BUSINESS SEGMENTS

The Company reorganized its operations in the first quarter of 2018 into the following six reportable segments for the purpose of making operating decisions and assessing performance: Kaplan Higher Education, Kaplan Professional (U.S.), Kaplan Test Preparation, Kaplan International, Television Broadcasting and Healthcare.

As a result of the Kaplan University transaction, Kaplan reorganized its higher education operations into the following two operating segments: Higher Education and Professional (U.S.). The higher education segment comprises the historical KU for-profit postsecondary education business and the future non-academic operations support services provided to the new university, Purdue University Global. The Professional (U.S.) segment comprises the KU School of Professional and Continuing Education, which provides professional training and exam preparation for professional certifications and licensures.

The business segments disclosed in the condensed consolidated financial statements are based on this new organizational structure and information reviewed by the Company's management to evaluate the business segment results. Segment operating results for the first quarter of 2017 have been restated to reflect this organizational change. Additionally, the Company includes the comparative results of the Company's segments for each quarter in fiscal year 2017 as well as fiscal years 2017 and 2016.

The following table summarizes the quarterly financial information related to each of the Company’s business segments:



	Three Months Ended
	March 31,			March 31,			June 30,			September 30,			December 31,
(in thousands)	2018			2017			2017			2017			2017
Operating Revenues
Education	$	375,499		$	372,897		$	386,499		$	376,805		$	380,575
Television broadcasting	108,802			91,496			106,102			101,295			111,023
Healthcare	37,621			36,899			38,220			40,473			38,610
Other businesses	137,538			81,425			145,266			138,652			145,660
Corporate office	—			—			—			—			—
Intersegment elimination	(24		)	—			—			—			(51		)
	$	659,436		$	582,717		$	676,087		$	657,225		$	675,817
Income (Loss) from Operations
Education	$	22,700		$	9,437		$	33,331		$	13,797		$	21,122
Television broadcasting	40,542			26,483			39,777			33,462			39,536
Healthcare	(1,391		)	(926		)	384			920			(2,947		)
Other businesses	(3,695		)	(9,638		)	(9,302		)	(7,021		)	6,698
Corporate office	(13,942		)	(15,103		)	(14,449		)	(14,208		)	(14,950		)
	$	44,214		$	10,253		$	49,741		$	26,950		$	49,459
Equity in Earnings (Losses) of Affiliates, Net	2,579			649			1,331			(532		)	(4,697		)
Interest Expense, Net	(6,699		)	(6,766		)	(7,862		)	(7,758		)	(4,919		)
Non-Operating Pension and Postretirement Benefit Income, Net	21,386			18,801			18,620			17,621			17,657
Loss on Marketable Equity Securities, Net	(14,102		)	—			—			—			—
Other Income (Expense), Net	9,187			849			4,069			1,963			(2,640		)
Income Before Income Taxes	$	56,565		$	23,786		$	65,899		$	38,244		$	54,860
Depreciation of Property, Plant and Equipment
Education	$	7,606		$	8,584		$	8,325		$	8,085		$	7,912
Television broadcasting	3,071			2,594			2,991			3,118			3,476
Healthcare	653			1,069			1,194			1,166			1,154
Other businesses	3,059			2,115			3,070			3,354			3,184
Corporate office	253			290			291			279			258
	$	14,642		$	14,652		$	15,871		$	16,002		$	15,984
Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets
Education	$	1,149		$	1,120		$	1,323		$	1,355		$	1,364
Television broadcasting	1,408			902			970			1,071			3,406
Healthcare	1,808			1,654			1,644			2,420			2,187
Other businesses	6,019			3,160			15,818			6,389			6,018
Corporate office	—			—			—			—			—
	$	10,384		$	6,836		$	19,755		$	11,235		$	12,975
Pension Expense
Education	$	2,664		$	2,706		$	2,153		$	2,430		$	2,431
Television broadcasting	493			493			479			485			485
Healthcare	122			166			166			166			167
Other businesses	289			317			249			277			282
Corporate office	1,372			1,232			1,544			1,233			1,226
	$	4,940		$	4,914		$	4,591		$	4,591		$	4,591

The following table summarizes annual financial information related to each of the Company's business segments:



(in thousands)	2017			2016
Operating Revenues
Education	$	1,516,776		$	1,598,461
Television broadcasting	409,916			409,718
Healthcare	154,202			146,962
Other businesses	511,003			326,888
Corporate office	—			—
Intersegment elimination	(51		)	(139		)
	$	2,591,846		$	2,481,890
Income (Loss) from Operations
Education	$	77,687		$	95,321
Television broadcasting	139,258			202,863
Healthcare	(2,569		)	2,799
Other businesses	(19,263		)	(24,901		)
Corporate office	(58,710		)	(53,213		)
	$	136,403		$	222,869
Equity in Losses of Affiliates, Net	(3,249		)	(7,937		)
Interest Expense, Net	(27,305		)	(32,297		)
Non-Operating Pension and Postretirement Benefit Income, Net	72,699			80,665
Other Income (Expense), Net	4,241			(12,642		)
Income Before Income Taxes	$	182,789		$	250,658
Depreciation of Property, Plant and Equipment
Education	$	32,906		$	41,187
Television broadcasting	12,179			9,942
Healthcare	4,583			2,805
Other businesses	11,723			9,570
Corporate office	1,118			1,116
	$	62,509		$	64,620
Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets
Education	$	5,162		$	7,516
Television broadcasting	6,349			251
Healthcare	7,905			6,701
Other businesses	31,385			13,806
Corporate office	—			—
	$	50,801		$	28,274
Pension Expense
Education	$	9,720		$	11,803
Television broadcasting	1,942			1,714
Healthcare	665			—
Other businesses	1,125			1,118
Corporate office	5,235			5,826
	$	18,687		$	20,461

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



	As of
	March 31,		December 31,
(in thousands)	2018		2017
Identifiable Assets
Education	$	1,577,217	$	1,592,097
Television broadcasting	451,070		455,884
Healthcare	125,041		129,856
Other businesses	789,771		855,399
Corporate office	140,396		182,905
	$	3,083,495	$	3,216,141
Investments in Marketable Equity Securities	471,703		536,315
Investments in Affiliates	131,887		128,590
Prepaid Pension Cost	1,073,873		1,056,777
Total Assets	$	4,760,958	$	4,937,823

The following table summaries the quarterly financial information related to the operating segments of the Company’s education division:



	Three Months Ended
	March 31,			March 31,			June 30,			September 30,			December 31,
(in thousands)	2018			2017			2017			2017			2017
Operating Revenues
Kaplan international	$	183,582		$	164,562		$	171,747		$	171,259		$	190,431
Higher education	99,830			111,111			111,840			105,210			103,264
Test preparation	59,151			64,568			75,730			72,680			60,320
Professional (U.S.)	33,356			33,199			27,364			28,249			27,027
Kaplan corporate and other	285			14			57			49			174
Intersegment elimination	(705		)	(557		)	(239		)	(642		)	(641		)
	$	375,499		$	372,897		$	386,499		$	376,805		$	380,575
Income (Loss) from Operations
Kaplan international	$	20,404		$	7,707		$	15,954		$	5,348		$	22,614
Higher education	1,355			2,446			13,140			1,493			(360		)
Test preparation	521			(2,864		)	5,741			7,330			1,300
Professional (U.S.)	9,315			10,158			4,571			7,316			5,513
Kaplan corporate and other	(8,895		)	(8,063		)	(6,045		)	(7,631		)	(8,124		)
Intersegment elimination	—			53			(30		)	(59		)	179
	$	22,700		$	9,437		$	33,331		$	13,797		$	21,122
Depreciation of Property, Plant and Equipment
Kaplan international	$	3,974		$	3,682		$	3,609		$	3,780		$	3,821
Higher education	1,858			2,648			2,484			2,010			1,975
Test preparation	978			1,341			1,332			1,407			1,206
Professional (U.S.)	642			783			765			758			735
Kaplan corporate and other	154			130			135			130			175
	$	7,606		$	8,584		$	8,325		$	8,085		$	7,912
Amortization of Intangible Assets	$	1,149		$	1,120		$	1,323		$	1,355		$	1,364
Pension Expense
Kaplan international	$	83		$	87		$	87		$	24		$	66
Higher education	1,406			1,742			1,742			467			1,318
Test preparation	729			911			911			244			689
Professional (U.S.)	290			302			302			81			228
Kaplan corporate and other	156			(336		)	(889		)	1,614			130
	$	2,664		$	2,706		$	2,153		$	2,430		$	2,431

The following table summarizes annual financial information related to the reportable segments of the Company's education division segments:



(in thousands)	2017			2016
Operating Revenues
Kaplan international	$	697,999		$	696,362
Higher education	431,425			501,784
Test preparation	273,298			286,556
Professional (U.S.)	115,839			115,263
Kaplan corporate and other	294			214
Intersegment elimination	(2,079		)	(1,718		)
	$	1,516,776		$	1,598,461
Income (Loss) from Operations
Kaplan international	$	51,623		$	48,398
Higher education	16,719			39,196
Test preparation	11,507			9,599
Professional (U.S.)	27,558			27,436
Kaplan corporate and other	(29,863		)	(29,279		)
Intersegment elimination	143			(29		)
	$	77,687		$	95,321
Depreciation of Property, Plant and Equipment
Kaplan international	$	14,892		$	17,523
Higher education	9,117			13,816
Test preparation	5,286			6,287
Professional (U.S.)	3,041			3,006
Kaplan corporate and other	570			555
	$	32,906		$	41,187
Amortization of Intangible Assets	$	5,162		$	7,516
Pension Expense
Kaplan international	$	264		$	268
Higher education	5,269			6,544
Test preparation	2,755			3,072
Professional (U.S.)	913			1,076
Kaplan corporate and other	519			843
	$	9,720		$	11,803

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



	As of
	March 31,		December 31,
(in thousands)	2018		2017
Identifiable assets
Kaplan international	$	1,147,327	$	1,115,919
Higher education	172,215		231,986
Test preparation	140,793		130,938
Professional (U.S.)	90,812		91,630
Kaplan corporate and other	26,070		21,624
	$	1,577,217	$	1,592,097