, the Company closed on its agreement with Nexstar Broadcasting Group, Inc. and Media General, Inc. to acquire WCWJ, a CW affiliate television station in Jacksonville, FL and WSLS, an NBC affiliate television station in Roanoke, VA for $60 million in cash and the assumption of certain pension obligations. The Company continues to operate both stations under their current network affiliations.

Revenue at the television broadcasting division increased 10% to $106.1 million in the second quarter of 2017, from $96.5 million in the same period of 2016. Excluding revenue from the two newly acquired stations, revenue increased 3% due to $5.8 million in higher retransmission revenues, offset by a $1.3 million decrease in political advertising revenue and lower network revenue. As previously disclosed, the Company’s NBC affiliates in Houston and Detroit are operating under a new contract with NBC effective January 1, 2017 that has resulted in a significant increase in network fees in 2017, compared to 2016. Operating income for the second quarter of 2017 decreased 11% to $39.3 million, from $44.2 million in the same period of 2016 due primarily to the significantly higher network fees. The Company’s television broadcasting division stations are operating under a new retransmission contract with Comcast effective April 1, 2017.

Revenue at the television broadcasting division increased 5% to $197.6 million in the first six months of 2017, from$188.5 million in the same period of 2016. Excluding revenue from the two newly acquired stations, revenue declined 1% due to a $5.3 million decrease in political advertising revenue and lower network revenue, offset by$8.8 million in higher retransmission revenues. Operating income for the first six months of 2017 decreased 24% to$65.2 million from $85.4 million in the same period of 2016, due primarily to significantly higher network fees.

23

Other Businesses

A summary of Other Businesses’ operating results is as follows:

	Three Months Ended								Six Months Ended
	June 30						%		June 30						%
(in thousands)	2017			2016			Change		2017			2016			Change
Operating Revenues
Manufacturing	$	120,672		$	58,026		—		$	182,570		$	114,701		59
Healthcare	38,220			36,498			5		75,119			72,378			4
SocialCode	14,855			13,126			13		27,429			23,781			15
Other	9,739			5,619			73		16,692			11,125			50
	$	183,486		$	113,269		62		$	301,810		$	221,985		36
Operating Expenses
Manufacturing	$	124,847		$	55,177		—		$	183,080		$	110,715		65
Healthcare	37,836			37,544			1		75,661			70,905			7
SocialCode	12,251			14,581			(16	)	29,333			28,206			4
Other	17,470			11,029			58		33,218			22,951			45
	$	192,404		$	118,331		63		$	321,292		$	232,777		38
Operating Income (Loss)
Manufacturing	$	(4,175	)	$	2,849		—		$	(510	)	$	3,986		—
Healthcare	384			(1,046		)	—		(542		)	1,473			—
SocialCode	2,604			(1,455		)	—		(1,904		)	(4,425		)	57
Other	(7,731		)	(5,410		)	(43	)	(16,526		)	(11,826		)	(40	)
	$	(8,918	)	$	(5,062	)	(76	)	$	(19,482	)	$	(10,792	)	(81	)
Depreciation
Manufacturing	$	2,404		$	1,906		26		$	3,912		$	3,779		4
Healthcare	1,194			666			79		2,263			1,403			61
SocialCode	251			213			18		497			442			12
Other	415			288			44		776			476			63
	$	4,264		$	3,073		39		$	7,448		$	6,100		22
Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets
Manufacturing	$	15,734		$	2,816		—		$	18,811		$	5,633		—
Healthcare	1,644			1,674			(2	)	3,298			3,355			(2	)
SocialCode	84			—			—		167			—			—
Other	—			21			—		—			41			—
	$	17,462		$	4,511		—		$	22,276		$	9,029		—
Pension Expense
Manufacturing	$	22		$	20		10		$	47		$	38		24
Healthcare	166			—			—		332			—			—
SocialCode	142			147			(3	)	296			271			9
Other	85			139			(39	)	223			251			(11	)
	$	415		$	306		36		$	898		$	560		60

Manufacturing includes four businesses: Dekko, a manufacturer of electrical workspace solutions, architectural lighting and electrical components and assemblies; Joyce/Dayton Corp., a Dayton, OH-based manufacturer of screw jacks and other linear motion systems; Forney, a global supplier of products and systems that control and monitor combustion processes in electric utility and industrial applications; and 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 that the Company acquired in April 2017. In September 2016, Dekko acquired Electri-Cable Assemblies (ECA), a Shelton, CT-based manufacturer of power, data and electrical solutions for the office furniture industry.

In the second quarter of 2017, the Company recorded a $9.2 million goodwill and other long-lived asset impairment charge at Forney, due to lower than expected revenues resulting from sluggish overall demand for its energy products. Excluding this impairment charge, manufacturing revenues and operating income increased in the first six months of 2017 due to the Hoover acquisition and growth and improved results at Dekko, including the ECA acquisition.

The Graham Healthcare Group (GHG) provides home health and hospice services in three states. In June 2016, the Company acquired the outstanding 20% redeemable noncontrolling interest in Residential Healthcare (Residential). Also in June 2016, Celtic Healthcare (Celtic) and Residential combined their business operations and the Company now owns 90% of the combined entity, known as GHG. Healthcare revenues increased 4% in the first six months of 2017, while operating results were down, due largely to increased bad debt expense and higher

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information systems and other integration costs. In the second quarter of 2016, GHG incurred approximately $2.0 million in expenses in conjunction with the June 2016 transactions discussed above. At the end of June 2017, GHG acquired Hometown Home Health and Hospice, a Lapeer, MI-based healthcare services provider.

In June 2016, Residential and a Michigan hospital formed a joint venture to provide home health services to West Michigan patients. Residential manages the operations of the joint venture and holds a 40% interest. The pro rata operating results of the joint venture are included in the Company’s equity in earnings of affiliates. In connection with this June 2016 transaction, the Company recorded a pre-tax gain of $3.2 million in the second quarter of 2016 that is included in other non-operating income.

SocialCode is a provider of marketing solutions on social, mobile and video platforms. SocialCode revenues increased 13% and 15% in the second quarter and for the first six months of 2017, due to growth in digital advertising service revenues. SocialCode reported operating income of $2.6 million and an operating loss of $1.9 million for the second quarter and first six months of 2017, compared to operating losses of $1.5 million and $4.4 million in the second quarter and first six months of 2016. The improved results include a $4.7 million and $3.9 million credit related to SocialCode’s phantom equity plans in the second quarter and first six months of 2017, respectively. As of June 30, 2017, the accrual balance related to these plans is $18.1 million.

Other businesses also include Slate and Foreign Policy, which publish online and print magazines and websites; and two investment stage businesses, Panoply and CyberVista. Losses from each of these businesses in the first six months of 2017 adversely affected operating results.

Corporate Office

Corporate office includes the expenses of the Company’s corporate office, the pension credit for the Company’s traditional defined benefit plan and certain continuing obligations related to prior business dispositions. The total pension credit for the Company’s traditional defined benefit plan was $36.4 million and $32.1 million in the first six months of 2017 and 2016, respectively.

Without the pension credit, corporate office expenses declined slightly in the first six months of 2017.

Equity in Earnings of Affiliates

At June 30, 2017, the Company held interests in a number of home health and hospice joint ventures, and interests in several other affiliates. The Company recorded equity in earnings of affiliates of $1.3 million for the second quarter of 2017, compared to losses of $0.9 million for the second quarter of 2016. The Company recorded equity in earnings of affiliates of $2.0 million for the first six months of 2017, compared to $0.1 million for the first six months of 2016.

Other Non-Operating Income (Expense)

The Company recorded total other non-operating income, net, of $4.1 million for the second quarter of 2017, compared to $19.0 million for the second quarter of 2016. The 2017 amounts included $3.5 million in foreign currency gains and other items. The 2016 amounts included a $34.1 million gain on the sale of land; a$4.5 milliongain on the sale of marketable equity securities; a $3.2 million gain on the Residential joint venture transaction and other items, offset by $24.1 million in foreign currency losses and other items.

The Company recorded total other non-operating income, net, of $4.9 million for the first six months of 2017, compared to $34.1 million for the first six months of 2016. The 2017 amounts included $5.2 million in foreign currency gains, offset by other items. The 2016 amounts included a $34.1 million gain on the sale of land; an $18.9 million gain on the sale of a business; a $6.3 million gain on the sale of marketable equity securities; a$3.2 million gain on the Residential joint venture transaction and other items, offset by $29.5 million in foreign currency losses.

Net Interest Expense and Related Balances

The Company incurred net interest expense of $7.9 million and $14.6 million for the second quarter and first six months of 2017, compared to $7.3 million and $14.6 millionfor the second quarter and first six months of 2016. At June 30, 2017, the Company had $496.2 million in borrowings outstanding at an average interest rate of 6.2% and cash, marketable equity securities and other investments of $925.1 million.

Provision for Income Taxes

The Company’s effective tax rate for the first six months of 2017 was 29.7%, compared to 31.7% for the first six months of 2016. The low effective tax rate in the first six months of 2017 is due to a $5.9 million income tax benefit related to the vesting of restricted stock awards. In the first quarter of 2017, the Company adopted a new accounting standard that requires all excess income tax benefits and deficiencies from stock compensation to be

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recorded as discrete items in the provision for income taxes. Excluding this $5.9 million benefit, the overall income tax rate in the first six months of 2017 was 36.3%.

In the second quarter of 2016, the Company benefited from a favorable $5.6 million out of period deferred tax adjustment related to the KHE goodwill impairment recorded in the third quarter of 2015. Excluding this adjustment, the Company’s effective tax rate for the first six months of 2016 was 35.6%.

Earnings Per Share

The calculation of diluted earnings per share for the second quarter and first six months of 2017 was based on 5,577,275 and 5,573,167 weighted average shares outstanding, compared to 5,574,336 and 5,612,959 for thesecond quarter and first six months of 2016. At June 30, 2017, there were 5,593,030 shares outstanding. On May 14, 2015, the Board of Directors authorized the Company to acquire up to 500,000 shares of its Class B common stock; the Company has remaining authorization for 223,526 shares as of June 30, 2017.

Kaplan University Transaction

On April 27, 2017, certain Kaplan subsidiaries entered into a Contribution and Transfer Agreement (Transfer Agreement) to contribute Kaplan University (KU), its institutional assets and operations to a new, nonprofit, public-benefit corporation (New University) affiliated with Purdue University (Purdue) in exchange for a Transition and Operations Support Agreement (TOSA) to provide key non-academic operations support to New University for an initial term of 30 years with a buy-out option after six years.

Subject to the terms and conditions of the Transfer Agreement, KU, which specializes in online education and is accredited by the Higher Learning Commission of the North Central Association of Colleges and Schools (HLC), will transfer certain assets of its Title IV-authorized and accredited academic institution to New University. New University will operate as a new Indiana public university, as authorized by the Indiana legislature, affiliated with Purdue University and focused on expanding access to education for non-traditional adult learners.

New University will initially consist of the seven schools and colleges that now comprise KU (excluding the Kaplan University School of Professional and Continuing Education (KU-PACE)), which together offer more than 100 diploma, certificate, associate, bachelor, masters and doctoral degree programs, as well as 15 campus and learning center locations. Current online and campus KU students, approximately 29,000, will transfer to New University. Current full-time and adjunct faculty and staff at KU, approximately 3,000 employees, will also transfer to New University. New University will be governed by its own board of trustees that will fully control all of the functions of New University, the members of which will be appointed by Purdue. Upon approval by its accreditor, New University will have its own institutional accreditation and maintain its own faculty and administrative operations.

In addition, as part of the transfer of KU’s academic institution, students, academic personnel, faculty and operations, and property leases for KU’s campuses and learning centers, KU also will transfer Kaplan-owned academic curriculum and content related to KU courses (collectively and including such specific assets as described in the Transfer Agreement, the “Institutional Assets”). The transfer does not include any of the assets of KU-PACE, which provides professional training and exam preparation for professional certifications and licensures, nor does it include the transfer of other Kaplan businesses such as Kaplan Test Preparation and Kaplan International.

Kaplan will receive nominal cash consideration upon transfer of KU’s Institutional Assets. In exchange for KU’s Institutional Assets, upon closing of the transactions contemplated by the Transfer Agreement, the parties will enter into the TOSA. Under the TOSA, Kaplan will provide operations support activities to New University including, but not limited to, technology support, help-desk functions, human resources support for transferred faculty and employees, admissions support, financial aid administration, marketing and advertising, back-office business functions, international student recruiting and certain test preparation services.

Pursuant to the TOSA, Kaplan is not entitled to receive any reimbursement of costs incurred in providing support functions, or any fee, unless and until New University has first covered all of its operating costs. In addition, during each of New University’s first five years, prior to any payment to Kaplan, New University is entitled to a priority payment of $10 million per year beyond costs, which will be paid out of New University’s revenue. To the extent New University’s revenue is insufficient to pay the $10 million per year priority payment, Kaplan is required to advance an amount to New University to cover such insufficiency. In addition, if New University achieves cost savings in its budgeted operating costs, then New University may be entitled to a payment equal to 20 percent of such savings (the “Efficiency Payment”). To the extent that there are sufficient revenues to pay the Efficiency Payment, pay the priority payment and to reimburse New University for its direct expenses, Kaplan will receive reimbursement for Kaplan’s costs of providing the support activities in addition to a fee equal to 12.5 percent of New University’s revenue.

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The TOSA has a 30-year initial term, which will automatically renew for five-year periods unless terminated. After the sixth year, New University has the right to terminate the agreement upon payment of a termination fee equal to 1.25 times New University’s revenue for the preceding 12-month period (the “Buy-out Fee”), which payment would be made pursuant to a 10-year note, and at New University’s election, it may receive for no additional consideration certain assets used by Kaplan to provide the support activities pursuant to the TOSA. At the end of the 30-year term, if New University does not renew the TOSA, New University would be obligated to make a final payment of six times the fees paid or payable during the preceding 12-month period, which payment would be made pursuant to a 10-year note, and at New University’s election, it may receive for no additional consideration certain assets used by Kaplan to provide the support activities pursuant to the TOSA.

Either party may terminate the TOSA at any time if New University generates (i) $25 million in cash operating losses for three consecutive years or (ii) aggregate cash operating losses greater than $75 million at any point during the initial term. Operating loss is defined as the amount of revenue New University generates minus the sum of (1) New University’s and Kaplan’s respective costs in performing academic and support functions and (2) the $10 million priority payment to New University in each of the first five years. Upon termination for any reason, New University would retain the assets that Kaplan contributed pursuant to the Transfer Agreement. Each party also has certain termination rights in connection with a material default or material breach of the TOSA by the other party.

Kaplan, on the one hand, and Purdue, on the other hand, will indemnify each other for damages arising from the indemnifying party’s breaches of its representations and warranties and covenants under the Transfer Agreement as well as for damages arising from certain specified liabilities, subject to certain limitations set forth in the Transfer Agreement.

Consummation of the transactions contemplated by the Transfer Agreement is subject to various closing conditions, including, among others, regulatory approvals from the U.S. Department of Education, the Indiana Commission for Higher Education and HLC, which is the regional accreditor of both Purdue and Kaplan University, and certain other state educational agencies and accreditors of programs. Kaplan is unable to predict with certainty when and if such approvals will be obtained; however, all approvals may not be received until the first quarter of 2018. If the transaction is not consummated by April 30, 2018, either party may terminate the Transfer Agreement.

Kaplan Higher Education (KHE) Regulatory Matters

Gainful Employment. On June 15, 2017, the Department of Education (ED) announced its intention to negotiate issues related to gainful employment. On July 5, 2017, the ED released in the Federal Register an announcement that the Department will allow additional time, until July 1, 2018, for institutions to comply with certain disclosure requirements in the GE regulations. The Department also extended the deadline for all programs to file supporting documents for their alternate earnings appeals, to a date not yet determined. The ED further indicated that it will issue a Federal Register notice specifically establishing new deadlines.

Borrower Defense to Repayment Regulations.The final rule was scheduled to be effective July 1, 2017. However, prior to the effective date, on June 14, 2017, the ED delayed implementation of a large portion of the rule.

Financial Condition: Capital Resources and Liquidity

Acquisitions, Dispositions and Exchanges

Acquisitions.  In the first six months of 2017, the Company acquired six businesses, two in its education division, two in its television broadcasting division and two in other businesses for $318.7 million in cash and contingent consideration, and the assumption of $59.1 million in certain pension and postretirement obligations.

At the end of June 2017, Graham Healthcare Group (GHG) acquired a 100% interest in Hometown Home Health and Hospice, a Lapeer, MI-based healthcare services provider by purchasing all of its issued and outstanding shares. This acquisition expands GHG’s service area in Michigan. GHG is included in other businesses.

In April 2017, the Company acquired 97.72% of the issued and outstanding shares of 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 $206.8 million, net of cash acquired. The fair value of the redeemable noncontrolling interest in Hoover was $3.7 million at the acquisition date, determined using a market approach. This acquisition is consistent with the Company’s ongoing strategy of investing in companies with a history of profitability and strong management. Hoover is included in other businesses.

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.

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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.

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 rationale for these acquisitions was 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.

Sale of Businesses. In February 2017, GHG completed the sale of Celtic Healthcare of Maryland.

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 June 30, 2017.

Capital Expenditures

During the first six months of 2017, the Company’s capital expenditures totaled $27.9 million. This amount includes assets acquired during the year, whereas the amounts reflected in the Company’s Condensed Statements of Cash Flows are based on cash payments made during the relevant periods. The Company estimates that its capital expenditures will be in the range of $75 million to $85 million in 2017.

Liquidity

The Company’s borrowings were $496.2 million and $491.8 million, at June 30, 2017 and December 31, 2016, respectively.

At June 30, 2017, the Company had cash and cash equivalents, restricted cash and investments in marketable securities and other investments totaling $925.1 million, compared with $1,119.1 million at December 31, 2016. The Company’s net cash provided by operating activities, as reported in the Company’s Condensed Consolidated Statements of Cash Flows, was $131.6 million for the first six months of 2017, compared to $146.6 million for the first six months of 2016. The decrease is due to increased current year payments to vendors, and a large reduction in the income tax receivable in the prior year, offset by significant cash receipts from customers received in the first half of 2017 compared to 2016.

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On June 29, 2015, the Company entered into a credit agreement (the Credit Agreement) providing for a U.S. $200 million five-year revolving credit facility (the Facility). The Company may draw on the Facility for general corporate purposes. The Facility will expire on July 1, 2020, unless the Company and the banks agree to extend the term. The Credit Agreement contains terms and conditions, including remedies in the event of a default by the Company, typical of facilities of this type.

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.

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 1.5%. 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.

On May 24, 2017, Moody’s affirmed the Company’s credit ratings, but revised the outlook from Stable to Negative.

The Company’s current credit ratings are as follows:

	Moody’s	Standard & Poor’s
Long-term	Ba1	BB+

At June 30, 2017 and December 31, 2016, the Company had working capital of $842.2 million and $1,052.4 million, respectively. The Company maintains working capital levels consistent with its underlying business requirements and consistently generates cash from operations in excess of required interest or principal payments. The Company expects to fund its estimated capital needs primarily through existing cash balances and internally generated funds. In management’s opinion, the Company will have sufficient liquidity to meet its various cash needs within the next 12 months.

In July 2016, Kaplan International Holdings Limited (KIHL) entered into an agreement with University of York International Pathway College LLP (York International College) to loan the LLP approximately £25 million over the next eighteen months, to construct an academic building in the UK to be used by the College. York International College is a limited liability partnership joint venture between Kaplan York Limited (a subsidiary of Kaplan International Colleges UK Limited) and a subsidiary of the University of York, that operates a pathways college. The loan will be repayable over 25 years at an interest rate of 7% and the loan is guaranteed by the University of York. While there is no strict requirement to make annual principal and interest payments, interest will be rolled up and accrue interest at 7% if no such payments are made. The loan becomes due and payable if the partnership agreement with Kaplan is terminated. In the second half of 2016, KIHL advanced approximately £11.0 million to York International College. In the first six months of 2017, there was no additional advance made.

There were no other significant changes to the Company’s contractual obligations or other commercial commitments from those disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

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Forward-Looking Statements

This report contains certain forward-looking statements that are based largely on the Company’s current expectations. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results and achievements to differ materially from those expressed in the forward-looking statements. For more information about these forward-looking statements and related risks, please refer to the section titled “Forward-Looking Statements” in Part I of the Company’s Annual Report on Form 10-K.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

The Company is exposed to market risk in the normal course of its business due primarily to its ownership of marketable equity securities, which are subject to equity price risk; to its borrowing and cash-management activities, which are subject to interest rate risk; and to its foreign business operations, which are subject to foreign exchange rate risk. The Company’s market risk disclosures set forth in its 2016 Annual Report filed on Form 10-K have not otherwise changed significantly.

Item 4. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures

An evaluation was performed by the Company’s management, with the participation of the Company’s Chief Executive Officer (the Company’s principal executive officer) and the Company’s Senior Vice President-Finance (the Company’s principal financial officer), of the effectiveness of the Company’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), as of June 30, 2017. Based on that evaluation, the Company’s Chief Executive Officer and Senior Vice President-Finance have concluded that the Company’s disclosure controls and procedures, as designed and implemented, are effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms and is accumulated and communicated to management, including the Chief Executive Officer and Senior Vice President-Finance, in a manner that allows timely decisions regarding required disclosure.

(b) Changes in Internal Control Over Financial Reporting

There has been no change in the Company’s internal control over financial reporting during the quarter ended June 30, 2017 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 6. Exhibits.

Exhibit Number	Description
2.1	Contribution and Transfer Agreement, dated April 27, 2017, by and among Kaplan Higher Education, LLC, Iowa College Acquisition, LLC, Purdue University, and Purdue New U, Inc. (incorporated by reference to the Company’s Current Report on Form 8-K filed April 27, 2017). *
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 June 30, 2017, formatted in Extensible Business Reporting Language (XBRL): (i) Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2107 and 2016, (ii) Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2017 and 2016, (iii) Condensed Consolidated Balance Sheets as of June 30, 2017 and December 31, 2016, (iv) Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 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 hereby undertakes to furnish supplementally a copy of any omitted exhibit or schedule to such agreement to the U.S. Securities and Exchange Commission upon request.

** Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	GRAHAM HOLDINGS COMPANY
	(Registrant)
Date: August 2, 2017	/s/ Timothy J. O’Shaughnessy
	Timothy J. O’Shaughnessy, President & Chief Executive Officer (Principal Executive Officer)
Date: August 2, 2017	/s/ Wallace R. Cooney
	Wallace R. Cooney, Senior Vice President-Finance (Principal Financial Officer)

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EX-31.1

Exhibit 31.1

RULE 13a-14(a)/15d-14(a) CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Timothy J. O’Shaughnessy, Chief Executive Officer (principal executive officer) of Graham Holdings Company (the “Registrant”), certify that:

1.I have reviewed this quarterly report on Form 10-Q of the Registrant;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4.The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(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

5.The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of Registrant’s board of directors (or persons performing the equivalent functions):

(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

Timothy J. O’Shaughnessy

Chief Executive Officer

August 2, 2017

EX-31.2

Exhibit 31.2

RULE 13a-14(a)/15d-14(a) CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Wallace R. Cooney, Senior Vice President-Finance (principal financial officer) of Graham Holdings Company (the “Registrant”), certify that:

1.I have reviewed this quarterly report on Form 10-Q of the Registrant;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4.The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(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

5.The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of Registrant’s board of directors (or persons performing the equivalent functions):

(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

Wallace R. Cooney

Senior Vice President–Finance

August 2, 2017

EX-32

Exhibit 32

SECTION 1350 CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER AND THE CHIEF FINANCIAL

OFFICER

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Graham Holdings Company (the “Company”) on Form 10-Q for the period ended June 30, 2017 (the “Report”), Timothy J. O'Shaughnessy, Chief Executive Officer of the Company and Wallace R. Cooney, Senior Vice President-Finance of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(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

Timothy J. O’Shaughnessy

Chief Executive Officer

August 2, 2017

/s/ Wallace R. Cooney

Wallace R. Cooney

Senior Vice President–Finance

August 2, 2017

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Jul. 28, 2017
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q2
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		4,628,229

XML

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Operating Revenues [Abstract]
Education	$ 386,698	$ 419,144	$ 759,673	$ 820,150
Advertising	73,532	70,901	137,648	139,059
Other	215,857	138,888	361,483	271,464
Total Operating Revenues	676,087	628,933	1,258,804	1,230,673
Operating Costs and Expenses [Abstract]
Operating	358,252	296,033	658,918	587,665
Selling, general and administrative	213,848	236,437	445,357	471,650
Depreciation of property, plant and equipment	15,871	16,045	30,523	32,806
Amortization of intangible assets	10,531	6,278	17,367	12,540
Impairment of goodwill and other long-lived assets	9,224	0	9,224	0
Total Operating Costs and Expenses	607,726	554,793	1,161,389	1,104,661
Income from Operations	68,361	74,140	97,415	126,012
Equity in earnings (losses) of affiliates, net	1,331	(891)	1,980	113
Interest income	1,173	721	2,536	1,312
Interest expense	(9,035)	(7,971)	(17,164)	(15,919)
Other income, net	4,069	19,000	4,918	34,096
Income Before Income Taxes	65,899	84,999	89,685	145,614
Provision for Income Taxes	23,900	23,800	26,600	46,200
Net Income	41,999	61,199	63,085	99,414
Net Income Attributable to Noncontrolling Interests	(3)	(433)	(3)	(868)
Net Income Attributable to Graham Holdings Company	41,996	60,766	63,082	98,546
Net Income Attributable to Graham Holdings Company Common Stockholders	$ 41,601	$ 59,962	$ 62,489	$ 97,245
Per Share Information Attributable to Graham Holdings Company Common Stockholders
Basic net income per common share in dollars per share	$ 7.51	$ 10.82	$ 11.29	$ 17.42
Basic average number of common shares outstanding in shares	5,539	5,544	5,537	5,584
Diluted net income per common share in dollars per share	$ 7.46	$ 10.76	$ 11.21	$ 17.33
Diluted average number of common shares outstanding in shares	5,577	5,574	5,573	5,613

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Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Statement of Comprehensive Income [Abstract]
Net Income	$ 41,999	$ 61,199	$ 63,085	$ 99,414
Foreign currency translation adjustments:
Translation adjustments arising during the period	9,638	(5,121)	23,306	(1,276)
Unrealized gains (losses) on available-for-sale securities:
Unrealized gains (losses) for the period, net	13,976	(5,307)	23,534	(4,964)
Reclassification of realized gain on sale of available-for-sale securities included in net income	0	(4,502)	0	(6,256)
Total unrealized gains (losses) on available-for-sale securities, before tax	13,976	(9,809)	23,534	(11,220)
Pension and other postretirement plans:
Amortization of net prior service cost included in net income	120	105	240	209
Amortization of net actuarial (gain) loss included in net income	(1,568)	289	(3,391)	579
Total pension and other postretirement plans, before tax	(1,448)	394	(3,151)	788
Cash flow hedge loss	(19)	0	(143)	0
Other Comprehensive Income (Loss), Before Tax	22,147	(14,536)	43,546	(11,708)
Income tax (expense) benefit related to items of other comprehensive income (loss)	(5,008)	3,766	(8,125)	4,173
Other Comprehensive Income (Loss), Net of Tax	17,139	(10,770)	35,421	(7,535)
Comprehensive Income	59,138	50,429	98,506	91,879
Comprehensive income attributable to noncontrolling interests	(3)	(433)	(3)	(868)
Total Comprehensive Income Attributable to Graham Holdings Company	$ 59,135	$ 49,996	$ 98,503	$ 91,011

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Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Current Assets
Cash and cash equivalents	$ 432,147	$ 648,885
Restricted cash	22,999	21,931
Investments in marketable equity securities and other investments	469,993	448,241
Accounts receivable, net	509,380	615,101
Income taxes receivable	36,131	41,635
Inventories and contracts in progress	58,760	34,818
Other current assets	68,015	60,735
Total Current Assets	1,597,425	1,871,346
Property, Plant and Equipment, Net	263,100	233,664
Investments in Affiliates	67,812	58,806
Goodwill, Net	1,279,894	1,122,954
Indefinite-Lived Intangible Assets, Net	110,060	66,026
Amortized Intangible Assets, Net	248,337	107,939
Prepaid Pension Cost	850,262	881,593
Deferred Income Taxes	15,817	17,246
Deferred Charges and Other Assets	75,732	73,096
Total Assets	4,508,439	4,432,670
Current Liabilities
Accounts payable and accrued liabilities	451,476	500,726
Deferred revenue	290,175	312,107
Current portion of long-term debt	6,492	6,128
Dividends declared	7,081	0
Total Current Liabilities	755,224	818,961
Postretirement Benefits Other Than Pensions	22,625	21,859
Accrued Compensation and Related Benefits	192,837	195,910
Other Liabilities	64,956	65,554
Deferred Income Taxes	430,406	379,092
Mandatorily Redeemable Noncontrolling Interest	12,584	12,584
Long-Term Debt	489,717	485,719
Total Liabilities	1,968,349	1,979,679
Redeemable Noncontrolling Interest	3,718	50
Preferred Stock	0	0
Common Stockholders’ Equity
Common stock	20,000	20,000
Capital in excess of par value	365,942	364,363
Retained earnings	5,630,743	5,588,942
Accumulated other comprehensive income (loss), net of tax
Cumulative foreign currency translation adjustment	(3,692)	(26,998)
Unrealized gain on available-for-sale securities	107,051	92,931
Unrealized gain on pensions and other postretirement plans	168,939	170,830
Cash Flow Hedge	(391)	(277)
Cost of Class B common stock held in treasury	(3,752,220)	(3,756,850)
Total Equity	2,536,372	2,452,941
Total Liabilities and Equity	$ 4,508,439	$ 4,432,670

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Cash Flows from Operating Activities
Net Income	$ 63,085	$ 99,414
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and goodwill and other long-lived asset impairment	57,113	45,346
Net pension benefit	(29,517)	(24,325)
Stock-based compensation expense, net	5,204	7,152
Loss (gain) on disposition of businesses, property, plant and equipment, investments and other assets, net	402	(62,273)
Foreign exchange (gain) loss	(5,194)	29,527
Equity in earnings of affiliates, net of distributions	(1,966)	(113)
Provision (benefit) for deferred income taxes	14,370	(6,806)
Net loss on sale of property, plant and equipment	0	(34,072)
Change in operating assets and liabilities:
Accounts receivable, net	122,122	49,786
Accounts payable and accrued liabilities	(63,654)	4,612
Deferred revenue	(29,706)	(19,751)
Income taxes receivable	6,374	38,989
Other assets and other liabilities, net	(7,425)	(15,459)
Other	360	502
Net Cash Provided by Operating Activities	131,568	146,601
Cash Flows from Investing Activities
Investments in certain businesses, net of cash acquired	(299,938)	(200,336)
Purchases of property, plant and equipment	(29,947)	(22,202)
Investments in equity affiliates and cost method investments	(10,527)	(2,387)
Return of investment in equity affiliate	3,527	0
Net proceeds from disposition of businesses, property, plant and equipment, investments and other assets	1,760	36,771
Proceeds from sales of marketable equity securities	0	22,837
Purchases of marketable equity securities	0	(18,274)
Net Cash Used in Investing Activities	(335,125)	(183,591)
Cash Flows from Financing Activities
Dividends paid	(14,201)	(13,736)
Common shares repurchased	(395)	(89,062)
Purchase of noncontrolling interest	0	(21,000)
Other	(4,543)	19,896
Net Cash Used in Financing Activities	(19,139)	(103,902)
Effect Of Currency Exchange Rate Change	7,026	(1,842)
Net Decrease in Cash and Cash Equivalents and Restricted Cash	(215,670)	(142,734)
Beginning Cash and Cash Equivalents and Restricted Cash	670,816	774,952
Ending Cash and Cash Equivalents and Restricted Cash	$ 455,146	$ 632,218

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Organization, Basis of Presentation and Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2017

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, several websites and print publications, and a marketing solutions provider. The Company’s other business operations include manufacturing and home health and hospice services.

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 and six months ended June 30, 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.

Out of Period Adjustment – In the second quarter of 2016, the Company benefited from a favorable $5.6 million out of period adjustment to the provision for deferred income taxes related to the $248.6 million goodwill impairment at the KHE reporting unit in the third quarter of 2015. With respect to this error, the Company has concluded that it was not material to the Company’s financial position or results of operations for 2016 and the related interim periods, based on its consideration of quantitative and qualitative factors.

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 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 the forfeiture rate 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:

	Six Months Ended June 30, 2016
	As
	Previously					As
(in thousands)	Reported			Adjustment		Adopted
Cash Flows from Operating Activities
Increase in Restricted Cash	$	(11,133	)	$	11,133	$	—
Net Cash Provided by Operating Activities	135,468			11,133		146,601
Net Decrease in Cash and Cash Equivalents and Restricted Cash	(153,867		)	11,133		(142,734		)
Cash and Cash Equivalents and Restricted Cash at Beginning of Period	754,207			20,745		774,952
Cash and Cash Equivalents and Restricted Cash at End of Period	600,340			31,878		632,218

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, with early adoption permitted. The Company early adopted this guidance in the second quarter of 2017.

In March 2017, the FASB issued new guidance that changes the presentation of net periodic pension cost and net periodic postretirement benefit cost for defined benefit plans. The guidance requires an issuer to disaggregate the service cost component of net periodic pension and postretirement benefit cost from other components. Under the new guidance, service cost will be included in the same line item(s) as other compensation costs arising from services rendered by employees during the period, while the other components will be recognized after income from operations. The guidance is effective for interim and fiscal years beginning after December 15, 2017. The guidance must be applied retrospectively; however, a practical expedient is available which permits an employer to use amounts previously disclosed in its pension and postretirement plans footnote for the prior comparative periods. The Company will adopt the new standard in the first quarter of 2018, and expects the following changes to its financial statements upon adoption, as detailed below:

	Income from Operations			Non-operating pension and postretirement benefit income		Income Before Income Taxes
(in thousands)
Three Months Ended June 30, 2017
As Reported	$	68,361		$	—	$	65,899
Adjustment	(18,620		)	18,620		—
Upon Adoption	49,741			18,620		65,899
Three Months Ended June 30, 2016
As Reported	$	74,140		$	—	$	84,999
Adjustment	(15,584		)	15,584		—
Upon Adoption	58,556			15,584		84,999
Six Months Ended June 30, 2017
As Reported	$	97,415		$	—	$	89,685
Adjustment	(37,421		)	37,421		—
Upon Adoption	59,994			37,421		89,685
Six Months Ended June 30, 2016
As Reported	$	126,012		$	—	$	145,614
Adjustment	(31,261		)	31,261		—
Upon Adoption	94,751			31,261		145,614
Twelve Months Ended December 31, 2016
As Reported	$	303,534		$	—	$	250,658
Adjustment	(80,665		)	80,665		—
Upon Adoption	222,869			80,665		250,658

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Investments

6 Months Ended

Jun. 30, 2017

Investments [Abstract]

Investments

INVESTMENTS

As of June 30, 2017 and December 31, 2016, the Company had commercial paper and money market investments of $262.8 million and $485.1 million, respectively, that are classified as cash, cash equivalents and restricted cash in the Company’s Condensed Consolidated Balance Sheets.

Investments in marketable equity securities comprised the following:

	As of
	June 30, 2017		December 31, 2016
(in thousands)
Total cost	$	269,343	$	269,343
Gross unrealized gains	178,420		154,886
Total Fair Value	$	447,763	$	424,229

There were no purchases of marketable equity securities during the first six months of 2017. The Company settled on $18.3 million of marketable equity securities purchases during the first six months of 2016, of which $17.9 million were purchased in the first six months.

There were no sales of marketable equity securities for the first six months of 2017. The total proceeds from the sales of marketable equity securities for the first six months of 2016 were $22.8 million, with realized gains of $6.3 million.

As of June 30, 2017, the Company held interests in several affiliates; Residential Healthcare (Residential) held a 40% interest in Residential Home Health Illinois, a 42.5% interest in Residential Hospice Illinois and a 40% interest in the joint venture formed between Residential and a Michigan hospital; and Celtic Healthcare (Celtic) held a 40% interest in the joint venture formed between Celtic Healthcare and Allegheny Health Network (AHN). For the three and six months ended June 30, 2017, the Company recorded $5.0 million and $9.6 million, respectively, 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.

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Acquisitions and Dispositions of Businesses

6 Months Ended

Jun. 30, 2017

Acqusitions and Dispositions [Abstract]

Acquisitions and Dispositions of Businesses

ACQUISITIONS AND DISPOSITIONS OF BUSINESSES

Acquisitions.  In the first six months of 2017, the Company acquired six businesses, two in its education division, two in its television broadcasting division and two in other businesses for $318.7 million in cash and contingent consideration, and the assumption of $59.1 million in certain pension and postretirement obligations.

At the end of June 2017, Graham Healthcare Group (GHG) acquired a 100% interest in Hometown Home Health and Hospice, a Lapeer, MI-based healthcare services provider by purchasing all of its issued and outstanding shares. This acquisition expands GHG’s service area in Michigan. GHG is included in other businesses.

In April 2017, the Company acquired 97.72% of the issued and outstanding shares of 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 $206.8 million, net of cash acquired. The fair value of the redeemable noncontrolling interest in Hoover was $3.7 million at the acquisition date, determined using a market approach. This acquisition is consistent with the Company’s ongoing strategy of investing in companies with a history of profitability and strong management. Hoover is included in other businesses.

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.

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.

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 rationale for these acquisitions was 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 $3.5 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):

	Purchase Price Allocation
	As of
(in thousands)	June 30, 2017			December 31, 2016
Accounts receivable	$	13,074		$	8,538
Inventory	25,754			878
Other current assets	593			1,420
Property, plant and equipment	30,961			3,940
Goodwill	138,000			184,118
Indefinite-lived intangible assets	41,600			53,110
Amortized intangible assets	159,107			28,267
Pension and other postretirement benefits liabilities	(59,116		)	—
Other liabilities	(10,614		)	(21,892		)
Deferred income taxes	(30,923		)	(11,009		)
Redeemable noncontrolling interest	(3,666		)	—
Aggregate purchase price, net of cash acquired	$	304,770		$	247,370

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. The Company expects to deduct $10.0 million and $22.2 million of goodwill for income tax purposes for the acquisitions completed in 2017 and 2016, respectively.

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 for the companies acquired in 2017 of $63.4 million and a nominal operating loss for the second quarter of 2017, and aggregate revenues and an operating loss of $68.9 million and $0.2 million, respectively, for the first six 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:

	Three Months Ended   June 30				Six Months Ended   June 30
(in thousands)	2017		2016		2017		2016
Operating revenues	$	680,759	$	695,357	$	1,322,559	$	1,361,804
Net income	46,718		62,638		71,330		101,717

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, GHG completed the sale of Celtic Healthcare of Maryland.

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 June 30, 2017.

Kaplan University Transaction. On April 27, 2017, certain Kaplan subsidiaries entered into a Contribution and Transfer Agreement (Transfer Agreement) to contribute Kaplan University (KU), its institutional assets and operations to a new, nonprofit, public-benefit corporation (New University) affiliated with Purdue University (Purdue) in exchange for a Transition and Operations Support Agreement (TOSA) to provide key non-academic operations support to New University for an initial term of 30 years with a buy-out option after six years. The transfer does not include any of the assets of Kaplan University School of Professional and Continuing Education (KU-PACE), which provides professional training and exam preparation for professional certifications and licensures, nor does it include the transfer of other Kaplan businesses such as Kaplan Test Preparation and Kaplan International.

Consummation of the transactions contemplated by the Transfer Agreement is subject to various closing conditions, including, among others, regulatory approvals from the U.S. Department of Education, the Indiana Commission for Higher Education and HLC, which is the regional accreditor of both Purdue and KU, and certain other state educational agencies and accreditors of programs. Kaplan is unable to predict with certainty when and if such approvals will be obtained; however, all approvals may not be received until the first quarter of 2018. If the transaction is not consummated by April 30, 2018, either party may terminate the Transfer Agreement.

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Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

GOODWILL AND OTHER INTANGIBLE ASSETS

In the second quarter of 2017, as a result of a challenging operating environment, the Forney reporting unit recorded a goodwill and other long-lived asset impairment charge of $9.2 million. The Company performed an interim review of the goodwill and other long-lived assets of the reporting unit by utilizing a discounted cash flow model to estimate the fair value. The carrying value of the reporting unit exceeded the estimated fair value, resulting in a goodwill impairment charge for the amount by which the carrying value exceeded the reporting unit’s estimated fair value.

Amortization of intangible assets for the three months ended June 30, 2017 and 2016 was $10.5 million and $6.3 million, respectively. Amortization of intangible assets for the six months ended June 30, 2017 and 2016 was $17.4 million and $12.5 million, respectively. Amortization of intangible assets is estimated to be approximately $22 million for the remainder of 2017, $37 million in 2018, $36 million in 2019, $33 million in 2020, $27 million in 2021 and $93 million thereafter.

The changes in the carrying amount of goodwill, by segment, were as follows:

(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	18,986			24,256		94,758			138,000
Impairment	—			—		(7,616		)	(7,616		)
Dispositions	—			—		(412		)	(412		)
Foreign currency exchange rate changes	26,968			—		—			26,968
Balance as of June 30, 2017
Goodwill	1,156,957			192,601		296,487			1,646,045
Accumulated impairment losses	(350,850		)	—		(15,301		)	(366,151		)
	$	806,107		$	192,601	$	281,186		$	1,279,894

The changes in carrying amount of goodwill at the Company’s education division were as follows:

(in thousands)	Higher Education			Test Preparation			Kaplan International		Total
Balance as of December 31, 2016
Goodwill	$	389,720		$	166,098		$	555,185	$	1,111,003
Accumulated impairment losses	(248,591		)	(102,259		)	—		(350,850		)
	141,129			63,839			555,185		760,153
Acquisitions	—			—			18,986		18,986
Foreign currency exchange rate changes	70			—			26,898		26,968
Balance as of June 30, 2017
Goodwill	389,790			166,098			601,069		1,156,957
Accumulated impairment losses	(248,591		)	(102,259		)	—		(350,850		)
	$	141,199		$	63,839		$	601,069	$	806,107

Other intangible assets consist of the following:

		As of June 30, 2017						As of December 31, 2016
(in thousands)	Useful Life Range	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Amortized Intangible Assets
Student and customer relationships	1–10 years (1)	$	224,280	$	66,780	$	157,500	$	129,616	$	55,863	$	73,753
Trade names and trademarks	2–10 years	56,995		31,920		25,075		55,240		29,670		25,570
Network affiliation agreements	15 years	42,600		1,302		41,298		—		—		—
Databases and technology	3–6 years (1)	19,505		3,321		16,184		5,601		4,368		1,233
Noncompete agreements	2–5 years	2,180		1,480		700		1,730		1,404		326
Other	1–8 years	13,730		6,150		7,580		12,030		4,973		7,057
		$	359,290	$	110,953	$	248,337	$	204,217	$	96,278	$	107,939
Indefinite-Lived Intangible Assets
Trade names and trademarks		$	82,810					$	65,192
FCC licenses		26,600						—
Licensure and accreditation		650						834
		$	110,060					$	66,026

____________

(1) As of December 31, 2016, the student and customer relationships’ minimum useful life was 2 years and the databases and technology’s maximum useful life was 5 years.

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Debt

6 Months Ended

Jun. 30, 2017

Debt Disclosure [Abstract]

Debt

DEBT

The Company’s borrowings consist of the following:

	As of
	June 30, 2017			December 31, 2016
(in thousands)
7.25% unsecured notes due February 1, 2019 (1)	$	399,279		$	399,052
UK Credit facility (2)	96,815			91,316
Other indebtedness	115			1,479
Total Debt	$	496,209		$	491,847
Less: current portion	(6,492		)	(6,128		)
Total Long-Term Debt	$	489,717		$	485,719

____________

(1) The carrying value is net of $0.1 million of unamortized debt issuance costs as of June 30, 2017 and December 31, 2016, respectively.

(2) The carrying value is net of $0.5 million of unamortized debt issuance costs as of June 30, 2017 and December 31, 2016, respectively.

The Company’s other indebtedness at June 30, 2017 is at an interest rate of 2% and matures in 2025.

On July 14, 2016, Kaplan entered into a Facility Agreement (the Kaplan Credit Agreement) among Kaplan International Holdings Limited, as borrower, the lenders party thereto, HSBC BANK PLC as Facility Agent, and other agents party thereto. The Kaplan Credit Agreement provides for a four-year credit facility in an aggregate principal amount of £75 million. Borrowings bear interest at a rate per annum of LIBOR plus an applicable interest rate margin between 1.25% and 1.75%, in each case determined on a quarterly basis by reference to a pricing grid 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 June 30, 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 June 30, 2017 and 2016, the Company had average borrowings outstanding of approximately $495.6 million and $400.0 million, respectively, at average annual interest rates of approximately 6.2% and 7.2%, respectively. During the three months ended June 30, 2017 and 2016, the Company incurred net interest expense of $7.9 million and $7.3 million, respectively.

During the six months ended June 30, 2017 and 2016, the Company had average borrowings outstanding of approximately $494.5 million and $399.9 million, respectively, at average annual interest rates of approximately 6.2% and 7.2%, respectively. During the six months ended June 30, 2017 and 2016, the Company incurred net interest expense of $14.6 million.

At June 30, 2017, the fair value of the Company’s 7.25% unsecured notes, based on quoted market prices (Level 2 fair value assessment), totaled $431.0 million, compared with the carrying amount of $399.3 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 June 30, 2017 approximates fair value.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2017

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:

	As of June 30, 2017
(in thousands)	Level 1		Level 2		Level 3		Total
Assets
Money market investments (1)	$	—	$	262,797	$	—	$	262,797
Marketable equity securities (3)	447,763		—		—		447,763
Other current investments (4)	6,207		16,023		—		22,230
Total Financial Assets	$	453,970	$	278,820	$	—	$	732,790
Liabilities
Deferred compensation plan liabilities (5)	$	—	$	44,840	$	—	$	44,840
Interest rate swap (6)	—		515		—		515
Mandatorily redeemable noncontrolling interest (7)	—		—		12,584		12,584
Total Financial Liabilities	$	—	$	45,355	$	12,584	$	57,939

	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.

In the second quarter of 2017, the Company recorded a goodwill and other long-lived asset impairment charge of $9.2 million. The remeasurement of the goodwill and other long-lived assets is classified as a Level 3 fair value assessment due to the significance of unobservable inputs developed in the determination of the fair value. The Company used a discounted cash flow model to determine the estimated fair value of the reporting unit and made estimates and assumptions regarding future cash flows, discount rates and long-term growth rates.

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Earnings Per Share

6 Months Ended

Jun. 30, 2017

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:

	Three Months Ended   June 30						Six Months Ended   June 30
(in thousands, except per share amounts)	2017			2016			2017			2016
Numerator:
Numerator for basic earnings per share:
Net income attributable to Graham Holdings Company common stockholders	$	41,996		$	60,766		$	63,082		$	98,546
Less: Dividends paid-common stock outstanding and unvested restricted shares	(7,080		)	(6,775		)	(21,282		)	(20,533		)
Undistributed earnings	34,916			53,991			41,800			78,013
Percent allocated to common stockholders	99.06		%	98.68		%	99.06		%	98.68		%
	34,588			53,277			41,407			76,981
Add: Dividends paid-common stock outstanding	7,013			6,685			21,082			20,264
Numerator for basic earnings per share	$	41,601		$	59,962		$	62,489		$	97,245
Add: Additional undistributed earnings due to dilutive stock options	3			4			3			5
Numerator for diluted earnings per share	$	41,604		$	59,966		$	62,492		$	97,250
Denominator:
Denominator for basic earnings per share:
Weighted average shares outstanding	5,539			5,544			5,537			5,584
Add: Effect of dilutive stock options	38			30			36			29
Denominator for diluted earnings per share	5,577			5,574			5,573			5,613
Graham Holdings Company Common Stockholders:
Basic earnings per share	$	7.51		$	10.82		$	11.29		$	17.42
Diluted earnings per share	$	7.46		$	10.76		$	11.21		$	17.33

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:

	Three Months Ended   June 30		Six Months Ended   June 30
(in thousands)	2017	2016	2017	2016
Weighted average restricted stock	29	41	28	39

The diluted earnings per share amounts for the three and six months ended June 30, 2017 and June 30, 2016 exclude the effects of 104,000 and 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 and six months ended June 30, 2017 and June 30, 2016 exclude the effects of 5,250 and 6,100 restricted stock awards, respectively, as their inclusion would have been antidilutive due to a performance condition.

In the three and six months ended June 30, 2017, the Company declared regular dividends totaling $1.27 and $3.81, respectively. In the three and six months ended June 30, 2016, the Company declared regular dividends totaling $1.21, and $3.63 respectively.

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Pension and Postretirement Plans

6 Months Ended

Jun. 30, 2017

Retirement Benefits, Description [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:

	Three Months Ended June 30						Six Months Ended June 30
(in thousands)	2017			2016			2017			2016
Service cost	$	4,591		$	5,040		$	9,505		$	10,382
Interest cost	11,979			12,845			23,965			25,918
Expected return on assets	(30,403		)	(30,226		)	(60,740		)	(60,774		)
Amortization of prior service cost	43			75			86			149
Recognized actuarial gain	(1,039		)	—			(2,333		)	—
Net Periodic Benefit	$	(14,829	)	$	(12,266	)	$	(29,517	)	$	(24,325	)

The total cost arising from the Company’s Supplemental Executive Retirement Plan (SERP) consists of the following components:

	Three Months Ended June 30				Six Months Ended June 30
(in thousands)	2017		2016		2017		2016
Service cost	$	215	$	246	$	429	$	492
Interest cost	1,058		1,096		2,116		2,192
Amortization of prior service cost	114		114		228		228
Recognized actuarial loss	443		665		887		1,330
Net Periodic Cost	$	1,830	$	2,121	$	3,660	$	4,242

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:

	As of
	June 30, 2017		December 31, 2016
U.S. equities	52	%	53	%
U.S. stock index fund	31	%	30	%
U.S. fixed income	10	%	11	%
International equities	7	%	6	%
	100	%	100	%

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 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 June 30, 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 June 30, 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 June 30, 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 $1,008.9 million and $978.8 million at June 30, 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:

	Three Months Ended June 30						Six Months Ended June 30
(in thousands)	2017			2016			2017			2016
Service cost	$	257		$	347		$	514		$	693
Interest cost	194			307			389			615
Amortization of prior service credit	(37		)	(84		)	(74		)	(168		)
Recognized actuarial gain	(972		)	(376		)	(1,945		)	(751		)
Net Periodic (Benefit) Cost	$	(558	)	$	194		$	(1,116	)	$	389

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Other Non-Operating Income

6 Months Ended

Jun. 30, 2017

Other Nonoperating Income (Expense) [Abstract]

Other Non-Operating Income

OTHER NON-OPERATING INCOME

A summary of non-operating income is as follows:

	Three Months Ended   June 30					Six Months Ended   June 30
(in thousands)	2017		2016			2017			2016
Foreign currency gain (loss), net	$	3,466	$	(24,084	)	$	5,194		$	(29,527	)
(Loss) gain on sales of businesses	—		—			(342		)	18,931
Gain on sale of land	—		34,072			—			34,072
Gain on sales of marketable equity securities (see Note 2)	—		4,502			—			6,256
Gain on the formation of a joint venture	—		3,232			—			3,232
Other, net	603		1,278			66			1,132
Total Other Non-Operating Income	$	4,069	$	19,000		$	4,918		$	34,096

In the second quarter of 2016, the Company sold the remaining portion of the Robinson Terminal real estate retained from the sale of the Publishing Subsidiaries, for a gain of $34.1 million.

In June 2016, Residential contributed assets to a joint venture entered into with a Michigan hospital in exchange for a 40% equity interest and other assets, resulting in a $3.2 million gain (see Note 3). The Company used an income and market approach to value the equity interest. The measurement of the equity interest in the joint venture is classified as a Level 3 fair value assessment due to the significance of unobservable inputs developed in the determination of the fair value.

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.

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Accumulated Other Comprehensive Income (Loss)

6 Months Ended

Jun. 30, 2017

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated Other Comprehensive Income (Loss)

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The other comprehensive income (loss) consists of the following components:

	Three Months Ended June 30
	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	$	9,638		$	—		$	9,638		$	(5,121	)	$	—		$	(5,121	)
Unrealized gains (losses) on available-for-sale securities:
Unrealized gains (losses) for the period, net	13,976			(5,591		)	8,385			(5,307		)	2,123			(3,184		)
Reclassification of realized gain on sale of available-for-sale securities included in net income	—			—			—			(4,502		)	1,801			(2,701		)
	13,976			(5,591		)	8,385			(9,809		)	3,924			(5,885		)
Pension and other postretirement plans:
Amortization of net prior service cost included in net income	120			(48		)	72			105			(43		)	62
Amortization of net actuarial (gain) loss included in net income	(1,568		)	627			(941		)	289			(115		)	174
	(1,448		)	579			(869		)	394			(158		)	236
Cash flow hedge:
Loss for the period	(19		)	4			(15		)	—			—			—
Other Comprehensive Income (Loss)	$	22,147		$	(5,008	)	$	17,139		$	(14,536	)	$	3,766		$	(10,770	)

	Six Months Ended June 30
	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	$	23,306		$	—		$	23,306		$	(1,276	)	$	—		$	(1,276	)
Unrealized gains (losses) on available-for-sale securities:
Unrealized gains (losses) for the period, net	23,534			(9,414		)	14,120			(4,964		)	1,986			(2,978		)
Reclassification of realized gain on sale of available-for-sale securities included in net income	—			—			—			(6,256		)	2,502			(3,754		)
	23,534			(9,414		)	14,120			(11,220		)	4,488			(6,732		)
Pension and other postretirement plans:
Amortization of net prior service cost included in net income	240			(96		)	144			209			(84		)	125
Amortization of net actuarial (gain) loss included in net income	(3,391		)	1,356			(2,035		)	579			(231		)	348
	(3,151		)	1,260			(1,891		)	788			(315		)	473
Cash flow hedge:
Loss for the period	(143		)	29			(114		)	—			—			—
Other Comprehensive Income (Loss)	$	43,546		$	(8,125	)	$	35,421		$	(11,708	)	$	4,173		$	(7,535	)

The accumulated balances related to each component of other comprehensive income (loss) are as follows:

(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	23,306			14,120		—			(172		)	37,254
Net amount reclassified from accumulated other comprehensive income (loss)	—			—		(1,891		)	58			(1,833		)
Other comprehensive income (loss), net of tax	23,306			14,120		(1,891		)	(114		)	35,421
Balance as of June 30, 2017	$	(3,692	)	$	107,051	$	168,939		$	(391	)	$	271,907

The amounts and line items of reclassifications out of Accumulated Other Comprehensive Income (Loss) are as follows:

	Three Months Ended   June 30						Six Months Ended   June 30						Affected Line Item in the Condensed Consolidated Statement of Operations
(in thousands)	2017			2016			2017			2016
Unrealized Gains on Available-for-sale Securities:
Realized gain for the period	$	—		$	(4,502	)	$	—		$	(6,256	)	Other income, net
	—			1,801			—			2,502			Provision for Income Taxes
	—			(2,701		)	—			(3,754		)	Net of Tax
Pension and Other Postretirement Plans:
Amortization of net prior service cost	120			105			240			209			(1)
Amortization of net actuarial (gain) loss	(1,568		)	289			(3,391		)	579			(1)
	(1,448		)	394			(3,151		)	788			Before tax
	579			(158		)	1,260			(315		)	Provision for Income Taxes
	(869		)	236			(1,891		)	473			Net of Tax
Cash Flow Hedge
	41			—			72			—			Interest expense
	(8		)	—			(14		)	—			Provision for Income Taxes
	33			—			58			—			Net of Tax
Total reclassification for the period	$	(836	)	$	(2,465	)	$	(1,833	)	$	(3,281	)	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).

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Contingencies

6 Months Ended

Jun. 30, 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.

Kaplan subsidiaries were subject to two unsealed cases filed by former employees that include, among other allegations, claims under the False Claims Act relating to eligibility for Title IV funding. The U.S. Government declined to intervene in all cases, and, as previously reported, court decisions either dismissed the cases in their entirety or narrowed the scope of their allegations. The two cases are captioned: United States of America ex rel. Carlos Urquilla-Diaz et al. v. Kaplan University et al. (“Diaz”, unsealed March 25, 2008) and United States of America ex rel. Charles Jajdelski v. Kaplan Higher Education Corp. et al. (“Jajdelski”, unsealed January 6, 2009).

On August 17, 2011, the U.S. District Court for the Southern District of Florida issued a series of rulings in the Diaz case, which actually included three separate complainants: Diaz, Wilcox and Gillespie. The court dismissed the Wilcox complaint in its entirety; dismissed all False Claims Act allegations in the Diaz complaint, leaving only an individual employment claim; and dismissed in part the Gillespie complaint limiting the scope and time frame of its False Claims Act allegations regarding compliance with the U.S. Federal Rehabilitation Act. On July 16, 2013, the court entered summary judgment in favor of the Company on all remaining claims in the Gillespie complaint and on March 11, 2015, the U.S. Court of Appeals for the Eleventh Judicial Circuit affirmed that dismissal ending the Gillespie claims in Kaplan’s favor. On October 31, 2012, the court entered summary judgment in favor of the Company as to the sole remaining employment claim in the Diaz complaint. And, on March 11, 2015, the appellate court affirmed the summary judgment on all issues in the Diaz case except the court reversed and remanded Diaz’s claim that incentive compensation for admissions representatives was improperly based solely on enrollments in violation of the Title IV regulations. On July 13, 2017, the District Court again granted summary judgment on this final issue in the Diaz case in Kaplan’s favor, ending the case at the U.S. District Court level. The plaintiff has 60 days to appeal.

On July 7, 2011, the U.S. District Court for the District of Nevada dismissed the Jajdelski complaint in its entirety and entered a final judgment in favor of Kaplan. On February 13, 2013, the U.S. Circuit Court for the Ninth Judicial Circuit affirmed the dismissal in part and reversed the dismissal on one allegation under the False Claims Act relating to eligibility for Title IV funding based on claims of false attendance. The surviving claim was remanded to the District Court, where Kaplan was again granted summary judgment on March 9, 2015. Plaintiff has appealed this judgment and briefing is complete. In March 2017, the Appellate Court denied the appeal and ruled fully in Kaplan’s favor and Jajdelski filed a motion to re-hear the matter. On May 12, 2017, the Court of Appeals issued its Mandate ending the case and relinquishing jurisdiction.

Despite the sale of the nationally accredited Kaplan Higher Education Campuses business, Kaplan retains liability for these claims.

Department of Education (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.

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Business Segments

6 Months Ended

Jun. 30, 2017

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:

	Three Months Ended June 30						Six Months Ended June 30
(in thousands)	2017			2016			2017			2016
Operating Revenues
Education	$	386,499		$	419,213		$	759,396		$	820,289
Television broadcasting	106,102			96,520			197,598			188,538
Other businesses	183,486			113,269			301,810			221,985
Corporate office	—			—			—			—
Intersegment elimination	—			(69		)	—			(139		)
	$	676,087		$	628,933		$	1,258,804		$	1,230,673
Income (Loss) from Operations
Education	$	32,925		$	32,892		$	41,956		$	47,380
Television broadcasting	39,264			44,215			65,233			85,435
Other businesses	(8,918		)	(5,062		)	(19,482		)	(10,792		)
Corporate office	5,090			2,095			9,708			3,989
	$	68,361		$	74,140		$	97,415		$	126,012
Equity in Earnings (Losses) of Affiliates, Net	1,331			(891		)	1,980			113
Interest Expense, Net	(7,862		)	(7,250		)	(14,628		)	(14,607		)
Other Income, Net	4,069			19,000			4,918			34,096
Income Before Income Taxes	$	65,899		$	84,999		$	89,685		$	145,614
Depreciation of Property, Plant and Equipment
Education	$	8,325		$	10,242		$	16,909		$	21,345
Television broadcasting	2,991			2,450			5,585			4,827
Other businesses	4,264			3,073			7,448			6,100
Corporate office	291			280			581			534
	$	15,871		$	16,045		$	30,523		$	32,806
Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets
Education	$	1,323		$	1,704		$	2,443		$	3,385
Television broadcasting	970			63			1,872			126
Other businesses	17,462			4,511			22,276			9,029
Corporate office	—			—			—			—
	$	19,755		$	6,278		$	26,591		$	12,540
Net Pension (Credit) Expense
Education	$	2,153		$	3,018		$	4,859		$	6,127
Television broadcasting	479			418			972			857
Other businesses	415			306			898			560
Corporate office	(17,876		)	(16,008		)	(36,246		)	(31,869		)
	$	(14,829	)	$	(12,266	)	$	(29,517	)	$	(24,325	)

Asset information for the Company’s business segments are as follows:

	As of
(in thousands)	June 30, 2017		December 31, 2016
Identifiable Assets
Education	$	1,494,736	$	1,479,267
Television broadcasting	451,296		336,631
Other businesses	946,499		796,935
Corporate office	250,071		455,209
	$	3,142,602	$	3,068,042
Investments in Marketable Equity Securities	447,763		424,229
Investments in Affiliates	67,812		58,806
Prepaid Pension Cost	850,262		881,593
Total Assets	$	4,508,439	$	4,432,670

The Company’s education division comprises the following operating segments:

	Three Months Ended						Six Months Ended
	June 30						June 30
(in thousands)	2017			2016			2017			2016
Operating Revenues
Higher education	$	139,204		$	157,980		$	283,514		$	323,529
Test preparation	75,730			79,349			140,298			145,811
Kaplan international	171,747			182,325			336,309			351,612
Kaplan corporate and other	57			18			71			143
Intersegment elimination	(239		)	(459		)	(796		)	(806		)
	$	386,499		$	419,213		$	759,396		$	820,289
Income (Loss) from Operations
Higher education	$	17,711		$	17,237		$	30,315		$	38,543
Test preparation	5,741			7,036			2,877			4,726
Kaplan international	15,954			16,479			23,661			21,376
Kaplan corporate and other	(6,451		)	(7,811		)	(14,920		)	(17,216		)
Intersegment elimination	(30		)	(49		)	23			(49		)
	$	32,925		$	32,892		$	41,956		$	47,380
Depreciation of Property, Plant and Equipment
Higher education	$	3,249		$	3,993		$	6,680		$	8,168
Test preparation	1,332			1,615			2,673			3,396
Kaplan international	3,609			4,319			7,291			9,379
Kaplan corporate and other	135			315			265			402
	$	8,325		$	10,242		$	16,909		$	21,345
Amortization of Intangible Assets	$	1,323		$	1,704		$	2,443		$	3,385
Pension Expense
Higher education	$	2,044		$	1,905		$	4,088		$	3,810
Test preparation	911			768			1,822			1,536
Kaplan international	87			67			174			134
Kaplan corporate and other	(889		)	278			(1,225		)	647
	$	2,153		$	3,018		$	4,859		$	6,127

Asset information for the Company’s education division is as follows:

	As of
(in thousands)	June 30, 2017		December 31, 2016
Identifiable assets
Higher education	$	339,304	$	373,127
Test preparation	133,482		133,709
Kaplan international	1,000,943		950,922
Kaplan corporate and other	21,007		21,509
	$	1,494,736	$	1,479,267

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Organization, Basis of Presentation And Recent Accounting Pronouncements (Policies)

6 Months Ended

Jun. 30, 2017

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 and six months ended June 30, 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

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

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 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 the forfeiture rate 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:

	Six Months Ended June 30, 2016
	As
	Previously					As
(in thousands)	Reported			Adjustment		Adopted
Cash Flows from Operating Activities
Increase in Restricted Cash	$	(11,133	)	$	11,133	$	—
Net Cash Provided by Operating Activities	135,468			11,133		146,601
Net Decrease in Cash and Cash Equivalents and Restricted Cash	(153,867		)	11,133		(142,734		)
Cash and Cash Equivalents and Restricted Cash at Beginning of Period	754,207			20,745		774,952
Cash and Cash Equivalents and Restricted Cash at End of Period	600,340			31,878		632,218

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, with early adoption permitted. The Company early adopted this guidance in the second quarter of 2017.

In March 2017, the FASB issued new guidance that changes the presentation of net periodic pension cost and net periodic postretirement benefit cost for defined benefit plans. The guidance requires an issuer to disaggregate the service cost component of net periodic pension and postretirement benefit cost from other components. Under the new guidance, service cost will be included in the same line item(s) as other compensation costs arising from services rendered by employees during the period, while the other components will be recognized after income from operations. The guidance is effective for interim and fiscal years beginning after December 15, 2017. The guidance must be applied retrospectively; however, a practical expedient is available which permits an employer to use amounts previously disclosed in its pension and postretirement plans footnote for the prior comparative periods. The Company will adopt the new standard in the first quarter of 2018, and expects the following changes to its financial statements upon adoption, as detailed below:

	Income from Operations			Non-operating pension and postretirement benefit income		Income Before Income Taxes
(in thousands)
Three Months Ended June 30, 2017
As Reported	$	68,361		$	—	$	65,899
Adjustment	(18,620		)	18,620		—
Upon Adoption	49,741			18,620		65,899
Three Months Ended June 30, 2016
As Reported	$	74,140		$	—	$	84,999
Adjustment	(15,584		)	15,584		—
Upon Adoption	58,556			15,584		84,999
Six Months Ended June 30, 2017
As Reported	$	97,415		$	—	$	89,685
Adjustment	(37,421		)	37,421		—
Upon Adoption	59,994			37,421		89,685
Six Months Ended June 30, 2016
As Reported	$	126,012		$	—	$	145,614
Adjustment	(31,261		)	31,261		—
Upon Adoption	94,751			31,261		145,614
Twelve Months Ended December 31, 2016
As Reported	$	303,534		$	—	$	250,658
Adjustment	(80,665		)	80,665		—
Upon Adoption	222,869			80,665		250,658

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Organization, Basis of Presentation and Recent Accounting Pronouncements (Tables)

6 Months Ended

Jun. 30, 2017

New Accounting Pronouncement, Early Adoption [Line Items]

New Accounting Pronouncement, Early Adoption

The prior period has been adjusted to reflect this adoption, as detailed below:

	Six Months Ended June 30, 2016
	As
	Previously					As
(in thousands)	Reported			Adjustment		Adopted
Cash Flows from Operating Activities
Increase in Restricted Cash	$	(11,133	)	$	11,133	$	—
Net Cash Provided by Operating Activities	135,468			11,133		146,601
Net Decrease in Cash and Cash Equivalents and Restricted Cash	(153,867		)	11,133		(142,734		)
Cash and Cash Equivalents and Restricted Cash at Beginning of Period	754,207			20,745		774,952
Cash and Cash Equivalents and Restricted Cash at End of Period	600,340			31,878		632,218

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:

	Income from Operations			Non-operating pension and postretirement benefit income		Income Before Income Taxes
(in thousands)
Three Months Ended June 30, 2017
As Reported	$	68,361		$	—	$	65,899
Adjustment	(18,620		)	18,620		—
Upon Adoption	49,741			18,620		65,899
Three Months Ended June 30, 2016
As Reported	$	74,140		$	—	$	84,999
Adjustment	(15,584		)	15,584		—
Upon Adoption	58,556			15,584		84,999
Six Months Ended June 30, 2017
As Reported	$	97,415		$	—	$	89,685
Adjustment	(37,421		)	37,421		—
Upon Adoption	59,994			37,421		89,685
Six Months Ended June 30, 2016
As Reported	$	126,012		$	—	$	145,614
Adjustment	(31,261		)	31,261		—
Upon Adoption	94,751			31,261		145,614
Twelve Months Ended December 31, 2016
As Reported	$	303,534		$	—	$	250,658
Adjustment	(80,665		)	80,665		—
Upon Adoption	222,869			80,665		250,658

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Investments (Tables)

6 Months Ended

Jun. 30, 2017

Investments [Abstract]

Investments in Marketable Equity Securities

Investments in marketable equity securities comprised the following:

	As of
	June 30, 2017		December 31, 2016
(in thousands)
Total cost	$	269,343	$	269,343
Gross unrealized gains	178,420		154,886
Total Fair Value	$	447,763	$	424,229

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Acquisitions and Dispositions of Businesses (Tables)

6 Months Ended

Jun. 30, 2017

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):

	Purchase Price Allocation
	As of
(in thousands)	June 30, 2017			December 31, 2016
Accounts receivable	$	13,074		$	8,538
Inventory	25,754			878
Other current assets	593			1,420
Property, plant and equipment	30,961			3,940
Goodwill	138,000			184,118
Indefinite-lived intangible assets	41,600			53,110
Amortized intangible assets	159,107			28,267
Pension and other postretirement benefits liabilities	(59,116		)	—
Other liabilities	(10,614		)	(21,892		)
Deferred income taxes	(30,923		)	(11,009		)
Redeemable noncontrolling interest	(3,666		)	—
Aggregate purchase price, net of cash acquired	$	304,770		$	247,370

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:

	Three Months Ended   June 30				Six Months Ended   June 30
(in thousands)	2017		2016		2017		2016
Operating revenues	$	680,759	$	695,357	$	1,322,559	$	1,361,804
Net income	46,718		62,638		71,330		101,717

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Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2017

Changes in Carrying Amount of Goodwill

The changes in the carrying amount of goodwill, by segment, were as follows:

(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	18,986			24,256		94,758			138,000
Impairment	—			—		(7,616		)	(7,616		)
Dispositions	—			—		(412		)	(412		)
Foreign currency exchange rate changes	26,968			—		—			26,968
Balance as of June 30, 2017
Goodwill	1,156,957			192,601		296,487			1,646,045
Accumulated impairment losses	(350,850		)	—		(15,301		)	(366,151		)
	$	806,107		$	192,601	$	281,186		$	1,279,894

Other Intangible Assets

Other intangible assets consist of the following:

		As of June 30, 2017						As of December 31, 2016
(in thousands)	Useful Life Range	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Amortized Intangible Assets
Student and customer relationships	1–10 years (1)	$	224,280	$	66,780	$	157,500	$	129,616	$	55,863	$	73,753
Trade names and trademarks	2–10 years	56,995		31,920		25,075		55,240		29,670		25,570
Network affiliation agreements	15 years	42,600		1,302		41,298		—		—		—
Databases and technology	3–6 years (1)	19,505		3,321		16,184		5,601		4,368		1,233
Noncompete agreements	2–5 years	2,180		1,480		700		1,730		1,404		326
Other	1–8 years	13,730		6,150		7,580		12,030		4,973		7,057
		$	359,290	$	110,953	$	248,337	$	204,217	$	96,278	$	107,939
Indefinite-Lived Intangible Assets
Trade names and trademarks		$	82,810					$	65,192
FCC licenses		26,600						—
Licensure and accreditation		650						834
		$	110,060					$	66,026

____________

(1) As of December 31, 2016, the student and customer relationships’ minimum useful life was 2 years and the databases and technology’s maximum useful life was 5 years.

Education [Member]

Changes in Carrying Amount of Goodwill

The changes in carrying amount of goodwill at the Company’s education division were as follows:

(in thousands)	Higher Education			Test Preparation			Kaplan International		Total
Balance as of December 31, 2016
Goodwill	$	389,720		$	166,098		$	555,185	$	1,111,003
Accumulated impairment losses	(248,591		)	(102,259		)	—		(350,850		)
	141,129			63,839			555,185		760,153
Acquisitions	—			—			18,986		18,986
Foreign currency exchange rate changes	70			—			26,898		26,968
Balance as of June 30, 2017
Goodwill	389,790			166,098			601,069		1,156,957
Accumulated impairment losses	(248,591		)	(102,259		)	—		(350,850		)
	$	141,199		$	63,839		$	601,069	$	806,107

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Debt (Tables)

6 Months Ended

Jun. 30, 2017

Debt Disclosure [Abstract]

Components of Debt

The Company’s borrowings consist of the following:

	As of
	June 30, 2017			December 31, 2016
(in thousands)
7.25% unsecured notes due February 1, 2019 (1)	$	399,279		$	399,052
UK Credit facility (2)	96,815			91,316
Other indebtedness	115			1,479
Total Debt	$	496,209		$	491,847
Less: current portion	(6,492		)	(6,128		)
Total Long-Term Debt	$	489,717		$	485,719

____________

(1) The carrying value is net of $0.1 million of unamortized debt issuance costs as of June 30, 2017 and December 31, 2016, respectively.

(2) The carrying value is net of $0.5 million of unamortized debt issuance costs as of June 30, 2017 and December 31, 2016, respectively.

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2017

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:

	As of June 30, 2017
(in thousands)	Level 1		Level 2		Level 3		Total
Assets
Money market investments (1)	$	—	$	262,797	$	—	$	262,797
Marketable equity securities (3)	447,763		—		—		447,763
Other current investments (4)	6,207		16,023		—		22,230
Total Financial Assets	$	453,970	$	278,820	$	—	$	732,790
Liabilities
Deferred compensation plan liabilities (5)	$	—	$	44,840	$	—	$	44,840
Interest rate swap (6)	—		515		—		515
Mandatorily redeemable noncontrolling interest (7)	—		—		12,584		12,584
Total Financial Liabilities	$	—	$	45,355	$	12,584	$	57,939

	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.

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 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:

	Three Months Ended   June 30						Six Months Ended   June 30
(in thousands, except per share amounts)	2017			2016			2017			2016
Numerator:
Numerator for basic earnings per share:
Net income attributable to Graham Holdings Company common stockholders	$	41,996		$	60,766		$	63,082		$	98,546
Less: Dividends paid-common stock outstanding and unvested restricted shares	(7,080		)	(6,775		)	(21,282		)	(20,533		)
Undistributed earnings	34,916			53,991			41,800			78,013
Percent allocated to common stockholders	99.06		%	98.68		%	99.06		%	98.68		%
	34,588			53,277			41,407			76,981
Add: Dividends paid-common stock outstanding	7,013			6,685			21,082			20,264
Numerator for basic earnings per share	$	41,601		$	59,962		$	62,489		$	97,245
Add: Additional undistributed earnings due to dilutive stock options	3			4			3			5
Numerator for diluted earnings per share	$	41,604		$	59,966		$	62,492		$	97,250
Denominator:
Denominator for basic earnings per share:
Weighted average shares outstanding	5,539			5,544			5,537			5,584
Add: Effect of dilutive stock options	38			30			36			29
Denominator for diluted earnings per share	5,577			5,574			5,573			5,613
Graham Holdings Company Common Stockholders:
Basic earnings per share	$	7.51		$	10.82		$	11.29		$	17.42
Diluted earnings per share	$	7.46		$	10.76		$	11.21		$	17.33

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:

	Three Months Ended   June 30		Six Months Ended   June 30
(in thousands)	2017	2016	2017	2016
Weighted average restricted stock	29	41	28	39

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Pension and Postretirement Plans (Tables)

6 Months Ended

Jun. 30, 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:

	Three Months Ended June 30						Six Months Ended June 30
(in thousands)	2017			2016			2017			2016
Service cost	$	4,591		$	5,040		$	9,505		$	10,382
Interest cost	11,979			12,845			23,965			25,918
Expected return on assets	(30,403		)	(30,226		)	(60,740		)	(60,774		)
Amortization of prior service cost	43			75			86			149
Recognized actuarial gain	(1,039		)	—			(2,333		)	—
Net Periodic Benefit	$	(14,829	)	$	(12,266	)	$	(29,517	)	$	(24,325	)

Schedule of Allocation of Plan Assets

The assets of the Company’s pension plan were allocated as follows:

	As of
	June 30, 2017		December 31, 2016
U.S. equities	52	%	53	%
U.S. stock index fund	31	%	30	%
U.S. fixed income	10	%	11	%
International equities	7	%	6	%
	100	%	100	%

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:

	Three Months Ended June 30				Six Months Ended June 30
(in thousands)	2017		2016		2017		2016
Service cost	$	215	$	246	$	429	$	492
Interest cost	1,058		1,096		2,116		2,192
Amortization of prior service cost	114		114		228		228
Recognized actuarial loss	443		665		887		1,330
Net Periodic Cost	$	1,830	$	2,121	$	3,660	$	4,242

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:

	Three Months Ended June 30						Six Months Ended June 30
(in thousands)	2017			2016			2017			2016
Service cost	$	257		$	347		$	514		$	693
Interest cost	194			307			389			615
Amortization of prior service credit	(37		)	(84		)	(74		)	(168		)
Recognized actuarial gain	(972		)	(376		)	(1,945		)	(751		)
Net Periodic (Benefit) Cost	$	(558	)	$	194		$	(1,116	)	$	389

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Other Non-Operating Income (Tables)

6 Months Ended

Jun. 30, 2017

Other Nonoperating Income (Expense) [Abstract]

Summary of non-operating income

A summary of non-operating income is as follows:

	Three Months Ended   June 30					Six Months Ended   June 30
(in thousands)	2017		2016			2017			2016
Foreign currency gain (loss), net	$	3,466	$	(24,084	)	$	5,194		$	(29,527	)
(Loss) gain on sales of businesses	—		—			(342		)	18,931
Gain on sale of land	—		34,072			—			34,072
Gain on sales of marketable equity securities (see Note 2)	—		4,502			—			6,256
Gain on the formation of a joint venture	—		3,232			—			3,232
Other, net	603		1,278			66			1,132
Total Other Non-Operating Income	$	4,069	$	19,000		$	4,918		$	34,096

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Accumulated Other Comprehensive Income (Loss) (Tables)

6 Months Ended

Jun. 30, 2017

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Summary of Other Comprehensive (Loss) Income

The other comprehensive income (loss) consists of the following components:

	Three Months Ended June 30
	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	$	9,638		$	—		$	9,638		$	(5,121	)	$	—		$	(5,121	)
Unrealized gains (losses) on available-for-sale securities:
Unrealized gains (losses) for the period, net	13,976			(5,591		)	8,385			(5,307		)	2,123			(3,184		)
Reclassification of realized gain on sale of available-for-sale securities included in net income	—			—			—			(4,502		)	1,801			(2,701		)
	13,976			(5,591		)	8,385			(9,809		)	3,924			(5,885		)
Pension and other postretirement plans:
Amortization of net prior service cost included in net income	120			(48		)	72			105			(43		)	62
Amortization of net actuarial (gain) loss included in net income	(1,568		)	627			(941		)	289			(115		)	174
	(1,448		)	579			(869		)	394			(158		)	236
Cash flow hedge:
Loss for the period	(19		)	4			(15		)	—			—			—
Other Comprehensive Income (Loss)	$	22,147		$	(5,008	)	$	17,139		$	(14,536	)	$	3,766		$	(10,770	)

	Six Months Ended June 30
	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	$	23,306		$	—		$	23,306		$	(1,276	)	$	—		$	(1,276	)
Unrealized gains (losses) on available-for-sale securities:
Unrealized gains (losses) for the period, net	23,534			(9,414		)	14,120			(4,964		)	1,986			(2,978		)
Reclassification of realized gain on sale of available-for-sale securities included in net income	—			—			—			(6,256		)	2,502			(3,754		)
	23,534			(9,414		)	14,120			(11,220		)	4,488			(6,732		)
Pension and other postretirement plans:
Amortization of net prior service cost included in net income	240			(96		)	144			209			(84		)	125
Amortization of net actuarial (gain) loss included in net income	(3,391		)	1,356			(2,035		)	579			(231		)	348
	(3,151		)	1,260			(1,891		)	788			(315		)	473
Cash flow hedge:
Loss for the period	(143		)	29			(114		)	—			—			—
Other Comprehensive Income (Loss)	$	43,546		$	(8,125	)	$	35,421		$	(11,708	)	$	4,173		$	(7,535	)

Summary of Changes in Accumulated Other Comprehensive (Loss) Income

The accumulated balances related to each component of other comprehensive income (loss) are as follows:

(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	23,306			14,120		—			(172		)	37,254
Net amount reclassified from accumulated other comprehensive income (loss)	—			—		(1,891		)	58			(1,833		)
Other comprehensive income (loss), net of tax	23,306			14,120		(1,891		)	(114		)	35,421
Balance as of June 30, 2017	$	(3,692	)	$	107,051	$	168,939		$	(391	)	$	271,907

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:

	Three Months Ended   June 30						Six Months Ended   June 30						Affected Line Item in the Condensed Consolidated Statement of Operations
(in thousands)	2017			2016			2017			2016
Unrealized Gains on Available-for-sale Securities:
Realized gain for the period	$	—		$	(4,502	)	$	—		$	(6,256	)	Other income, net
	—			1,801			—			2,502			Provision for Income Taxes
	—			(2,701		)	—			(3,754		)	Net of Tax
Pension and Other Postretirement Plans:
Amortization of net prior service cost	120			105			240			209			(1)
Amortization of net actuarial (gain) loss	(1,568		)	289			(3,391		)	579			(1)
	(1,448		)	394			(3,151		)	788			Before tax
	579			(158		)	1,260			(315		)	Provision for Income Taxes
	(869		)	236			(1,891		)	473			Net of Tax
Cash Flow Hedge
	41			—			72			—			Interest expense
	(8		)	—			(14		)	—			Provision for Income Taxes
	33			—			58			—			Net of Tax
Total reclassification for the period	$	(836	)	$	(2,465	)	$	(1,833	)	$	(3,281	)	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).

XML

Business Segments (Tables)

6 Months Ended

Jun. 30, 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:

	Three Months Ended June 30						Six Months Ended June 30
(in thousands)	2017			2016			2017			2016
Operating Revenues
Education	$	386,499		$	419,213		$	759,396		$	820,289
Television broadcasting	106,102			96,520			197,598			188,538
Other businesses	183,486			113,269			301,810			221,985
Corporate office	—			—			—			—
Intersegment elimination	—			(69		)	—			(139		)
	$	676,087		$	628,933		$	1,258,804		$	1,230,673
Income (Loss) from Operations
Education	$	32,925		$	32,892		$	41,956		$	47,380
Television broadcasting	39,264			44,215			65,233			85,435
Other businesses	(8,918		)	(5,062		)	(19,482		)	(10,792		)
Corporate office	5,090			2,095			9,708			3,989
	$	68,361		$	74,140		$	97,415		$	126,012
Equity in Earnings (Losses) of Affiliates, Net	1,331			(891		)	1,980			113
Interest Expense, Net	(7,862		)	(7,250		)	(14,628		)	(14,607		)
Other Income, Net	4,069			19,000			4,918			34,096
Income Before Income Taxes	$	65,899		$	84,999		$	89,685		$	145,614
Depreciation of Property, Plant and Equipment
Education	$	8,325		$	10,242		$	16,909		$	21,345
Television broadcasting	2,991			2,450			5,585			4,827
Other businesses	4,264			3,073			7,448			6,100
Corporate office	291			280			581			534
	$	15,871		$	16,045		$	30,523		$	32,806
Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets
Education	$	1,323		$	1,704		$	2,443		$	3,385
Television broadcasting	970			63			1,872			126
Other businesses	17,462			4,511			22,276			9,029
Corporate office	—			—			—			—
	$	19,755		$	6,278		$	26,591		$	12,540
Net Pension (Credit) Expense
Education	$	2,153		$	3,018		$	4,859		$	6,127
Television broadcasting	479			418			972			857
Other businesses	415			306			898			560
Corporate office	(17,876		)	(16,008		)	(36,246		)	(31,869		)
	$	(14,829	)	$	(12,266	)	$	(29,517	)	$	(24,325	)

Asset information for the Company’s business segments are as follows:

	As of
(in thousands)	June 30, 2017		December 31, 2016
Identifiable Assets
Education	$	1,494,736	$	1,479,267
Television broadcasting	451,296		336,631
Other businesses	946,499		796,935
Corporate office	250,071		455,209
	$	3,142,602	$	3,068,042
Investments in Marketable Equity Securities	447,763		424,229
Investments in Affiliates	67,812		58,806
Prepaid Pension Cost	850,262		881,593
Total Assets	$	4,508,439	$	4,432,670

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:

	Three Months Ended						Six Months Ended
	June 30						June 30
(in thousands)	2017			2016			2017			2016
Operating Revenues
Higher education	$	139,204		$	157,980		$	283,514		$	323,529
Test preparation	75,730			79,349			140,298			145,811
Kaplan international	171,747			182,325			336,309			351,612
Kaplan corporate and other	57			18			71			143
Intersegment elimination	(239		)	(459		)	(796		)	(806		)
	$	386,499		$	419,213		$	759,396		$	820,289
Income (Loss) from Operations
Higher education	$	17,711		$	17,237		$	30,315		$	38,543
Test preparation	5,741			7,036			2,877			4,726
Kaplan international	15,954			16,479			23,661			21,376
Kaplan corporate and other	(6,451		)	(7,811		)	(14,920		)	(17,216		)
Intersegment elimination	(30		)	(49		)	23			(49		)
	$	32,925		$	32,892		$	41,956		$	47,380
Depreciation of Property, Plant and Equipment
Higher education	$	3,249		$	3,993		$	6,680		$	8,168
Test preparation	1,332			1,615			2,673			3,396
Kaplan international	3,609			4,319			7,291			9,379
Kaplan corporate and other	135			315			265			402
	$	8,325		$	10,242		$	16,909		$	21,345
Amortization of Intangible Assets	$	1,323		$	1,704		$	2,443		$	3,385
Pension Expense
Higher education	$	2,044		$	1,905		$	4,088		$	3,810
Test preparation	911			768			1,822			1,536
Kaplan international	87			67			174			134
Kaplan corporate and other	(889		)	278			(1,225		)	647
	$	2,153		$	3,018		$	4,859		$	6,127

Asset information for the Company’s education division is as follows:

	As of
(in thousands)	June 30, 2017		December 31, 2016
Identifiable assets
Higher education	$	339,304	$	373,127
Test preparation	133,482		133,709
Kaplan international	1,000,943		950,922
Kaplan corporate and other	21,007		21,509
	$	1,494,736	$	1,479,267

XML

Organization, Basis of Presentation and Recent Accounting Pronouncements (Organization and Basis of Presentation) (Narrative) (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Jun. 30, 2017 USD ($) TelevisionStation
Percentage of ownership indicating control for consolidation purposes			more than 50%
Impairment of goodwill			$ 7,616
Television Broadcasting [Member]
Number of television broadcast stations | TelevisionStation			7
Impairment of goodwill			$ 0
Education [Member]
Impairment of goodwill			$ 0
Education [Member] | Higher Education [Member]
Impairment of goodwill		$ 248,600
Q3 2015 [Member] | Education [Member] | Higher Education [Member]
Immaterial Error Correction Amount	$ 5,600

XML

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

XML

Organization, Basis of Presentation and Recent Accounting Pronouncements (Recent Accounting Pronouncements) (Details 1) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016	Dec. 31, 2015
New Accounting Pronouncement, Early Adoption [Line Items]
Net Cash Provided by Operating Activities	$ 131,568	$ 146,601
Net Decrease in Cash and Cash Equivalents and Restricted Cash	(215,670)	(142,734)
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents	$ 455,146	632,218	$ 670,816	$ 774,952
As previously reported [Member]
New Accounting Pronouncement, Early Adoption [Line Items]
Increase in Restricted Cash		(11,133)
Net Cash Provided by Operating Activities		135,468
Net Decrease in Cash and Cash Equivalents and Restricted Cash		(153,867)
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents		600,340		754,207
Adjustment [Member]
New Accounting Pronouncement, Early Adoption [Line Items]
Increase in Restricted Cash		11,133
Net Cash Provided by Operating Activities		11,133
Net Decrease in Cash and Cash Equivalents and Restricted Cash		11,133
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents		31,878		20,745
As Adopted [Member]
New Accounting Pronouncement, Early Adoption [Line Items]
Increase in Restricted Cash		0
Net Cash Provided by Operating Activities		146,601
Net Decrease in Cash and Cash Equivalents and Restricted Cash		(142,734)
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents		$ 632,218		$ 774,952

XML

Organization, Basis of Presentation and Recent Accounting Pronouncements (Recent Accounting Pronouncements)(Details 2) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Item Effected [Line Items]
Income from Operations	$ 68,361	$ 74,140	$ 97,415	$ 126,012
Income before income taxes	65,899	84,999	89,685	145,614
As reported [Member]
Item Effected [Line Items]
Income from Operations	68,361	74,140	97,415	126,012	$ 303,534
Non-operating pension and postretirement benefit income	0	0	0	0	0
Income before income taxes	65,899	84,999	89,685	145,614	250,658
Adjustment [Member]
Item Effected [Line Items]
Income from Operations	(18,620)	(15,584)	(37,421)	(31,261)	(80,665)
Non-operating pension and postretirement benefit income	18,620	15,584	37,421	31,261	80,665
Income before income taxes	0	0	0	0	0
Upon Adoption [Member]
Item Effected [Line Items]
Income from Operations	49,741	58,556	59,994	94,751	222,869
Non-operating pension and postretirement benefit income	18,620	15,584	37,421	31,261	80,665
Income before income taxes	$ 65,899	$ 84,999	$ 89,685	$ 145,614	$ 250,658

XML

Investments (Narrative) (Details) £ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)	Jun. 30, 2017 GBP (£)	Dec. 31, 2016 USD ($)	Dec. 31, 2016 GBP (£)
Schedule of Investments [Line Items]
Commercial paper and money market investments	$ 262,800,000	$ 262,800,000			$ 485,100,000
Marketable equity securities	447,763,000	447,763,000			$ 424,229,000
Cash paid for new marketable equity securities		0	$ 18,274,000
Marketable equity securities purchased		0	17,900,000
Proceeds from sales of marketable equity securities		0	22,800,000
Gain on sales of marketable equity securities			$ 6,300,000
Celtic and Residential [Member]
Schedule of Investments [Line Items]
Revenue from Related Parties	$ 5,000,000	$ 9,600,000
Residential Home Health Illinois [Member] | Residential Healthcare Group Inc [Member]
Schedule of Investments [Line Items]
Equity Method Investment, Ownership Percentage	40.00%	40.00%		40.00%
Residential Hospice Illinois [Member] | Residential Healthcare Group Inc [Member]
Schedule of Investments [Line Items]
Equity Method Investment, Ownership Percentage	42.50%	42.50%		42.50%
Residential Healthcare Michigan hospital joint venture [Member] | Residential Healthcare Group Inc [Member]
Schedule of Investments [Line Items]
Equity Method Investment, Ownership Percentage	40.00%	40.00%		40.00%
Celtic Healthcare Allegheny Health Network Joint Venture [Member] | Celtic Healthcare [Member]
Schedule of Investments [Line Items]
Equity Method Investment, Ownership Percentage	40.00%	40.00%		40.00%
York Joint Venture [Member] | York University [Member]
Schedule of Investments [Line Items]
Advances to Affiliate | £						£ 11.0
Loan commitment to affiliate | £				£ 25.0
Loan Receivable, Payment Terms		25 years
Loan Receivable Fixed Interest Rate		7.00%
Equity Method Investment, Ownership Percentage	45.00%	45.00%		45.00%

XML

Investments (Investments in Marketable Equity Securities) (Details 1) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Investments [Abstract]
Total cost	$ 269,343	$ 269,343
Gross unrealized gains	178,420	154,886
Total Fair Value	$ 447,763	$ 424,229

XML

Acquisitions and Dispositions of Businesses (Acquisitions) (Narrative) (Details) $ in Thousands	1 Months Ended	3 Months Ended	6 Months Ended		12 Months Ended
	Apr. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2017 USD ($) business	Jun. 30, 2016 USD ($)	Dec. 31, 2016 USD ($) business	Feb. 28, 2017	Sep. 30, 2016	Feb. 29, 2016	Jan. 31, 2016
Business Acquisition [Line Items]
Number of businesses acquired | business			6		5
Acqusition purchase price			$ 318,700
Pension and other post retirement benefits liabilities		$ (59,100)	(59,100)
Business Acquisition, Transaction Costs		3,500	3,500
Goodwill expected to be deductible for income tax purposes		10,000	10,000		$ 22,200
Revenues of acquired companies since acquisition date		$ 63,400	68,900
Operating loss of acquired companies since acquisition date			(200)
Purchase Price Net of Cash			$ 299,938	$ 200,336
Other Businesses [Member]
Business Acquisition [Line Items]
Number of businesses acquired | business			2		2
Education [Member]
Business Acquisition [Line Items]
Number of businesses acquired | business			2		3
Television Broadcasting [Member]
Business Acquisition [Line Items]
Number of businesses acquired | business			2
Hometown Home Health and Hospice [Member] | Other Businesses [Member]
Business Acquisition [Line Items]
Percentage of interest acquired				100.00%
Hoover Treated Wood Products [Member] | Other Businesses [Member]
Business Acquisition [Line Items]
Percentage of interest acquired	97.72%
Redeemable noncontrolling interest	$ 3,700
Purchase Price Net of Cash	$ 206,800
Genesis [Member] | Education [Member]
Business Acquisition [Line Items]
Percentage of interest acquired						100.00%
Red Marker [Member] | Education [Member]
Business Acquisition [Line Items]
Percentage of interest acquired						100.00%
Mander Portman Woodward [Member] | Education [Member]
Business Acquisition [Line Items]
Percentage of interest acquired									100.00%
Osborne Books [Member] | Education [Member]
Business Acquisition [Line Items]
Percentage of interest acquired								100.00%
Electri-Cable Assemblies [Member] | Other Businesses [Member]
Business Acquisition [Line Items]
Percentage of interest acquired							100.00%

XML

Acquisitions and Dispositions of Businesses (Dispositions and Other) (Narrative) (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Gain on the formation of a joint venture		$ 0	$ 3,232	$ 0	$ 3,232
Celtic Healthcare Inc [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Noncontrolling interest exchanged	20.00%
Celtic Healthcare Inc [Member] | Celtic Healthcare Allegheny Health Network Joint Venture [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Equity Method Investment, Ownership Percentage		40.00%		40.00%
Residential Healthcare [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Noncontrolling interest purchased	20.00%
Noncontrolling Interest, Change in Redemption Value	$ 3,000
Redeemable Noncontrolling Interest, Redemption Value	$ 24,000		$ 24,000		$ 24,000
Residential Healthcare [Member] | Residential Healthcare Michigan hospital joint venture [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Percentage of joint venture sold	60.00%
Equity Method Investment, Ownership Percentage	40.00%		40.00%		40.00%
Gain on the formation of a joint venture	$ 3,200
Graham Healthcare Group [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Noncontrolling Interest, Change in Redemption Value	$ 4,100
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners	10.00%		10.00%		10.00%
Noncontrolling Interest, Ownership Percentage by Parent		90.00%		90.00%

XML

Acquisitions and Dispositions of Businesses (Assets Acquired and Liabilities Assumed) (Details 1) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Business Acquisition [Line Items]
Goodwill	$ 1,279,894	$ 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	13,074	8,538
Inventory	25,754	878
Other current assets	593	1,420
Property, plant and equipment	30,961	3,940
Goodwill	138,000	184,118
Indefinite-lived intangible assets	41,600	53,110
Amortized intangible assets	159,107	28,267
Pension and other post retirement benefits liabilities	(59,116)	0
Other liabilities	(10,614)	(21,892)
Deferred income tax liability	(30,923)	(11,009)
Redeemable noncontrolling interest	(3,666)	0
Aggregate purchase price, net of cash acquired	$ 304,770	$ 247,370

XML

Acquisitions and Dispositions of Businesses (Pro Forma Financials) (Details 2) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Acquisitions And Dispositions [Abstract]
Pro Forma Operating Revenues	$ 680,759	$ 695,357	$ 1,322,559	$ 1,361,804
Pro Forma Net Income	$ 46,718	$ 62,638	$ 71,330	$ 101,717

XML

Goodwill and Other Intangible Assets (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Amortized Intangible Assets [Line Items]
Goodwill and other long-lived asset impairment charge	$ 9,224	$ 0	$ 9,224	$ 0
Amortization of Intangible Assets
Amortization of intangible assets	10,531	$ 6,278	17,367	$ 12,540
Estimated amortization of intangible assets, remainder of 2017	22,000		22,000
Estimated amortization of intangible assets, 2018	37,000		37,000
Estimated amortization of intangible assets, 2019	36,000		36,000
Estimated amortization of intangible assets, 2020	33,000		33,000
Estimated amortization of intangible assets, 2021	27,000		27,000
Estimated amortization of intangible assets, after 2021	93,000		$ 93,000
Forney [Member]
Amortized Intangible Assets [Line Items]
Goodwill and other long-lived asset impairment charge	$ 9,200

XML

Goodwill and Other Intangible Assets (Changes in Carrying Amount of Goodwill) (Details 1) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Sep. 30, 2015	Jun. 30, 2017
Goodwill [Roll Forward]
Goodwill, beginning balance		$ 1,481,489
Accumulated impairment losses, beginning balance		(358,535)
Goodwill, net, beginning balance		1,122,954
Acquisitions		138,000
Impairment		(7,616)
Dispositions		(412)
Foreign currency exchange rate changes		26,968
Goodwill, ending balance		1,646,045
Accumulated impairment losses, ending balance		(366,151)
Goodwill, net, ending balance		1,279,894
Education [Member]
Goodwill [Roll Forward]
Goodwill, beginning balance		1,111,003
Accumulated impairment losses, beginning balance		(350,850)
Goodwill, net, beginning balance		760,153
Acquisitions		18,986
Impairment		0
Dispositions		0
Foreign currency exchange rate changes		26,968
Goodwill, ending balance		1,156,957
Accumulated impairment losses, ending balance		(350,850)
Goodwill, net, ending balance		806,107
Education [Member] | Higher Education [Member]
Goodwill [Roll Forward]
Goodwill, beginning balance		389,720
Accumulated impairment losses, beginning balance		(248,591)
Goodwill, net, beginning balance		141,129
Acquisitions		0
Impairment	$ (248,600)
Foreign currency exchange rate changes		70
Goodwill, ending balance		389,790
Accumulated impairment losses, ending balance		(248,591)
Goodwill, net, ending balance		141,199
Education [Member] | Test Preparation [Member]
Goodwill [Roll Forward]
Goodwill, beginning balance		166,098
Accumulated impairment losses, beginning balance		(102,259)
Goodwill, net, beginning balance		63,839
Acquisitions		0
Foreign currency exchange rate changes		0
Goodwill, ending balance		166,098
Accumulated impairment losses, ending balance		(102,259)
Goodwill, net, ending balance		63,839
Education [Member] | Kaplan International [Member]
Goodwill [Roll Forward]
Goodwill, beginning balance		555,185
Accumulated impairment losses, beginning balance		0
Goodwill, net, beginning balance		555,185
Acquisitions		18,986
Foreign currency exchange rate changes		26,898
Goodwill, ending balance		601,069
Accumulated impairment losses, ending balance		0
Goodwill, net, ending balance		601,069
Television Broadcasting [Member]
Goodwill [Roll Forward]
Goodwill, beginning balance		168,345
Accumulated impairment losses, beginning balance		0
Goodwill, net, beginning balance		168,345
Acquisitions		24,256
Impairment		0
Dispositions		0
Foreign currency exchange rate changes		0
Goodwill, ending balance		192,601
Accumulated impairment losses, ending balance		0
Goodwill, net, ending balance		192,601
Other Businesses [Member]
Goodwill [Roll Forward]
Goodwill, beginning balance		202,141
Accumulated impairment losses, beginning balance		(7,685)
Goodwill, net, beginning balance		194,456
Acquisitions		94,758
Impairment		(7,616)
Dispositions		(412)
Foreign currency exchange rate changes		0
Goodwill, ending balance		296,487
Accumulated impairment losses, ending balance		(15,301)
Goodwill, net, ending balance		$ 281,186

XML

Goodwill and Other Intangible Assets (Other Intangible Assets) (Details 2) - USD ($) $ in Thousands		6 Months Ended	12 Months Ended
		Jun. 30, 2017	Dec. 31, 2016
Amortized Intangible Assets [Line Items]
Gross Carrying Amount		$ 359,290	$ 204,217
Accumulated Amortization		110,953	96,278
Net Carrying Amount		248,337	107,939
Indefinite-Lived Intangible Assets [Line Items]
Indefinite-Lived Intangible Assets, Net		110,060	66,026
Trade Names and Trademarks [Member]
Indefinite-Lived Intangible Assets [Line Items]
Indefinite-Lived Intangible Assets, Net		82,810	65,192
FCC licenses [Member]
Indefinite-Lived Intangible Assets [Line Items]
Indefinite-Lived Intangible Assets, Net		26,600	0
Licensure and Accreditation [Member]
Indefinite-Lived Intangible Assets [Line Items]
Indefinite-Lived Intangible Assets, Net		650	834
Student and Customer Relationships [Member]
Amortized Intangible Assets [Line Items]
Gross Carrying Amount		224,280	129,616
Accumulated Amortization		66,780	55,863
Net Carrying Amount		$ 157,500	$ 73,753
Student and Customer Relationships [Member] | Minimum [Member]
Amortized Intangible Assets [Line Items]
Useful Life	[1]	1 year	2 years
Student and Customer Relationships [Member] | Maximum [Member]
Amortized Intangible Assets [Line Items]
Useful Life	[1]	10 years	10 years
Trade Names and Trademarks [Member]
Amortized Intangible Assets [Line Items]
Gross Carrying Amount		$ 56,995	$ 55,240
Accumulated Amortization		31,920	29,670
Net Carrying Amount		$ 25,075	$ 25,570
Trade Names and Trademarks [Member] | Minimum [Member]
Amortized Intangible Assets [Line Items]
Useful Life		2 years	2 years
Trade Names and Trademarks [Member] | Maximum [Member]
Amortized Intangible Assets [Line Items]
Useful Life		10 years	10 years
Network Affiliation Agreements [Member]
Amortized Intangible Assets [Line Items]
Useful Life		15 years
Gross Carrying Amount		$ 42,600	$ 0
Accumulated Amortization		1,302	0
Net Carrying Amount		41,298	0
Databases and Technology [Member]
Amortized Intangible Assets [Line Items]
Gross Carrying Amount		19,505	5,601
Accumulated Amortization		3,321	4,368
Net Carrying Amount		$ 16,184	$ 1,233
Databases and Technology [Member] | Minimum [Member]
Amortized Intangible Assets [Line Items]
Useful Life	[1]	3 years	3 years
Databases and Technology [Member] | Maximum [Member]
Amortized Intangible Assets [Line Items]
Useful Life	[1]	6 years	5 years
Non-compete Agreements [Member]
Amortized Intangible Assets [Line Items]
Gross Carrying Amount		$ 2,180	$ 1,730
Accumulated Amortization		1,480	1,404
Net Carrying Amount		$ 700	$ 326
Non-compete Agreements [Member] | Minimum [Member]
Amortized Intangible Assets [Line Items]
Useful Life		2 years	2 years
Non-compete Agreements [Member] | Maximum [Member]
Amortized Intangible Assets [Line Items]
Useful Life		5 years	5 years
Other [Member]
Amortized Intangible Assets [Line Items]
Gross Carrying Amount		$ 13,730	$ 12,030
Accumulated Amortization		6,150	4,973
Net Carrying Amount		$ 7,580	$ 7,057
Other [Member] | Minimum [Member]
Amortized Intangible Assets [Line Items]
Useful Life		1 year	1 year
Other [Member] | Maximum [Member]
Amortized Intangible Assets [Line Items]
Useful Life		8 years	8 years

[1] As of December 31, 2016, the student and customer relationships’ minimum useful life was 2 years and the databases and technology’s maximum useful life was 5 years.

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Debt (Narrative) (Details) $ in Thousands				3 Months Ended		6 Months Ended
		Jul. 25, 2016 GBP (£)	Jul. 14, 2016 GBP (£)	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)	Dec. 31, 2016 USD ($)
Debt Instrument [Line Items]
Average borrowings outstanding				$ 495,600	$ 400,000	$ 494,500	$ 399,900
Weighted average interest rate of borrowings				6.20%	7.20%	6.20%	7.20%
Net interest expense incurred				$ 7,900	$ 7,300	$ 14,600	$ 14,600
7.25% Unsecured Notes due February 1, 2019 [Member]
Debt Instrument [Line Items]
Unamortized debt issuance costs				$ 100		$ 100		$ 100
Debt Instrument, Interest Rate, Stated Percentage				7.25%		7.25%
Fair value of debt instrument				$ 431,000		$ 431,000		438,700
Carrying value of debt instrument	[1]			$ 399,279		$ 399,279		399,052
Other Indebtedness [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage				2.00%		2.00%
Debt Instrument, Maturity year						Dec. 31, 2025
Kaplan Four-Year Credit Agreement dated July 14, 2016 [Member]
Debt Instrument [Line Items]
Unamortized debt issuance costs				$ 500		$ 500		500
Borrowings outstanding	[2]			$ 96,815		$ 96,815		$ 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]
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%

[1] The carrying value is net of $0.1 million of unamortized debt issuance costs as of June 30, 2017 and December 31, 2016, respectively.

[2] The carrying value is net of $0.5 million of unamortized debt issuance costs as of June 30, 2017 and December 31, 2016, respectively.

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Debt (Details 1) $ in Thousands		Jun. 30, 2017 USD ($)	Dec. 31, 2016 USD ($)	Jul. 25, 2016 GBP (£)
Debt Instrument [Line Items]
Other indebtedness		$ 115	$ 1,479
Total Debt		496,209	491,847
Less: current portion		(6,492)	(6,128)
Total Long-Term Debt		489,717	485,719
7.25% Unsecured Notes due February 1, 2019 [Member]
Debt Instrument [Line Items]
Unsecured notes	[1]	399,279	399,052
Unamortized debt issuance costs		100	100
Kaplan Four-Year Credit Agreement dated July 14, 2016 [Member]
Debt Instrument [Line Items]
UK Credit Facility	[2]	96,815	91,316
Unamortized debt issuance costs		$ 500	$ 500
Education [Member] | Kaplan Four-Year Credit Agreement dated July 14, 2016 [Member]
Debt Instrument [Line Items]
UK Credit Facility | £				£ 75,000,000

[1] The carrying value is net of $0.1 million of unamortized debt issuance costs as of June 30, 2017 and December 31, 2016, respectively.

[2] The carrying value is net of $0.5 million of unamortized debt issuance costs as of June 30, 2017 and December 31, 2016, respectively.

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Fair Value Measurements (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Goodwill and other long-lived asset impairment charge	$ 9,224	$ 0	$ 9,224	$ 0
Impairment of goodwill			$ 7,616

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Fair Value Measurements (Details 1) - USD ($) $ in Thousands		Jun. 30, 2017	Dec. 31, 2016
Assets
Marketable equity securities		$ 447,763	$ 424,229
7.25% Unsecured Notes due February 1, 2019 [Member]
Liabilities
Debt instrument		431,000	438,700
Fair Value, Measurements, Recurring [Member]
Assets
Money market investments	[1]	262,797	435,258
Commercial paper	[2]		49,882
Marketable equity securities	[3]	447,763	424,229
Other current investments	[4]	22,230	24,012
Total Financial Assets		732,790	933,381
Liabilities
Deferred compensation plan liabilities	[5]	44,840	46,300
Interest rate swap	[6]	515	365
Mandatorily redeemable noncontrolling interest	[7]	12,584	12,584
Total Financial Liabilities		57,939	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]	447,763	424,229
Other current investments	[4]	6,207	6,957
Total Financial Assets		453,970	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]	262,797	435,258
Commercial paper	[2]		0
Marketable equity securities	[3]	0	0
Other current investments	[4]	16,023	17,055
Total Financial Assets		278,820	452,313
Liabilities
Deferred compensation plan liabilities	[5]	44,840	46,300
Interest rate swap	[6]	515	365
Mandatorily redeemable noncontrolling interest	[7]	0	0
Total Financial Liabilities		45,355	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

[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.

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Earnings Per Share (Narrative) (Details) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Dividends declared per common share	$ 1.27	$ 1.21	$ 3.81	$ 3.63
Stock Option Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Antidilutive securities, shares	104,000	102,000	104,000	102,000
Restricted Stock Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Antidilutive securities, shares	5,250	6,100	5,250	6,100

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Earnings Per Share (Details 1) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Schedule of Earnings Per Share, Basic and Diluted, Including Two Class Method [Line Items]
Net Income attributable to Graham Holdings Company common stockholders	$ 41,996	$ 60,766	$ 63,082	$ 98,546
Less: Dividends paid-common stock outstanding and unvested restricted shares	(7,080)	(6,775)	(21,282)	(20,533)
Undistributed earnings	$ 34,916	$ 53,991	$ 41,800	$ 78,013
Percent allocated to common stockholders	99.06%	98.68%	99.06%	98.68%
Undistributed Earnings Allocated To Common Stockholders	$ 34,588	$ 53,277	$ 41,407	$ 76,981
Add: Dividends paid-common stock outstanding	7,013	6,685	21,082	20,264
Numerator for basic earnings per share	41,601	59,962	62,489	97,245
Add: Additional undistributed earnings due to dilutive stock options	3	4	3	5
Numerator for diluted earnings per share	$ 41,604	$ 59,966	$ 62,492	$ 97,250
Weighted average shares outstanding (shares)	5,539	5,544	5,537	5,584
Denominator for diluted earnings per share (shares)	5,577	5,574	5,573	5,613
Graham Holdings Company Common Stockholders:
Basic income per common share in dollars per share	$ 7.51	$ 10.82	$ 11.29	$ 17.42
Diluted income per common share in dollars per share	$ 7.46	$ 10.76	$ 11.21	$ 17.33
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)	38	30	36	29

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Earnings Per Share (Details 2) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Earnings Per Share [Abstract]
Weighted average restricted stock	29	41	28	39

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Pension and Postretirement Plans (Narrative) (Details) - Defined Benefit Pension Plan [Member] $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 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] | Maximum [Member]
Retirement Benefits Disclosure [Line Items]
Defined benefit plan, target allocation percentage of assets	23.00%
Fixed income securities [Member] | Minimum [Member]
Retirement Benefits Disclosure [Line Items]
Defined benefit plan, target allocation percentage of assets	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 | $	$ 1,008.9	$ 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%

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Pension and Postretirement Plans (Total Benefit/Cost) (Details 1) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Defined Benefit Plan Disclosure [Line Items]
Net Periodic Cost (Benefit)	$ (14,829)	$ (12,266)	$ (29,517)	$ (24,325)
Defined Benefit Pension Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	4,591	5,040	9,505	10,382
Interest cost	11,979	12,845	23,965	25,918
Expected return on assets	(30,403)	(30,226)	(60,740)	(60,774)
Amortization of prior service cost (credit)	43	75	86	149
Recognized actuarial loss (gain)	(1,039)	0	(2,333)	0
Net Periodic Cost (Benefit)	(14,829)	(12,266)	(29,517)	(24,325)
Supplemental Executive Retirement Plan (SERP) [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	215	246	429	492
Interest cost	1,058	1,096	2,116	2,192
Amortization of prior service cost (credit)	114	114	228	228
Recognized actuarial loss (gain)	443	665	887	1,330
Net Periodic Cost (Benefit)	1,830	2,121	3,660	4,242
Other Postretirement Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	257	347	514	693
Interest cost	194	307	389	615
Amortization of prior service cost (credit)	(37)	(84)	(74)	(168)
Recognized actuarial loss (gain)	(972)	(376)	(1,945)	(751)
Net Periodic Cost (Benefit)	$ (558)	$ 194	$ (1,116)	$ 389

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Pension and Postretirement Plans (Asset Allocation) (Details 2) - Defined Benefit Pension Plans [Member]	Jun. 30, 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)	52.00%	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)	10.00%	11.00%
International [Member] | Equity Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan Assets Allocation (Percent)	7.00%	6.00%

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Other Non-Operating Income (Narrative) (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended			6 Months Ended
	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Mar. 31, 2016	Jun. 30, 2017	Jun. 30, 2016
Schedule of Non-Operating Income (Expense) [Line Items]
Document Fiscal Year Focus					2017
Gain on sale of land		$ 0	$ 34,072		$ 0	$ 34,072
Gain on the formation of a joint venture		0	3,232		0	3,232
(Loss) gain on sales of businesses		$ 0	$ 0		$ (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%		40.00%			40.00%
Gain on the formation of a joint venture	$ 3,200
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%			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%			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

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Other Non-Operating Income (Details 1) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Schedule of Non-Operating Income (Expense) [Line Items]
Foreign currency gain (loss), net	$ 3,466	$ (24,084)	$ 5,194	$ (29,527)
(Loss) gain on sales of businesses	0	0	(342)	18,931
Gain on sale of land	0	34,072	0	34,072
Gain on sales of marketable equity securities (see Note 2)	0	4,502	0	6,256
Gain on the formation of a joint venture	0	3,232	0	3,232
Other, net	603	1,278	66	1,132
Total Other Non-Operating Income	$ 4,069	$ 19,000	$ 4,918	$ 34,096

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Accumulated Other Comprehensive Income (Loss) (Components of OCI) (Details 1) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Other Comprehensive Income (Loss) [Line Items]
Other Comprehensive Income (Loss), before tax		$ 22,147	$ (14,536)	$ 43,546	$ (11,708)
Other Comprehensive Income (Loss), income tax		(5,008)	3,766	(8,125)	4,173
Other Comprehensive Income (Loss), Net of Tax		17,139	(10,770)	35,421	(7,535)
Foreign Currency Translation Adjustment [Member]
Other Comprehensive Income (Loss) [Line Items]
Other Comprehensive Income (Loss), before Reclassifications, before Tax		9,638	(5,121)	23,306	(1,276)
Other Comprehensive Income (Loss) before Reclassifications, Tax		0	0	0	0
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax		9,638	(5,121)	23,306	(1,276)
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax				0
Other Comprehensive Income (Loss), Net of Tax				23,306
Unrealized Gains (Losses) on Available-for-Sale Securities [Member]
Other Comprehensive Income (Loss) [Line Items]
Other Comprehensive Income (Loss), before Reclassifications, before Tax		13,976	(5,307)	23,534	(4,964)
Other Comprehensive Income (Loss) before Reclassifications, Tax		(5,591)	2,123	(9,414)	1,986
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax		8,385	(3,184)	14,120	(2,978)
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax		0	(4,502)	0	(6,256)
Reclassification from AOCI, Current Period, Tax		0	1,801	0	2,502
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax		0	(2,701)	0	(3,754)
Other Comprehensive Income (Loss), before tax		13,976	(9,809)	23,534	(11,220)
Other Comprehensive Income (Loss), income tax		(5,591)	3,924	(9,414)	4,488
Other Comprehensive Income (Loss), Net of Tax		8,385	(5,885)	14,120	(6,732)
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		(1,448)	394	(3,151)	788
Reclassification from AOCI, Current Period, Tax		579	(158)	1,260	(315)
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax		(869)	236	(1,891)	473
Other Comprehensive Income (Loss), before tax		(1,448)	394	(3,151)	788
Other Comprehensive Income (Loss), income tax		579	(158)	1,260	(315)
Other Comprehensive Income (Loss), Net of Tax		(869)	236	(1,891)	473
Net Prior Service Cost [Member]
Other Comprehensive Income (Loss) [Line Items]
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax	[1]	120	105	240	209
Reclassification from AOCI, Current Period, Tax		(48)	(43)	(96)	(84)
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax		72	62	144	125
Net Actuarial (Gain) Loss [Member]
Other Comprehensive Income (Loss) [Line Items]
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax	[1]	(1,568)	289	(3,391)	579
Reclassification from AOCI, Current Period, Tax		627	(115)	1,356	(231)
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax		(941)	174	(2,035)	348
Cash Flow Hedge [Member]
Other Comprehensive Income (Loss) [Line Items]
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax				(172)
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax				58
Other Comprehensive Income (Loss), before tax		(19)	0	(143)	0
Other Comprehensive Income (Loss), income tax		4	0	29	0
Other Comprehensive Income (Loss), Net of Tax		$ (15)	$ 0	$ (114)	$ 0

[1] These accumulated other comprehensive income components are included in the computation of net periodic pension and postretirement plan cost (see Note 8).

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Accumulated Other Comprehensive Income (Loss) (AOCI balances) (Details 2) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 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 (Loss), Net of Tax	$ 17,139	$ (10,770)	35,421	$ (7,535)
Accumulated Other Comprehensive Income, ending balance	2,536,372		2,536,372
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			37,254
Net amount reclassified from accumulated other comprehensive income			(1,833)
Other Comprehensive Income (Loss), Net of Tax			35,421
Accumulated Other Comprehensive Income, ending balance	271,907		271,907
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	9,638	(5,121)	23,306	(1,276)
Net amount reclassified from accumulated other comprehensive income			0
Other Comprehensive Income (Loss), Net of Tax			23,306
Accumulated Other Comprehensive Income, ending balance	(3,692)		(3,692)
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	8,385	(3,184)	14,120	(2,978)
Net amount reclassified from accumulated other comprehensive income	0	(2,701)	0	(3,754)
Other Comprehensive Income (Loss), Net of Tax	8,385	(5,885)	14,120	(6,732)
Accumulated Other Comprehensive Income, ending balance	107,051		107,051
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	(869)	236	(1,891)	473
Other Comprehensive Income (Loss), Net of Tax	(869)	236	(1,891)	473
Accumulated Other Comprehensive Income, ending balance	168,939		168,939
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			(172)
Net amount reclassified from accumulated other comprehensive income			58
Other Comprehensive Income (Loss), Net of Tax	(15)	$ 0	(114)	$ 0
Accumulated Other Comprehensive Income, ending balance	$ (391)		$ (391)

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Accumulated Other Comprehensive Income (Loss) (Reclassifications out of AOCI) (Details 3) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Other income, net		$ (4,069)	$ (19,000)	$ (4,918)	$ (34,096)
Interest expense		9,035	7,971	17,164	15,919
Provision for Income Taxes		23,900	23,800	26,600	46,200
Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Income Net of Tax		(836)	(2,465)	(1,833)	(3,281)
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	(4,502)	0	(6,256)
Provision for Income Tax		0	1,801	0	2,502
Reclassifications, net of tax		0	(2,701)	0	(3,754)
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 income, net		0	(4,502)	0	(6,256)
Provision for Income Taxes		0	1,801	0	2,502
Income Net of Tax		0	(2,701)	0	(3,754)
Pension and Other Postretirement Plans [Member]
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Reclassifications, before tax		(1,448)	394	(3,151)	788
Provision for Income Tax		579	(158)	1,260	(315)
Reclassifications, net of tax		(869)	236	(1,891)	473
Net Prior Service Cost [Member]
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Reclassifications, before tax	[1]	120	105	240	209
Provision for Income Tax		(48)	(43)	(96)	(84)
Reclassifications, net of tax		72	62	144	125
Net Actuarial (Gain) Loss [Member]
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Reclassifications, before tax	[1]	(1,568)	289	(3,391)	579
Provision for Income Tax		627	(115)	1,356	(231)
Reclassifications, net of tax		(941)	174	(2,035)	348
Cash Flow Hedge [Member]
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Reclassifications, net of tax				58
Cash Flow Hedge [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Interest expense		41	0	72	0
Provision for Income Taxes		(8)	0	(14)	0
Income Net of Tax		$ 33	$ 0	$ 58	$ 0

[1] These accumulated other comprehensive income components are included in the computation of net periodic pension and postretirement plan cost (see Note 8).

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Contingencies (Details) $ in Millions			6 Months Ended
	Feb. 13, 2013 allegations	Aug. 17, 2011 Complaint	Jun. 30, 2017 USD ($) claim Case 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] | Higher Education [Member]
Loss Contingencies [Line Items]
Number of pending program reviews | program_review			5
Education [Member] | Sale of KHE Campuses business [Member] | Higher Education [Member]
Loss Contingencies [Line Items]
Number of pending program reviews | program_review			4
Diaz Case [Member] | Education [Member]
Loss Contingencies [Line Items]
Separate complaints included In Diaz Case received rulings | Complaint		3
Remaining employment claim in the Diaz complaint | Complaint		1
Urquilla-Diaz And Jajdelski Case [Member] | Education [Member]
Loss Contingencies [Line Items]
Number of unsealed cases filed by former employees under the U.S. Federal False Claims Act | Case			2
Jajdelski Case [Member] | Education [Member]
Loss Contingencies [Line Items]
Number of allegations not dismissed | allegations	1

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Business Segments (Narrative) (Details)	6 Months Ended
	Jun. 30, 2017 Segment
Business Segments [Line Items]
Number of reportable segments	4

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Business Segments (Information by Operating Segment) (Details 1) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Segment Reporting Information [Line Items]
Operating Revenues	$ 676,087	$ 628,933	$ 1,258,804	$ 1,230,673
Income (Loss) from Operations	68,361	74,140	97,415	126,012
Equity in earnings (losses) of affiliates, net	1,331	(891)	1,980	113
Interest Expense, Net	(7,862)	(7,250)	(14,628)	(14,607)
Other income, net	4,069	19,000	4,918	34,096
Income Before Income Taxes	65,899	84,999	89,685	145,614
Depreciation of property, plant and equipment	15,871	16,045	30,523	32,806
Amortization of Intangible Assets	10,531	6,278	17,367	12,540
Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets	19,755	6,278	26,591	12,540
Net Pension (Credit) Expense	(14,829)	(12,266)	(29,517)	(24,325)
Identifiable Assets	3,142,602		3,142,602		$ 3,068,042
Investments in Marketable Equity Securities	447,763		447,763		424,229
Investments in Affiliates	67,812		67,812		58,806
Prepaid Pension Cost	850,262		850,262		881,593
Total Assets	4,508,439		4,508,439		4,432,670
Operating Segments [Member] | Education [Member]
Segment Reporting Information [Line Items]
Operating Revenues	386,499	419,213	759,396	820,289
Income (Loss) from Operations	32,925	32,892	41,956	47,380
Depreciation of property, plant and equipment	8,325	10,242	16,909	21,345
Amortization of Intangible Assets	1,323	1,704	2,443	3,385
Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets	1,323	1,704	2,443	3,385
Net Pension (Credit) Expense	2,153	3,018	4,859	6,127
Identifiable Assets	1,494,736		1,494,736		1,479,267
Operating Segments [Member] | Education [Member] | Kaplan Corporate and Other [Member]
Segment Reporting Information [Line Items]
Operating Revenues	57	18	71	143
Income (Loss) from Operations	(6,451)	(7,811)	(14,920)	(17,216)
Depreciation of property, plant and equipment	135	315	265	402
Net Pension (Credit) Expense	(889)	278	(1,225)	647
Identifiable Assets	21,007		21,007		21,509
Operating Segments [Member] | Education [Member] | Reportable Subsegments [Member] | Higher Education [Member]
Segment Reporting Information [Line Items]
Operating Revenues	139,204	157,980	283,514	323,529
Income (Loss) from Operations	17,711	17,237	30,315	38,543
Depreciation of property, plant and equipment	3,249	3,993	6,680	8,168
Net Pension (Credit) Expense	2,044	1,905	4,088	3,810
Identifiable Assets	339,304		339,304		373,127
Operating Segments [Member] | Education [Member] | Reportable Subsegments [Member] | Test Preparation [Member]
Segment Reporting Information [Line Items]
Operating Revenues	75,730	79,349	140,298	145,811
Income (Loss) from Operations	5,741	7,036	2,877	4,726
Depreciation of property, plant and equipment	1,332	1,615	2,673	3,396
Net Pension (Credit) Expense	911	768	1,822	1,536
Identifiable Assets	133,482		133,482		133,709
Operating Segments [Member] | Education [Member] | Reportable Subsegments [Member] | Kaplan International [Member]
Segment Reporting Information [Line Items]
Operating Revenues	171,747	182,325	336,309	351,612
Income (Loss) from Operations	15,954	16,479	23,661	21,376
Depreciation of property, plant and equipment	3,609	4,319	7,291	9,379
Net Pension (Credit) Expense	87	67	174	134
Identifiable Assets	1,000,943		1,000,943		950,922
Operating Segments [Member] | Education [Member] | Intersubsegment Eliminations [Member]
Segment Reporting Information [Line Items]
Operating Revenues	(239)	(459)	(796)	(806)
Income (Loss) from Operations	(30)	(49)	23	(49)
Operating Segments [Member] | Television Broadcasting [Member]
Segment Reporting Information [Line Items]
Operating Revenues	106,102	96,520	197,598	188,538
Income (Loss) from Operations	39,264	44,215	65,233	85,435
Depreciation of property, plant and equipment	2,991	2,450	5,585	4,827
Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets	970	63	1,872	126
Net Pension (Credit) Expense	479	418	972	857
Identifiable Assets	451,296		451,296		336,631
Operating Segments [Member] | Other Businesses [Member]
Segment Reporting Information [Line Items]
Operating Revenues	183,486	113,269	301,810	221,985
Income (Loss) from Operations	(8,918)	(5,062)	(19,482)	(10,792)
Depreciation of property, plant and equipment	4,264	3,073	7,448	6,100
Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets	17,462	4,511	22,276	9,029
Net Pension (Credit) Expense	415	306	898	560
Identifiable Assets	946,499		946,499		796,935
Corporate Office [Member]
Segment Reporting Information [Line Items]
Operating Revenues	0	0	0	0
Income (Loss) from Operations	5,090	2,095	9,708	3,989
Depreciation of property, plant and equipment	291	280	581	534
Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets	0	0	0	0
Net Pension (Credit) Expense	(17,876)	(16,008)	(36,246)	(31,869)
Identifiable Assets	250,071		250,071		$ 455,209
Intersegment Elimination [Member]
Segment Reporting Information [Line Items]
Operating Revenues	$ 0	$ (69)	$ 0	$ (139)