UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q


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

For the Quarterly Period Ended ~~September~~June 30, ~~2021~~2022


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

Commission File Number 001-06714

~~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)~~

~~Securities Registered Pursuant to Section 12(b) of the Act:~~

~~Title of each class~~

~~Trading Symbol(s)~~

~~Name of each exchange on which registered~~

~~Class B Common Stock, par value $1.00 per share~~

~~GHC~~

~~New York Stock Exchange~~

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 ☒~~. No~~ ☐.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒~~. 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,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

~~Large Accelerated Filer~~

☒

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~~ ☒.

~~Shares outstanding at October 29, 2021:~~

~~Class A Common Stock – 964,001 Shares~~

~~Class B Common Stock – 3,988,665 Shares~~

~~GRAHAM HOLDINGS COMPANY~~

~~Index to Form 10-Q~~


~~PART I. FINANCIAL INFORMATION~~

~~Item 1.~~	~~Financial Statements~~

	~~Condensed Consolidated Statements of Operations~~	1

	~~Condensed Consolidated Statements of Comprehensive Income~~	2

	~~Condensed Consolidated Balance Sheets~~	3

	~~Condensed Consolidated Statements of Cash Flows~~	4

	~~Condensed Consolidated Statements of Changes in Common Stockholders' Equity~~	5

	~~Notes to Condensed Consolidated Financial Statements~~	7

	~~Organization, Basis of Presentation and Recent Accounting Pronouncements~~	7
	~~Acquisitions and Dispositions of Businesses~~	7
	~~Investments~~	9
	~~Accounts Receivable, Accounts Payable and Accrued Liabilities~~	10
	~~Inventories, Contracts in Progress and Vehicle Floor Plan Payable~~	11

	~~Goodwill and Other Intangible Assets~~	11
	~~Debt~~	13
	~~Fair Value Measurements~~	14
	~~Income Taxes~~	15
	~~Revenue From Contracts With Customers~~	15
	~~Earnings Per Share~~	16
	~~Pension and Postretirement Plans~~	18
	~~Other Non-Operating Income~~	19
	~~Accumulated Other Comprehensive Income (Loss)~~	20
	~~Contingencies~~	21
	~~Business Segments~~	22

~~Item 2.~~	~~Management’s Discussion and Analysis of Results of Operations and Financial Condition~~	26

~~Item 3.~~	~~Quantitative and Qualitative Disclosures about Market Risk~~	38

~~Item 4.~~	~~Controls and Procedures~~	38

~~PART II. OTHER INFORMATION~~

~~Item 1A.~~	~~Risk Factors~~	38

~~Item 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~	39

~~Item 6.~~	~~Exhibits~~	40

~~Signatures~~		41

~~PART I. FINANCIAL INFORMATION~~

~~Item 1. Financial Statements.~~

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)

Securities Registered Pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class B Common Stock, par value $1.00 per share

GHC

New York Stock Exchange

Large Accelerated Filer

☒

Accelerated
filer

☐

Non-accelerated
filer

☐

Smaller reporting
company

☐

Emerging growth
company

☐

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

Shares outstanding at July 29, 2022:

Class A Common Stock – 964,001 Shares

Class B Common Stock – 3,878,319 Shares

GRAHAM HOLDINGS COMPANY

Index to Form 10-Q


PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Consolidated Statements of Operations	1

	Condensed Consolidated Statements of Comprehensive (Loss) Income	2

	Condensed Consolidated Balance Sheets	3

	Condensed Consolidated Statements of Cash Flows	4

	Condensed Consolidated Statements of Changes in Common Stockholders' Equity	5

	Notes to Condensed Consolidated Financial Statements	7

	Organization, Basis of Presentation and Recent Accounting Pronouncements	7
	Acquisitions and Dispositions of Businesses	7
	Investments	9
	Accounts Receivable, Accounts Payable and Accrued Liabilities	10
	Inventories, Contracts in Progress and Vehicle Floor Plan Payable	11

	Goodwill and Other Intangible Assets	11
	Debt	12
	Fair Value Measurements	14

	Revenue From Contracts With Customers	15
	Earnings Per Share	16
	Pension and Postretirement Plans	18
	Other Non-Operating Income	19
	Accumulated Other Comprehensive Income (Loss)	20
	Contingencies	21
	Business Segments	23

Item 2.	Management’s Discussion and Analysis of Results of Operations and Financial Condition	26

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	37

Item 4.	Controls and Procedures	37

PART II. OTHER INFORMATION



Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38

Item 6.	Exhibits	39

Signatures		40

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

GRAHAM HOLDINGS COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)


		Three Months Ended September 30				Nine Months Ended September 30					Three Months Ended June 30				Six Months Ended June 30

(in thousands, except per share amounts)	(in thousands, except per share amounts)	2021		2020		2021		2020		(in thousands, except per share amounts)	2022		2021		2022		2021
Operating Revenues	Operating Revenues									Operating Revenues
Sales of services	Sales of services	$	515,280	$	492,399	$	1,509,986	$	1,492,631	Sales of services	$	563,113	$	511,037	$	1,120,682	$	994,706
Sales of goods	Sales of goods	294,156		224,583		813,057		609,479		Sales of goods	370,189		290,115		727,341		518,901
		809,436		716,982		2,323,043		2,102,110			933,302		801,152		1,848,023		1,513,607
Operating Costs and Expenses	Operating Costs and Expenses									Operating Costs and Expenses
Cost of services sold (exclusive of items shown below)	Cost of services sold (exclusive of items shown below)	307,138		298,250		906,555		929,877		Cost of services sold (exclusive of items shown below)	329,702		306,983		654,683		599,417
Cost of goods sold (exclusive of items shown below)	Cost of goods sold (exclusive of items shown below)	241,539		177,734		647,218		481,260		Cost of goods sold (exclusive of items shown below)	302,126		226,892		592,646		405,679
Selling, general and administrative	Selling, general and administrative	215,891		166,207		587,181		506,199		Selling, general and administrative	227,844		195,429		452,706		371,290
Depreciation of property, plant and equipment	Depreciation of property, plant and equipment	18,741		18,481		51,886		58,098		Depreciation of property, plant and equipment	19,413		16,600		38,888		33,145
Amortization of intangible assets	Amortization of intangible assets	15,981		14,150		43,807		42,642		Amortization of intangible assets	14,889		13,889		29,801		27,826
Impairment of goodwill and other long-lived assets		26,753		1,916		31,568		29,828
Impairment of long-lived assets										Impairment of long-lived assets	—		3,768		—		4,815
		826,043		676,738		2,268,215		2,047,904			893,974		763,561		1,768,724		1,442,172
(Loss) Income from Operations		(16,607)		40,244		54,828		54,206
Income from Operations										Income from Operations	39,328		37,591		79,299		71,435
Equity in earnings of affiliates, net	Equity in earnings of affiliates, net	12,964		4,092		28,168		3,727		Equity in earnings of affiliates, net	1,427		1,776		4,031		15,204
Interest income	Interest income	(79)		890		2,687		2,995		Interest income	696		1,876		1,411		2,766
Interest expense	Interest expense	(9,343)		(7,247)		(25,144)		(22,302)		Interest expense	(15,973)		(7,353)		(27,390)		(15,801)
Non-operating pension and postretirement benefit income, net	Non-operating pension and postretirement benefit income, net	27,561		10,489		81,564		41,028		Non-operating pension and postretirement benefit income, net	50,871		25,216		101,376		54,003
Gain (loss) on marketable equity securities, net		14,069		59,364		176,981		(1,139)
(Loss) gain on marketable equity securities, net										(Loss) gain on marketable equity securities, net	(165,540)		83,698		(118,628)		162,912
Other income, net	Other income, net	5,218		222		27,660		11,010		Other income, net	1,176		16,122		4,052		22,442
Income Before Income Taxes		33,783		108,054		346,744		89,525
(Loss) Income Before Income Taxes										(Loss) Income Before Income Taxes	(88,015)		158,926		44,151		312,961
(Benefit from) Provision for Income Taxes	(Benefit from) Provision for Income Taxes	(5,900)		30,000		78,500		26,500		(Benefit from) Provision for Income Taxes	(21,400)		43,000		14,200		84,400
Net Income		39,683		78,054		268,244		63,025
Net (Income) Loss Attributable to Noncontrolling Interests		(97)		(439)		(850)		199
Net Income Attributable to Graham Holdings Company Common Stockholders		$	39,586	$	77,615	$	267,394	$	63,224
Net (Loss) Income										Net (Loss) Income	(66,615)		115,926		29,951		228,561
Net Income Attributable to Noncontrolling Interests										Net Income Attributable to Noncontrolling Interests	(870)		(568)		(1,812)		(753)
Net (Loss) Income Attributable to Graham Holdings Company Common Stockholders										Net (Loss) Income Attributable to Graham Holdings Company Common Stockholders	$	(67,485)	$	115,358	$	28,139	$	227,808

Per Share Information Attributable to Graham Holdings Company Common Stockholders	Per Share Information Attributable to Graham Holdings Company Common Stockholders									Per Share Information Attributable to Graham Holdings Company Common Stockholders
Basic net income per common share		$	7.93	$	15.25	$	53.49	$	12.15
Basic net (loss) income per common share										Basic net (loss) income per common share	$	(13.95)	$	23.07	$	5.76	$	45.55
Basic average number of common shares outstanding	Basic average number of common shares outstanding	4,961		5,060		4,966		5,176		Basic average number of common shares outstanding	4,842		4,968		4,857		4,968
Diluted net income per common share		$	7.90	$	15.22	$	53.33	$	12.11
Diluted net (loss) income per common share										Diluted net (loss) income per common share	$	(13.95)	$	22.99	$	5.74	$	45.43
Diluted average number of common shares outstanding	Diluted average number of common shares outstanding	4,977		5,072		4,980		5,192		Diluted average number of common shares outstanding	4,842		4,985		4,870		4,981

See accompanying Notes to Condensed Consolidated Financial Statements.

GRAHAM HOLDINGS COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (UNAUDITED)


		Three Months Ended September 30				Nine Months Ended September 30					Three Months Ended June 30				Six Months Ended June 30
(in thousands)	(in thousands)	2021		2020		2021		2020		(in thousands)	2022		2021		2022		2021
Net Income		$	39,683	$	78,054	$	268,244	$	63,025
Net (Loss) Income										Net (Loss) Income	$	(66,615)	$	115,926	$	29,951	$	228,561
Other Comprehensive (Loss) Income, Before Tax	Other Comprehensive (Loss) Income, Before Tax									Other Comprehensive (Loss) Income, Before Tax
Foreign currency translation adjustments:	Foreign currency translation adjustments:									Foreign currency translation adjustments:
Translation adjustments arising during the period	Translation adjustments arising during the period	(16,033)		20,430		(15,352)		(541)		Translation adjustments arising during the period	(40,928)		1,167		(42,666)		681

Pension and other postretirement plans:	Pension and other postretirement plans:									Pension and other postretirement plans:
Amortization of net prior service cost included in net income	Amortization of net prior service cost included in net income	793		671		2,377		2,010		Amortization of net prior service cost included in net income	716		792		1,432		1,584
Amortization of net actuarial (gain) loss included in net income		(1,066)		304		(4,419)		914
Amortization of net actuarial gain included in net income										Amortization of net actuarial gain included in net income	(18,082)		(924)		(35,856)		(3,353)

		(273)		975		(2,042)		2,924			(17,366)		(132)		(34,424)		(1,769)
Cash flow hedges gain (loss)		169		157		803		(1,564)
Cash flow hedge gain										Cash flow hedge gain	1,091		13		2,733		634
Other Comprehensive (Loss) Income, Before Tax	Other Comprehensive (Loss) Income, Before Tax	(16,137)		21,562		(16,591)		819		Other Comprehensive (Loss) Income, Before Tax	(57,203)		1,048		(74,357)		(454)
Income tax benefit (expense) related to items of other comprehensive (loss) income		11		(299)		342		(431)
Income tax benefit related to items of other comprehensive (loss) income										Income tax benefit related to items of other comprehensive (loss) income	4,224		32		8,243		331
Other Comprehensive (Loss) Income, Net of Tax	Other Comprehensive (Loss) Income, Net of Tax	(16,126)		21,263		(16,249)		388		Other Comprehensive (Loss) Income, Net of Tax	(52,979)		1,080		(66,114)		(123)
Comprehensive Income		23,557		99,317		251,995		63,413
Comprehensive (income) loss attributable to noncontrolling interests		(97)		(439)		(850)		199
Total Comprehensive Income Attributable to Graham Holdings Company		$	23,460	$	98,878	$	251,145	$	63,612
Comprehensive (Loss) Income										Comprehensive (Loss) Income	(119,594)		117,006		(36,163)		228,438
Comprehensive income attributable to noncontrolling interests										Comprehensive income attributable to noncontrolling interests	(870)		(568)		(1,812)		(753)
Total Comprehensive (Loss) Income Attributable to Graham Holdings Company										Total Comprehensive (Loss) Income Attributable to Graham Holdings Company	$	(120,464)	$	116,438	$	(37,975)	$	227,685

See accompanying Notes to Condensed Consolidated Financial Statements.

GRAHAM HOLDINGS COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

As of
(in thousands) September 30,
2021 December 31,
2020
   (Unaudited)
Assets
Current Assets
Cash and cash equivalents $ 133,882 $ 413,991
Restricted cash 14,272 9,063
Investments in marketable equity securities and other investments 779,073 587,582
Accounts receivable, net 578,592 537,156
Inventories and contracts in progress 100,258 120,622
Prepaid expenses 78,212 75,523
Income taxes receivable 15,654 29,313
Other current assets 1,641 942
Total Current Assets 1,701,584 1,774,192
Property, Plant and Equipment, Net 461,107 378,286
Lease Right-of-Use Assets 427,225 462,560
Investments in Affiliates 171,249 155,777
Goodwill, Net 1,612,343 1,484,750
Indefinite-Lived Intangible Assets 120,093 120,437
Amortized Intangible Assets, Net 248,246 204,646
Prepaid Pension Cost 1,772,859 1,708,305
Deferred Income Taxes 7,854 8,396
Deferred Charges and Other Assets (includes $782 and $0 of restricted cash) 156,912 146,770
Total Assets $ 6,679,472 $ 6,444,119
Liabilities and Equity
Current Liabilities
Accounts payable and accrued liabilities $ 506,638 $ 520,236
Deferred revenue 371,208 331,021
Income taxes payable 6,869 5,140
Current portion of lease liabilities 84,144 86,797
Current portion of long-term debt 44,254 6,452
Dividends declared 7,496 —
Total Current Liabilities 1,020,609 949,646
Accrued Compensation and Related Benefits 205,514 201,918
Other Liabilities 33,282 48,768
Deferred Income Taxes 522,923 521,274
Mandatorily Redeemable Noncontrolling Interest 11,921 9,240
Lease Liabilities 392,438 428,849
Long-Term Debt 511,635 506,103
Total Liabilities 2,698,322 2,665,798
Redeemable Noncontrolling Interests 7,412 11,928
Preferred Stock — —
Common Stockholders’ Equity
Common stock 20,000 20,000
Capital in excess of par value 388,386 388,159
Retained earnings 7,042,061 6,804,822
Accumulated other comprehensive income, net of taxes
Cumulative foreign currency translation adjustment (5,598) 9,754
Unrealized gain on pensions and other postretirement plans 593,773 595,287
Cash flow hedges (1,110) (1,727)
Cost of Class B common stock held in treasury (4,073,677) (4,056,993)
Total Common Stockholders’ Equity 3,963,835 3,759,302
Noncontrolling Interests 9,903 7,091
Total Equity 3,973,738 3,766,393
Total Liabilities and Equity $ 6,679,472 $ 6,444,119


	As of
(in thousands)	June 30, 2022		December 31, 2021
	(Unaudited)
Assets
Current Assets
Cash and cash equivalents	$	126,368	$	145,886
Restricted cash	18,849		12,175
Investments in marketable equity securities and other investments	662,831		824,445
Accounts receivable, net	475,333		607,471

Inventories and contracts in progress	178,280		141,471
Prepaid expenses	97,566		81,741
Income taxes receivable	39,789		32,744
Other current assets	2,411		1,241

Total Current Assets	1,601,427		1,847,174
Property, Plant and Equipment, Net	442,409		468,126
Lease Right-of-Use Assets	434,843		437,969
Investments in Affiliates	172,612		155,444
Goodwill, Net	1,617,648		1,649,582
Indefinite-Lived Intangible Assets	137,545		142,180
Amortized Intangible Assets, Net	216,612		247,120
Prepaid Pension Cost	2,364,135		2,306,514
Deferred Income Taxes	7,042		7,900
Deferred Charges and Other Assets (includes $646 and $782 of restricted cash)	167,032		163,516

Total Assets	$	7,161,305	$	7,425,525

Liabilities and Equity
Current Liabilities
Accounts payable and accrued liabilities	$	560,122	$	583,629
Deferred revenue	283,701		358,720
Income taxes payable	3,440		4,585


Current portion of lease liabilities	70,896		77,655
Current portion of long-term debt	94,578		141,749
Dividends declared	7,688		—


Total Current Liabilities	1,020,425		1,166,338

Accrued Compensation and Related Benefits	164,239		175,391
Other Liabilities	28,686		36,497
Deferred Income Taxes	670,512		676,706
Mandatorily Redeemable Noncontrolling Interest	25,149		13,661
Lease Liabilities	401,977		405,200
Long-Term Debt	511,574		525,752

Total Liabilities	2,822,562		2,999,545
Commitments and Contingencies (Note 14)	0		0

Redeemable Noncontrolling Interests	16,500		14,311
Preferred Stock	—		—
Common Stockholders’ Equity
Common stock	20,000		20,000
Capital in excess of par value	392,973		389,456
Retained earnings	7,131,747		7,126,761
Accumulated other comprehensive income, net of taxes
Cumulative foreign currency translation adjustment	(48,964)		(6,298)

Unrealized gain on pensions and other postretirement plans	953,605		979,157
Cash flow hedge	633		(1,471)
Cost of Class B common stock held in treasury	(4,141,303)		(4,108,022)
Total Common Stockholders’ Equity	4,308,691		4,399,583
Noncontrolling Interests	13,552		12,086
Total Equity	4,322,243		4,411,669
Total Liabilities and Equity	$	7,161,305	$	7,425,525

See accompanying Notes to Condensed Consolidated Financial Statements.

GRAHAM HOLDINGS COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


		Nine Months Ended September 30					Six Months Ended June 30
(in thousands)	(in thousands)	2021		2020		(in thousands)	2022		2021
Cash Flows from Operating Activities	Cash Flows from Operating Activities					Cash Flows from Operating Activities
Net Income	Net Income	$	268,244	$	63,025	Net Income	$	29,951	$	228,561
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and goodwill and other long-lived asset impairments		127,261		130,568
Depreciation, amortization and long-lived asset impairments						Depreciation, amortization and long-lived asset impairments	68,689		65,786
Amortization of lease right-of-use asset	Amortization of lease right-of-use asset	55,246		70,214		Amortization of lease right-of-use asset	33,473		36,774
Net pension benefit and special separation benefit expense		(68,644)		(27,669)
Gain on marketable equity securities and cost method investments, net		(179,737)		(493)
Gain on disposition and write-down of businesses, property, plant and equipment, investments and other assets, net		(14,406)		(5,918)
Net pension benefit						Net pension benefit	(90,971)		(45,413)
Loss (gain) on marketable equity securities and cost method investments, net						Loss (gain) on marketable equity securities and cost method investments, net	118,628		(165,257)
Gain on disposition of businesses, property, plant and equipment and investments, net						Gain on disposition of businesses, property, plant and equipment and investments, net	(2,265)		(15,080)
Provision for doubtful trade receivables	Provision for doubtful trade receivables	4,171		8,229		Provision for doubtful trade receivables	2,218		2,506
Stock-based compensation expense, net		4,686		4,758
Foreign exchange gain		(674)		(877)
Equity in (earnings) losses of affiliates, net of distributions		(11,364)		2,784
Provision for (benefit from) deferred income taxes		43,580		(733)
Stock-based compensation expense, net of forfeitures						Stock-based compensation expense, net of forfeitures	3,102		3,060
Foreign exchange loss (gain)						Foreign exchange loss (gain)	1,525		(680)
Equity in earnings of affiliates, net of distributions						Equity in earnings of affiliates, net of distributions	2,036		(5,053)
Provision for deferred income taxes						Provision for deferred income taxes	5,795		52,856
Accretion expense and change in fair value of contingent consideration liabilities	Accretion expense and change in fair value of contingent consideration liabilities	(4,325)		—		Accretion expense and change in fair value of contingent consideration liabilities	(2,655)		(2,679)
Change in operating assets and liabilities:	Change in operating assets and liabilities:					Change in operating assets and liabilities:
Accounts receivable, net		(27,350)		139,306
Accounts receivable						Accounts receivable	126,006		38,541
Inventories	Inventories	21,117		51		Inventories	(36,360)		(4,971)
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	(7,979)		(65,708)		Accounts payable and accrued liabilities	(37,455)		(15,592)
Deferred revenue	Deferred revenue	33,561		(26,094)		Deferred revenue	(59,558)		(61,591)
Income taxes receivable		10,724		(190)
Income taxes receivable/payable						Income taxes receivable/payable	(8,284)		10,681
Lease liabilities	Lease liabilities	(61,775)		(67,299)		Lease liabilities	(40,872)		(41,655)
Other assets and other liabilities, net	Other assets and other liabilities, net	3,192		16,791		Other assets and other liabilities, net	(15,834)		(9,343)
Other	Other	1,743		145		Other	2,239		1,394
Net Cash Provided by Operating Activities	Net Cash Provided by Operating Activities	197,271		240,890		Net Cash Provided by Operating Activities	99,408		72,845
Cash Flows from Investing Activities	Cash Flows from Investing Activities					Cash Flows from Investing Activities
Investments in certain businesses, net of cash acquired		(272,428)		(20,080)
Proceeds from sales of marketable equity securities						Proceeds from sales of marketable equity securities	74,233		37,629
Purchases of property, plant and equipment	Purchases of property, plant and equipment	(140,935)		(56,121)		Purchases of property, plant and equipment	(32,154)		(27,502)
Purchases of marketable equity securities	Purchases of marketable equity securities	(48,036)		—		Purchases of marketable equity securities	(31,468)		(48,036)
Proceeds from sales of marketable equity securities		38,308		93,775
Investments in equity affiliates, cost method and other investments	Investments in equity affiliates, cost method and other investments	(6,610)		(8,298)		Investments in equity affiliates, cost method and other investments	(27,950)		(4,910)
Net proceeds from disposition of businesses, property, plant and equipment, investments and other assets		8,771		1,570
Investments in certain businesses, net of cash acquired						Investments in certain businesses, net of cash acquired	(3,053)		(272,428)
Net proceeds from disposition of businesses, property, plant and equipment, and investments						Net proceeds from disposition of businesses, property, plant and equipment, and investments	2,324		4,735

Return of investment in equity affiliates	Return of investment in equity affiliates	474		314		Return of investment in equity affiliates	152		4
Other		—		1,562
Net Cash (Used in) Provided by Investing Activities		(420,456)		12,722

Net Cash Used in Investing Activities						Net Cash Used in Investing Activities	(17,916)		(310,508)
Cash Flows from Financing Activities	Cash Flows from Financing Activities					Cash Flows from Financing Activities
Net payments under revolving credit facilities						Net payments under revolving credit facilities	(47,000)		(2,304)
Common shares repurchased						Common shares repurchased	(34,303)		—
Dividends paid						Dividends paid	(15,465)		(15,106)
Net proceeds from (repayments of) vehicle floor plan payable						Net proceeds from (repayments of) vehicle floor plan payable	14,121		(9,591)
Repayments of borrowings						Repayments of borrowings	(7,580)		(2,071)
Proceeds from bank overdrafts						Proceeds from bank overdrafts	6,073		4,433
Deferred payments of acquisitions	Deferred payments of acquisitions	(30,866)		(5,010)		Deferred payments of acquisitions	(4,731)		(30,866)
Dividends paid		(22,659)		(22,870)
Net borrowings under revolving credit facilities		37,696		75,905
Repayments of borrowings		(16,878)		(75,841)
Proceeds from exercise of stock options						Proceeds from exercise of stock options	1,437		—
Purchase of noncontrolling interest						Purchase of noncontrolling interest	—		(3,508)
Issuance of borrowings	Issuance of borrowings	22,684		2,084		Issuance of borrowings	—		121
Common shares repurchased		(21,840)		(123,155)
Net payments on vehicle floor plan payable		(15,035)		(16,300)
Purchase of noncontrolling interest		(3,508)		—
Proceeds from bank overdrafts		1,137		6,454

Proceeds from exercise of stock options		—		5,335

Other	Other	1,244		(276)		Other	(2,123)		(283)
Net Cash Used in Financing Activities	Net Cash Used in Financing Activities	(48,025)		(153,674)		Net Cash Used in Financing Activities	(89,571)		(59,175)
Effect of Currency Exchange Rate Change	Effect of Currency Exchange Rate Change	(2,908)		(2,729)		Effect of Currency Exchange Rate Change	(4,901)		(684)
Net (Decrease) Increase in Cash and Cash Equivalents and Restricted Cash		(274,118)		97,209
Net Decrease in Cash and Cash Equivalents and Restricted Cash						Net Decrease in Cash and Cash Equivalents and Restricted Cash	(12,980)		(297,522)
Beginning Cash and Cash Equivalents and Restricted Cash	Beginning Cash and Cash Equivalents and Restricted Cash	423,054		214,044		Beginning Cash and Cash Equivalents and Restricted Cash	158,843		423,054
Ending Cash and Cash Equivalents and Restricted Cash	Ending Cash and Cash Equivalents and Restricted Cash	$	148,936	$	311,253	Ending Cash and Cash Equivalents and Restricted Cash	$	145,863	$	125,532

See accompanying Notes to Condensed Consolidated Financial Statements.

GRAHAM HOLDINGS COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN COMMON STOCKHOLDERS’ EQUITY (UNAUDITED)


(in thousands)	(in thousands)	Common Stock		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Income		Treasury Stock		Noncontrolling Interest		Total Equity		Redeemable Noncontrolling Interest		(in thousands)	Common Stock		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Income		Treasury Stock		Noncontrolling Interest		Total Equity		Redeemable Noncontrolling Interest
As of December 31, 2020		$	20,000	$	388,159	$	6,804,822	$	603,314	$	(4,056,993)	$	7,091	$	3,766,393	$	11,928
Net income for the period						112,635								112,635
Net income attributable to noncontrolling interests						(185)						185		—

Change in redemption value of redeemable noncontrolling interests				697								64		761		(634)
Distribution to noncontrolling interest												(126)		(126)
Dividends on common stock						(15,106)								(15,106)

Issuance of Class B common stock, net of restricted stock forfeitures				(5,188)						5,084				(104)
Amortization of unearned stock compensation and stock option expense				1,589										1,589
Other comprehensive loss, net of income taxes								(1,203)						(1,203)
Purchase of redeemable noncontrolling interest														—		(3,508)

As of March 31, 2021		$	20,000	$	385,257	$	6,902,166	$	602,111	$	(4,051,909)	$	7,214	$	3,864,839	$	7,786
As of December 31, 2021																		As of December 31, 2021	$	20,000	$	389,456	$	7,126,761	$	971,388	$	(4,108,022)	$	12,086	$	4,411,669	$	14,311
Net income for the period	Net income for the period					115,926								115,926				Net income for the period					96,566								96,566
Net income attributable to noncontrolling interests	Net income attributable to noncontrolling interests					(699)						699		—				Net income attributable to noncontrolling interests					(986)						986		—

Net loss attributable to redeemable noncontrolling interests	Net loss attributable to redeemable noncontrolling interests					131								131		(131)		Net loss attributable to redeemable noncontrolling interests					44								44		(44)
Change in redemption value of redeemable noncontrolling interests	Change in redemption value of redeemable noncontrolling interests											65		65		65		Change in redemption value of redeemable noncontrolling interests											64		64		64
Distribution to noncontrolling interest	Distribution to noncontrolling interest											(152)		(152)				Distribution to noncontrolling interest											(357)		(357)
Dividends on common stock	Dividends on common stock					(7,553)								(7,553)				Dividends on common stock					(15,497)								(15,497)
Repurchase of Class B common stock																		Repurchase of Class B common stock									(9,527)				(9,527)
Issuance of Class B common stock																		Issuance of Class B common stock									1,437				1,437
Amortization of unearned stock compensation and stock option expense																		Amortization of unearned stock compensation and stock option expense			1,677										1,677
Other comprehensive loss, net of income taxes																		Other comprehensive loss, net of income taxes							(13,135)						(13,135)

Forfeiture of restricted stock awards, net of Class B common stock issuances				(47)						(49)				(96)
Amortization of unearned stock compensation and stock option expense				1,672										1,672
Other comprehensive income, net of income taxes								1,080						1,080
As of June 30, 2021		$	20,000	$	386,882	$	7,009,971	$	603,191	$	(4,051,958)	$	7,826	$	3,975,912	$	7,720
Net income for the period						39,683								39,683

As of March 31, 2022																		As of March 31, 2022	$	20,000	$	391,133	$	7,206,888	$	958,253	$	(4,116,112)	$	12,779	$	4,472,941	$	14,331
Net loss for the period																		Net loss for the period					(66,615)								(66,615)
Noncontrolling interest capital contribution	Noncontrolling interest capital contribution											1,750		1,750				Noncontrolling interest capital contribution											140		140
Net income attributable to noncontrolling interest						(469)						469		—
Acquisition of noncontrolling interest																		Acquisition of noncontrolling interest											512		512
Net income attributable to noncontrolling interests																		Net income attributable to noncontrolling interests					(929)						929		—
Acquisition of redeemable noncontrolling interest																		Acquisition of redeemable noncontrolling interest													—		2,164
Net loss attributable to redeemable noncontrolling interests	Net loss attributable to redeemable noncontrolling interests					372								372		(372)		Net loss attributable to redeemable noncontrolling interests					59								59		(59)
Change in redemption value of redeemable noncontrolling interests	Change in redemption value of redeemable noncontrolling interests											64		64		64		Change in redemption value of redeemable noncontrolling interests											64		64		64
Distribution to noncontrolling interest	Distribution to noncontrolling interest											(206)		(206)				Distribution to noncontrolling interest											(872)		(872)
Dividends on common stock	Dividends on common stock					(7,496)								(7,496)				Dividends on common stock					(7,656)								(7,656)
Repurchase of Class B common stock	Repurchase of Class B common stock									(21,840)				(21,840)				Repurchase of Class B common stock									(24,776)				(24,776)
Issuance of Class B common stock, net of restricted stock forfeitures				(188)						121				(67)
Forfeiture of restricted stock awards, net of Class B common stock issuances																		Forfeiture of restricted stock awards, net of Class B common stock issuances			(462)						(415)				(877)
Amortization of unearned stock compensation and stock option expense	Amortization of unearned stock compensation and stock option expense			1,692										1,692				Amortization of unearned stock compensation and stock option expense			2,302										2,302
Other comprehensive loss, net of income taxes	Other comprehensive loss, net of income taxes							(16,126)						(16,126)				Other comprehensive loss, net of income taxes							(52,979)						(52,979)
As of June 30, 2022																		As of June 30, 2022	$	20,000	$	392,973	$	7,131,747	$	905,274	$	(4,141,303)	$	13,552	$	4,322,243	$	16,500

As of September 30, 2021		$	20,000	$	388,386	$	7,042,061	$	587,065	$	(4,073,677)	$	9,903	$	3,973,738	$	7,412

(in thousands) Common
Stock Capital in
Excess of
Par Value Retained
Earnings Accumulated Other Comprehensive Income Treasury
Stock Noncontrolling
Interest Total Equity Redeemable Noncontrolling Interest
As of December 31, 2019 $ 20,000 $ 381,669 $ 6,534,427 $ 303,295 $ (3,920,152) $ 7,557 $ 3,326,796 $ 5,655
Net loss for the period (33,891) (33,891)
Net loss attributable to noncontrolling interests 772 (772) —
Net income attributable to redeemable noncontrolling interests (126) (126) 126
Dividends on common stock (15,289) (15,289)
Repurchase of Class B common stock (33,610) (33,610)
Issuance of Class B common stock 5,335 5,335
Amortization of unearned stock compensation and stock option expense 1,568 1,568
Other comprehensive loss, net of income taxes (37,943) (37,943)
As of March 31, 2020 $ 20,000 $ 383,237 $ 6,485,893 $ 265,352 $ (3,948,427) $ 6,785 $ 3,212,840 $ 5,781
Net income for the period 18,862 18,862
Net loss attributable to noncontrolling interests 37 (37) —
Acquisition of redeemable noncontrolling interest — 6,005
Net income attributable to redeemable noncontrolling interests (45) (45) 45
Dividends on common stock (7,581) (7,581)
Repurchase of Class B common stock (29,295) (29,295)
Amortization of unearned stock compensation and stock option expense 1,567 1,567
Other comprehensive income, net of income taxes 17,068 17,068
As of June 30, 2020 $ 20,000 $ 384,804 $ 6,497,166 $ 282,420 $ (3,977,722) $ 6,748 $ 3,213,416 $ 11,831
Net income for the period 78,054 78,054
Net income attributable to noncontrolling interest (373) 373 —
Net income attributable to redeemable noncontrolling interests (66) (66) 66
Distribution to noncontrolling interest (276) (276)
Dividends on common stock (7,100) (7,100)
Repurchase of Class B common stock (60,250) (60,250)
Forfeiture of restricted stock awards, net of Class B common stock issuances (66) (80) (146)
Amortization of unearned stock compensation and stock option expense 1,768 1,768
Other comprehensive income, net of income taxes 21,263 21,263
Other (5) (5)
As of September 30, 2020 $ 20,000 $ 386,506 $ 6,567,676 $ 303,683 $ (4,038,052) $ 6,845 $ 3,246,658 $ 11,897






































(in thousands)	Common Stock		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Income		Treasury Stock		Noncontrolling Interest		Total Equity		Redeemable Noncontrolling Interest
As of December 31, 2020	$	20,000	$	388,159	$	6,804,822	$	603,314	$	(4,056,993)	$	7,091	$	3,766,393	$	11,928
Net income for the period					112,635								112,635

Net income attributable to noncontrolling interests					(185)						185		—
Change in redemption value of redeemable noncontrolling interests			697								64		761		(634)

Distribution to noncontrolling interest											(126)		(126)
Dividends on common stock					(15,106)								(15,106)


Issuance of Class B common stock, net of restricted stock forfeitures			(5,188)						5,084				(104)
Amortization of unearned stock compensation and stock option expense			1,589										1,589
Other comprehensive loss, net of income taxes							(1,203)						(1,203)
Purchase of redeemable noncontrolling interest													—		(3,508)
As of March 31, 2021	$	20,000	$	385,257	$	6,902,166	$	602,111	$	(4,051,909)	$	7,214	$	3,864,839	$	7,786
Net income for the period					115,926								115,926
Net income attributable to noncontrolling interests					(699)						699		—
Net loss attributable to redeemable noncontrolling interests					131								131		(131)
Change in redemption value of redeemable noncontrolling interests											65		65		65
Distribution to noncontrolling interest											(152)		(152)
Dividends on common stock					(7,553)								(7,553)

Forfeiture of restricted stock awards, net of Class B common stock issuances			(47)						(49)				(96)
Amortization of unearned stock compensation and stock option expense			1,672										1,672
Other comprehensive income, net of income taxes							1,080						1,080
As of June 30, 2021	$	20,000	$	386,882	$	7,009,971	$	603,191	$	(4,051,958)	$	7,826	$	3,975,912	$	7,720

See accompanying Notes to Condensed Consolidated Financial Statements.

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 (U.S.). The Company’s media operations comprise the ownership and operation of 7 television broadcasting stations, several websites and print publications, podcast content and a marketing solutions provider. The Company’s other business operations include manufacturing, automotive dealerships, consumer internet brands, restaurants and entertainment venues, custom framing services 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 ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 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, ~~2020.~~2021.

The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP.

Use of Estimates in the Preparation of the Condensed Consolidated Financial Statements – The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and judgments that affect the amounts reported herein. Management bases its estimates and assumptions on historical experience and on various other factors that are believed to be reasonable under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in those estimates.

The Company assessed certain accounting matters that generally require consideration of forecasted financial information, in context with the information reasonably available to the Company and the unknown future impacts of the novel coronavirus (COVID-19) pandemic as of ~~September~~June 30, ~~2021~~2022 and through the date of this filing. The accounting matters assessed included, but were not limited to, the Company’s carrying value of goodwill and other long-lived assets, allowance for doubtful accounts, inventory valuation and related reserves, fair value of financial assets, valuation allowances for tax assets and revenue recognition. T~~Other than the goodwill and other long-lived asset impairment charges (see Note 6 and Note 8), there were~~hese assessments had no ~~other impacts to~~impact on the Company’s condensed consolidated financial statements as of and for the ~~nine~~six months ended ~~September~~June 30, ~~2021 resulting from our assessments.~~2022. The Company’s assessments as of and for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 resulted in ~~goodwill, indefinite-lived asset and~~ other long-lived asset impairment charges (see ~~Note 6 and~~ Note 8). The Company’s future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in material impacts to the Company’s condensed consolidated financial statements in future reporting periods.

2. ACQUISITIONS AND DISPOSITIONS OF BUSINESSES

Acquisitions. On July 5, 2022, the Company’s automotive subsidiary acquired 2 automotive dealerships, including the real property for the dealership operations. In addition to a cash payment and the assumption of $10.9 million in floor plan payables, the automotive subsidiary borrowed $77.4 million to finance the acquisition. The dealerships are operated and managed by an entity affiliated with Christopher J. Ourisman, a member of the Ourisman Automotive Group family of dealerships. These acquisitions expand the Company’s automotive business operations and will be included in automotive.

In May 2022, Graham Healthcare Group (GHG) acquired 2 small businesses which are included in healthcare.

During 2021, the Company acquired 6 businesses: 2 in education, 2 in healthcare, 1 in automotive, and 1 in other businesses for $392.4 million in cash and contingent consideration and the assumption of floor plan payables. The assets and liabilities of the companies acquired were recorded at their estimated fair values at the date of the acquisition.

On June 14, 2021, the Company acquired all of the outstanding common shares of Leaf Group Ltd. (Leaf) for $308.6 million in cash and the assumption of $9.2 million in liabilities related to their previous stock compensation plan, which will be paid in the future. Leaf is a consumer internet company that builds creator-driven brands in lifestyle and home and art design categories. The acquisition is expected to provide benefits in the future by diversifying the Company’s business operations and providing operating synergies with other business units. The Company includes Leaf in other businesses.

~~During 2020,~~Kaplan acquired certain assets of Projects in Knowledge, a continuing medical education provider for healthcare professionals, and another small business in November 2021. These acquisitions are expected to build upon Kaplan’s existing customer base in the medical and test preparation fields. Both business are included in Kaplan’s supplemental education division.

In December 2021, GHG acquired 2 businesses, a home health business in Florida and a 50.1% interest in Weiss, a physician practice specializing in allergies, asthma and immunology. The minority shareholder of Weiss has an option to put 10% of the shares to the Company ~~acquired 3 businesses: 2~~annually starting in ~~education~~2026 and ~~1 in other businesses for $96.8 million in cash and contingent consideration. The assets and liabilities~~may put all of the ~~companies acquired were recorded at their estimated fair values at the date of acquisition.~~

~~In the first three months of 2020, Kaplan acquired 2 small businesses; 1~~shares starting in ~~its supplemental education division and 1 in its international division.~~

In May 2020, the Company acquired an additional interest in Framebridge, Inc. for cash and contingent consideration that resulted in the Company obtaining control of the investee. Following the acquisition, the Company owns 93.4% of Framebridge. The Company previously accounted for Framebridge under the equity method, and included it in Investments in Affiliates on the Condensed Consolidated Balance Sheet (see Note 3). The contingent consideration is primarily based on Framebridge achieving revenue milestones within a specific time period. The fair value of the contingent consideration at the acquisition date was $50.6 million, determined using a Monte Carlo simulation.2033. The fair value of the redeemable noncontrolling interest in ~~Framebridge~~Weiss was ~~$6.0~~$6.6 million ~~as of~~at the acquisition date, determined using an income approach. These acquisitions are expected to expand the market the healthcare division serves and are included in healthcare.

On December 28, 2021, the Company’s automotive subsidiary acquired a ~~market approach. The minority shareholder has an option to put 20%~~Ford automotive dealership for cash and the assumption of $16.2 million in floor plan payables (see Note 5). In connection with the acquisition, the automotive subsidiary of the ~~minority shares annually starting in 2024.~~Company borrowed $22.5 million to finance the acquisition. The dealership is operated and managed by an entity affiliated with Christopher J. Ourisman, a member of the Ourisman Automotive Group family of dealerships. The acquisition ~~is expected to provide benefits in~~expands the ~~future by diversifying the~~ Company’s automotive business operations and is included in ~~other businesses.~~automotive.

Acquisition-related costs for acquisitions that closed during the first ~~nine~~six months of 2021 ~~and 2020~~ were ~~$1.6~~$1.4 million ~~and $1.1 million, respectively,~~ and were expensed as incurred. The aggregate purchase price of the 2021 ~~and 2020~~ acquisitions was allocated as follows ~~(2021~~ on a preliminary ~~basis),~~basis, based on acquisition date fair values to the following assets and liabilities:

Purchase Price Allocation
Nine Months Ended Year Ended
(in thousands) September 30, 2021 December 31, 2020
Accounts receivable $ 16,080 $ 745
Inventory 777 3,496
Property, plant and equipment 6,019 3,346
Lease right-of-use assets 7,744 6,580
Goodwill 167,334 73,951
Amortized intangible assets 88,000 14,589
Other assets 4,507 975
Deferred income taxes 40,850 15,958
Other liabilities (49,823) (14,917)
Current and noncurrent lease liabilities (7,742) (6,593)
Redeemable noncontrolling interest — (6,005)
Aggregate purchase price, net of cash acquired $ 273,746 $ 92,125


	Purchase Price Allocation
	Year Ended
(in thousands)	December 31, 2021
Accounts receivable	$	17,928
Inventory	25,383
Property, plant and equipment	13,126
Lease right-of-use assets	25,890
Goodwill	204,070
Indefinite-lived intangible assets	22,200
Amortized intangible assets	99,800
Other assets	4,911
Deferred income taxes	44,975
Floor plan payables	(16,198)
Other liabilities	(52,760)

Current and noncurrent lease liabilities	(25,593)
Redeemable noncontrolling interest	(6,616)

Aggregate purchase price, net of cash acquired	$	357,116

The 2021 fair values recorded were based upon preliminary valuations and the estimates and assumptions used in such valuations are subject to change within the measurement period (up to one year from the acquisition date). These values include measurement period adjustments related to accounts receivable, goodwill, amortized intangible assets, current and noncurrent lease liabilities, deferred income taxes and contingent consideration. The recording of deferred tax assets and liabilities, working capital and the amounts 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 ~~$43.4 million and $3.2~~$80.0 million of goodwill for income tax purposes for the acquisitions completed in ~~2021 and 2020, respectively.~~2021.

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 for the third quarter of 2021 include aggregate revenues and operating losses for the company acquired in 2021 of $57.5 million and $7.2 million, respectively. The Company's Condensed Consolidated Statements of Operations include aggregate revenues and operating losses of $66.7 million and $9.1 million, respectively, for the first nine months of 2021. The following unaudited pro forma financial information presents the Company’s results as if the

current year acquisitions had occurred at the beginning of ~~2020.~~2021. The unaudited pro forma information also includes the ~~2020~~2021 acquisitions as if they occurred at the beginning of ~~2019:~~2020:


		Three Months Ended September 30				Nine Months Ended September 30					Three Months Ended June 30				Six Months Ended June 30
(in thousands)	(in thousands)	2021		2020		2021		2020		(in thousands)	2022		2021		2022		2021
Operating revenues	Operating revenues	$	809,810	$	780,302	$	2,416,109	$	2,255,760	Operating revenues	$	934,076	$	903,405	$	1,851,383	$	1,728,945
Net income		40,066		75,328		257,887		38,627
Net (loss) income										Net (loss) income	(66,299)		113,875		31,152		225,206

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 December 2020, the Company completed the sale of Megaphone which was included in other businesses.~~

Other Transactions. In March 2021, Hoover’s minority shareholders put the remaining outstanding shares to the Company, which had a redemption value of $3.5 million. Following the redemption, the Company owns 100% of Hoover.

3. INVESTMENTS

Money Market Investments. As of ~~September~~June 30, ~~2021~~ 2022, the Company had no money market investments ~~compared to $268.8~~of $17.8 million ~~at December 31, 2020,~~ that are classified as cash and cash equivalents in the Company’s Condensed Consolidated Balance Sheets. The Company had no money market investments as of December 31, 2021.

Investments in Marketable Equity Securities. Investments in marketable equity securities consist of the following:


		As of					As of
		September 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
(in thousands)	(in thousands)					(in thousands)
Total cost	Total cost	$	275,825	$	232,847	Total cost	$	269,576	$	273,201
Gross unrealized gains	Gross unrealized gains	489,191		340,255		Gross unrealized gains	382,007		537,915
Gross unrealized losses	Gross unrealized losses	(185)		—		Gross unrealized losses	(2,979)		(1,119)
Total Fair Value	Total Fair Value	$	764,831	$	573,102	Total Fair Value	$	648,604	$	809,997

At ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company owned 55,430 and 44,430 shares ~~and 28,000 shares, respectively,~~ in Markel Corporation (Markel) valued at ~~$53.1~~$71.7 million and ~~$28.9~~$54.8 million, respectively. The Co-Chief Executive Officer of Markel, Mr. Thomas S. Gayner, is a member of the Company’s Board of Directors. As of ~~September~~June 30, ~~2021,~~2022, there was no marketable equity security holding that exceeded 5% of the Company’s total assets.

The Company purchased $31.5 million of marketable equity securities during the first six months of 2022. The Company purchased $48.0 million of marketable equity securities during the first ~~nine~~six months of 2021. ~~There were no purchases~~

During the first six months of 2022, the gross cumulative realized gains from the sales of marketable equity securities ~~during the first nine months of 2020.~~

were $39.1 million. The total proceeds from such sales were $74.2 million. During the first ~~nine~~six months of 2021, the gross cumulative realized gains from the sales of marketable equity securities were $27.7 million. The total proceeds from such sales were $38.3 million. During the first nine months of 2020, the gross cumulative realized gains from the sales of marketable equity securities were $23.0 million. The total proceeds from such sales were $93.8$37.6 million.

The net (loss) gain ~~(loss)~~ on marketable equity securities comprised the following:


		Three Months Ended September 30				Nine Months Ended September 30					Three Months Ended June 30				Six Months Ended June 30
(in thousands)	(in thousands)	2021		2020		2021		2020		(in thousands)	2022		2021		2022		2021
Gain (loss) on marketable equity securities, net		$	14,069	$	59,364	$	176,981	$	(1,139)
(Loss) gain on marketable equity securities, net										(Loss) gain on marketable equity securities, net	$	(165,540)	$	83,698	$	(118,628)	$	162,912
Less: Net losses (gains) in earnings from marketable equity securities sold and donated	Less: Net losses (gains) in earnings from marketable equity securities sold and donated	411		—		(7,750)		13,382		Less: Net losses (gains) in earnings from marketable equity securities sold and donated	4,838		(8,161)		10,605		(8,161)
Net unrealized gains in earnings from marketable equity securities still held at the end of the period		$	14,480	$	59,364	$	169,231	$	12,243
Net unrealized (losses) gains in earnings from marketable equity securities still held at the end of the period										Net unrealized (losses) gains in earnings from marketable equity securities still held at the end of the period	$	(160,702)	$	75,537	$	(108,023)	$	154,751

Investments in Affiliates. As of ~~September~~June 30, ~~2021,~~2022, the Company held an approximate 12% interest in Intersection Holdings, LLC (Intersection), and accounts for its investment under the equity method. The Company holds two of the ten seats of Intersection’s governing board, which allows the Company to exercise significant influence over

Intersection. As of June 30, 2022, the Company also held investments in several other affiliates; ~~Graham Healthcare Group (GHG)~~GHG held a 40% interest in Residential Home Health Illinois, a ~~42.5%~~40% interest in Residential Hospice Illinois, a 40% interest in the joint venture formed between GHG and a Michigan hospital, and a 40% interest in the joint venture formed between GHG and Allegheny Health Network (AHN). During the first quarter of 2022, GHG invested an additional $18.5 million in the Residential Home Health Illinois and Residential Hospice Illinois affiliates to fund their acquisition of certain home health and hospice assets of the NorthShore University HealthSystem. The transaction diluted GHG’s interest in Residential Hospice Illinois resulting in a $0.6 million gain on the sale of investment in affiliate (see Note 12). For the three and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, the Company recorded ~~$2.8~~$3.7 million and ~~$8.0~~$7.0 million, respectively, in revenue for services provided to the affiliates of GHG. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, the Company recorded ~~$2.4~~$2.7 million and ~~$7.1~~$5.2 million, respectively, in revenue for services provided to the affiliates of GHG.

The Company had ~~$51.3~~$54.3 million and ~~$26.1~~$52.5 million in its investment account that represents cumulative undistributed income in its investments in affiliates as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

In the third quarter of 2021, the Company recorded an impairment charge of $6.6 million on 1 of its investments in affiliates as a result of the challenging economic environment for this business following an announcement by the Chinese government to reform the education sector for private education companies. In the first quarter of 2020, the Company recorded impairment charges of $3.6 million on 2 of its investments in affiliates as a result of the challenging economic environment for these businesses, of which $2.7 million related to the Company’s investment in Framebridge. It is reasonably possible that further COVID-19 disruptions could result in additional impairment charges related to the Company’s investments in affiliates should the impact of COVID-19 not dissipate or have a worsening adverse impact on our affiliates in future periods. The Company records its share of the earnings or losses of its affiliates from their most recent available financial statements. In some instances, the reporting period of the affiliates’ financial statements lags the Company’s financial reporting period, but such lag is never more than three months. It is possible that the Company’s results of operations for the nine months ended September 30, 2021 does not capture the impact of the COVID-19 pandemic on the earnings or losses of the affiliates whose financial results are recorded on a lag basis.

~~In May 2020, the Company made an additional investment in Framebridge (see Note 2) th~~at resulted in the Company obtaining control of the investee. The results of operations, cash flows, assets and liabilities of Framebridge are included in the condensed consolidated financial statements of the Company from the date of the acquisition. Timothy J. O’Shaughnessy, President and Chief Executive Officer of Graham Holdings Company, was a personal investor in Framebridge and served as Chairman of the Board prior to the acquisition of the additional interest. The Company acquired Mr. O’Shaughnessy’s interest under the same terms as the other Framebridge investors.

Additionally, Kaplan International Holdings Limited (KIHL) held a 45% interest in a joint venture formed with ~~York University.~~University of York. KIHL loaned the joint venture £22 million, which loan is repayable over 25 years at an interest rate of 7% and guaranteed by the University of York. The loan is repayable by December 2041.

Cost Method Investments. The Company held investments without readily determinable fair values in a number of equity securities that are accounted for as cost method investments, which are recorded at cost, less impairment, and adjusted for observable price changes for identical or similar investments of the same issuer. The carrying value of these investments was ~~$48.5~~$52.3 million and ~~$35.7~~$48.9 million as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. During the ~~first nine~~three and six months ofended June 30, 2021, the Company recorded gains of ~~$10.5 million to those equity securities based on observable transactions. During the three and nine months ended September 30, 2020, the Company recorded gains of $1.6~~$7.8 million and ~~$4.2~~$10.5 million, respectively, to those equity securities based on observable transactions. ~~During the first nine months of 2020, the Company recorded impairment losses of $2.6 million to those equity securities.~~

4. ACCOUNTS RECEIVABLE, ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts receivable consist of the following:


		As of					As of
		September 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
(in thousands)	(in thousands)					(in thousands)
Receivables from contracts with customers, less estimated credit losses of $21,866 and $21,494		$	550,853	$	519,577
Receivables from contracts with customers, less estimated credit losses of $22,093 and $21,836						Receivables from contracts with customers, less estimated credit losses of $22,093 and $21,836	$	449,268	$	589,582
Other receivables	Other receivables	27,739		17,579		Other receivables	26,065		17,889
		$	578,592	$	537,156		$	475,333	$	607,471

Credit loss expense was ~~$1.7~~$0.7 million and ~~$1.0~~$1.4 million for the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively. Credit loss expense was ~~$4.2~~$2.2 million and ~~$8.2~~$2.5 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively.

Accounts payable and accrued liabilities consist of the following:


		As of					As of
		September 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
(in thousands)	(in thousands)					(in thousands)
Accounts payable	Accounts payable	$	105,143	$	106,215	Accounts payable	$	143,196	$	126,985
Accrued compensation and related benefits	Accrued compensation and related benefits	160,062		135,493		Accrued compensation and related benefits	155,031		179,307
Other accrued liabilities	Other accrued liabilities	241,433		278,528		Other accrued liabilities	261,895		277,337
		$	506,638	$	520,236		$	560,122	$	583,629

Cash overdrafts of ~~$3.3~~$11.6 million and ~~$2.1~~$5.5 million are included in accounts payable as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

5. INVENTORIES, CONTRACTS IN PROGRESS AND VEHICLE FLOOR PLAN PAYABLE

Inventories and contracts in progress consist of the following:


		As of					As of
		September 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
(in thousands)	(in thousands)					(in thousands)
Raw materials	Raw materials	$	43,045	$	45,382	Raw materials	$	65,049	$	54,944
Work-in-process	Work-in-process	10,873		10,402		Work-in-process	15,835		11,506
Finished goods	Finished goods	45,311		64,061		Finished goods	97,137		72,796
Contracts in progress	Contracts in progress	1,029		777		Contracts in progress	259		2,225
		$	100,258	$	120,622		$	178,280	$	141,471

The Company finances new, used and ~~used~~service loaner vehicle inventory through a standardized floor plan ~~facility (the “floor plan facility”)~~facilities with Truist ~~Bank.~~Bank (Truist floor plan facility) and Ford Motor Credit Company (Ford floor plan facility). The ~~vehicle~~Truist floor plan facility bears interest at variable rates that are based on ~~LIBOR~~Secured Overnight Financing Rate (SOFR) plus ~~1.15%~~ 1.19% per annum. The Ford floor plan facility bears interest at variable interest rates that are based on the prime rate, with a floor of 3.5%, plus 1.5% per annum. The weighted average interest rate for the floor plan ~~facility~~facilities was ~~0.9%~~2.2% and 1.2% for the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively. The weighted average interest rate for the floor plan ~~facility~~facilities was ~~1.1%~~2.1% and ~~1.9%~~1.2% for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively. As of ~~September~~June 30, ~~2021,~~2022, the aggregate capacity under the floor plan ~~facility~~facilities was ~~$50~~$70.9 million, of which ~~$10.9~~$45.7 million had been utilized, and is included in accounts payable and accrued liabilities in the Condensed Consolidated Balance Sheet. Changes in the vehicle floor plan payable are reported as cash flows from financing activities in the Condensed Consolidated Statements of Cash Flows.

The floor plan ~~facility is~~facilities are collateralized by vehicle inventory and other assets of the relevant dealership subsidiary, and contains a number of covenants, including, among others, covenants restricting the dealership subsidiary with respect to the creation of liens and changes in ownership, officers and key management personnel. The Company was in compliance with all of these restrictive covenants as of ~~September~~June 30, ~~2021.~~2022.

The floor plan interest expense related to the vehicle floor plan arrangements is offset by amounts received from manufacturers in the form of floor plan assistance capitalized in inventory and recorded against cost of goods sold in the Condensed Consolidated Statements of Operations when the associated inventory is sold. For the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, the Company recognized a reduction in cost of goods sold of ~~$0.7~~$1.1 million and ~~$0.6~~$0.8 million, respectively, related to manufacturer floor plan assistance. For the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, the Company recognized a reduction in cost of goods sold of ~~$2.1~~$2.0 million and ~~$1.5~~$1.4 million, respectively, related to manufacturer floor plan assistance.

6. GOODWILL AND OTHER INTANGIBLE ASSETS

~~The Company changed the presentation of its segments in the third quarter of 2021 into the following 7~~ ~~segments: Kaplan International, Higher Education, Supplemental Education, Television Broadcasting, Manufacturing, Healthcare and Automotive (see Note 16).~~

In the third quarter of 2021, as a result of the emergence of the COVID-19 Delta variant and continued weak product demand in the commercial office electrical products and hospitality sectors caused by the COVID-19 pandemic, the Company performed an interim review of the goodwill and indefinite-lived intangibles of the Dekko reporting unit. As a result of the impairment review, the Company recorded a $26.7 million goodwill impairment charge. The Company estimated the fair value of the reporting unit by utilizing a discounted cash flow model. 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 estimated fair value after taking into account the effect of deferred income taxes. Dekko is included in manufacturing.

In the first quarter of 2020, as a result of the uncertainty and challenging operating environment created by the COVID-19 pandemic, the Company performed an interim review of the goodwill, indefinite-lived intangibles and other long-lived assets of the Clyde’s Restaurant Group (CRG) and automotive dealership reporting units and asset groups. As a result of the impairment reviews, the Company recorded a $9.7 million goodwill and indefinite-lived intangible asset impairment charge at CRG and a $6.7 million indefinite-lived intangible asset impairment charge at the auto dealerships. The Company estimated the fair value of the reporting units and indefinite-lived intangible assets by utilizing a discounted cash flow model. The carrying value of the CRG reporting unit and the indefinite-lived intangible assets exceeded the estimated fair value, resulting in a goodwill and indefinite-lived intangible asset impairment charge for the amount by which the carrying value exceeded the estimated fair value. CRG is included in other businesses and the automotive dealerships are included in automotive.

Additional COVID-19 disruptions could result in future adverse changes in projections for future operating results or other key assumptions, such as projected revenue, profit margin, capital expenditures or cash flows associated with fair value estimates and could lead to additional future impairments, which could be material.

Amortization of intangible assets for the three months ended ~~September~~June 30, 2022 and 2021, ~~and 2020,~~ was ~~$16.0~~$14.9 million and ~~$14.2~~$13.9 million, respectively. Amortization of intangible assets for the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021, ~~and 2020,~~ was ~~$43.8~~$29.8 million and ~~$42.6~~$27.8 million, respectively. Amortization of intangible assets is estimated to be approximately ~~$16~~$29 million for the remainder of ~~2021, $60 million in~~ 2022, $51 million in 2023, ~~$40~~$39 million in 2024, ~~$33~~$31 million in 2025, $26 million in 2026 and ~~$48~~$41 million thereafter. The changes in the carrying amount of goodwill, by segment, were as follows:


(in thousands)	(in thousands)	Education		Television Broadcasting		Manufacturing		Healthcare		Automotive		Other Businesses		Total		(in thousands)	Education		Television Broadcasting		Manufacturing		Healthcare		Automotive		Other Businesses		Total
Balance as of December 31, 2020
Balance as of December 31, 2021																Balance as of December 31, 2021
Goodwill	Goodwill	$	1,183,379	$	190,815	$	234,993	$	98,421	$	39,121	$	91,351	$	1,838,080	Goodwill	$	1,186,236	$	190,815	$	234,993	$	118,329	$	45,826	$	253,399	$	2,029,598
Accumulated impairment losses	Accumulated impairment losses	(331,151)		—		(7,616)		—		—		(14,563)		(353,330)		Accumulated impairment losses	(331,151)		—		(34,302)		—		—		(14,563)		(380,016)
		852,228		190,815		227,377		98,421		39,121		76,788		1,484,750			855,085		190,815		200,691		118,329		45,826		238,836		1,649,582

Measurement period adjustments																Measurement period adjustments	1,000		—		—		250		—		(2,183)		(933)
Acquisitions																Acquisitions	—		—		—		5,971		—		—		5,971

Acquisitions		—		—		—		—		—		167,334		167,334
Impairment		—		—		(26,686)		—		—		—		(26,686)

Foreign currency exchange rate changes	Foreign currency exchange rate changes	(13,055)		—		—		—		—		—		(13,055)		Foreign currency exchange rate changes	(36,972)		—		—		—		—		—		(36,972)
Balance as of September 30, 2021
Balance as of June 30, 2022																Balance as of June 30, 2022
Goodwill	Goodwill	1,170,324		190,815		234,993		98,421		39,121		258,685		1,992,359		Goodwill	1,150,264		190,815		234,993		124,550		45,826		251,216		1,997,664
Accumulated impairment losses	Accumulated impairment losses	(331,151)		—		(34,302)		—		—		(14,563)		(380,016)		Accumulated impairment losses	(331,151)		—		(34,302)		—		—		(14,563)		(380,016)
		$	839,173	$	190,815	$	200,691	$	98,421	$	39,121	$	244,122	$	1,612,343		$	819,113	$	190,815	$	200,691	$	124,550	$	45,826	$	236,653	$	1,617,648

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


(in thousands)	(in thousands)	Kaplan International		Higher Education		Supplemental Education		Total		(in thousands)	Kaplan International		Higher Education		Supplemental Education		Total
Balance as of December 31, 2020
Balance as of December 31, 2021										Balance as of December 31, 2021
Goodwill	Goodwill	$	634,749	$	174,564	$	374,066	$	1,183,379	Goodwill	$	621,268	$	174,564	$	390,404	$	1,186,236
Accumulated impairment losses	Accumulated impairment losses	—		(111,324)		(219,827)		(331,151)		Accumulated impairment losses	—		(111,324)		(219,827)		(331,151)
		634,749		63,240		154,239		852,228			621,268		63,240		170,577		855,085

Measurement period adjustments										Measurement period adjustments	—		—		1,000		1,000

Foreign currency exchange rate changes	Foreign currency exchange rate changes	(13,065)		—		10		(13,055)		Foreign currency exchange rate changes	(36,962)		—		(10)		(36,972)
Balance as of September 30, 2021
Balance as of June 30, 2022										Balance as of June 30, 2022
Goodwill	Goodwill	621,684		174,564		374,076		1,170,324		Goodwill	584,306		174,564		391,394		1,150,264
Accumulated impairment losses	Accumulated impairment losses	—		(111,324)		(219,827)		(331,151)		Accumulated impairment losses	—		(111,324)		(219,827)		(331,151)
		$	621,684	$	63,240	$	154,249	$	839,173		$	584,306	$	63,240	$	171,567	$	819,113

Other intangible assets consist of the following:


			As of September 30, 2021						As of December 31, 2020								As of June 30, 2022						As of December 31, 2021
(in thousands)	(in thousands)	Useful Life Range	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		(in thousands)	Useful Life Range	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Amortized Intangible Assets	Amortized Intangible Assets														Amortized Intangible Assets
Student and customer relationships	Student and customer relationships	2–10 years	$	323,569	$	201,297	$	122,272	$	294,077	$	178,075	$	116,002	Student and customer relationships	2–10 years	$	297,886	$	218,349	$	79,537	$	300,027	$	206,714	$	93,313
Trade names and trademarks	Trade names and trademarks	2–10 years	160,411		65,551		94,860		109,809		54,766		55,043		Trade names and trademarks	2–15 years	158,006		75,092		82,914		158,365		68,113		90,252
Databases and technology															Databases and technology	3–6 years	36,186		29,309		6,877		36,585		26,464		10,121
Network affiliation agreements	Network affiliation agreements	10 years	17,400		8,193		9,207		17,400		6,888		10,512		Network affiliation agreements	10 years	17,400		9,497		7,903		17,400		8,628		8,772
Databases and technology		3–6 years	36,550		24,709		11,841		34,864		19,924		14,940
Noncompete agreements	Noncompete agreements	2–5 years	1,000		990		10		1,000		937		63		Noncompete agreements	2–5 years	1,000		993		7		1,000		991		9
Other	Other	1–8 years	29,800		19,744		10,056		24,800		16,714		8,086		Other	1–8 years	68,900		29,526		39,374		68,500		23,847		44,653
			$	568,730	$	320,484	$	248,246	$	481,950	$	277,304	$	204,646			$	579,378	$	362,766	$	216,612	$	581,877	$	334,757	$	247,120
Indefinite-Lived Intangible Assets	Indefinite-Lived Intangible Assets														Indefinite-Lived Intangible Assets
Trade names and trademarks	Trade names and trademarks		$	87,085					$	87,429					Trade names and trademarks		$	82,316					$	86,972
Franchise agreements	Franchise agreements		21,858						21,858						Franchise agreements		44,058						44,058
FCC licenses	FCC licenses		11,000						11,000						FCC licenses		11,000						11,000
Licensure and accreditation	Licensure and accreditation		150						150						Licensure and accreditation		150						150
Other															Other		21						—
			$	120,093					$	120,437							$	137,545					$	142,180

7. DEBT

The Company’s borrowings consist of the following:


		As of								As of
		September 30, 2021		December 31, 2020
(in thousands)	(in thousands)					(in thousands)	Maturities	Stated Interest Rate	Effective Interest Rate	June 30, 2022		December 31, 2021
5.75% unsecured notes due June 1, 2026 (1)		$	396,649	$	396,112
Unsecured notes (1)						Unsecured notes (1)	2026	5.75%	5.75%	$	397,186	$	396,830
Revolving credit facility	Revolving credit facility	122,251		74,686		Revolving credit facility	2027	1.61% - 4.38%	2.00%	150,804		209,643

Commercial note		23,000		25,250
Truist Bank commercial note (2)						Truist Bank commercial note (2)	2031	1.85% - 2.72%	2.16%	24,013		24,504
Truist Bank commercial note						Truist Bank commercial note	2032	2.10% - 2.97%	2.41%	21,563		22,500
Pinnacle Bank term loan	Pinnacle Bank term loan	9,840		10,692		Pinnacle Bank term loan	2024	4.15%	4.19%	8,996		9,558
Pinnacle Bank line of credit		—		2,295

Other indebtedness	Other indebtedness	4,149		3,520		Other indebtedness	2025 - 2030	0.00% - 16.00%		3,590		4,466
Total Debt	Total Debt	$	555,889	$	512,555	Total Debt				606,152		667,501
Less: current portion	Less: current portion	(44,254)		(6,452)		Less: current portion				(94,578)		(141,749)
Total Long-Term Debt	Total Long-Term Debt	$	511,635	$	506,103	Total Long-Term Debt				$	511,574	$	525,752

____________

(1) The carrying value is net of ~~$3.4~~$2.8 million and ~~$3.9~~$3.2 million of unamortized debt issuance costs as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

(2) The carrying value is net of $0.1 million of unamortized debt issuance costs as of June 30, 2022 and December 31, 2021.

At June 30, 2022 and December 31, 2021, the fair value of the Company’s 5.75% unsecured notes, based on quoted market prices (Level 2 fair value assessment), totaled $394.5 million and $417.5 million, respectively.

On May 3, 2022, the Company amended the revolving credit facility to, among other things, (i) extend the maturity of the facility to May 30, 2027, (ii) eliminate borrowings under separate U.S. Dollar and multicurrency tranches, (iii) update certain interest rate benchmarks including replacing USD London Interbank Offered Rate (LIBOR) with SOFR for borrowings denominated in U.S. dollars, (iv) incorporate a sub-facility for the issuance of letters of credit, and (v) allow for applicable margin for borrowings to be determined and adjusted quarterly based on the Company’s Total Net Leverage Ratio. The outstanding balance on the Company’s $300 million unsecured revolving credit facility was ~~$122.3~~$150.8 million as of ~~September~~June 30, ~~2021. Borrowings under the Company’s revolving credit facility consisted~~2022, consisting of U.S. dollar borrowings of ~~$40~~$90 million ~~and £61 million under its U.S. dollar and multicurrency tranches, respectively,~~ with interest payable at ~~1 month USD~~SOFR plus 1.375%, and ~~3 month GBP LIBOR, respectively,~~British Pound (GBP) borrowings of £50 million with interest payable at Daily Sterling Overnight Index Average (SONIA) plus ~~1.50%~~1.375%.

The fair value of the Company’s other ~~indebtedness at September~~debt, which is based on Level 2 inputs, approximates its carrying value as of June 30, ~~2021~~2022 and December 31, ~~2020 is at interest rates of 0% to 16% and matures between 2023 and 2030.~~

2021. The Company is in compliance with all financial covenants of the revolving credit facility, commercial notes, and Pinnacle Bank term loanas of ~~September~~June 30, ~~2021.~~2022.

During the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, the Company had average borrowings outstanding of approximately ~~$545.9~~$638.3 million and ~~$515.1~~$525.5 million, respectively, at average annual interest rates of approximately ~~4.8%~~4.7% and ~~5.0%~~4.9%, respectively. During the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, the Company incurred net interest expense of ~~$9.4~~$15.3 million and ~~$6.4~~$5.5 million, respectively.

During the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, the Company had average borrowings outstanding of approximately ~~$531.3~~$648.8 million and ~~$512.8~~$520.0 million, respectively, at average annual interest rates of approximately ~~4.9%~~4.5% and ~~5.1%~~5.0%, respectively. During the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, the Company incurred net interest expense of ~~$22.5~~$26.0 million and ~~$19.3~~$13.0 million, respectively.

During the three and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, the Company recorded ~~net~~ interest expense of ~~$2.6~~$8.0 million and ~~$2.7~~$11.4 million, respectively, to adjust the fair value of the mandatorily redeemable noncontrolling interest. ~~Fair value adjustments are presented within~~During the three and six months ended June 30, 2021, the Company recorded interest income of $1.0 million and net interest expense ~~and interest income in~~of $0.1 million, respectively, to adjust the ~~Company’s Condensed Consolidated Statements of Operations and are reclassified to present the net change in~~ fair value ~~for each reporting period.~~of the mandatorily redeemable noncontrolling interest. The fair value of the mandatorily redeemable noncontrolling interest was based on the fair value of the underlying subsidiaries owned by GHC One, after taking into account any debt and other noncontrolling interests of its subsidiary investments. The fair value of the owned subsidiaries is determined by reference to either a discounted cash flow or EBITDA multiple, which approximates fair value (Level 3 fair value assessment).

At September 30, 2021 and December 31, 2020, the fair value of the Company’s 5.75% unsecured notes, based on quoted market prices (Level 2 fair value assessment), totaled $417.7 million and $421.7 million, respectively, compared with the carrying amount of $396.6 million and $396.1 million, respectively. The carrying value of the Company’s other unsecured debt at September 30, 2021 and December 31, 2020 approximates fair value.

8. FAIR VALUE MEASUREMENTS

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


		As of September 30, 2021									As of June 30, 2022
(in thousands)	(in thousands)	Level 1		Level 2		Level 3		Total		(in thousands)	Level 1		Level 2		Level 3		Total
Assets	Assets									Assets

Money market investments (1)										Money market investments (1)	$	—	$	17,773	$	—	$	17,773
Marketable equity securities ~~(1)~~(2)	Marketable equity securities ~~(1)~~(2)	$	764,831	$	—	$	—	$	764,831	Marketable equity securities ~~(1)~~(2)	648,604		—		—		648,604
Other current investments ~~(2)~~(3)	Other current investments ~~(2)~~(3)	7,184		7,058		—		14,242		Other current investments ~~(2)~~(3)	7,890		6,337		—		14,227
Interest rate swap (4)										Interest rate swap (4)	—		610		—		610
Total Financial Assets	Total Financial Assets	$	772,015	$	7,058	$	—	$	779,073	Total Financial Assets	$	656,494	$	24,720	$	—	$	681,214
Liabilities	Liabilities									Liabilities
Deferred compensation plan liabilities (3)		$	—	$	29,950	$	—	$	29,950
Contingent consideration liabilities (4)		—		—		12,895		12,895
Interest rate swap (5)		—		1,534		—		1,534

Contingent consideration liabilities (5)										Contingent consideration liabilities (5)	$	—	$	—	$	10,873	$	10,873

Mandatorily redeemable noncontrolling interest (6)	Mandatorily redeemable noncontrolling interest (6)	—		—		11,921		11,921		Mandatorily redeemable noncontrolling interest (6)	—		—		25,149		25,149
Total Financial Liabilities	Total Financial Liabilities	$	—	$	31,484	$	24,816	$	56,300	Total Financial Liabilities	$	—	$	—	$	36,022	$	36,022


		As of December 31, 2020									As of December 31, 2021
(in thousands)	(in thousands)	Level 1		Level 2		Level 3		Total		(in thousands)	Level 1		Level 2		Level 3		Total
Assets	Assets									Assets
Money market investments (7)		$	—	$	268,841	$	—	$	268,841

Marketable equity securities ~~(1)~~(2)	Marketable equity securities ~~(1)~~(2)	573,102		—		—		573,102		Marketable equity securities ~~(1)~~(2)	$	809,997	$	—	$	—	$	809,997
Other current investments ~~(2)~~(3)	Other current investments ~~(2)~~(3)	10,397		4,083		—		14,480		Other current investments ~~(2)~~(3)	7,230		7,218		—		14,448

Total Financial Assets	Total Financial Assets	$	583,499	$	272,924	$	—	$	856,423	Total Financial Assets	$	817,227	$	7,218	$	—	$	824,445
Liabilities	Liabilities									Liabilities
Deferred compensation plan liabilities (3)		$	—	$	31,178	$	—	$	31,178

Contingent consideration liabilities ~~(4)~~(5)	Contingent consideration liabilities ~~(4)~~(5)	—		—		37,174		37,174		Contingent consideration liabilities ~~(4)~~(5)	$	—	$	—	$	14,881	$	14,881
Interest rate swap (5)		—		2,342		—		2,342
Interest rate swap (7)										Interest rate swap (7)	—		2,049		—		2,049
Foreign exchange swap (8)	Foreign exchange swap (8)	—		259		—		259		Foreign exchange swap (8)	—		484		—		484
Mandatorily redeemable noncontrolling interest (6)	Mandatorily redeemable noncontrolling interest (6)	—		—		9,240		9,240		Mandatorily redeemable noncontrolling interest (6)	—		—		13,661		13,661
Total Financial Liabilities	Total Financial Liabilities	$	—	$	33,779	$	46,414	$	80,193	Total Financial Liabilities	$	—	$	2,533	$	28,542	$	31,075

____________


(1)			The Company’s money market investments are included in cash and cash equivalents and the value considers the liquidity of the counterparty.
~~(1)~~(2)			The Company’s investments in marketable equity securities are held in common shares of U.S. ~~and Canadian~~ corporations that are actively traded on U.S. ~~and Canadian~~ stock exchanges. Price quotes for these shares are readily available.
~~(2)~~(3)			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 fair value hierarchy.
~~(3)~~
(4)			~~Includes Graham Holdings Company’s~~Included in Deferred ~~Compensation Plan~~Charges and ~~supplemental savings plan benefits under~~Other Assets. The Company utilized a market approach model using the ~~Graham Holdings Company’s Supplemental Executive Retirement Plan, which are included in accrued compensation~~notional amount of the interest rate swap multiplied by the observable inputs of time to maturity 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.interest rates.
~~(4)~~(5)			Included in Accounts payable and accrued liabilities and Other Liabilities. The Company determined the fair value of the contingent consideration liabilities using either a Monte Carlo simulation, Black-Scholes model, or probability-weighted analysis depending on the type of target included in the contingent consideration requirements (revenue, EBITDA, client retention). All analyses included estimated financial projections for the acquired businesses and acquisition-specific discount ~~rates.~~
~~(5)~~			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.
(6)			The fair value of the mandatorily redeemable noncontrolling interest is based on the fair value of the underlying subsidiaries owned by GHC One, after taking into account any debt and other noncontrolling interests of its subsidiary investments. The fair value of the owned subsidiaries is determined using enterprise value analyses which include an equal weighing between guideline public company and discounted cash flow analyses.
(7)			Included in Other Liabilities. The ~~Company’s money~~Company utilized a market ~~investments are included in cash and cash equivalents and~~approach model using the ~~value considers the liquidity~~notional amount of the ~~counterparty.~~interest rate swap multiplied by the observable inputs of time to maturity and market interest rates.
(8)			Included in Accounts payable and accrued liabilities, and valued based on a valuation model that calculates the differential between the contract price and the market-based forward rate.

The following ~~table provides~~tables provide a reconciliation of changes in the Company’s financial liabilities measured at fair value on a recurring basis, using Level 3 inputs:

(in thousands) Contingent consideration liabilities Mandatorily redeemable noncontrolling interest
As of December 31, 2020 $ 37,174 $ 9,240
Changes in fair value (1)
(5,482) 2,703
Capital contributions — 50
Accretion of value included in net income (1)
1,157 —
Settlements or distributions (19,942) (72)
Foreign currency exchange rate changes (12) —
As of September 30, 2021 $ 12,895 $ 11,921


(in thousands)	Contingent consideration liabilities		Mandatorily redeemable noncontrolling interest
As of December 31, 2021	$	14,881	$	13,661
Acquisition of business	397		—
Changes in fair value (1)	(3,317)		11,430
Capital contributions	—		242
Accretion of value included in net income (1)	662		—
Settlements or distributions	(1,750)		(184)

As of June 30, 2022	$	10,873	$	25,149


(in thousands)	Contingent consideration liabilities		Mandatorily redeemable noncontrolling interest
As of December 31, 2020	$	37,174	$	9,240

Changes in fair value (1)	(3,720)		96
Capital contributions	—		37
Accretion of value included in net income (1)	1,041		—
Settlements or distributions	(19,836)		(41)
Foreign currency exchange rate changes	34		—
As of June 30, 2021	$	14,693	$	9,332

____________


(1)			Changes in fair value and accretion of value of contingent consideration liabilities are included in Selling, general and administrative expenses and the changes in fair value of mandatorily redeemable noncontrolling interest is included in Interest expense in the Company’s Condensed Consolidated Statements of Operations.

During the three and ~~nine~~six months ended ~~September~~June 30, 2021, the Company recorded ~~goodwill and~~ other long-lived asset impairment charges of ~~$26.8~~$3.8 million and ~~$31.6~~$4.8 million, respectively. ~~During the three and nine months ended September 30, 2020, the Company recorded goodwill and other long-lived asset impairment charges of $1.9 million and $29.8 million, respectively (see Note 16).~~ The remeasurement of ~~goodwill and~~the 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, indefinite-lived intangible assets, and~~ other long-lived assets. A market value approach was also utilized to supplement the discounted cash flow model. The Company made estimates and assumptions regarding future cash flows, ~~royalty rates,~~ discount rates and market ~~values, and long-term growth rates.~~values.

During the ~~nine~~three and six months ended ~~September~~June 30, 2021, the Company recorded gains of $7.8 million and $10.5 million, respectively, to equity securities that are accounted for as cost method investments based on observable transactions for identical or similar investments of the same issuer. During the three and nine months ended September 30, 2020, the Company recorded gains of $1.6 million and $4.2 million, respectively, to an equity security that is accounted for as a cost method investment based on observable transactions for identical or similar investments of the same issuer. During the nine months ended September 30, 2020, the Company recorded impairment losses of $2.6 million to equity securities that are accounted for as cost method investments.

~~During the third quarter of 2021, the Company recorded an impairment charge of $6.6 million on 1 of its investments in affiliates.~~ ~~During the first quarter of 2020, the Company recorded impairment charges of $3.6 million on 2 of its investments in affiliates (see Note 3).~~

9. ~~INCOME TAXES~~

On July 1, 2015 (the Distribution Date), the Company completed the spin-off of Cable ONE as an independent, publicly traded company. The transaction was structured as a tax-free spin-off of Cable ONE to the stockholders of the Company. Since July 1, 2015, Cable One has been an independent public company trading on the New York Stock Exchange under the symbol “CABO”. In connection with the Coronavirus Aid, Relief and Economic Security (CARES) Act, Cable One has the ability to carryback its 2019 taxable losses to the tax period from January 1, 2015 to June 30, 2015, the period in which Cable One was included in the Company’s 2015 tax return. As a result, the Company amended its 2015 tax returns in order to accommodate Cable One's request to carryback its 2019 taxable losses. The Company expects that this action will have no impact on the results or the financial position of the Company. To reflect the expected refund due to Cable One, the Company has included an estimated $15.9 million current income tax receivable and a corresponding current liability to Cable One on its balance sheet as of September 30, 2021.

The Company's effective tax rate for the first nine months of 2021 and 2020 was 22.6% and 29.6%, respectively. The Company’s effective tax rate for 2021 was favorably impacted by a $15.7 million deferred tax adjustment arising from a change in the estimated deferred state income tax rate attributable to the apportionment formula used in the calculation of deferred taxes related to the Company’s pension and other postretirement plans.

~~10.~~ REVENUE FROM CONTRACTS WITH CUSTOMERS

The Company generated ~~82% and~~ 79% of its revenue from U.S. domestic sales for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022. The remaining ~~18% and~~ 21% of revenue was generated from non-U.S. sales for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021, respectively.~~2022. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2020, 83%~~2021, 78% and ~~78%~~77% of revenue was from U.S. domestic sales and the remaining ~~17%~~22% and ~~22%~~23% of revenue was generated from non-U.S. sales.

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, the Company recognized ~~66% and 67%~~60% of its revenue over time as control of the services and goods transferred to the customer, and the remaining ~~34% and 33%~~40% at a point in time, when the customer obtained control of the promised goods. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, the Company recognized ~~71%~~66% and ~~73%~~68% of its revenue over time, and the remaining ~~29%~~34% and ~~27%~~32% at a point in time.

In the second quarter of 2020, GHG received $7.4 million under the CARES Act as a general distribution from the Provider Relief Fund to provide relief for lost revenues and expenses incurred in connection with COVID-19. The healthcare revenue for the three and nine months ended September 30, 2020 includes $0.2 million and $5.7 million, respectively, for lost revenues related to COVID-19.

Contract Assets. As of ~~September~~June 30, ~~2021,~~2022, the Company recognized a contract asset of ~~$13.4~~$19.0 million related to a contract at a Kaplan International business, which is included in Deferred Charges and Other Assets. The Company expects to recognize an additional ~~$4.0~~$456.1 million related to this performance obligation within the next ~~year.~~ten years. As of December 31, ~~2020,~~2021, the contract asset was ~~$8.7~~$17.7 million.

Deferred Revenue. The Company records deferred revenue when cash payments are received or due in advance of the Company’s performance, including amounts which are refundable. The following table presents the change in the Company’s deferred revenue balance:


		As of						As of
		September 30, 2021		December 31, 2020		%		June 30, 2022		December 31, 2021		%
(in thousands)	(in thousands)					Change	(in thousands)					Change
Deferred revenue	Deferred revenue	$	376,803	$	343,322	10	Deferred revenue	$	287,681	$	363,065	(21)

In April 2020, GHG received $31.5 million under the expanded Medicare Accelerated and Advanced Payment Program modified by the ~~CARES~~Coronavirus Aid, Relief, and Economic Security Act (CARES Act) as a result of COVID-19. The Department of Health and Human Services started to recoup this advance 365 days after the payment was ~~issued and for the three and nine months ended September 30, 2021, $6.6~~issued. GHG recognized $5.6 million and ~~$11.6~~$12.0 million of the balance ~~was recognized~~ in revenue for claims submitted for eligible ~~services.~~services for the three and six months ended June 30, 2022, respectively. The remaining ~~amount~~balance of $0.5 million is included in the current deferred revenue balance on the Condensed Consolidated Balance Sheet as of ~~September~~June 30, ~~2021. As~~2022. For the three and six months ended June 30, 2021, GHG recognized $5.0 million of ~~December 31, 2020,~~ the ~~$31.5 million~~ balance ~~was included~~ in ~~the current and noncurrent deferred~~ revenue ~~balances on the Condensed Consolidated Balance Sheet.~~for claims submitted for eligible services.

The majority of the change in the deferred revenue balance is related to the cyclical nature of services in the Kaplan international division. During the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, the Company recognized ~~$257.4~~$271.9 million related to the Company’s deferred revenue balance as of December 31, ~~2020.~~2021.

Revenue allocated to remaining performance obligations represents deferred revenue amounts that will be recognized as revenue in future periods. As of ~~September~~June 30, ~~2021,~~2022, the deferred revenue balance related to certain medical and nursing qualifications with an original contract length greater than twelve months at Kaplan Supplemental Education was ~~$9.4~~$7.7 million. Kaplan Supplemental Education expects to recognize ~~68%~~75% of this revenue over the next twelve months and the remainder thereafter.

Costs to Obtain a Contract. The following table presents changes in the Company’s costs to obtain a contract asset:


(in thousands)	(in thousands)	Balance at Beginning of Period		Costs associated with new contracts		Less: Costs amortized during the period		Other		Balance at End of Period		(in thousands)	Balance at Beginning of Period		Costs associated with new contracts		Less: Costs amortized during the period		Other		Balance at End of Period
2021		$	24,363	$	23,907	$	(33,903)	$	978	$	15,345
2022												2022	$	26,081	$	20,991	$	(28,911)	$	(1,733)	$	16,428

~~Other~~The majority of other activity ~~includes~~was related to currency translation adjustments for the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022.

~~11.~~10. (LOSS) 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 (loss) income and share data used in the basic and diluted (loss) earnings per share computations using the two-class method:

Three Months Ended
September 30 Nine Months Ended
September 30
(in thousands, except per share amounts) 2021 2020 2021 2020
Numerator:
Numerator for basic earnings per share:
Net income attributable to Graham Holdings Company common stockholders $ 39,586 $ 77,615 $ 267,394 $ 63,224
Less: Dividends paid-common stock outstanding and unvested restricted shares (7,496) (7,100) (30,155) (29,970)
Undistributed earnings 32,090 70,515 237,239 33,254
Percent allocated to common stockholders 99.32 % 99.43 % 99.32 % 99.43 %
31,872 70,116 235,633 33,066
Add: Dividends paid-common stock outstanding 7,447 7,059 29,953 29,806
Numerator for basic earnings per share $ 39,319 $ 77,175 $ 265,586 $ 62,872
Add: Additional undistributed earnings due to dilutive stock options 1 1 5 1
Numerator for diluted earnings per share $ 39,320 $ 77,176 $ 265,591 $ 62,873
Denominator:
Denominator for basic earnings per share:
Weighted average shares outstanding 4,961 5,060 4,966 5,176
Add: Effect of dilutive stock options 16 12 14 16
Denominator for diluted earnings per share 4,977 5,072 4,980 5,192
Graham Holdings Company Common Stockholders:
Basic earnings per share $ 7.93 $ 15.25 $ 53.49 $ 12.15
Diluted earnings per share $ 7.90 $ 15.22 $ 53.33 $ 12.11


	Three Months Ended June 30						Six Months Ended June 30
(in thousands, except per share amounts)	2022			2021			2022			2021
Numerator:
Numerator for basic (loss) earnings per share:
Net (loss) income attributable to Graham Holdings Company common stockholders	$	(67,485)		$	115,358		$	28,139		$	227,808
Less: Dividends-common stock outstanding and unvested restricted shares	(7,656)			(7,553)			(23,153)			(22,659)
Undistributed (loss) earnings	(75,141)			107,805			4,986			205,149
Percent allocated to common stockholders (1)	100.00		%	99.34		%	99.40		%	99.34		%
	(75,141)			107,089			4,956			203,786
Add: Dividends-common stock outstanding	7,610			7,503			23,016			22,508
Numerator for basic (loss) earnings per share	$	(67,531)		$	114,592		$	27,972		$	226,294
Add: Additional undistributed earnings due to dilutive stock options	—			2			—			4
Numerator for diluted (loss) earnings per share	$	(67,531)		$	114,594		$	27,972		$	226,298
Denominator:
Denominator for basic (loss) earnings per share:
Weighted average shares outstanding	4,842			4,968			4,857			4,968
Add: Effect of dilutive stock options	—			17			13			13
Denominator for diluted (loss) earnings per share	4,842			4,985			4,870			4,981
Graham Holdings Company Common Stockholders:
Basic (loss) earnings per share	$	(13.95)		$	23.07		$	5.76		$	45.55
Diluted (loss) earnings per share	$	(13.95)		$	22.99		$	5.74		$	45.43

____________

(Loss) earnings per share amounts may not recalculate due to rounding.

(1) Percent of undistributed losses allocated to common stockholders is 100% in the three months ended June 30, 2022 as participating securities are not contractually obligated to share in losses.

Diluted (loss) 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 September 30		Nine Months Ended September 30			Three Months Ended June 30		Six Months Ended June 30
(in thousands)	(in thousands)	2021	2020	2021	2020	(in thousands)	2022	2021	2022	2021
Weighted average restricted stock	Weighted average restricted stock	14	12	11	11	Weighted average restricted stock	17	13	17	10

Weighted average stock options						Weighted average stock options	13	—	—	—

The diluted (loss) earnings per share amounts for the three and ~~nine~~six months ended ~~September~~June 30, 2022 and June 30, 2021 exclude the effects of 104,000 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 nine months ended September 30, 2020 exclude the effects of 181,258105,000 and 104,000 stock options and contingently issuable shares outstanding, respectively, as their inclusion would have been antidilutive due to a market condition.

In the three and ~~nine~~six months ended ~~September~~June 30, 2022, the Company declared regular dividends totaling $1.58 and $4.74 per common share, respectively. In the three and six months ended June 30, 2021, the Company declared regular dividends totaling $1.51 and ~~$6.04 per common share, respectively. In the three and nine months ended September 30, 2020, the Company declared regular dividends totaling $1.45 and $5.80~~$4.53 per common share, respectively.

~~12.~~11. 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 September 30				Nine Months Ended September 30					Three Months Ended June 30				Six Months Ended June 30
(in thousands)	(in thousands)	2021		2020		2021		2020		(in thousands)	2022		2021		2022		2021
Service cost	Service cost	$	5,775	$	5,457	$	17,254	$	17,044	Service cost	$	4,993	$	5,877	$	11,024	$	11,479
Interest cost	Interest cost	6,754		8,139		20,162		24,448		Interest cost	7,611		6,754		15,281		13,408
Expected return on assets	Expected return on assets	(34,800)		(28,347)		(103,078)		(85,081)		Expected return on assets	(41,963)		(33,702)		(83,926)		(68,278)
Amortization of prior service cost	Amortization of prior service cost	711		708		2,134		2,123		Amortization of prior service cost	709		712		1,418		1,423
Recognized actuarial gain	Recognized actuarial gain	(1,671)		—		(6,234)		—		Recognized actuarial gain	(17,539)		(1,671)		(34,768)		(4,563)
Net Periodic Benefit	Net Periodic Benefit	(23,231)		(14,043)		(69,762)		(41,466)		Net Periodic Benefit	(46,189)		(22,030)		(90,971)		(46,531)

Special separation benefit expense	Special separation benefit expense	—		7,783		1,118		13,797		Special separation benefit expense	—		1,118		—		1,118
Total Benefit	Total Benefit	$	(23,231)	$	(6,260)	$	(68,644)	$	(27,669)	Total Benefit	$	(46,189)	$	(20,912)	$	(90,971)	$	(45,413)

In the second quarter of 2021, the Company recorded $1.1 million in expenses related to a Separation Incentive Program ~~(SIP)~~ for certain Dekko employees, which will be funded from the assets of the Company’s pension plan. In the third quarter of 2020, the Company recorded $7.8 million in expenses related to a SIP for certain Kaplan employees, which was funded from the assets of the Company’s pension plan. In the second quarter of 2020, the Company recorded $6.0 million in expenses related to a SIP for certain Kaplan, Code3 and Decile employees, which was funded from the assets of the Company’s pension plan.

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


		Three Months Ended September 30				Nine Months Ended September 30					Three Months Ended June 30				Six Months Ended June 30
(in thousands)	(in thousands)	2021		2020		2021		2020		(in thousands)	2022		2021		2022		2021
Service cost	Service cost	$	256	$	238	$	767	$	715	Service cost	$	228	$	256	$	456	$	511
Interest cost	Interest cost	736		920		2,207		2,759		Interest cost	822		735		1,644		1,471
Amortization of prior service cost	Amortization of prior service cost	83		83		248		248		Amortization of prior service cost	9		82		18		165
Recognized actuarial loss	Recognized actuarial loss	1,482		1,316		4,447		3,950		Recognized actuarial loss	167		1,483		333		2,965
Net Periodic Cost	Net Periodic Cost	$	2,557	$	2,557	$	7,669	$	7,672	Net Periodic Cost	$	1,226	$	2,556	$	2,451	$	5,112

Defined Benefit Plan Assets. The Company’s defined benefit pension obligations are funded by a portfolio made up of a private investment ~~fund,~~funds, a U.S. stock index fund, and 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 plans were allocated as follows:


		As of					As of
		September 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021

U.S. equities	U.S. equities	60	%	58	%	U.S. equities	63	%	61	%
Private investment fund		18	%	18	%
Private investment funds						Private investment funds	16	%	17	%
U.S. stock index fund	U.S. stock index fund	9	%	9	%	U.S. stock index fund	8	%	9	%
International equities	International equities	9	%	8	%	International equities	8	%	9	%
U.S. fixed income	U.S. fixed income	4	%	7	%	U.S. fixed income	5	%	4	%
		100	%	100	%		100	%	100	%

The Company manages approximately 40% of the pension assets internally, of which the majority is invested in a private investment ~~fund~~funds with the remaining investments in Berkshire Hathaway stock, a U.S. stock index fund, and short-term fixed-income securities. The remaining 60% of plan assets are managed by 2 investment companies. The goal of the investment managers 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. One investment manager cannot invest more than 15% of the assets at the time of purchase in the stock of Alphabet and Berkshire Hathaway, and no more than 30% of the assets it manages in specified international exchanges at the time the investment is made. The other investment manager cannot invest more than 20% of the assets at the time of purchase in the stock of Berkshire Hathaway, and no more than 15% of the assets it manages 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. Excluding the exceptions noted above, the

investment managers cannot invest 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.

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 ~~September~~June 30, ~~2021.~~2022. 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 ~~September~~June 30, 2022, the pension plan held investments in 1 common stock and 1 private investment fund that exceeded 10% of total plan assets, valued at $782.4 million, or approximately 31% of total plan assets. At December 31, 2021, the pension plan held investments in 1 common stock and 1 private investment fund that exceeded 10% of total plan assets, valued at ~~$967.0~~$998.8 million, or approximately 30% of total plan assets. At December 31, 2020, the pension plan held investments in 1 common stock and 1 private investment fund that exceeded 10% of total plan assets, valued at $850.6 million, or approximately 30%29% of total plan assets.

Other Postretirement Plans. The total ~~cost~~benefit arising from the Company’s other postretirement plans consists of the following components:


		Three Months Ended September 30				Nine Months Ended September 30					Three Months Ended June 30				Six Months Ended June 30
(in thousands)	(in thousands)	2021		2020		2021		2020		(in thousands)	2022		2021		2022		2021

Interest cost	Interest cost	$	23	$	41	$	69	$	125	Interest cost	$	25	$	10	$	49	$	46
Amortization of prior service credit	Amortization of prior service credit	(1)		(120)		(5)		(361)		Amortization of prior service credit	(2)		(2)		(4)		(4)
Recognized actuarial gain	Recognized actuarial gain	(877)		(1,012)		(2,632)		(3,036)		Recognized actuarial gain	(710)		(736)		(1,421)		(1,755)
Net Periodic Benefit	Net Periodic Benefit	$	(855)	$	(1,091)	$	(2,568)	$	(3,272)	Net Periodic Benefit	$	(687)	$	(728)	$	(1,376)	$	(1,713)

~~13.~~12. OTHER NON-OPERATING INCOME

A summary of non-operating income is as follows:


		Three Months Ended September 30				Nine Months Ended September 30					Three Months Ended June 30				Six Months Ended June 30
(in thousands)	(in thousands)	2021		2020		2021		2020		(in thousands)	2022		2021		2022		2021
Gain on cost method investments		$	—	$	1,638	$	10,506	$	4,209
Gain on sale of cost method investments		—		521		6,793		1,039
Gain on sale of businesses	Gain on sale of businesses	1,303		755		2,749		2,515		Gain on sale of businesses	$	753	$	644	$	1,698	$	1,446
Foreign currency (loss) gain, net	Foreign currency (loss) gain, net	(6)		(2,343)		674		877		Foreign currency (loss) gain, net	(478)		677		(1,525)		680
Gain on acquiring a controlling interest in an equity affiliate		—		—		—		3,708
Impairment of cost method investments		—		—		—		(2,577)
Gain on sale of equity affiliates		—		—		—		1,370
(Loss) gain on sale of cost method investments										(Loss) gain on sale of cost method investments	(51)		6,699		1,024		6,793
Gain on sale of investment in affiliate										Gain on sale of investment in affiliate	—		—		604		—
Gain on cost method investments										Gain on cost method investments	—		7,783		—		10,506

Other gain (loss), net		3,921		(349)		6,938		(131)

Other gain, net										Other gain, net	952		319		2,251		3,017
Total Other Non-Operating Income	Total Other Non-Operating Income	$	5,218	$	222	$	27,660	$	11,010	Total Other Non-Operating Income	$	1,176	$	16,122	$	4,052	$	22,442

The gains on cost method investments result from observable price changes in the fair value of the underlying equity securities accounted for under the cost method (see Notes 3 and 8).

During the three and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, the Company recorded contingent consideration gains of ~~$1.3~~$0.8 million and ~~$2.8~~$1.7 million, respectively, related to the disposition of Kaplan University (KU) in 2018. During the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, the Company recorded contingent consideration gains of ~~$0.8~~$0.6 million and ~~$2.5~~$1.5 million, respectively.

In the second quarter of 2020, the Company made an additional investment in Framebridge (see Notes 2 and 3) that resulted in the Company obtaining control of the investee. The Company remeasured its previously held equity interest in Framebridge at the acquisition-date fair value and recorded a gain of $3.7 million. The fair value was determined using a market approach by using the share value indicated in the transaction.

~~14.~~13. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

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


		Three Months Ended September 30													Three Months Ended June 30
		2021						2020							2022						2021
		Before-Tax		Income		After-Tax		Before-Tax		Income		After-Tax			Before-Tax		Income		After-Tax		Before-Tax		Income		After-Tax
(in thousands)	(in thousands)	Amount		Tax		Amount		Amount		Tax		Amount		(in thousands)	Amount		Tax		Amount		Amount		Tax		Amount
Foreign currency translation adjustments:	Foreign currency translation adjustments:													Foreign currency translation adjustments:

Translation adjustments arising during the period	Translation adjustments arising during the period	$	(16,033)	$	—	$	(16,033)	$	20,430	$	—	$	20,430	Translation adjustments arising during the period	$	(40,928)	$	—	$	(40,928)	$	1,167	$	—	$	1,167

Pension and other postretirement plans:	Pension and other postretirement plans:													Pension and other postretirement plans:
Amortization of net prior service cost included in net income	Amortization of net prior service cost included in net income	793		(188)		605		671		(180)		491		Amortization of net prior service cost included in net income	716		(185)		531		792		(214)		578
Amortization of net actuarial (gain) loss included in net income		(1,066)		238		(828)		304		(83)		221
Amortization of net actuarial gain included in net income														Amortization of net actuarial gain included in net income	(18,082)		4,660		(13,422)		(924)		249		(675)

		(273)		50		(223)		975		(263)		712			(17,366)		4,475		(12,891)		(132)		35		(97)
Cash flow hedges:
Cash flow hedge:														Cash flow hedge:
Gain for the period	Gain for the period	169		(39)		130		157		(36)		121		Gain for the period	1,091		(251)		840		13		(3)		10
Other Comprehensive (Loss) Income	Other Comprehensive (Loss) Income	$	(16,137)	$	11	$	(16,126)	$	21,562	$	(299)	$	21,263	Other Comprehensive (Loss) Income	$	(57,203)	$	4,224	$	(52,979)	$	1,048	$	32	$	1,080


		Nine Months Ended September 30													Six Months Ended June 30
		2021						2020							2022						2021
		Before-Tax		Income		After-Tax		Before-Tax		Income		After-Tax			Before-Tax		Income		After-Tax		Before-Tax		Income		After-Tax
(in thousands)	(in thousands)	Amount		Tax		Amount		Amount		Tax		Amount		(in thousands)	Amount		Tax		Amount		Amount		Tax		Amount
Foreign currency translation adjustments:	Foreign currency translation adjustments:													Foreign currency translation adjustments:

Translation adjustments arising during the period	Translation adjustments arising during the period	$	(15,352)	$	—	$	(15,352)	$	(541)	$	—	$	(541)	Translation adjustments arising during the period	$	(42,666)	$	—	$	(42,666)	$	681	$	—	$	681
Pension and other postretirement plans:	Pension and other postretirement plans:													Pension and other postretirement plans:
Amortization of net prior service cost included in net income	Amortization of net prior service cost included in net income	2,377		(615)		1,762		2,010		(542)		1,468		Amortization of net prior service cost included in net income	1,432		(369)		1,063		1,584		(427)		1,157
Amortization of net actuarial (gain) loss included in net income		(4,419)		1,143		(3,276)		914		(247)		667
Amortization of net actuarial gain included in net income														Amortization of net actuarial gain included in net income	(35,856)		9,241		(26,615)		(3,353)		905		(2,448)

		(2,042)		528		(1,514)		2,924		(789)		2,135			(34,424)		8,872		(25,552)		(1,769)		478		(1,291)
Cash flow hedges:
Gain (loss) for the period		803		(186)		617		(1,564)		358		(1,206)
Other Comprehensive (Loss) Income		$	(16,591)	$	342	$	(16,249)	$	819	$	(431)	$	388
Cash flow hedge:														Cash flow hedge:
Gain for the period														Gain for the period	2,733		(629)		2,104		634		(147)		487
Other Comprehensive Loss														Other Comprehensive Loss	$	(74,357)	$	8,243	$	(66,114)	$	(454)	$	331	$	(123)

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


(in thousands, net of taxes)	(in thousands, net of taxes)	Cumulative Foreign Currency Translation Adjustment		Unrealized Gain on Pensions and Other Postretirement Plans		Cash Flow Hedges		Accumulated Other Comprehensive Income		(in thousands, net of taxes)	Cumulative Foreign Currency Translation Adjustment		Unrealized Gain on Pensions and Other Postretirement Plans		Cash Flow Hedge		Accumulated Other Comprehensive Income
Balance as of December 31, 2020		$	9,754	$	595,287	$	(1,727)	$	603,314
Balance as of December 31, 2021										Balance as of December 31, 2021	$	(6,298)	$	979,157	$	(1,471)	$	971,388

Other comprehensive (loss) income before reclassifications	Other comprehensive (loss) income before reclassifications	(15,352)		—		161		(15,191)		Other comprehensive (loss) income before reclassifications	(42,666)		—		1,769		(40,897)
Net amount reclassified from accumulated other comprehensive income (loss)	Net amount reclassified from accumulated other comprehensive income (loss)	—		(1,514)		456		(1,058)		Net amount reclassified from accumulated other comprehensive income (loss)	—		(25,552)		335		(25,217)
Other comprehensive (loss) income, net of tax	Other comprehensive (loss) income, net of tax	(15,352)		(1,514)		617		(16,249)		Other comprehensive (loss) income, net of tax	(42,666)		(25,552)		2,104		(66,114)
Balance as of September 30, 2021		$	(5,598)	$	593,773	$	(1,110)	$	587,065
Balance as of June 30, 2022										Balance as of June 30, 2022	$	(48,964)	$	953,605	$	633	$	905,274

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


		Three Months Ended September 30				Nine Months Ended September 30						Affected Line Item in the Condensed Consolidated Statements of Operations		Three Months Ended June 30						Six Months Ended June 30						Affected Line Item in the Condensed Consolidated Statements of Operations

(in thousands)	(in thousands)	2021		2020				2021			2020				(in thousands)	2022			2021			2022			2021

Pension and Other Postretirement Plans:	Pension and Other Postretirement Plans:														Pension and Other Postretirement Plans:
Amortization of net prior service cost	Amortization of net prior service cost	$	793	$	671	$	2,377		$	2,010		(1)	Amortization of net prior service cost	$	716		$	792		$	1,432		$	1,584		(1)
Amortization of net actuarial (gain) loss		(1,066)		304		(4,419)			914			(1)
Amortization of net actuarial gain													Amortization of net actuarial gain	(18,082)			(924)			(35,856)			(3,353)			(1)

		(273)		975		(2,042)			2,924			Before tax		(17,366)			(132)			(34,424)			(1,769)			Before tax
		50		(263)		528			(789)			(Benefit from) Provision for Income Taxes		4,475			35			8,872			478			(Benefit from) Provision for Income Taxes
		(223)		712		(1,514)			2,135			Net of Tax		(12,891)			(97)			(25,552)			(1,291)			Net of Tax
Cash Flow Hedges
		149		166		456			313			Interest expense
Cash Flow Hedge													Cash Flow Hedge	151			153			335			307			Interest expense
		—		—		—			13			(Benefit from) Provision for Income Taxes
		149		166		456			326			Net of Tax
Total reclassification for the period	Total reclassification for the period	$	(74)	$	878	$	(1,058)		$	2,461		Net of Tax	Total reclassification for the period	$	(12,740)		$	56		$	(25,217)		$	(984)		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 ~~12)~~11) and are included in non-operating pension and postretirement benefit income in the Company’s Condensed Consolidated Statements of Operations.

~~15.~~14. CONTINGENCIES

Litigation, Legal and Other Matters. The Company and its subsidiaries are subject to complaints and administrative proceedings and are defendants in various civil lawsuits that have arisen in the ordinary course of their businesses, including contract disputes; actions alleging negligence, libel, defamation and invasion of privacy; trademark, copyright and patent infringement; violations of employment laws and applicable wage and hour laws; and statutory or common law claims involving current and former students and employees. Although the outcomes of the legal claims and 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 and threatened legal, regulatory and other proceedings in excess of the amounts recorded could reach approximately $15 million.

In 2015, Kaplan sold substantially all of the assets of the ~~Kaplan Higher Education~~KHE Campuses (KHEC) business to Education Corporation of America. In 2018, certain subsidiaries of Kaplan contributed the institutional assets and operations of KU to a new university: an Indiana nonprofit, public-benefit corporation affiliated with Purdue University, known as Purdue University Global. Kaplan could be held liable to the current owners of KU and the KHEC schools related to the pre-sale conduct of the schools, and the pre-sale conduct of the schools has been and could be the subject of future compliance reviews, regulatory proceedings or lawsuits that could result in monetary liabilities or fines or other sanctions. InOn May 6, 2021, Kaplan received a ~~Notice~~notice from the ~~U.S.~~ Department of Education (ED) that ~~the department~~it would be ~~requiring~~conducting a fact-finding process pursuant to the borrower defense to repayment (BDTR) regulations to determine the validity of more than 800 ~~borrower defense to repayment~~BDTR claims and a request for documents related to several of Kaplan’s ~~previously-owned~~previously owned schools. InBeginning in July 2021, Kaplan started receiving the claims and related information requests. In total, Kaplan received ~~information requests~~1,449 borrower defense applications that seek discharge of approximately $35 million in loans (excluding interest). Most claims received are from former KU students. The ED’s process for adjudicating these claims is subject to the borrower defense regulations but it is not clear to what extent the ED will exclude claims based on the underlying statutes of limitations, evidence provided by Kaplan, or any prior investigation related to ~~over 1,400~~schools attended by the student ~~claims~~applicants.

On June 22, 2022, the ED filed a joint motion for approval of a settlement agreement in Sweet, et al. vs. Cardona, a case pending in the United States District Court for the EDNorthern District of California. Kaplan is not a party to ~~grant debt relief. If the ED grants any student claims, it is possible~~this case. This case was brought in 2019 by a purported class of borrowers demanding that the ED adjudicate all pending borrower defense claims. The settlement proposes that the ED will discharge the loans for students who borrowed to attend any school on a specified list. The list includes approximately 150 schools, including Bauder College, Mount Washington College, Kaplan Career Institute and Kaplan College, as well as Purdue University Global (encompassing the former Kaplan University). This proposed settlement would ~~seek reimbursement from Kaplan. Based on Kaplan’s review~~cover all claims to which Kaplan has previously responded to the ED and may also include new claims for which Kaplan has not received any information or which may still be filed prior to any final approval of the ~~information received from~~settlement by the court. ED has clarified that while attendance at one of the listed schools justifies presumptive relief for the borrowers, inclusion on the list is not a finding of misconduct by the school and does not provide an evidentiary basis upon which ED could rely to take action against any of the schools. In its July 25, 2022 filing, the ED stated that the proposed settlement in Sweet “creates no independent basis for action against the schools” and “any concrete consequences on the schools – financial or otherwise—could be imposed only after the ED initiates a separate, future proceeding...” The proposed settlement agreement will not be effective unless and until it achieves final court approval; a hearing on the

preliminary settlement approval is scheduled for later in August 2022. In the event the settlement is approved, the ED will likely be required to separately fully adjudicate the borrowers’ claims under the borrower defense rules process if it wishes to ultimately apply liability to institutions and seek recoupment of discharged amounts.

In any such process Kaplan believes it has ~~legal claims~~defenses that would bar any student discharge or school liability including that the claims are barred by the applicable statute of limitations, unproven, incomplete and ~~expects~~fail to meet regulatory filing requirements. Kaplan will vigorously defend any attempt by the ED to hold Kaplan liable for any ultimate student ~~discharges. At this time,~~discharges and is responding to all claims with documentary and narrative evidence to refute the allegations, demonstrate their lack of merit, and support the denial of all such claims by the ED. If the ED grants borrower claims through the BTDR process, the ED may seek reimbursement for the amount discharged from Kaplan. If the ED were to initiate a recoupment action against Kaplan, ~~is uncertain as~~and that action successfully overcame Kaplan’s defenses, Kaplan could be subject to significant liability.

On July 6, 2022 the ED released the draft Borrower Defense to Repayment rule for comment with the intention of publishing a final rule by November 1, 2022 with an effective date of July 1, 2023. Compared to the ~~total number~~previous rule, this new rule in part, would expand actions that can give rise to claims for discharge; provides that the borrower’s claim will be presumed true if the institution does not provide any responsive evidence; provides an easier process for group claims; and relies on current program review penalty hearing processes for discharge recoupment. Under the proposed rule, the recoupment process applies only to loans first disbursed after July 1, 2023; however, the discharge process and standards apply to any pending application regardless of ~~possible claims or~~loan date.

In August 2018, Purdue University Global received an updated Provisional Program Participation Agreement (PPPA) from the ~~amount of potential liability.~~ED which is necessary for continued participation in the federal Title IV programs after the change in ownership from Kaplan to Purdue. The PPPA expired on June 30, 2021 but was extended to June 30, 2022. Purdue Global submitted its renewed application for recertification in March 2022 which is pending review. The PPPA remains in effect as it is automatically extended on a month to month basis until the ED takes action to approve a full Program Participation Agreement.

In June 2021, the Committee for Private Education (CPE) in Singapore instructed Kaplan Singapore to cease new enrollments for ~~three~~3 marketing diploma programs on both a full and part-time basis due to ~~non-compliance~~noncompliance with minimum entry level requirements for admission and to teach out existing students in these programs. On August 23, 2021, the CPE issued the same instructions inwith respect ofto the Kaplan Foundation diploma and ~~four~~4 information technology diploma programs on both a full and part-time basis. In November 2021, the CPE issued the same instructions with respect to a further 23 full-time or part-time diploma programs. ~~In September 2021, CPE requested additional information related to admissions on a number of other awards.~~Post regulatory action, Kaplan Singapore ~~has responded,~~was still able to offer 449 programs that remained registered with the CPE, out of which there were 16 diplomas, 361 bachelors and ~~no additional instruction has been~~the balance of which were certificate and postgraduate courses. In April 2022, Kaplan Singapore applied for re-registration for certain of the diploma programs and in July 2022 received approval from the CPE. In May 2022, CPE ~~to date. The impact from possible~~also renewed Kaplan Singapore’s registrations as a private education institution for a four year period expiring in 2026. While the regulatory actions by the CPE ~~could~~in 2021 will have a ~~material~~significant adverse impact on Kaplan Singapore’s revenues, operating results and cash flows in the ~~future.~~future, the impact is expected to be mitigated as a result of the recently approved registrations of certain impacted programs.

2122

~~16.~~15. BUSINESS SEGMENTS

~~To meet the quantitative threshold related to revenue required for separate disclosure, the~~The Company ~~changed the presentation of its segments in the third quarter of 2021 into the following~~has 7 reportable segments: Kaplan International, Kaplan Higher Education, Kaplan Supplemental Education, Television Broadcasting, Manufacturing, Healthcare and Automotive. ~~Segment operating results have been restated to reflect this change.~~

~~Restructuring related costs across all businesses in 2020 were recorded as follows:~~

Three Months Ended September 30, 2020
(in thousands) Kaplan International Higher Education Supplemental Education Kaplan Corporate Total Education Other Businesses Total
Severance (1)
$ 959 $ — $ 913 $ — $ 1,872 $ — $ 1,872
Impairment of other long-lived assets:

Lease right-of-use assets — — 1,710 — 1,710 — 1,710
Property, plant and equipment — — 206 — 206 — 206
Non-operating pension and postretirement benefit income, net — 802 6,287 694 7,783 — 7,783
Total Restructuring Related Costs $ 959 $ 802 $ 9,116 $ 694 $ 11,571 $ — $ 11,571
Nine Months Ended September 30, 2020
(in thousands) Kaplan International Higher Education Supplemental Education Kaplan Corporate Total Education Other Businesses Total
Severance $ 2,183 $ — $ 913 $ — $ 3,096 $ — $ 3,096
Facility related costs:
Operating lease cost 2,418 3,442 3,296 — 9,156 — 9,156
Accelerated depreciation of property, plant and equipment 1,472 95 1,801 — 3,368 — 3,368
Total Restructuring Costs Included in Segment Income (Loss) from Operations (1)
$ 6,073 $ 3,537 $ 6,010 $ — $ 15,620 $ — $ 15,620
Impairment of other long-lived assets:
Lease right-of-use assets 3,790 2,062 3,908 — 9,760 1,405 11,165
Property, plant and equipment 1,199 174 803 — 2,176 86 2,262
Non-operating pension and postretirement benefit income, net 1,100 2,233 8,582 883 12,798 999 13,797
Total Restructuring Related Costs $ 12,162 $ 8,006 $ 19,303 $ 883 $ 40,354 $ 2,490 $ 42,844
~~____________~~

~~(1) These amounts are included in the segments’ Income (Loss) from Operations before Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets.~~

In June 2020, CRG made the decision to close its restaurant and entertainment venue in Columbia, MD effective July 19, 2020 and recorded accelerated depreciation of property, plant and equipment totaling $2.8 million and $5.7 million for the three and nine months ended September 30, 2020, respectively.

The following tables summarize the financial information related to each of the Company’s business segments:


		Three months ended			Nine months ended							Three months ended	Six months ended
		September 30			September 30							June 30	June 30
(in thousands)	(in thousands)		2021		2020		2021		2020		(in thousands)			2022		2021		2022		2021
Operating Revenues	Operating Revenues										Operating Revenues
Education	Education		$	335,999	$	302,467	$	1,005,300	$	992,020	Education			$	353,013	$	339,984	$	711,025	$	669,301
Television broadcasting	Television broadcasting		126,498		133,828		360,089		350,038		Television broadcasting			122,386		119,966		245,805		233,591
Manufacturing	Manufacturing		99,766		106,690		356,849		303,387		Manufacturing			127,062		141,123		243,002		257,083
Healthcare	Healthcare		55,445		51,426		160,184		146,601		Healthcare			76,385		54,696		143,640		104,739
Automotive	Automotive		84,702		76,790		242,702		182,288		Automotive			147,602		90,273		298,569		158,000
Other businesses	Other businesses		107,539		46,306		199,477		128,953		Other businesses			107,326		55,626		206,943		91,938
Corporate office	Corporate office		—		—		—		—		Corporate office			—		—		—		—
Intersegment elimination	Intersegment elimination		(513)		(525)		(1,558)		(1,177)		Intersegment elimination			(472)		(516)		(961)		(1,045)
			$	809,436	$	716,982	$	2,323,043	$	2,102,110				$	933,302	$	801,152	$	1,848,023	$	1,513,607
Income (Loss) from Operations before Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets
Income (Loss) from Operations before Amortization of Intangible Assets and Impairment of Long-Lived Assets											Income (Loss) from Operations before Amortization of Intangible Assets and Impairment of Long-Lived Assets
Education	Education		$	13,869	$	9,584	$	57,238	$	45,022	Education			$	22,769	$	19,221	$	47,327	$	43,369
Television broadcasting	Television broadcasting		41,911		54,105		113,212		116,229		Television broadcasting			41,042		36,964		82,300		71,301
Manufacturing	Manufacturing		(6,942)		11,838		27,990		30,982		Manufacturing			9,666		19,038		24,804		34,932
Healthcare	Healthcare		6,016		8,965		23,312		23,569		Healthcare			7,250		9,375		14,538		17,296
Automotive	Automotive		4,506		1,986		8,815		69		Automotive			7,365		3,785		14,443		4,309
Other businesses	Other businesses		(19,752)		(17,429)		(57,533)		(54,864)		Other businesses			(23,031)		(18,565)		(50,461)		(37,781)
Corporate office	Corporate office		(13,481)		(12,739)		(42,831)		(34,331)		Corporate office			(10,844)		(14,570)		(23,851)		(29,350)
			$	26,127	$	56,310	$	130,203	$	126,676				$	54,217	$	55,248	$	109,100	$	104,076
Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets
Amortization of Intangible Assets and Impairment of Long-Lived Assets											Amortization of Intangible Assets and Impairment of Long-Lived Assets
Education	Education		$	3,955	$	6,251	$	15,240	$	24,743	Education			$	4,064	$	6,073	$	8,210	$	11,285
Television broadcasting	Television broadcasting		1,361		1,360		4,081		4,081		Television broadcasting			1,360		1,361		2,720		2,720
Manufacturing	Manufacturing		32,541		6,987		46,138		21,112		Manufacturing			5,164		6,610		10,327		13,597
Healthcare	Healthcare		756		823		2,317		3,440		Healthcare			988		780		1,917		1,561
Automotive	Automotive		—		—		—		6,698		Automotive			—		—		—		—
Other businesses	Other businesses		4,121		645		7,599		12,396		Other businesses			3,313		2,833		6,627		3,478
Corporate office	Corporate office		—		—		—		—		Corporate office			—		—		—		—
			$	42,734	$	16,066	$	75,375	$	72,470				$	14,889	$	17,657	$	29,801	$	32,641
Income (Loss) from Operations	Income (Loss) from Operations										Income (Loss) from Operations
Education	Education		$	9,914	$	3,333	$	41,998	$	20,279	Education			$	18,705	$	13,148	$	39,117	$	32,084
Television broadcasting	Television broadcasting		40,550		52,745		109,131		112,148		Television broadcasting			39,682		35,603		79,580		68,581
Manufacturing	Manufacturing		(39,483)		4,851		(18,148)		9,870		Manufacturing			4,502		12,428		14,477		21,335
Healthcare	Healthcare		5,260		8,142		20,995		20,129		Healthcare			6,262		8,595		12,621		15,735
Automotive	Automotive		4,506		1,986		8,815		(6,629)		Automotive			7,365		3,785		14,443		4,309
Other businesses	Other businesses		(23,873)		(18,074)		(65,132)		(67,260)		Other businesses			(26,344)		(21,398)		(57,088)		(41,259)
Corporate office	Corporate office		(13,481)		(12,739)		(42,831)		(34,331)		Corporate office			(10,844)		(14,570)		(23,851)		(29,350)
			$	(16,607)	$	40,244	$	54,828	$	54,206				$	39,328	$	37,591	$	79,299	$	71,435
Equity in Earnings of Affiliates, Net	Equity in Earnings of Affiliates, Net		12,964		4,092		28,168		3,727		Equity in Earnings of Affiliates, Net			1,427		1,776		4,031		15,204
Interest Expense, Net	Interest Expense, Net		(9,422)		(6,357)		(22,457)		(19,307)		Interest Expense, Net			(15,277)		(5,477)		(25,979)		(13,035)
Non-Operating Pension and Postretirement Benefit Income, Net	Non-Operating Pension and Postretirement Benefit Income, Net		27,561		10,489		81,564		41,028		Non-Operating Pension and Postretirement Benefit Income, Net			50,871		25,216		101,376		54,003
Gain (Loss) on Marketable Equity Securities, Net			14,069		59,364		176,981		(1,139)
(Loss) Gain on Marketable Equity Securities, Net											(Loss) Gain on Marketable Equity Securities, Net			(165,540)		83,698		(118,628)		162,912
Other Income, Net	Other Income, Net		5,218		222		27,660		11,010		Other Income, Net			1,176		16,122		4,052		22,442
Income Before Income Taxes			$	33,783	$	108,054	$	346,744	$	89,525
Depreciation of Property, Plant and Equipment
Education			$	8,217	$	6,822	$	23,479	$	24,475
Television broadcasting			3,462		3,399		10,478		10,188
Manufacturing			2,402		2,557		7,346		7,610
Healthcare			322		318		970		1,351
Automotive			535		619		1,555		1,735
Other businesses			3,649		4,589		7,578		12,211
Corporate office			154		177		480		528
			$	18,741	$	18,481	$	51,886	$	58,098

(Loss) Income Before Income Taxes											(Loss) Income Before Income Taxes			$	(88,015)	$	158,926	$	44,151	$	312,961


		Three months ended			Nine months ended							Three months ended	Six months ended
		September 30			September 30							June 30	June 30
(in thousands)	(in thousands)		2021		2020		2021		2020		(in thousands)		2022		2021		2022		2021
Depreciation of Property, Plant and Equipment											Depreciation of Property, Plant and Equipment
Education											Education		$	8,531	$	7,482	$	17,036	$	15,262
Television broadcasting											Television broadcasting		3,085		3,543		6,374		7,016
Manufacturing											Manufacturing		2,323		2,427		4,751		4,944
Healthcare											Healthcare		455		331		865		648
Automotive											Automotive		752		490		1,529		1,020
Other businesses											Other businesses		4,114		2,169		8,029		3,929
Corporate office											Corporate office		153		158		304		326
													$	19,413	$	16,600	$	38,888	$	33,145
Pension Service Cost	Pension Service Cost										Pension Service Cost
Education	Education		$	2,339	$	2,350	$	7,020	$	7,527	Education		$	1,931	$	2,398	$	4,467	$	4,681
Television broadcasting	Television broadcasting		901		817		2,692		2,449		Television broadcasting		856		956		1,782		1,791
Manufacturing	Manufacturing		321		318		962		1,107		Manufacturing		224		246		552		641
Healthcare	Healthcare		141		136		421		407		Healthcare		93		108		279		280
Automotive	Automotive		—		—		—		—		Automotive		5		—		11		—
Other businesses	Other businesses		458		410		1,314		1,276		Other businesses		477		487		997		856
Corporate office	Corporate office		1,615		1,426		4,845		4,278		Corporate office		1,407		1,682		2,936		3,230
			$	5,775	$	5,457	$	17,254	$	17,044			$	4,993	$	5,877	$	11,024	$	11,479

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

   As of
(in thousands) September 30, 2021 December 31, 2020
Identifiable Assets
Education $ 1,975,302 $ 1,975,104
Television broadcasting 441,098 453,988
Manufacturing 486,241 551,611
Healthcare 163,286 160,654
Automotive 160,025 151,789
Other businesses 660,385 365,744
Corporate office 84,196 348,045
   $ 3,970,533 $ 4,006,935
Investments in Marketable Equity Securities 764,831 573,102
Investments in Affiliates 171,249 155,777
Prepaid Pension Cost 1,772,859 1,708,305
Total Assets $ 6,679,472 $ 6,444,119


	As of
(in thousands)	June 30, 2022		December 31, 2021
Identifiable Assets
Education	$	1,824,482	$	2,026,782
Television broadcasting	429,070		448,627
Manufacturing	500,918		486,304
Healthcare	217,190		194,823
Automotive	268,156		238,200
Other businesses	623,159		689,872
Corporate office	112,979		68,962
	$	3,975,954	$	4,153,570
Investments in Marketable Equity Securities	648,604		809,997
Investments in Affiliates	172,612		155,444
Prepaid Pension Cost	2,364,135		2,306,514
Total Assets	$	7,161,305	$	7,425,525

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


		Three Months Ended				Nine months ended					Three Months Ended				Six months ended
		September 30				September 30					June 30				June 30
(in thousands)	(in thousands)	2021		2020		2021		2020		(in thousands)	2022		2021		2022		2021
Operating Revenues	Operating Revenues									Operating Revenues
Kaplan international	Kaplan international	$	168,143	$	123,768	$	521,314	$	488,096	Kaplan international	$	200,871	$	181,276	$	405,384	$	353,171
Higher education	Higher education	85,518		83,841		239,944		243,831		Higher education	72,975		78,740		148,783		154,426
Supplemental education	Supplemental education	80,489		92,568		238,055		253,641		Supplemental education	77,546		77,911		153,850		157,566
Kaplan corporate and other	Kaplan corporate and other	3,761		3,194		10,739		9,438		Kaplan corporate and other	4,454		3,615		8,799		6,978
Intersegment elimination	Intersegment elimination	(1,912)		(904)		(4,752)		(2,986)		Intersegment elimination	(2,833)		(1,558)		(5,791)		(2,840)
		$	335,999	$	302,467	$	1,005,300	$	992,020		$	353,013	$	339,984	$	711,025	$	669,301

Income (Loss) From Operations before Amortization of Intangible Assets and Impairment of Long-Lived Assets	Income (Loss) From Operations before Amortization of Intangible Assets and Impairment of Long-Lived Assets									Income (Loss) From Operations before Amortization of Intangible Assets and Impairment of Long-Lived Assets
Kaplan international	Kaplan international	$	(999)	$	(13,759)	$	23,285	$	21,256	Kaplan international	$	19,063	$	14,077	$	39,627	$	24,284
Higher education	Higher education	9,525		6,853		18,152		21,883		Higher education	2,704		2,374		7,741		8,627
Supplemental education	Supplemental education	11,769		19,069		33,079		12,849		Supplemental education	4,829		8,813		8,200		21,310
Kaplan corporate and other	Kaplan corporate and other	(6,426)		(2,579)		(17,375)		(10,971)		Kaplan corporate and other	(3,771)		(6,042)		(8,204)		(10,949)
Intersegment elimination	Intersegment elimination	—		—		97		5		Intersegment elimination	(56)		(1)		(37)		97
		$	13,869	$	9,584	$	57,238	$	45,022		$	22,769	$	19,221	$	47,327	$	43,369
Amortization of Intangible Assets	Amortization of Intangible Assets	$	3,888	$	4,335	$	11,967	$	12,807	Amortization of Intangible Assets	$	4,064	$	3,914	$	8,210	$	8,079
Impairment of Long-Lived Assets	Impairment of Long-Lived Assets	$	67	$	1,916	$	3,273	$	11,936	Impairment of Long-Lived Assets	$	—	$	2,159	$	—	$	3,206

Income (Loss) from Operations	Income (Loss) from Operations									Income (Loss) from Operations
Kaplan international	Kaplan international	$	(999)	$	(13,759)	$	23,285	$	21,256	Kaplan international	$	19,063	$	14,077	$	39,627	$	24,284
Higher education	Higher education	9,525		6,853		18,152		21,883		Higher education	2,704		2,374		7,741		8,627
Supplemental education	Supplemental education	11,769		19,069		33,079		12,849		Supplemental education	4,829		8,813		8,200		21,310
Kaplan corporate and other	Kaplan corporate and other	(10,381)		(8,830)		(32,615)		(35,714)		Kaplan corporate and other	(7,835)		(12,115)		(16,414)		(22,234)
Intersegment elimination	Intersegment elimination	—		—		97		5		Intersegment elimination	(56)		(1)		(37)		97
		$	9,914	$	3,333	$	41,998	$	20,279		$	18,705	$	13,148	$	39,117	$	32,084
Depreciation of Property, Plant and Equipment	Depreciation of Property, Plant and Equipment									Depreciation of Property, Plant and Equipment
Kaplan international	Kaplan international	$	5,516	$	4,585	$	15,603	$	14,782	Kaplan international	$	5,794	$	4,835	$	11,549	$	10,087
Higher education	Higher education	923		682		2,648		2,237		Higher education	1,064		873		2,084		1,725
Supplemental education	Supplemental education	1,658		1,454		4,904		7,165		Supplemental education	1,578		1,670		3,217		3,246
Kaplan corporate and other	Kaplan corporate and other	120		101		324		291		Kaplan corporate and other	95		104		186		204
		$	8,217	$	6,822	$	23,479	$	24,475		$	8,531	$	7,482	$	17,036	$	15,262

Pension Service Cost	Pension Service Cost									Pension Service Cost
Kaplan international	Kaplan international	$	73	$	102	$	221	$	334	Kaplan international	$	63	$	77	$	135	$	148
Higher education	Higher education	1,109		973		3,329		3,113		Higher education	820		1,137		1,901		2,220
Supplemental education	Supplemental education	954		986		2,861		3,155		Supplemental education	895		976		2,077		1,907
Kaplan corporate and other	Kaplan corporate and other	203		289		609		925		Kaplan corporate and other	153		208		354		406
		$	2,339	$	2,350	$	7,020	$	7,527		$	1,931	$	2,398	$	4,467	$	4,681

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


		As of					As of

(in thousands)	(in thousands)	September 30, 2021		December 31, 2020		(in thousands)	June 30, 2022		December 31, 2021
Identifiable Assets	Identifiable Assets					Identifiable Assets
Kaplan international	Kaplan international	$	1,445,125	$	1,455,722	Kaplan international	$	1,320,183	$	1,493,868
Higher education	Higher education	207,834		187,123		Higher education	177,954		187,789
Supplemental education	Supplemental education	263,169		274,687		Supplemental education	268,054		286,877
Kaplan corporate and other	Kaplan corporate and other	59,174		57,572		Kaplan corporate and other	58,291		58,248
		$	1,975,302	$	1,975,104		$	1,824,482	$	2,026,782

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 a net loss attributable to common shares of $67.5 million ($13.95 per share) for the second quarter of 2022, compared to income of $115.4 million ($22.99 per share) for the second quarter of 2021.

Items included in the Company’s net loss for the second quarter of 2022:

•a $3.2 million net credit related to a fair value change in contingent consideration from a prior acquisition at Corporate (after-tax impact of $3.2 million, or $0.66 per share);

•$165.5 million in net losses on marketable equity securities (after-tax impact of $122.4 million, or $25.05 per share);

•$0.4 million in net losses of affiliates whose operations are not managed by the Company (after-tax impact of $0.3 million, or $0.07 per share); and

•$8.0 million in interest expense to adjust the fair value of the mandatorily redeemable noncontrolling interest (after-tax impact of $7.6 million, or $1.56 per share).

Items included in the Company’s net income for the second quarter of 2021:

•a $2.6 million net credit related to a fair value change in contingent consideration from a prior acquisition at Corporate ($0.52 per share);

•$3.4 million in long-lived asset impairment charges (after-tax impact of $2.6 million, or $0.51 per share);

•$1.1 million in expenses related to a non-operating Separation Incentive Program (SIP) at manufacturing (after-tax impact of $0.8 million, or $0.16 per share);

•$83.7 million in net gains on marketable equity securities (after-tax impact of $60.9 million, or $12.18 per share);

•$1.4 million in net losses of affiliates whose operations are not managed by the Company (after-tax impact of $1.0 million, or $0.21 per share);

•a net non-operating gain of $14.5 million from the sale and write-up of cost method investments (after-tax impact of $10.7 million, or $2.13 per share); and

•$1.0 million in interest income to adjust the fair value of the mandatorily redeemable noncontrolling interest ($0.19 per share).

Revenue for the second quarter of 2022 was $933.3 million, up 16% from $801.2 million in the second quarter of 2021. Revenues increased at education, television broadcasting, healthcare, automotive and other businesses, partially offset by a decline at manufacturing. The Company reported operating income of $39.3 million for the second quarter of 2022, compared to $37.6 million for the second quarter of 2021. Operating results increased at education, television broadcasting and automotive, offset by declines at manufacturing, healthcare and other businesses.

For the first six months of 2022, the Company reported net income attributable to common shares of ~~$39.6~~$28.1 million ($5.74 per share), compared to $227.8 million ($~~7.90~~45.43 per share) for the ~~third quarter~~first six months of ~~2021,~~2021.

Items included in the Company’s net income for the first six months of 2022:

•a $3.2 million net credit related to a fair value change in contingent consideration from a prior acquisition at Corporate (after-tax impact of $3.1 million, or $0.64 per share);

•$118.6 million in net losses on marketable equity securities (after-tax impact of $87.7 million, or $17.90 per share);

•$0.1 million in net losses of affiliates whose operations are not managed by the Company (after-tax impact of $0.1 million, or $0.01 per share);

•Non-operating gain of $1.7 million from sales of an equity method and cost method investment (after-tax impact of $1.3 million, or $0.26 per share); and

•$11.4 million in interest expense to adjust the fair value of the mandatorily redeemable noncontrolling interest (after-tax impact of $10.9 million, or $2.23 per share).

Items included in the Company’s net income for the first six months of 2021:

•a $2.2 million net credit related to a fair value change in contingent consideration from a prior acquisition at Corporate ($0.44 per share);

•$3.4 million in long-lived asset impairment charges (after-tax impact of $2.6 million, or $0.51 per share);

•$1.1 million in expenses related to a non-operating SIP at manufacturing (after-tax impact of $0.8 million, or $0.16 per share);

•$162.9 million in net gains on marketable equity securities (after-tax impact of $118.5 million, or $23.64 per share);

•$8.9 million in net earnings of affiliates whose operations are not managed by the Company (after-tax impact of $6.5 million, or $1.29 per share);

•a net non-operating gain of $17.2 million from the sale and write-up of cost method investments (after-tax impact of $12.7 million, or $2.54 per share); and

•$0.1 million in net interest expense to adjust the fair value of the mandatorily redeemable noncontrolling interest ($0.02 per share).

Revenue for the first six months of 2022 was $1,848.0 million, up 22% from $1,513.6 million in the first six months of 2021. Revenues increased at education, television broadcasting, healthcare, automotive and other businesses, partially offset by a decline at manufacturing. The Company reported operating income of $79.3 million for the first six months of 2022, compared to ~~$77.6~~$71.4 million ~~($15.22 per share)~~ for the ~~third quarter~~first six months of ~~2020.~~2021. Operating results increased at education, television broadcasting and automotive, offset by declines at manufacturing, healthcare and other businesses.

The COVID-19 pandemic and measures taken to prevent its spread ~~such as travel restrictions, shelter in place orders and mandatory closures,~~ significantly impacted the Company’s results for ~~2020~~2021 and, to a lesser extent, the first ~~nine~~six months of ~~2021,~~2022, largely from reduced demand for the Company’s products and services. This significant adverse impact is expected to continue for several of the Company’s businesses for the remainder of 2021. The Company’s management has taken a variety of measures to reduce costs and implement changes to business operations. The Company cannot predict the severity or duration of the pandemic, the extent to which demand for the Company’s products and services will be adversely affected or the degree to which financial and operating results will be negatively impacted.

~~Items included in the Company’s income before income taxes for the third quarter of 2021:~~

•~~a $1.7 million net credit related to a fair value change in contingent consideration from a prior acquisition;~~

•~~a $0.1 million reduction to operating expenses from property, plant and equipment gains in connection with the spectrum repacking mandate of the FCC;~~

•~~$26.8 million in goodwill and other long-lived asset impairment charges;~~

•~~$14.1 million in net gains on marketable equity securities;~~

•~~$16.7 million in net earnings of affiliates whose operations are not managed by the Company;~~

•~~a net non-operating loss of $6.4 million from the write-down of an equity method investment; and~~

•~~$2.6 million in net interest expense to adjust the fair value of the mandatorily redeemable noncontrolling interest.~~

~~Items included in the Company’s income before income taxes for the third quarter of 2020:~~

•~~$1.9 million in long-lived asset impairment charges at the education division;~~

•~~$1.9 million in restructuring charges at the education division;~~

•~~$2.8 million in accelerated depreciation at other businesses;~~

•~~a $1.2 million reduction to operating expenses from property, plant and equipment gains in connection with the spectrum repacking mandate of the FCC;~~

•~~$7.0 million in expenses related to non-operating Separation Incentive Programs at the education division;~~

•~~$59.4 million in net gains on marketable equity securities;~~

•~~$0.8 million in net earnings of affiliates whose operations are not managed by the Company;~~

•~~a non-operating gain of $1.6 million from write-up of a cost method investment; and~~

•~~$2.3 million in non-operating foreign currency losses.~~

Revenue for the third quarter of 2021 was $809.4 million, up 13% from $717.0 million in the third quarter of 2020. Revenues increased at education, healthcare, automotive and other businesses, offset by decreases at television broadcasting and manufacturing. The Company reported an operating loss of $16.6 million for the third quarter of 2021, compared to operating income of $40.2 million for the third quarter of 2020. Operating results declined at manufacturing, television broadcasting, healthcare and other businesses, offset by an improvement at education and automotive.

~~Items included in the Company’s income before income taxes for the nine months of 2021:~~

•~~a $3.9 million net credit related to fair value changes in contingent consideration from prior acquisitions;~~

•~~a $0.9 million reduction to operating expenses from property, plant and equipment gains in connection with the spectrum repacking mandate of the FCC;~~

•~~$30.2 million in goodwill and long-lived asset impairment charges;~~

•~~$1.1 million in expenses related to a non-operating Separation Incentive Program at manufacturing;~~

•~~$177.0 million in net gains on marketable equity securities;~~

•~~$25.6 million in net earnings of affiliates whose operations are not managed by the Company;~~

•~~a net non-operating gain of $10.8 million from the sale, write-up and write-down of cost and equity method investments;~~

•~~$2.7 million in net interest expense to adjust the fair value of the mandatorily redeemable noncontrolling interest; and~~

•~~$0.7 million in non-operating foreign currency gains.~~

~~Items included in the Company’s income before income taxes for the nine months of 2020:~~

•~~$27.6 million in goodwill and other long-lived asset impairment charges;~~

•~~$12.1 million in restructuring charges at the education division;~~

•~~$5.7 million in accelerated depreciation at other businesses;~~

•~~a $2.5 million reduction to operating expenses from property, plant and equipment gains in connection with the spectrum repacking mandate of the FCC;~~

•~~$11.6 million in expenses related to non-operating Separation Incentive Programs at the education division and other businesses;~~

•~~$1.1 million in net losses on marketable equity securities;~~

•~~$2.9 million in net losses of affiliates whose operations are not managed by the Company;~~

•~~non-operating gain, net, of $3.3 million from write-ups, sales and impairments of cost and equity method investments; and~~

•~~$0.9 million in non-operating foreign currency gains.~~

Revenue for the first nine months of 2021 was $2,323.0 million, up 11% from $2,102.1 million in the first nine months of 2020. Revenues increased at all the Company’s divisions. The Company reported operating income of $54.8 million for the first nine months of 2021, compared to $54.2 million for the first nine months of 2020. Operating results improved at education and automotive, offset by declines at manufacturing and television broadcasting.

Division Results

Education

Education division revenue totaled ~~$336.0~~$353.0 million for the ~~third~~second quarter of ~~2021,~~2022, up ~~11%~~4% from ~~$302.5~~$340.0 million for the same period of ~~2020.~~2021. Kaplan reported operating income of ~~$9.9~~$18.7 million for the ~~third~~second quarter of ~~2021,~~2022, compared to ~~$3.3~~$13.1 million for the ~~third~~second quarter of ~~2020.~~

2021.

For the first ~~nine~~six months of ~~2021,~~2022, education division revenue totaled ~~$1,005.3~~$711.0 million, up 1%6% from ~~revenue of $992.0~~$669.3 million for the same period of ~~2020.~~2021. Kaplan reported operating income of ~~$42.0~~$39.1 million for the first ~~nine~~six months of ~~2021,~~2022, compared to ~~$20.3~~$32.1 million for the first ~~nine~~six months of ~~2020.~~2021.

The COVID-19 pandemic adversely impacted Kaplan’s operating results ~~beginning in February 2020~~during 2021 and, ~~continued through~~to a lesser extent, the first ~~nine~~six months of ~~2021.~~

2022. Kaplan serves a ~~significant~~large number of students who travel to other countries to study a second language, prepare for licensure, or pursue a higher education degree. Government-imposed travel restrictions and school closures arising from COVID-19 had a negative impact on the ability of certain international students to travel and attend Kaplan’s programs, particularly at Kaplan International’s Language ~~programs.~~ programs (Languages) in 2021.

In addition, most licensing bodies and administrators of standardized exams postponed or canceled scheduled examinations due to COVID-19, resulting in a significant number of students deciding to defer their studies, negatively impacting Kaplan’s exam preparation education businesses. Overall, this is expected to continue to adversely impact Kaplan's revenues and operating results for the remainder of 2021, particularly at Kaplan International Languages (Languages).

To help mitigate the adverse impact of COVID-19, Kaplan implemented a number of significant cost reduction and restructuring activities across its businesses. Related to these restructuring activities, Kaplan recorded ~~$0.1~~$2.2 million and ~~$3.3~~$3.2 million in impairment of long-lived ~~assets~~asset charges in the ~~third~~second quarter and first ~~nine~~six months of 2021, respectively. In the first nine months of 2020, Kaplan recorded $12.5 million in lease restructuring costs and in the third quarter and first nine months of 2020, Kaplan recorded $1.9 million and $3.1 million in severance restructuring costs, respectively. The lease restructuring costs included $3.4 million in accelerated depreciation expense in the first nine months of 2020. Kaplan also recorded $1.9 million and $11.9 million in lease impairment charges in connection with these restructuring plans in the third quarter and first nine months of 2020, respectively. These impairment charges included $0.2 million and $2.2 million in property, plant and equipment write-downs in the third quarter and first nine months, respectively. In the second and third quarters of 2020, the Company approved Separation Incentive Programs (SIP) that reduced the number of employees at all of Kaplan’s divisions, resulting in $7.8 million and $12.8 million in non-operating pension expense in the third quarter and first nine months of 2020, respectively. Kaplan management is continuing to monitor the ongoing COVID-19 disruptions and changes in its operating environment and may develop and implement further restructuring activities in 2021.

In 2020, Kaplan also accelerated the development and promotion of various online programs and solutions, rapidly transitioned most of its classroom-based programs online and addressed the individual needs of its students and partners, substantially reducing the disruption from COVID-19 while simultaneously adding important new product offerings and operating capabilities. Further, in the fourth quarter of 2020, Kaplan combined its three primary divisions based in the United States (Kaplan Test Prep, Kaplan Professional, and Kaplan Higher Education) into one business known as Kaplan North America (KNA). This combination is designed to enhance Kaplan’s competitiveness by better leveraging its diversified academic and professional portfolio, as well as its relationship with students, universities and businesses. For financial reporting purposes, KNA is reported in two segments: Higher Education and Supplemental Education (combining Kaplan Test Prep and Kaplan Professional (U.S.) into one reporting segment).

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


		Three Months Ended					Nine Months Ended						Three Months Ended					Six Months Ended
		September 30					September 30						June 30					June 30
(in thousands)	(in thousands)	2021		2020		% Change	2021		2020		% Change	(in thousands)	2022		2021		% Change	2022		2021		% Change
Revenue	Revenue											Revenue
Kaplan international	Kaplan international	$	168,143	$	123,768	36	$	521,314	$	488,096	7	Kaplan international	$	200,871	$	181,276	11	$	405,384	$	353,171	15
Higher education	Higher education	85,518		83,841		2	239,944		243,831		(2)	Higher education	72,975		78,740		(7)	148,783		154,426		(4)
Supplemental education	Supplemental education	80,489		92,568		(13)	238,055		253,641		(6)	Supplemental education	77,546		77,911		0	153,850		157,566		(2)
Kaplan corporate and other	Kaplan corporate and other	3,761		3,194		18	10,739		9,438		14	Kaplan corporate and other	4,454		3,615		23	8,799		6,978		26
Intersegment elimination	Intersegment elimination	(1,912)		(904)		—	(4,752)		(2,986)		—	Intersegment elimination	(2,833)		(1,558)		—	(5,791)		(2,840)		—
		$	335,999	$	302,467	11	$	1,005,300	$	992,020	1		$	353,013	$	339,984	4	$	711,025	$	669,301	6
Operating Income (Loss)	Operating Income (Loss)											Operating Income (Loss)
Kaplan international	Kaplan international	$	(999)	$	(13,759)	93	$	23,285	$	21,256	10	Kaplan international	$	19,063	$	14,077	35	$	39,627	$	24,284	63
Higher education	Higher education	9,525		6,853		39	18,152		21,883		(17)	Higher education	2,704		2,374		14	7,741		8,627		(10)
Supplemental education	Supplemental education	11,769		19,069		(38)	33,079		12,849		—	Supplemental education	4,829		8,813		(45)	8,200		21,310		(62)
Kaplan corporate and other	Kaplan corporate and other	(6,426)		(2,579)		—	(17,375)		(10,971)		(58)	Kaplan corporate and other	(3,771)		(6,042)		38	(8,204)		(10,949)		25
Amortization of intangible assets	Amortization of intangible assets	(3,888)		(4,335)		10	(11,967)		(12,807)		7	Amortization of intangible assets	(4,064)		(3,914)		(4)	(8,210)		(8,079)		(2)
Impairment of long-lived assets	Impairment of long-lived assets	(67)		(1,916)		97	(3,273)		(11,936)		73	Impairment of long-lived assets	—		(2,159)		—	—		(3,206)		—
Intersegment elimination	Intersegment elimination	—		—		—	97		5		—	Intersegment elimination	(56)		(1)		—	(37)		97		—
		$	9,914	$	3,333	—	$	41,998	$	20,279	—		$	18,705	$	13,148	42	$	39,117	$	32,084	22

Kaplan International includes postsecondary education, professional training and language training businesses largely outside the United States. Kaplan International revenue increased ~~36%~~11% and 7%15% for the ~~third~~second quarter and first ~~nine~~six months of ~~2021,~~2022, respectively ~~(increase of 31%~~(20% and ~~decrease of 1%~~21%, respectively, on a constant currency basis). The increase ~~in the third quarter~~ is due largely to growth at Languages, Pathways and UK Professional ~~and Languages. The increase for the first nine months is due largely to growth at UK Professional and Pathways, partially offset by declines at Languages.~~. Kaplan International reported an operating ~~loss~~income of ~~$1.0~~$19.1 million in the ~~third~~second quarter of ~~2021,~~2022, compared to ~~$13.8~~$14.1 million in the ~~third~~second quarter of ~~2020.~~2021. Operating income increased to ~~$23.3~~$39.6 million in the first ~~nine~~six months of ~~2021,~~2022, compared to ~~$21.3~~$24.3 million in the first ~~nine~~six months of ~~2020.~~ 2021. The increase ~~in operating results in the third quarter and first nine months of 2021~~ is due largely to a reduction in losses at Languages, and improved results at Pathways, partially offset by declines in Australia and ~~UK Professional.~~Singapore and the adverse impact of foreign currency exchange rates. Overall, Kaplan International’s operating results were negatively impacted by $5$3 million and ~~$31~~$9 million in losses, respectively, incurred at Languages from ~~continued significant~~ COVID-19 disruptions for the ~~third~~second quarter and first ~~nine~~six months of 2022; compared to $12 million and $26 million in losses, respectively, incurred at Languages from COVID-19 disruptions for the second quarter and first six months of 2021. ~~In addition, Kaplan International recorded $3.9 million~~At the end of ~~lease restructuring costs and $2.2 million~~the second quarter of ~~severance restructuring costs at Languages in the first nine months of 2020; the lease restructuring costs included $1.5 million in accelerated depreciation expense. Due to the~~2022, travel restrictions imposed as a result of COVID-19 ~~Kaplan~~have been substantially lifted, except in parts of Asia. Consequently, the Company expects ~~the disruption of its~~significantly improved results at Languages ~~business operating environment to continue~~and Australia for the remainder of ~~2021.~~2022, assuming no new travel restrictions are imposed.

Higher Education includes the results of Kaplan as a service provider to higher education institutions. In the ~~third~~second quarter and first six months of ~~2021,~~2022, Higher Education revenue ~~increased 2%~~declined 7% and 4%, respectively, due largely to ~~an increase in~~lower costs incurred for reimbursement under the Purdue Global ~~fee recorded, resulting in increased operating income for the quarter.~~agreement. For the ~~first nine months of 2021, Higher Education revenue was down 2% and operating income declined due to a reduction in the overall Purdue Global fee recorded during this period. For the third~~second quarter and first ~~nine months~~half of 2022 and 2021, Kaplan recorded a portion of the fee with Purdue Global based on an assessment of its collectability under the ~~TOSA with a lower fee recognized in~~TOSA. Enrollments at Purdue Global for the first half of ~~2021 due to less cash available for distribution at June 30, 2021 due to timing~~2022 were approximately the same as the first half of ~~cash receipts at Purdue Global.~~2021. The Company will continue to assess the collectability of the fee with Purdue Global on a quarterly basis to make a determination as to whether to record all or part of the fee in the future and whether to make adjustments to fee amounts recognized in earlier periods. ~~For~~Higher Education results increased in the second quarter of 2022 due to an increase in the Purdue Global fee recorded, partially offset by increased investment costs incurred related to other university agreements. Higher Education results declined in the first ~~nine months~~half of ~~2020, Kaplan Higher Education recorded $3.5 million~~2022 due to increased investment costs incurred related to other university agreements, partially offset by an increase in ~~lease restructuring costs, of which $0.1 million was accelerated depreciation expense.~~the Purdue Global fee recorded.

As of ~~September~~June 30, ~~2021,~~2022, Kaplan had a total outstanding accounts receivable balance of ~~$113.5~~$90.0 million from Purdue Global related to amounts due for reimbursements for services, fees earned and a deferred fee. Included in this total, Kaplan has a ~~$19.1~~$19.3 million long-term receivable balance due from Purdue Global at ~~September~~June 30, ~~2021,~~2022, related to the advance of $20 million during the initial KU Transaction.

Supplemental Education includes Kaplan’s standardized test preparation programs and domestic professional and other continuing education businesses. In November 2021, Supplemental Education acquired two small businesses. Supplemental Education revenue declined 13% and 6%, respectively, for the third quarter and first nine months of 2021, due to additional revenue recognized in the third quarter of 2020 from product-life extensions made earlier in 2020 relatedwas flat compared to the ~~postponement of various standardized test and certification exam dates due to COVID-19, offset in part by growth in securities and insurance programs. Operating results were down in the third~~second quarter of 2021 and declined 2% for the first six months of 2022 due largely to ~~additional revenue recognized~~declines in ~~the third quarter of 2020 from product-life extensions made earlier in 2020 related~~retail comprehensive test preparation demand. Overall, demand for graduate and pre-college test preparation programs has declined due to the ~~postponement~~strength of ~~various standardized test~~U.S. employment markets and ~~certification exam dates due to COVID-19.~~the decline in test-takers. Operating results ~~improved in the first nine months of 2021 due to savings from restructuring activities implemented in 2020, $5.1 million of lease restructuring costs incurred~~declined in the second quarter and first six months of ~~2020 (of which $1.8 million was accelerated depreciation),~~2022 due to lower revenues and ~~$0.9 million in severance restructuring costs incurred in the third quarter of 2020.~~increased advertising and product development costs.

Kaplan corporate and other represents unallocated expenses of Kaplan, Inc.’s corporate office, other minor businesses and certain shared activities. Overall, Kaplan corporate and other expenses increased in the first nine months of 2021 due to normalization of compensation costs compared to 2020, which included salary abatements and reduced incentive compensation accruals.

Television Broadcasting

Three Months Ended Nine Months Ended
September 30 September 30
(in thousands) 2021 2020 % Change 2021 2020 % Change
Revenue $ 126,498 $ 133,828 (5) $ 360,089 $ 350,038 3
Operating Income 40,550 52,745 (23) 109,131 112,148 (3)
A summary of television broadcasting’s operating results is as follows:


	Three Months Ended					Six Months Ended
	June 30					June 30
(in thousands)	2022		2021		% Change	2022		2021		% Change
Revenue	$	122,386	$	119,966	2	$	245,805	$	233,591	5
Operating Income	39,682		35,603		11	79,580		68,581		16

Graham Media Group, Inc. owns seven television stations located in Houston, TX; Detroit, MI; Orlando, FL; San Antonio, TX; Jacksonville, FL; and Roanoke, VA, as well as SocialNewsDesk, a provider of social media management tools designed to connect newsrooms with their users. Revenue at the television broadcasting division ~~decreased 5%~~increased 2% to ~~$126.5~~$122.4 million in the ~~third~~second quarter of ~~2021,~~2022, from ~~$133.8~~$120.0 million in the same period of ~~2020.~~2021. The revenue ~~decrease~~increase is due to a ~~$24.1~~$2.6 million ~~decline~~increase in political advertising revenue partially offset by increased local and national advertising revenues, which were adversely impacted in 2020 by reduced demand related to the COVID-19 pandemic, increased revenue from summer Olympics-related advertising revenue at the Company’s NBC affiliates, and a ~~$2.8~~$1.1 million increase in retransmission revenues. ~~The increase in local and national advertising was from growth in the home products, health and fitness,~~

and sports betting categories. In the third quarter of 2021 and 2020, the television broadcasting division recorded $0.1 million and $1.2 million, respectively, in reductions to operating expenses related to property, plant and equipment gains due to new equipment received at no cost in connection with the spectrum repacking mandate of the FCC. Operating income for the ~~third~~second quarter of ~~2021 decreased 23%~~2022 increased 11% to ~~$40.6~~$39.7 million, from ~~$52.7~~$35.6 million in the same period of ~~2020,~~2021, due to ~~reduced~~increased revenues and ~~higher network fees.~~a reduction in incentive compensation costs.

Revenue at the television broadcasting division increased 3%5% to ~~$360.1~~$245.8 million in the first ~~nine~~six months of ~~2021,~~2022, from ~~$350.0~~$233.6 million in the same period of ~~2020.~~2021. The revenue increase is due to ~~increased local and national advertising revenues, which were adversely impacted~~a $5.0 million increase in ~~2020 by reduced demand related to the COVID-19 pandemic, an $8.7~~political revenue, a $3.6 million increase in retransmission revenues, and ~~increased revenue~~increases from ~~summer Olympics-related~~winter Olympics and Super Bowl advertising revenue at the Company’s NBC affiliates ~~partially offset by a $38.1 million decline in political advertising revenue. The increase in local and national advertising was from growth~~ in the ~~home products, health and fitness, and sports betting categories. In the~~ first ~~nine months~~quarter of 2021 and 2020, the television broadcasting division recorded $0.9 million and $2.5 million, respectively, in reductions to operating expenses related to property, plant and equipment gains due to new equipment received at no cost in connection with the spectrum repacking mandate of the FCC.2022. Operating income for the first ~~nine~~six months of ~~2021 decreased 3%~~2022 increased 16% to ~~$109.1~~$79.6 million, from ~~$112.1~~$68.6 million in the same period of ~~2020,~~2021, due to ~~higher network fees.~~increased revenues.

In ~~March 2021,~~May 2022, the Company’s television ~~stations located~~station in Orlando ~~FL and Jacksonville, FL received approval of their FCC license renewals~~(WKMG) entered into a new network affiliation agreement with CBS that covers the period July 1, 2022 through ~~February 1, 2029.~~June 30, 2026.

Manufacturing

Three Months Ended Nine Months Ended
September 30 September 30
(in thousands) 2021 2020 % Change 2021 2020 % Change
Revenue $ 99,766 $ 106,690 (6) $ 356,849 $ 303,387 18
Operating (Loss) Income (39,483) 4,851 — (18,148) 9,870 —
A summary of manufacturing’s operating results is as follows:


	Three Months Ended					Six Months Ended
	June 30					June 30
(in thousands)	2022		2021		% Change	2022		2021		% Change
Revenue	$	127,062	$	141,123	(10)	$	243,002	$	257,083	(5)
Operating Income	4,502		12,428		(64)	14,477		21,335		(32)

Manufacturing includes four businesses: Hoover, a supplier of pressure impregnated kiln-dried lumber and plywood products for fire retardant and preservative applications; Dekko, a manufacturer of electrical workspace solutions, architectural lighting and electrical components and assemblies; Joyce/Dayton, a manufacturer of screw jacks and other linear motion systems; and Forney, a global supplier of products and systems that control and monitor combustion processes in electric utility and industrial applications.

Manufacturing revenues ~~decreased 6%~~declined 10% and 5% in the ~~third~~second quarter and first six months of ~~2021,~~2022, respectively, due ~~primarily~~largely to a significant reduction in revenues at Hoover from lower wood prices ~~during the quarter~~ and modestly lower product ~~demand. Manufacturing revenue~~demand, offset by increased ~~18%~~revenues at Dekko, Joyce, and Forney. Wood prices were highly volatile in 2021 and the first half of 2022. Overall, Hoover results included wood gains on inventory sales for both the first half of 2022 and 2021; however, wood gains on inventory sales were significantly higher in the first ~~nine months~~half of ~~2021, due primarily to significantly increased revenues at~~2021. For the second quarter of 2022, Hoover ~~from substantially higher~~results included wood prices in 2021 and improved product demand, partially offset by reduced revenues at Dekko from lower product demand, particularly in the commercial office electrical products and hospitality sectors. Wood prices began to decline in June 2021 and this trend has continued through September 2021, which resulted in significant losses on inventory sales, compared with significant wood gains on inventory sales in the second quarter of 2021. Manufacturing operating results declined 64% and 32% in the second quarter and first six months of 2022, respectively, due largely to declines at Hoover related to wood gains and losses on inventory sales during the relevant periods. Excluding the impact of wood gains and losses, Hoover results improved in the second quarter of 2022 and were down slightly in the first half of 2022. The declines at Hoover in the ~~third~~second quarter and first half of ~~2021. For the first nine months of 2021, Hoover’s operating~~2022 were partially offset by improved results reflect overall gains on inventory sales. Manufacturing operating results declined in the third quarter of 2021 due to a significant loss at Hoover from substantial losses on inventory sales, and a $26.7 million goodwill impairment charge recorded at Dekko ~~due to continued weakness in demand for certain Dekko products related to the COVID-19 pandemic, increases in labor~~ and ~~commodity costs~~Forney and ~~related supply chain challenges. Manufacturing operating results declined in the first nine months~~reduced amortization of ~~2021 due primarily to the Dekko goodwill impairment charge.~~intangible assets expense.

In the second quarter of 2021, Dekko announced a plan to relocate its manufacturing operations in Shelton, CT to other Dekko manufacturing ~~facilities.~~facilities, which was substantially completed by the end of 2021. In connection with this activity, Dekko ~~is in the process of implementing~~implemented a SIP for the affected employees, resulting in $1.1 million in non-operating SIP expense recorded in the second quarter of 2021, ~~to be~~which was funded by the assets of the ~~Company's~~Company’s pension plan.

Healthcare

Three Months Ended Nine Months Ended
September 30 September 30
(in thousands) 2021 2020 % Change 2021 2020 % Change
Revenue $ 55,445 $ 51,426 8 $ 160,184 $ 146,601 9
Operating Income 5,260 8,142 (35) 20,995 20,129 4
A summary of healthcare’s operating results is as follows:

~~The~~


	Three Months Ended					Six Months Ended
	June 30					June 30
(in thousands)	2022		2021		% Change	2022		2021		% Change
Revenue	$	76,385	$	54,696	40	$	143,640	$	104,739	37
Operating Income	6,262		8,595		(27)	12,621		15,735		(20)

Graham Healthcare Group (GHG) provides home health and hospice services in ~~three~~ sixstates. In December 2021, GHG acquired two small businesses, one of which expanded GHG’s home health operations into Florida. In May 2022, GHG acquired two small businesses, one of which expanded GHG’s home health operations into Kansas and Missouri. GHG provides other healthcare services, including nursing care and prescription services for patients receiving in-home infusion treatments through its 75% interest in CSI Pharmacy Holdings Company, LLC (CSI). Healthcare revenues increased 8%40% and 9%37% for the ~~third~~second quarter and first ~~nine~~six months of ~~2021,~~2022, respectively, largely due to growth at CSI

and home health ~~services.~~services and from businesses acquired in the fourth quarter of 2021 and second quarter of 2022. The decline in GHG operating results in the ~~third~~second quarter ~~of 2021 was primarily due to lower patient census for hospice services~~ and ~~increased business development costs. The increase in GHG operating results in the~~ first ~~nine~~six months of ~~2021~~2022 is due to increased marketing, human resources, recruiting and business development costs and overall increased compensation and transportation costs in nursing and clinical staffing, partially offset by improved results ~~from home health services and CSI, offset by a decline in results from hospice services.~~at CSI.

In the second quarter of 2020, GHG received $7.4 million from the Federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act) Provider Relief Fund. GHG did not apply for these funds; they were disbursed to GHG as a Medicare provider under the CARES Act. Under the Department of Health and Human Services guidelines, these funds may be used to offset revenue reductions and expenses incurred in connection with the COVID-19 pandemic. Of this amount, GHG recorded $5.5 million and $0.2 million in revenue in the second and third quarters of 2020, respectively, to partially offset the impact of revenue reductions due to the COVID-19 pandemic from the curtailment of elective procedures by health systems and other factors. The remaining amount of $1.7 million was recorded as a credit to operating costs in the second quarter of 2020 to partially offset the impact of costs incurred to procure personal protective equipment for GHG employees and other COVID-19 related costs.

The Company also holds interests in four home health and hospice joint ventures managed by GHG, whose results are included in equity in earnings of affiliates in the Company’s Consolidated Statements of Operations. The Company recorded equity in earnings of ~~$2.5~~$1.7 million and ~~$2.8~~$2.7 million for the ~~third~~second quarter of ~~2021~~2022 and ~~2020,~~2021, respectively, from these joint ventures. The Company recorded equity in earnings of ~~$8.0~~$3.6 million and ~~$8.3~~$5.5 million for the first ~~nine~~six months of 2022 and 2021, respectively. During the first quarter of 2022, GHG, through its Residential Home Illinois and ~~2020, respectively, from these joint ventures.~~Residential Hospice Illinois affiliates, acquired an interest in the home health and hospice assets of NorthShore University HealthSystem, an integrated healthcare delivery system serving patients throughout the Chicago, IL area. The transaction resulted in a decrease to GHG’s interest in Residential Hospice Illinois and a $0.6 million non-operating gain was recorded in the first quarter of 2022 related to the change in interest.

Automotive

~~Automotive~~A summary of automotive’s operating results is as follows:
Three Months Ended Nine Months Ended
September 30 September 30
(in thousands) 2021 2020 % Change 2021 2020 % Change
Revenue $ 84,702 $ 76,790 10 $ 242,702 $ 182,288 33
Operating Income (Loss) 4,506 1,986 — 8,815 (6,629) —


	Three Months Ended					Six Months Ended
	June 30					June 30
(in thousands)	2022		2021		% Change	2022		2021		% Change
Revenue	$	147,602	$	90,273	64	$	298,569	$	158,000	89
Operating Income	7,365		3,785		95	14,443		4,309		—

Automotive includes ~~three~~four automotive dealerships in the Washington, D.C. metropolitan area: Ourisman Lexus of Rockville, Ourisman Honda of Tysons Corner, Ourisman Jeep Bethesda and Ourisman ~~Jeep~~Ford of ~~Bethesda.~~ Manassas, which was acquired on December 28, 2021, from the Battlefield Automotive Group. Christopher J. Ourisman, a member of the Ourisman Automotive Group family of dealerships, and his team of industry professionals operate and manage the dealerships; the Company holds a 90% stake.

Revenues for the ~~third~~second quarter and first ~~nine~~six months of ~~2021~~2022 increased ~~10% and 33%, respectively,~~significantly due to the Ford dealership acquisition, sales growth at ~~each of~~ the ~~three dealerships,~~Jeep dealership due ~~partly~~ to ~~significantly reduced demand for sales and service~~an increase in new vehicle inventory provided by the ~~first half of 2020 at the onset of the COVID-19 pandemic in March 2020,~~manufacturer, and higher average new and used car selling prices at the Jeep, Lexus and Honda dealerships as a result of strong ~~consumer~~customer demand and new vehicle inventory shortages related to supply chain disruptions and production delays at vehicle ~~manufacturers. In~~manufacturers, partially offset by volume declines at Honda and Lexus. Operating results for the ~~first~~second quarter of 2020, the Company’s automotive dealerships recorded a $6.7 million intangible asset impairment charge as a result of the pandemic and the related recessionary conditions. Operating earnings for the third quarter and first nine months of 20212022 improved significantly ~~from~~due largely to the ~~prior year~~Ford acquisition and improved results at the Jeep dealership due to increased sales and margins, ~~in addition~~offset by declines at the Honda dealership due to inventory shortages. Operating results for the first six months of 2022 improved significantly due to the ~~impairment charge recorded~~Ford acquisition and improved results at the Jeep, Lexus and Honda dealerships.

On July 5, 2022, the Company acquired a Toyota dealership and a Chrysler-Dodge-Jeep-Ram dealership in Woodbridge, VA from the ~~first quarter of 2020.~~Lustine Automotive Group.

Other Businesses

~~Clyde’s Restaurant Group~~

Clyde’s Restaurant Group (CRG) owns and operates eleven restaurants and entertainment venues in the Washington, D.C. metropolitan area, including Old Ebbitt Grill and The Hamilton. As a result of the COVID-19 pandemic, CRG temporarily closed all of its restaurants and venues in mid-March 2020 through mid-June 2020, pursuant to government orders, maintaining limited operations for outdoor dining, delivery and pickup. CRG recorded a $9.7 million goodwill and intangible assets impairment charge in the first quarter of 2020. In June 2020, CRG made the decision to close its restaurant and entertainment venue in Columbia, MD effective July 19, 2020, resulting in accelerated depreciation of property, plant and equipment totaling $2.8 million in the second quarter of 2020; an additional $2.8 million in accelerated depreciation was recorded in the third quarter of 2020. In December 2020, CRG temporarily closed its restaurant dining rooms in Maryland and the District of Columbia for the second time, reopening again for limited indoor dining service in mid-February 2021. Dining restrictions from government orders were substantially lifted for all of CRG’s operations by the end of the second quarter of 2021.

Overall, CRG incurred operating losses in each of the third quarters and first nine months of 2021 and 2020 due to limited revenues and costs incurred to maintain its facilities and support its employees; however, the losses incurred in 2021 were significantly lower than the losses incurred in 2020. While CRG revenues have been adversely impacted as a result of the pandemic, such revenues improved steadily in each of the first three quarters of 2021. CRG continues to develop and implement initiatives to increase sales and reduce costs to mitigate the impact of COVID-19.

~~Framebridge~~

On May 15, 2020, the Company acquired Framebridge, Inc., a custom framing service company, headquartered in Washington, DC, with two retail locations in the DC metropolitan area and a manufacturing facility in Richmond, KY.

At the end of the third quarter of 2021, Framebridge had twelve retail locations in the Washington, DC, New York City, Atlanta, GA, Philadelphia, PA, Boston, MA and Chicago, IL areas and three manufacturing facilities in Kentucky and New Jersey. Framebridge expects to open four additional stores in the Chicago, IL and New York City areas in the fourth quarter of 2021, with plans for additional expansion in 2022. Framebridge revenues for the third quarter and first nine months of 2021 increased from the prior year. Framebridge is an investment stage business and reported significant operating losses in the first nine months of 2021.

~~Code3~~

Code3 is a performance marketing agency focused on driving performance for brands through three core elements of digital success: media, creative and commerce. Code 3 revenue was up in the third quarter of 2021, due to strong growth in creative and commerce revenues. Code 3 revenue was down in the first nine months of 2021, due to overall sluggish marketing spending by some advertising clients, offset by strong growth in creative and commerce revenues. Code3 reported operating losses in the first nine months of 2021 and 2020. For the third quarter of 2021, however, Code 3 reported operating income due largely to revenue growth. In the second quarter of 2021, Code 3 recorded a $1.6 million lease impairment charge (including $0.4 million in property, plant and equipment write-downs). In the second quarter of 2020, Code3 recorded a $1.5 million lease impairment charge (including $0.1 million in property, plant and equipment write-downs) in connection with a restructuring plan that included other cost reduction initiatives. These initiatives included the approval of a SIP that reduced the number of employees at Code3, resulting in $1.0 million in non-operating pension expense in the second quarter of 2020.

Leaf Group

On June 14, 2021, the Company ~~closed on the acquisition of all outstanding shares of common stock of~~acquired Leaf Group Ltd. (Leaf) ~~at $8.50 per share in an all cash transaction valued at approximately $322 million. Leaf Group,~~, a consumer internet company, headquartered in Santa Monica, CA, ~~is a consumer internet company~~ that builds enduring, creator-driven brands that reach passionate audiences in large and growing lifestyle categories, including fitness and wellness (Well+Good, Livestrong.com and MyPlate App), and home, art and design (Saatchi Art, Society6 and Hunker).

~~The Leaf operating results for the period June 14, 2021 to September 30, 2021 are included in other businesses.~~ Leaf has three major operating divisions: Society6 Group and Saatchi Art Group (Marketplace businesses) and the Media Group. ~~For~~Overall, Leaf reported significant operating losses for the ~~third~~second quarter and first six months of 2022.

Clyde’s Restaurant Group

Clyde’s Restaurant Group (CRG) owns and operates ten restaurants and entertainment venues in the Washington, D.C. metropolitan area, including Old Ebbitt Grill and The Hamilton. As a result of the COVID-19 pandemic, CRG temporarily closed its restaurant dining rooms in Maryland and the District of Columbia in December 2020, reopening again for limited indoor dining service in February 2021. Various government-ordered dining restrictions continued until the middle of 2021. CRG reported an operating profit for the second quarter and first six months of 2022; both revenues and operating results improved significantly from the second quarter and first six months of 2021 due largely to the absence of government-ordered dining restrictions in 2022 and a favorable rent concession that was recorded in the second quarter of 2022. Improvement in both revenue and operating results is expected to continue for the remainder of 2022.

Framebridge

Framebridge is a custom framing service company, headquartered in Washington, D.C., with sixteen retail locations in the Washington, D.C., New York City, Atlanta, GA, Philadelphia, PA, Boston, MA and Chicago, IL areas and two manufacturing facilities in Kentucky and New Jersey. Framebridge plans to open three additional stores in 2022. Framebridge revenues increased in the second quarter and first six months of 2022 due to operating additional retail stores compared to the same periods in 2021. Framebridge is an investment stage business and reported significant operating losses in the first six months of 2022 and 2021.

Code3

Code3 is a performance marketing agency focused on driving performance for brands through three core elements of digital success: media, creative and commerce. Code3 revenues increased modestly in the second quarter and first six months of 2022. Code3 reported operating losses in the second quarter and first six months of 2022 and 2021. In the second quarter of 2021, ~~revenue for Society6 Group declined, as Society6 Group reported rapid growth~~Code3 recorded a $1.6 million lease impairment charge (including $0.4 million in ~~the third quarter of 2020, largely related to the COVID-19 pandemic. The Media Group~~property, plant and ~~Saatchi Art Group each reported revenue growth in the third quarter of 2021. Overall, Leaf reported an operating loss for the third quarter of 2021.~~

~~Megaphone~~

~~Megaphone was sold by the Company to Spotify in December 2020.~~equipment write-downs).

Other

Other businesses also include Slate and Foreign Policy, which publish online and print magazines and websites; and four investment stage businesses, CyberVista, Decile, Pinna and City Cast. Slate, Foreign Policy, Decile, Pinna ~~as well as~~and City Cast ~~a local daily podcast business that began operations in 2021. All of these businesses~~ reported revenue increases in the first ~~nine~~six months of ~~2021.~~2022. Losses from each of these six businesses in the first ~~nine~~six months of ~~2021~~2022 adversely affected operating results.

Overall, for the ~~third~~second quarter and first six months of ~~2021,~~2022, operating revenues for other businesses increased due largely to the Leaf acquisition and increases at CRG and Framebridge. Operating results declined in the second quarter and first six months of 2022 due primarily to losses at Leaf and increased losses at Framebridge, partially offset by declines due to the sale of Megaphone in December 2020. For the first nine months of 2021, operating revenues for other businesses increased due largely to increases from the Framebridge and Leaf acquisitions and increasesimproved results at CRG, partially offset due to the sale of Megaphone in December 2020. Operating results improved in the first nine months of 2021 primarily due to improvements at CRG, in addition to the goodwill and other long-lived asset impairment charges recorded in the first quarter of 2020 at CRG, partially offset by losses at Framebridge and Leaf.CRG.

Corporate Office

Corporate office includes the expenses of the Company’s corporate office and certain continuing obligations related to prior business dispositions. Corporate office expenses ~~increased~~declined in the first ~~nine~~six months of ~~2021~~2022 due primarily to ~~higher~~lower incentive compensation ~~costs, offset by a credit related to the fair value change in contingent consideration related to the Framebridge acquisition.~~

costs.

Equity in Earnings (Losses)of Affiliates

At ~~September~~June 30, ~~2021,~~2022, the Company held an approximate 12% interest in Intersection Holdings, LLC (Intersection), a company that provides digital marketing and advertising services and products for cities, transit systems, airports, and other public and private spaces. The Company also holds interests in several other affiliates, including a number of home health and hospice joint ventures managed by GHG and two joint ventures managed by Kaplan. Overall, the Company recorded equity in earnings of affiliates of ~~$13.0~~$1.4 million for the ~~third~~second quarter of ~~2021,~~2022, compared to ~~$4.1~~$1.8 million for the ~~third~~second quarter of ~~2020.~~2021. These amounts include ~~$16.7~~$0.4 million and ~~$0.8~~$1.4 million in net ~~earnings~~losses for the ~~third~~second quarter of ~~2021~~2022 and ~~2020,~~2021, respectively, from affiliates whose operations are not managed by ~~the Company. The Company recorded $6.4 million in write-downs in equity in earnings of affiliates related to one of its investments in the third quarter of 2021.~~

The Company recorded equity in earnings of affiliates of $28.2 million for the first nine months of 2021, compared to $3.7 million for the first nine months of 2020. These amounts include $25.6 million in net earnings for the first nine months of 2021 and $2.9 million in net losses for the first nine months of 2020 from affiliates whose operations are not managed by

the Company; this includes losses from the Company’s investment in Intersection in the ~~first nine months~~second quarter of 2022 and 2021.

The Company recorded ~~$6.4 million in write-downs in~~ equity in earnings of affiliates ~~related~~of $4.0 million for the first six months of 2022, compared to ~~one~~$15.2 million for the first six months of ~~its investments in the third quarter of 2021 and $3.6~~2021. These amounts include $0.1 million in ~~write-downs in equity in earnings of affiliates related to two of its investments in~~net losses for the first ~~quarter~~six months of ~~2020.~~

~~The recessionary environment resulting~~2022 from affiliates whose operations are not managed by the Company compared to $8.9 million in net earnings for the first six months of 2021; this includes losses from the ~~COVID-19 pandemic adversely impacted the underlying businesses of Intersection due to lower marketing spending by advertising clients. The decline~~Company’s investment in revenues adversely impacted the operating results and liquidity of the business since the onset of the COVID-19 pandemic. The Company concluded that these events are not indicative of an other than temporary decline in the value of its investment to an amount less than its carrying value. Given the uncertain economic impact of the COVID-19 pandemic, it is possible that an other than temporary impairment charge could occur in the future should Intersection fail to execute on its operating strategy to address the decline in revenues and operating results. Further, the Company recorded a $13.1 million loss in equity earnings related to Intersection in the first ~~nine~~six months of ~~2021~~2022 and ~~expects to record additional losses for the remainder of~~ 2021.

Net Interest Expense and Related Balances

The Company incurred net interest expense of ~~$9.4~~$15.3 million and ~~$22.5~~$26.0 million for the ~~third~~second quarter and first ~~nine~~six months of ~~2021,~~2022, respectively; compared to ~~$6.4~~$5.5 million and ~~$19.3~~$13.0 million for the ~~third~~second quarter and first ~~nine~~six months of ~~2020,~~2021, respectively. The Company recorded interest expense of $8.0 million and $11.4 million in the second quarter and first six months of 2022, respectively, to adjust the fair value of the mandatorily redeemable noncontrolling interest at GHG. The Company recorded interest income of $1.0 million in the second quarter of 2021 and net interest expense of ~~$2.6 million in the third quarter of 2021 and $2.7~~$0.1 million in the first ~~nine~~six months of 2021 to adjust the fair value of the mandatorily redeemable noncontrolling interest at GHG.

At ~~September~~June 30, ~~2021,~~2022, the Company had ~~$555.9~~$606.2 million in borrowings outstanding at an average interest rate of 4.8%, and cash, marketable equity securities and other investments of ~~$928.0~~$808.7 million. At ~~September~~June 30, ~~2021,~~2022, the Company had ~~$122.3~~$150.8 million outstanding on its $300 million revolving credit facility. On May 3, 2022, the Company entered into an amended and restated revolving credit facility agreement, which among other things, extends the maturity date to May 30, 2027, and removes USD LIBOR as a benchmark interest rate for borrowings denominated in U.S. dollars.

Non-operating Pension and Postretirement Benefit Income, net

The Company recorded net non-operating pension and postretirement benefit income of ~~$27.6~~$50.9 million and ~~$81.6~~$101.4 million for the ~~third~~second quarter and first ~~nine~~six months of ~~2021,~~2022, respectively; compared to ~~$10.5~~$25.2 million and ~~$41.0~~$54.0 million for the ~~third~~second quarter and first ~~nine~~six months of ~~2020,~~2021, respectively.

In the second quarter of 2021, the Company recorded $1.1 million in expenses related to a non-operating SIP at manufacturing. In the third quarter of 2020, the Company recorded $7.8 million in expenses related to a non-operating SIP at the education division. In the second quarter of 2020, the Company recorded $6.0 million in expenses related to non-operating SIPs at the education division and other businesses.

(Loss) Gain ~~(Loss)~~ on Marketable Equity Securities, net

Overall, the Company recognized ~~$14.1~~$165.5 million and ~~$177.0~~$118.6 million in net losses on marketable equity securities in the second quarter and first six months of 2022, respectively; compared to $83.7 million and $162.9 million in net gains on marketable equity securities in the ~~third~~second quarter and first ~~nine~~six months of 2021, ~~respectively; compared to $59.4 million in net gains and $1.1 million in net losses on marketable equity securities in the third quarter and first nine months of 2020,~~ respectively.

Other Non-Operating Income

The Company recorded total other non-operating income, net, of ~~$5.2~~$1.2 million for the ~~third~~second quarter of ~~2021,~~2022, compared to ~~$0.2~~$16.1 million for the ~~third~~second quarter of ~~2020.~~2021. The ~~2021~~2022 amounts included ~~other items. The 2020 amounts included a $1.6~~$0.8 million ~~fair value increase on a cost method investment~~in gains related to the sale of businesses and contingent consideration, and other items; partially offset by ~~$2.3~~$0.5 million in foreign currency losses.

The 2021 amounts included $6.7 million in gains on the sale of cost method investments; $7.8 million in fair value increases on cost method investments; $0.7 million in foreign currency gains; $0.6 million in gains related to the sale of businesses and contingent consideration and other items.

The Company recorded total ~~other~~ non-operating income, net of ~~$27.7~~$4.1 million for the first ~~nine~~six months of ~~2021,~~2022, compared to ~~$11.0~~$22.4 million for the first ~~nine~~six months of ~~2020.~~2021. The 2022 amounts included $1.7 million in gains related to the sale of businesses and contingent consideration; a $1.0 million gain on sale of a cost method investment; a $0.6 million gain on sale of an equity affiliate, and other items; partially offset by $1.5 million in foreign currency losses. The 2021 amounts included $6.8 million in gains on sales of cost method investments; $10.5 million in fair value increases on cost method ~~investments and other items. The 2020 amounts included a $4.2 million fair value increase on a cost method investment; a $3.7 million gain on acquiring a controlling interest in an equity affiliate;~~investments; $1.4 million ~~net gain on sales~~in gains related to the sale of ~~equity affiliates, $0.9~~businesses and contingent consideration; $0.7 million in foreign currency gains and other ~~items; partially offset by $2.6 million in impairments on cost method investments.~~items.

~~(Benefit from)~~ Provision for Income Taxes

The Company’s effective tax rate for the first ~~nine~~six months of ~~2021~~2022 and ~~2020 was 22.6% and 29.6%, respectively. The Company’s effective tax rate for~~ 2021 was favorably impacted by a $15.7 million deferred tax adjustment arising from a change in the estimated deferred state income tax rate attributable to the apportionment formula used in the calculation of deferred taxes related to the Company’s pension32.2% and ~~other postretirement plans.~~27.0%, respectively.

Earnings Per Share

The calculation of diluted earnings per share for the ~~third~~second quarter and first ~~nine~~six months of ~~2021~~2022 was based on ~~4,976,998~~4,842,383 and ~~4,980,056~~4,870,316 weighted average shares outstanding, respectively, compared to ~~5,071,998~~4,985,488 and ~~5,191,556,~~4,981,000, respectively, for the ~~third~~second quarter and first ~~nine~~six months of ~~2020.~~2021. At ~~September~~June 30, ~~2021,~~2022, there were ~~4,965,396~~4,850,326 shares outstanding. On September 10, 2020, 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 ~~327,640~~212,473 shares as of ~~September~~June 30, ~~2021.~~2022.

Other

The Company continuously assesses relevant events and circumstances to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. In the second quarter of 2022, the Company performed an interim impairment review at the Leaf marketplace and Framebridge reporting units due to significant operating losses at the reporting units, combined with a decline in general market conditions and in market multiples. The quantitative goodwill impairment analyses indicated the estimated fair values of these reporting units, included in other businesses, exceeded their carrying values as of June 30, 2022. The estimated fair values of these reporting units exceeded their carrying values by a margin less than 10%. The total goodwill at these reporting units was $79.0 million as of June 30, 2022, or 5% of the total goodwill of the Company.

In connection with the Company’s annual impairment testing in 2021, the Company performed a goodwill impairment review at all of its reporting units. At the time, the estimated fair value of the Dekko reporting unit at the manufacturing businesses exceeded its carrying values by a margin less than 25%. The total goodwill at this reporting unit was $47.8 million as of June 30, 2022, or 3% of the total goodwill of the Company. The estimated fair value of the Company’s other reporting units with significant goodwill balances exceeded their respective carrying values by a margin in excess of 25% at the time of the annual test.

It is possible that impairment charges, which may be material, could occur in the future, given changes in market conditions and the inherent variability in projecting future operating performance.

As previously communicated, the Company has been exploring opportunities to utilize surplus pension assets in a tax-efficient manner. This includes studying the viability of a transaction in which a part of the existing pension plan is spun off and then terminated in order to fund what is known as a Qualified Replacement Plan (QRP), which could allow the Company to utilize its pension surplus to fund and expand defined contribution benefits. Because of the complexities associated with these transactions and to ensure excise taxes of up to 50% would not be imposed, companies pursuing these transactions typically sought private letter rulings from the IRS prior to implementing them. However, in June 2022, the IRS announced that it will no longer issue private letter rulings on such transactions, and as a result, the Company is no longer actively considering this specific transaction.

Financial Condition: Capital Resources and Liquidity

The Company considers the following when assessing its liquidity and capital resources:


		As of					As of
(In thousands)	(In thousands)	September 30, 2021		December 31, 2020		(In thousands)	June 30, 2022		December 31, 2021
Cash and cash equivalents	Cash and cash equivalents	$	133,882	$	413,991	Cash and cash equivalents	$	126,368	$	145,886
Restricted cash	Restricted cash	15,054		9,063		Restricted cash	19,495		12,957
Investments in marketable equity securities and other investments	Investments in marketable equity securities and other investments	779,073		587,582		Investments in marketable equity securities and other investments	662,831		824,445
Total debt	Total debt	555,889		512,555		Total debt	606,152		667,501

Cash generated by operations is the Company’s primary source of liquidity. The Company maintains investments in a portfolio of marketable equity securities, which is considered when assessing the Company’s sources of liquidity. An additional source of liquidity includes the undrawn portion of the Company’s $300 million revolving credit facility, amounting to ~~$177.7~~$149.2 million at ~~September~~June 30, ~~2021.~~2022.

In March 2020, the U.S. government enacted legislation, including the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to provide stimulus in the form of financial aid to businesses affected by the COVID-19 pandemic. Under the CARES Act, employers may defer the payment of the employer share of FICA taxes due for the period beginning on March 27, 2020, and ending December 31, 2020. ~~As of September 30, 2021, the~~The Company ~~has~~ deferred ~~$21.4~~$21.5 million of FICA payments under this program, with $10.7 million of ~~which 50%~~the deferred payments still payable at June 30, 2022. The remaining deferred balance is ~~due by December 31, 2021 and the remaining balance~~ due by December 31, 2022.

The CARES Act also included provisions to support healthcare providers in the form of grants and changes to Medicare and Medicaid payments. In the second quarter of 2020, GHG received $7.4 million under the CARES Act as a general distribution from the Provider Relief Fund to provide relief for lost revenues and expenses incurred in connection with C\OVID-19. In addition to the above distribution, in April 2020, GHG applied for and received $31.5 million under the expanded Medicare Accelerated and Advanced Payment Program, modified by the CARES Act. The Department of Health and Human Services (HHS) started to recoup this advance in April 2021 by withholding a portion of the amount reimbursed for claims submitted for services provided after the beginning of the recoupment period. During the ~~three and nine~~six months ended ~~September~~June 30, ~~2021,~~2022, an amount of ~~$6.6~~$12.0 million ~~and $11.6 million, respectively,~~ was withheld by HHS and the Company expects the remaining balance of ~~$19.9~~$0.5 million to be withheld from claims submitted in the next ~~twelve~~three months.

Governments in other jurisdictions where the Company operates also provided relief to businesses affected by the COVID-19 pandemic in the form of job retention schemes, payroll assistance, deferral of income and other tax payments, and loans. During the first nine months of 2021, Kaplan recorded benefits totaling $4.1 million related to job retention and payroll schemes, mostly at Kaplan International.

During the first ~~nine~~six months of ~~2021,~~2022, the Company’s cash and cash equivalents decreased by ~~$280.1~~$19.5 million, due to the ~~acquisition~~net repayment of ~~Leaf, the purchase of~~borrowings, additional investments in marketable equity securities ~~deferred payments on previous acquisitions,~~and equity affiliates, capital expenditures, dividend payments and share repurchases, which was offset by cash generated from

operations and the proceeds from the sale of marketable equity securities. In the first ~~nine~~six months of ~~2021,~~2022, the Company’s borrowings ~~increased~~decreased by ~~$43.3~~$61.3 million, primarily due to ~~additional borrowings~~repayments under the revolving credit ~~facility, which were partially offset by repayments.~~facility.

~~The Company had no money market investments as of September~~At June 30, ~~2021, compared to $268.8 million at December 31, 2020, which are included in cash and cash equivalents. At September 30, 2021,~~2022, the Company held approximately ~~$98~~$69 million in cash and cash equivalents in businesses domiciled outside the U.S., of which approximately $8$7 million is not available for immediate use in operations or for distribution. Additionally, Kaplan’s business operations outside the U.S. retain cash balances to support ongoing working capital requirements, capital expenditures, and regulatory requirements. As a result, the Company considers a significant portion of the cash and cash equivalents balance held outside the U.S. as not readily available for use in U.S. operations.

At ~~September~~June 30, ~~2021,~~2022, the fair value of the Company’s investments in marketable equity securities was ~~$764.8~~$648.6 million, which includes investments in the common stock of ~~seven~~five publicly traded companies. ~~The~~During the first six months of 2022, the Company purchased ~~$48.0~~$31.5 million of marketable equity securities ~~during the first nine months of 2021. During the first nine months of 2021, the Company~~and sold marketable equity securities that generated proceeds of ~~$38.3~~$74.2 million. At ~~September~~June 30, ~~2021,~~2022, the net unrealized gain related to the Company’s investments totaled ~~$489.0~~$379.0 million.

The Company had working capital of ~~$681.0~~$581.0 million and ~~$824.5~~$680.8 million at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, 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.

At ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company had borrowings outstanding of ~~$555.9~~$606.2 million and ~~$512.6~~$667.5 million, respectively. The Company’s borrowings at ~~September~~June 30, 2022 were mostly from $400.0 million of 5.75% unsecured notes due June 1, 2026, $150.8 million in outstanding borrowings under the Company’s revolving credit facility and commercial notes of $45.6 million at the Automotive subsidiary. The Company’s borrowings at December 31, 2021 were mostly from $400.0 million of 5.75% unsecured notes due June 1, 2026, ~~$122.3~~$209.6 million in outstanding borrowings under the Company’s revolving credit facility and a commercial ~~note~~notes of $23.0 million at the Automotive subsidiary. The Company’s borrowings at December 31, 2020 were mostly from $400.0 million of 5.75% unsecured notes due June 1, 2026, £55 million in outstanding borrowings under the Company’s revolving credit facility and a commercial note of $25.3$47.0 million at the Automotive subsidiary. The interest on the $400.0 million of 5.75% unsecured notes is payable semiannually on June 1 and December 1.

On May 3, 2022, the Company amended the revolving credit facility agreement to, among other things, extend the maturity date to May 30, 2027.

On ~~June 3, 2021, Moody’s affirmed~~July 5, 2022, the Company’s ~~credit ratings, but revised~~automotive subsidiary acquired two automotive dealerships, including the ~~outlook from Negative~~real property for the dealership operations. In addition to ~~Stable.~~ a cash payment and the assumption of $10.9 million in floor plan payables, the automotive subsidiary borrowed $77.4 million to finance the acquisition.

On April ~~27, 2021,~~12, 2022, Standard & Poor’s affirmed the Company’s credit rating and ~~revised~~maintained the outlook ~~from Negative to~~as Stable.

The Company’s current credit ratings are as follows:


	Moody’s	Standard & Poor’s
Long-term	Ba1	BB
Outlook	Stable	Stable

The Company expects to fund its estimated capital needs primarily through existing cash balances and internally generated funds, and, as needed, from borrowings under its revolving credit facility. As of ~~September~~June 30, ~~2021,~~2022, the Company had ~~$122.3~~$150.8 million outstanding under the $300 million revolving credit facility, which borrowing was used to purchase land and buildings at Kaplan International’s sixth-form college in London, U.K. and at the automotive division in the third quarter of 2021, and to repay the £60 million Kaplan U.K. credit facility that matured at the end of June 2020.facility. In management’s opinion, the Company will have sufficient financial resources to meet its business requirements in the next 12 months, including working capital requirements, capital expenditures, interest payments, potential acquisitions and strategic investments, dividends and stock repurchases.

In summary, the Company’s cash flows for each period were as follows:

Nine Months Ended
September 30
(In thousands) 2021 2020
Net cash provided by operating activities $ 197,271 $ 240,890
Net cash (used in) provided by investing activities (420,456) 12,722
Net cash used in financing activities (48,025) (153,674)
Effect of currency exchange rate change (2,908) (2,729)
Net (decrease) increase in cash and cash equivalents and restricted cash $ (274,118) $ 97,209


	Six Months Ended June 30
(In thousands)	2022		2021
Net cash provided by operating activities	$	99,408	$	72,845
Net cash used in investing activities	(17,916)		(310,508)
Net cash used in financing activities	(89,571)		(59,175)
Effect of currency exchange rate change	(4,901)		(684)
Net decrease in cash and cash equivalents and restricted cash	$	(12,980)	$	(297,522)

Operating Activities. Cash provided by operating activities is net income adjusted for certain non-cash items and changes in assets and liabilities. The Company’s net cash flow provided by operating activities were as follows:


		Nine Months Ended September 30					Six Months Ended June 30
(In thousands)	(In thousands)	2021		2020		(In thousands)	2022		2021
Net Income	Net Income	$	268,244	$	63,025	Net Income	$	29,951	$	228,561
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and goodwill and other long-lived asset impairments		127,261		130,568
Depreciation, amortization and long-lived asset impairments						Depreciation, amortization and long-lived asset impairments	68,689		65,786
Amortization of lease right-of-use asset	Amortization of lease right-of-use asset	55,246		70,214		Amortization of lease right-of-use asset	33,473		36,774
Net pension benefit and special separation benefit expense		(68,644)		(27,669)
Net pension benefit						Net pension benefit	(90,971)		(45,413)
Other non-cash activities	Other non-cash activities	(156,326)		7,895		Other non-cash activities	130,623		(128,933)
Change in operating assets and liabilities	Change in operating assets and liabilities	(28,510)		(3,143)		Change in operating assets and liabilities	(72,357)		(83,930)
Net Cash Provided by Operating Activities	Net Cash Provided by Operating Activities	$	197,271	$	240,890	Net Cash Provided by Operating Activities	$	99,408	$	72,845

Net cash provided by operating activities consists primarily of cash receipts from customers, less disbursements for costs, benefits, income taxes, interest and other expenses.

For the first ~~nine~~six months of ~~2021~~2022 compared to the first ~~nine~~six months of ~~2020,~~2021, the ~~decrease~~increase in net cash provided by operating activities is primarily driven by ~~lower~~higher net income, net of non-cash adjustments, and changes in operating assets and liabilities. Changes in operating assets and liabilities were primarily the result of ~~a decrease~~an increase in the collection of cash from customers that were ~~partially~~ offset by ~~lower vendor payments at Code3,~~higher purchase of inventories and ~~changes~~decreases in ~~the income tax receivable~~accounts payable and ~~inventory balances.~~accrued liabilities.

Investing Activities. The Company’s net cash flow ~~(used in) provided by~~used in investing activities were as follows:


		Nine Months Ended September 30					Six Months Ended June 30
(In thousands)	(In thousands)	2021		2020		(In thousands)	2022		2021
Net proceeds from sales of (purchases of) marketable equity securities						Net proceeds from sales of (purchases of) marketable equity securities	$	42,765	$	(10,407)
Purchases of property, plant and equipment						Purchases of property, plant and equipment	(32,154)		(27,502)
Investments in equity affiliates, cost method and other investments						Investments in equity affiliates, cost method and other investments	(27,950)		(4,910)
Investments in certain businesses, net of cash acquired	Investments in certain businesses, net of cash acquired	$	(272,428)	$	(20,080)	Investments in certain businesses, net of cash acquired	(3,053)		(272,428)
Purchases of property, plant and equipment		(140,935)		(56,121)
Net (purchases of) proceeds from sales of marketable equity securities		(9,728)		93,775
Investments in equity affiliates, cost method and other investments		(6,610)		(8,298)

Other	Other	9,245		3,446		Other	2,476		4,739
Net Cash (Used in) Provided by Investing Activities		$	(420,456)	$	12,722
Net Cash Used in Investing Activities						Net Cash Used in Investing Activities	$	(17,916)	$	(310,508)

~~Acquisitions.~~ Net proceeds from sale of (purchases of) marketable equity securities.During the first ~~nine~~six months of 2022 and 2021, the Company ~~acquired all~~sold marketable equity securities that generated proceeds of ~~the outstanding shares~~$74.2 million and $37.6 million, respectively. The Company purchased $31.5 million and $48.0 million of Leaf for cash and the assumption of $9.2 million in liabilities related to their pre-acquisition stock compensation plan, which will be paid in the future. Leaf is included in other businesses. Duringmarketable equity securities during the first ~~nine~~six months of ~~2020, the Company acquired three businesses: two small businesses in its education division~~2022 and an additional interest in Framebridge, Inc., which is included in other businesses. The Framebridge purchase price includes $54.3 million in deferred payments and contingent consideration based on the acquiree achieving certain revenue milestones in the future.2021, respectively.

Capital Expenditures. Capital expenditures for the first nine months of 2021 were higher than the first nine months of 2020 primarily due to land and building purchases at Kaplan International’s sixth-form college in London, U.K. and at the automotive division. In addition, 2020 includes capital expenditures in connection with spectrum repacking at the Company’s television stations in Detroit, MI, Jacksonville, FL, and Roanoke, VA, as mandated by the FCC; these expenditures were largely reimbursed to the Company by the FCC. The amounts reflected in the Company’s Condensed Consolidated Statements of Cash Flows are based on cash payments made during the relevant periods, whereas the Company’s capital expenditures for the first ~~nine~~six months of ~~2021~~2022 of ~~$140.7~~$31.4 million include assets acquired during the quarter. The Company estimates that its capital expenditures will be in the range of ~~$155~~$70 million to ~~$165~~$80 million in ~~2021.~~2022.

~~Net (purchases of) proceeds from sale of investments.~~Investment in equity affiliates. ~~The Company purchased $48.0 million of marketable equity securities during~~During the first ~~nine~~six months of ~~2021.~~2022, GHG invested an additional $18.5 million in two affiliates to fund their acquisition of an interest in a health system in Illinois.

Acquisitions. In May 2022, GHG acquired two small businesses which are included in healthcare. During the first ~~nine~~six months of 2021, ~~and 2020,~~ the Company ~~sold marketable equity securities that generated proceeds~~acquired all of ~~$38.3 million~~the outstanding shares of Leaf for cash and ~~$93.8 million, respectively.~~the assumption of $9.2

3635

million in liabilities related to their pre-acquisition stock compensation plan, which will be paid in the future. Leaf is included in other businesses.

On July 5, 2022, the Company’s automotive subsidiary acquired two automotive dealerships, including the real property for the dealership operations, which will be included in automotive.

Financing Activities. The Company’s net cash flow used in financing activities were as follows:


		Nine Months Ended September 30					Six Months Ended June 30
(In thousands)	(In thousands)	2021		2020		(In thousands)	2022		2021
Net payments under revolving credit facility						Net payments under revolving credit facility	$	(47,000)	$	(2,304)
Repayments of borrowings						Repayments of borrowings	(7,580)		(2,071)
Net proceeds from (repayments of) vehicle floor plan payable						Net proceeds from (repayments of) vehicle floor plan payable	14,121		(9,591)
Common shares repurchased						Common shares repurchased	(34,303)		—
Dividends paid	Dividends paid	$	(22,659)	$	(22,870)	Dividends paid	(15,465)		(15,106)
Net payments on vehicle floor plan payable		(15,035)		(16,300)
Net borrowings under revolving credit facility		37,696		75,905
Repayments of borrowings		(16,878)		(75,841)
Issuance of borrowings		22,684		2,084
Common shares repurchased		(21,840)		(123,155)

Other	Other	(31,993)		6,503		Other	656		(30,103)
Net Cash Used in Financing Activities	Net Cash Used in Financing Activities	$	(48,025)	$	(153,674)	Net Cash Used in Financing Activities	$	(89,571)	$	(59,175)

~~Dividends.~~ ~~The quarterly dividend rate per share was $1.51~~Borrowings and ~~$1.45 for the first nine months of 2021 and 2020, respectively.~~

Vehicle Floor Plan ~~Payable and Borrowings.~~Payable. In the first ~~nine~~six months of ~~2021~~2022, the Company made repayments on the $300 million revolving credit facility. In the first six months of 2022 and ~~2020,~~2021, the Company used vehicle floor plan financing to fund the purchase of new, used and ~~used~~service loaner vehicles at its automotive division. InThe proceeds from (repayments of) the ~~first nine months~~vehicle floor plan payable fluctuates with changes in the amount of 2021, the Company borrowed against the $300 million revolving credit facility, which borrowing was used to purchase land and buildings at Kaplan International’s sixth-form college in London, U.K. and atvehicle inventory held by the automotive division in the third quarter of 2021. In the first nine months of 2020, the Company borrowed £60 million against the $300 million revolving credit facility and used the proceeds to repay the £60 million outstanding balance under the Kaplan Credit Agreement that matured at the end of June 2020.dealerships.

Common Stock Repurchases. During the first ~~nine~~six months of ~~2021,~~2022, the Company purchased a total of ~~36,511~~57,709 shares of its Class B common stock at a cost of approximately ~~$21.8 million. During the first nine months of 2020, the Company purchased a total of 321,864 shares of its Class B common stock at a cost of approximately $123.2~~$34.3 million. On September 10, 2020, the Board of Directors authorized the Company to acquire up to 500,000 shares of its Class B common stock. The Company did not announce a ceiling price or time limit for the purchases. At ~~September~~June 30, ~~2021,~~2022, the Company had remaining authorization from the Board of Directors to purchase up to ~~327,640~~212,473 shares of Class B common stock.

Dividends. The quarterly dividend rate per share was $1.58 and $1.51 for the first six months of 2022 and 2021, respectively. The Company expects to pay a dividend of $6.32 per share in 2022.

Other. During the first ~~nine~~six months of 2022, the Company paid $4.7 million related to deferred payments from prior acquisitions. During the first six months of 2021, the Company paid $30.9 million related to contingent consideration and deferred payments from prior acquisitions, mostly for the 2020 acquisition of Framebridge. During the first six months of 2022 and 2021, the Company increased the borrowings under its cash overdraft facilities by $6.1 million and $4.4 million, respectively. In March 2021, Hoover’s minority shareholders put their remaining outstanding shares to the Company, which had a redemption value of $3.5 million. During the first nine months of 2021, the Company increased the borrowings under its cash overdraft facilities by $1.1 million. During the first nine months of 2020, the Company increased the borrowings under its cash overdraft by $6.5 million and received $5.3 million in proceeds from the exercise of stock options.

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, ~~2020.~~2021.

Forward-Looking Statements

All public statements made by the Company and its representatives that are not statements of historical fact, including certain statements in this report, in the Company’s Annual Report on Form 10-K and in the Company’s ~~2020~~2021 Annual Report to Stockholders, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected as a result of certain risks and uncertainties, including but not limited to the duration and severity of the COVID-19 pandemic and its effects on the Company’s operations, financial results, liquidity and cash flows. Other forward-looking statements include comments about expectations related to acquisitions or dispositions or related business activities, including the TOSA, the Company’s business strategies and objectives, anticipated results of license renewal applications, the prospects for growth in the Company’s various business operations and the Company’s future financial performance. As with any projection or forecast, forward-looking statements are subject to various risks and uncertainties, including the risks and uncertainties described in Item 1A of the Company’s Annual Report on Form 10-K, that could cause actual results or events to differ materially from those anticipated in such statements. Accordingly, undue reliance should not be placed on any forward-looking statement made by or on behalf of the Company. The Company assumes no obligation to update any forward-looking statement after the date on which such statement is made, even if new information subsequently becomes available.

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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 ~~2020~~2021 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 (principal executive officer) and the Company’s Chief Financial Officer (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 ~~September~~June 30, ~~2021.~~2022. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer 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 Chief Financial Officer, 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 ~~September~~June 30, ~~2021~~2022 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

~~PART II. OTHER INFORMATION~~

~~Item 1A. Risk Factors.~~

The Company faces a number of significant risks and uncertainties in connection with its operations. The most significant of these are described below. These risks and uncertainties may not be the only ones facing the Company. Additional risks and uncertainties not presently known, or currently deemed immaterial, may adversely affect the Company in the future. In addition to the other information included in the Annual Report on Form 10-K and the subsequently filed information included on Forms 10-Q, investors should carefully consider the following risk factors. If any of the events or developments described below occurs, it could have a material adverse effect on the Company’s business, financial condition or results of operations.

• ~~New regulations on mandatory COVID-19 vaccination of employees could have a material adverse impact on our business and results of operations.~~

On September 9, 2021, President Biden directed the Occupational Safety and Health Administration (OSHA) to develop an emergency temporary standard (ETS) requiring all employers with at least 100 employees to mandate vaccination or weekly testing for their unvaccinated employees. OSHA has not yet issued the ETS. It is currently not possible to predict the impact the ETS will have on our workforce. As a company with more than 100 employees, we would be required to mandate COVID-19 vaccination of our workforce or our unvaccinated employees would require weekly testing. Additional vaccine mandates may be announced in jurisdictions in which our businesses operate. This may result in employee attrition and difficulty in meeting labor needs, which could have an adverse effect on future revenues and costs, which could be material. Accordingly, the proposed new regulation when implemented could have a material adverse effect on our business and results of operations.

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PART II. OTHER INFORMATION

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

During the quarter ended ~~September~~June 30, ~~2021,~~2022, the Company purchased shares of its Class B Common Stock as set forth in the following table:

Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plan* Maximum Number of Shares that May Yet Be Purchased Under the Plan*
July — $ — — 364,151
August 8,216 608.71 8,216 355,935
September 28,295 595.11 28,295 327,640
36,511 $ 598.17 36,511


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plan*	Maximum Number of Shares that May Yet Be Purchased Under the Plan*
April	11,762	$	610.19	11,762	242,457
May	15,801	600.01		15,801	226,656
June	14,183	572.38		14,183	212,473
	41,746	$	593.49	41,746

*On September 10, 2020, the Company’s Board of Directors authorized the Company to purchase, on the open market or otherwise, up to 500,000 shares of its Class B Common Stock. There is no expiration date for this authorization. All purchases made during the quarter ended ~~September~~June 30, ~~2021~~2022 were open market ~~transactions.~~transactions and some of these shares were purchased under a 10b5-1 plan.

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Item 6. Exhibits.


Exhibit Number			Description

3.1			Restated Certificate of Incorporation of the Company dated November 13, 2003 (incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2003).

3.2			Certificate of Amendment, effective November 29, 2013, to the Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s current Report on Form 8-K dated November 29, 2013).

3.3			By-Laws of the Company as amended and restated through November 29, 2013 (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K dated November 29, 2013).

4.1			Senior Notes Indenture dated as of May 30, 2018, between the Company and The Bank of New York Mellon Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated May 30, 2018).

4.2			First Supplemental Indenture, dated as of March 24, 2020, among Graham Healthcare Group, Inc., a Delaware corporation, a subsidiary of the Company, and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020).

4.3			Second Supplemental Indenture, dated as of January 6, 2022, among Graham Automotive LLC, a Delaware limited liability company, a subsidiary of Graham Holdings Company, a Delaware corporation, and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021).

10.1			Second Amended and Restated Five Year Credit Agreement, dated as of May 3, 2022, among the Company, Kaplan U.K. Limited, and the foreign borrowers from time to time party thereto, 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 Quarterly Report on Form 10-Q for the quarter ended March 31, 2022).

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.INS			Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH			Inline XBRL Taxonomy Extension Schema Document

101.CAL			Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF			Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB			Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE			Inline XBRL Taxonomy Extension Presentation Linkbase Document

104			Cover Page Interactive Data File, formatted in Inline XBRL and included as Exhibit 101

* 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: ~~November~~August 3, ~~2021~~2022						/s/ Timothy J. O’Shaughnessy
						Timothy J. O’Shaughnessy, President & Chief Executive Officer (Principal Executive Officer)

Date: ~~November~~August 3, ~~2021~~2022						/s/ Wallace R. Cooney
						Wallace R. Cooney, Chief Financial Officer (Principal Financial Officer)

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	Three Months Ended September 30, 2020
(in thousands)	Kaplan International		Higher Education		Supplemental Education		Kaplan Corporate		Total Education		Other Businesses		Total
Severance (1)	$	959	$	—	$	913	$	—	$	1,872	$	—	$	1,872




Impairment of other long-lived assets:
Lease right-of-use assets	—		—		1,710		—		1,710		—		1,710
Property, plant and equipment	—		—		206		—		206		—		206
Non-operating pension and postretirement benefit income, net	—		802		6,287		694		7,783		—		7,783
Total Restructuring Related Costs	$	959	$	802	$	9,116	$	694	$	11,571	$	—	$	11,571

	Nine Months Ended September 30, 2020
(in thousands)	Kaplan International		Higher Education		Supplemental Education		Kaplan Corporate		Total Education		Other Businesses		Total
Severance	$	2,183	$	—	$	913	$	—	$	3,096	$	—	$	3,096
Facility related costs:
Operating lease cost	2,418		3,442		3,296		—		9,156		—		9,156
Accelerated depreciation of property, plant and equipment	1,472		95		1,801		—		3,368		—		3,368
Total Restructuring Costs Included in Segment Income (Loss) from Operations (1)	$	6,073	$	3,537	$	6,010	$	—	$	15,620	$	—	$	15,620
Impairment of other long-lived assets:
Lease right-of-use assets	3,790		2,062		3,908		—		9,760		1,405		11,165
Property, plant and equipment	1,199		174		803		—		2,176		86		2,262
Non-operating pension and postretirement benefit income, net	1,100		2,233		8,582		883		12,798		999		13,797
Total Restructuring Related Costs	$	12,162	$	8,006	$	19,303	$	883	$	40,354	$	2,490	$	42,844