Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Jul. 28, 2017 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | ghc | |
Entity Registrant Name | GRAHAM HOLDINGS CO | |
Entity Central Index Key | 104,889 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Class A Common Stock [Member] | ||
Entity Common Stock, Shares Outstanding | 964,001 | |
Class B Common Stock [Member] | ||
Entity Common Stock, Shares Outstanding | 4,628,229 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Operating Revenues [Abstract] | ||||
Education | $ 386,698 | $ 419,144 | $ 759,673 | $ 820,150 |
Advertising | 73,532 | 70,901 | 137,648 | 139,059 |
Other | 215,857 | 138,888 | 361,483 | 271,464 |
Total Operating Revenues | 676,087 | 628,933 | 1,258,804 | 1,230,673 |
Operating Costs and Expenses [Abstract] | ||||
Operating | 358,252 | 296,033 | 658,918 | 587,665 |
Selling, general and administrative | 213,848 | 236,437 | 445,357 | 471,650 |
Depreciation of property, plant and equipment | 15,871 | 16,045 | 30,523 | 32,806 |
Amortization of intangible assets | 10,531 | 6,278 | 17,367 | 12,540 |
Impairment of goodwill and other long-lived assets | 9,224 | 0 | 9,224 | 0 |
Total Operating Costs and Expenses | 607,726 | 554,793 | 1,161,389 | 1,104,661 |
Income from Operations | 68,361 | 74,140 | 97,415 | 126,012 |
Equity in earnings (losses) of affiliates, net | 1,331 | (891) | 1,980 | 113 |
Interest income | 1,173 | 721 | 2,536 | 1,312 |
Interest expense | (9,035) | (7,971) | (17,164) | (15,919) |
Other income, net | 4,069 | 19,000 | 4,918 | 34,096 |
Income Before Income Taxes | 65,899 | 84,999 | 89,685 | 145,614 |
Provision for Income Taxes | 23,900 | 23,800 | 26,600 | 46,200 |
Net Income | 41,999 | 61,199 | 63,085 | 99,414 |
Net Income Attributable to Noncontrolling Interests | (3) | (433) | (3) | (868) |
Net Income Attributable to Graham Holdings Company | 41,996 | 60,766 | 63,082 | 98,546 |
Net Income Attributable to Graham Holdings Company Common Stockholders | $ 41,601 | $ 59,962 | $ 62,489 | $ 97,245 |
Per Share Information Attributable to Graham Holdings Company Common Stockholders | ||||
Basic net income per common share in dollars per share | $ 7.51 | $ 10.82 | $ 11.29 | $ 17.42 |
Basic average number of common shares outstanding in shares | 5,539 | 5,544 | 5,537 | 5,584 |
Diluted net income per common share in dollars per share | $ 7.46 | $ 10.76 | $ 11.21 | $ 17.33 |
Diluted average number of common shares outstanding in shares | 5,577 | 5,574 | 5,573 | 5,613 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income | $ 41,999 | $ 61,199 | $ 63,085 | $ 99,414 |
Foreign currency translation adjustments: | ||||
Translation adjustments arising during the period | 9,638 | (5,121) | 23,306 | (1,276) |
Unrealized gains (losses) on available-for-sale securities: | ||||
Unrealized gains (losses) for the period, net | 13,976 | (5,307) | 23,534 | (4,964) |
Reclassification of realized gain on sale of available-for-sale securities included in net income | 0 | (4,502) | 0 | (6,256) |
Total unrealized gains (losses) on available-for-sale securities, before tax | 13,976 | (9,809) | 23,534 | (11,220) |
Pension and other postretirement plans: | ||||
Amortization of net prior service cost included in net income | 120 | 105 | 240 | 209 |
Amortization of net actuarial (gain) loss included in net income | (1,568) | 289 | (3,391) | 579 |
Total pension and other postretirement plans, before tax | (1,448) | 394 | (3,151) | 788 |
Cash flow hedge loss | (19) | 0 | (143) | 0 |
Other Comprehensive Income (Loss), Before Tax | 22,147 | (14,536) | 43,546 | (11,708) |
Income tax (expense) benefit related to items of other comprehensive income (loss) | (5,008) | 3,766 | (8,125) | 4,173 |
Other Comprehensive Income (Loss), Net of Tax | 17,139 | (10,770) | 35,421 | (7,535) |
Comprehensive Income | 59,138 | 50,429 | 98,506 | 91,879 |
Comprehensive income attributable to noncontrolling interests | (3) | (433) | (3) | (868) |
Total Comprehensive Income Attributable to Graham Holdings Company | $ 59,135 | $ 49,996 | $ 98,503 | $ 91,011 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Current Assets | ||
Cash and cash equivalents | $ 432,147 | $ 648,885 |
Restricted cash | 22,999 | 21,931 |
Investments in marketable equity securities and other investments | 469,993 | 448,241 |
Accounts receivable, net | 509,380 | 615,101 |
Income taxes receivable | 36,131 | 41,635 |
Inventories and contracts in progress | 58,760 | 34,818 |
Other current assets | 68,015 | 60,735 |
Total Current Assets | 1,597,425 | 1,871,346 |
Property, Plant and Equipment, Net | 263,100 | 233,664 |
Investments in Affiliates | 67,812 | 58,806 |
Goodwill, Net | 1,279,894 | 1,122,954 |
Indefinite-Lived Intangible Assets, Net | 110,060 | 66,026 |
Amortized Intangible Assets, Net | 248,337 | 107,939 |
Prepaid Pension Cost | 850,262 | 881,593 |
Deferred Income Taxes | 15,817 | 17,246 |
Deferred Charges and Other Assets | 75,732 | 73,096 |
Total Assets | 4,508,439 | 4,432,670 |
Current Liabilities | ||
Accounts payable and accrued liabilities | 451,476 | 500,726 |
Deferred revenue | 290,175 | 312,107 |
Current portion of long-term debt | 6,492 | 6,128 |
Dividends declared | 7,081 | 0 |
Total Current Liabilities | 755,224 | 818,961 |
Postretirement Benefits Other Than Pensions | 22,625 | 21,859 |
Accrued Compensation and Related Benefits | 192,837 | 195,910 |
Other Liabilities | 64,956 | 65,554 |
Deferred Income Taxes | 430,406 | 379,092 |
Mandatorily Redeemable Noncontrolling Interest | 12,584 | 12,584 |
Long-Term Debt | 489,717 | 485,719 |
Total Liabilities | 1,968,349 | 1,979,679 |
Redeemable Noncontrolling Interest | 3,718 | 50 |
Preferred Stock | 0 | 0 |
Common Stockholders’ Equity | ||
Common stock | 20,000 | 20,000 |
Capital in excess of par value | 365,942 | 364,363 |
Retained earnings | 5,630,743 | 5,588,942 |
Accumulated other comprehensive income (loss), net of tax | ||
Cumulative foreign currency translation adjustment | (3,692) | (26,998) |
Unrealized gain on available-for-sale securities | 107,051 | 92,931 |
Unrealized gain on pensions and other postretirement plans | 168,939 | 170,830 |
Cash Flow Hedge | (391) | (277) |
Cost of Class B common stock held in treasury | (3,752,220) | (3,756,850) |
Total Equity | 2,536,372 | 2,452,941 |
Total Liabilities and Equity | $ 4,508,439 | $ 4,432,670 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash Flows from Operating Activities | ||
Net Income | $ 63,085 | $ 99,414 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation, amortization and goodwill and other long-lived asset impairment | 57,113 | 45,346 |
Net pension benefit | (29,517) | (24,325) |
Stock-based compensation expense, net | 5,204 | 7,152 |
Loss (gain) on disposition of businesses, property, plant and equipment, investments and other assets, net | 402 | (62,273) |
Foreign exchange (gain) loss | (5,194) | 29,527 |
Equity in earnings of affiliates, net of distributions | (1,966) | (113) |
Provision (benefit) for deferred income taxes | 14,370 | (6,806) |
Net loss on sale of property, plant and equipment | 0 | (34,072) |
Change in operating assets and liabilities: | ||
Accounts receivable, net | 122,122 | 49,786 |
Accounts payable and accrued liabilities | (63,654) | 4,612 |
Deferred revenue | (29,706) | (19,751) |
Income taxes receivable | 6,374 | 38,989 |
Other assets and other liabilities, net | (7,425) | (15,459) |
Other | 360 | 502 |
Net Cash Provided by Operating Activities | 131,568 | 146,601 |
Cash Flows from Investing Activities | ||
Investments in certain businesses, net of cash acquired | (299,938) | (200,336) |
Purchases of property, plant and equipment | (29,947) | (22,202) |
Investments in equity affiliates and cost method investments | (10,527) | (2,387) |
Return of investment in equity affiliate | 3,527 | 0 |
Net proceeds from disposition of businesses, property, plant and equipment, investments and other assets | 1,760 | 36,771 |
Proceeds from sales of marketable equity securities | 0 | 22,837 |
Purchases of marketable equity securities | 0 | (18,274) |
Net Cash Used in Investing Activities | (335,125) | (183,591) |
Cash Flows from Financing Activities | ||
Dividends paid | (14,201) | (13,736) |
Common shares repurchased | (395) | (89,062) |
Purchase of noncontrolling interest | 0 | (21,000) |
Other | (4,543) | 19,896 |
Net Cash Used in Financing Activities | (19,139) | (103,902) |
Effect Of Currency Exchange Rate Change | 7,026 | (1,842) |
Net Decrease in Cash and Cash Equivalents and Restricted Cash | (215,670) | (142,734) |
Beginning Cash and Cash Equivalents and Restricted Cash | 670,816 | 774,952 |
Ending Cash and Cash Equivalents and Restricted Cash | $ 455,146 | $ 632,218 |
Organization, Basis of Presenta
Organization, Basis of Presentation and Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Basis of Presentation and Recent Accounting Pronouncements | ORGANIZATION, BASIS OF PRESENTATION AND RECENT ACCOUNTING PRONOUNCEMENTS Graham Holdings Company (the Company), is a diversified education and media company. The Company’s Kaplan subsidiary provides a wide variety of educational services, both domestically and outside the United States. The Company’s media operations comprise the ownership and operation of seven television broadcasting stations, several websites and print publications, and a marketing solutions provider. The Company’s other business operations include manufacturing and home health and hospice services. Basis of Presentation – The accompanying condensed consolidated financial statements have been prepared in accordance with: (i) generally accepted accounting principles in the United States of America (GAAP) for interim financial information; (ii) the instructions to Form 10-Q; and (iii) the guidance of Rule 10-01 of Regulation S-X under the Securities and Exchange Act of 1934, as amended, for financial statements required to be filed with the Securities and Exchange Commission (SEC). They include the assets, liabilities, results of operations and cash flows of the Company, including its domestic and foreign subsidiaries that are more than 50% owned or otherwise controlled by the Company. As permitted under such rules, certain notes and other financial information normally required by GAAP have been condensed or omitted. Management believes the accompanying condensed consolidated financial statements reflect all normal and recurring adjustments necessary for a fair statement of the Company’s financial position, results of operations, and cash flows as of and for the periods presented herein. The Company’s results of operations for the three and six months ended June 30, 2017 and 2016 may not be indicative of the Company’s future results. These condensed consolidated financial statements are unaudited and should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 . The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. Out of Period Adjustment – In the second quarter of 2016, the Company benefited from a favorable $5.6 million out of period adjustment to the provision for deferred income taxes related to the $248.6 million goodwill impairment at the KHE reporting unit in the third quarter of 2015. With respect to this error, the Company has concluded that it was not material to the Company’s financial position or results of operations for 2016 and the related interim periods, based on its consideration of quantitative and qualitative factors. Use of Estimates in the Preparation of the Condensed Consolidated Financial Statements – The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and judgments that affect the amounts reported herein. Management bases its estimates and assumptions on historical experience and on various other factors that are believed to be reasonable under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in those estimates. Recently Adopted and Issued Accounting Pronouncements – In May 2014, the Financial Accounting Standards Board (FASB) issued comprehensive new guidance that supersedes all existing revenue recognition guidance. In August 2015, the FASB issued an amendment to the guidance that defers the effective date by one year. The new guidance requires revenue to be recognized when the Company transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The new guidance also significantly expands the disclosure requirements for revenue recognition. The guidance is effective for interim and fiscal years beginning after December 15, 2017. Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016. The standard permits two implementation approaches, full retrospective, requiring retrospective application of the new guidance with a restatement of prior years, or modified retrospective, requiring prospective application of the new guidance with disclosure of results under the old guidance in the first year of adoption. The Company anticipates adopting the standard using the modified retrospective approach. The Company is in the process of evaluating the impact of this new guidance on its Condensed Consolidated Financial Statements and believes such evaluation will extend over future periods because of the significance of the changes to the Company’s policies and business processes. In January 2016, the FASB issued new guidance that substantially revises the recognition, measurement and presentation of financial assets and financial liabilities. The new guidance, among other things, requires, (i) equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, with some exceptions, (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, (iii) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, (iv) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements, and (v) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. The guidance is effective for interim and fiscal years beginning after December 15, 2017. Early adoption is not permitted. The Company is in the process of evaluating the impact of this new guidance on its Condensed Consolidated Financial Statements. In February 2016, the FASB issued new guidance that requires, among other things, a lessee to recognize a right-of-use asset representing an entity’s right to use the underlying asset for the lease term and a liability for lease payments on its balance sheet, regardless of classification of a lease as operating or financing. For leases with a term of twelve months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and liabilities and account for the lease similar to existing guidance for operating leases today. This new guidance supersedes all prior guidance. The guidance is effective for interim and fiscal years beginning after December 15, 2018. Early adoption is permitted. The standard requires lessees and lessors to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The Company is in the process of evaluating the impact of this new guidance on its Condensed Consolidated Financial Statements. In March 2016, the FASB issued new guidance that simplifies the accounting for stock-based compensation. The new guidance (i) requires all excess tax benefits and tax deficiencies to be recognized in the income statement with the tax effects of vested or exercised awards treated as discrete items. Additionally, excess tax benefits will be recognized regardless of whether the benefit reduces taxes payable in the current period, effectively eliminating the APIC pool, (ii) concludes excess tax benefits should be classified as an operating activity in the statement of cash flows, (iii) requires an entity to make an entity-wide accounting policy election to either estimate a forfeiture rate for awards or account for forfeitures as they occur, (iv) changes the threshold for equity classification for cash settlements of awards for withholding requirements to the maximum statutory tax rate in the applicable jurisdiction and (v) concludes cash paid by an employer when directly withholding shares for tax-withholding purposes should be classified as a financing activity in the statement of cash flows. The guidance is effective for interim and fiscal years beginning after December 15, 2016. The Company adopted the new guidance as of January 1, 2017. As a result of adoption, the Company recognized a $5.9 million excess tax benefit as a discrete item in its tax provision related to the vesting of restricted stock awards in the first quarter of 2017. This tax benefit is classified as an operating activity on the Condensed Consolidated Statement of Cash Flows. Additionally, the Company elected to account for forfeitures of stock awards as they occur and not estimate a forfeiture rate. The Company does not expect the forfeiture rate election to have a material impact on its financial statements. In November 2016, the FASB issued new guidance that clarifies how restricted cash and restricted cash equivalents should be presented in the statement of cash flows. The guidance requires the cash flow statement to show changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents, which eliminates the presentation of transfers between cash and cash equivalents and restricted cash and cash equivalents. The guidance is effective for interim and fiscal years beginning after December 15, 2017, with early adoption permitted. The Company adopted the new guidance retrospectively as of December 31, 2016. The prior period has been adjusted to reflect this adoption, as detailed below: Six Months Ended June 30, 2016 As Previously As (in thousands) Reported Adjustment Adopted Cash Flows from Operating Activities Increase in Restricted Cash $ (11,133 ) $ 11,133 $ — Net Cash Provided by Operating Activities 135,468 11,133 146,601 Net Decrease in Cash and Cash Equivalents and Restricted Cash (153,867 ) 11,133 (142,734 ) Cash and Cash Equivalents and Restricted Cash at Beginning of Period 754,207 20,745 774,952 Cash and Cash Equivalents and Restricted Cash at End of Period 600,340 31,878 632,218 In January 2017, the FASB issued new guidance which simplifies the subsequent measurement of goodwill. The new guidance eliminates Step 2 from the goodwill impairment test, which required entities to determine the implied fair value of goodwill as of the test date to measure a goodwill impairment charge. Instead, an entity should continue to test goodwill for impairment by comparing the fair value of a reporting unit with its carrying amount (Step 1), and an impairment charge will be recognized for the amount by which the carrying amount exceeds the reporting unit ’ s fair value. The guidance is effective for interim and fiscal years beginning after December 15, 2019, with early adoption permitted. The Company early adopted this guidance in the second quarter of 2017. In March 2017, the FASB issued new guidance that changes the presentation of net periodic pension cost and net periodic postretirement benefit cost for defined benefit plans. The guidance requires an issuer to disaggregate the service cost component of net periodic pension and postretirement benefit cost from other components. Under the new guidance, service cost will be included in the same line item(s) as other compensation costs arising from services rendered by employees during the period, while the other components will be recognized after income from operations. The guidance is effective for interim and fiscal years beginning after December 15, 2017. The guidance must be applied retrospectively; however, a practical expedient is available which permits an employer to use amounts previously disclosed in its pension and postretirement plans footnote for the prior comparative periods. The Company will adopt the new standard in the first quarter of 2018, and expects the following changes to its financial statements upon adoption, as detailed below: Income from Operations Non-operating pension and postretirement benefit income Income Before Income Taxes (in thousands) Three Months Ended June 30, 2017 As Reported $ 68,361 $ — $ 65,899 Adjustment (18,620 ) 18,620 — Upon Adoption 49,741 18,620 65,899 Three Months Ended June 30, 2016 As Reported $ 74,140 $ — $ 84,999 Adjustment (15,584 ) 15,584 — Upon Adoption 58,556 15,584 84,999 Six Months Ended June 30, 2017 As Reported $ 97,415 $ — $ 89,685 Adjustment (37,421 ) 37,421 — Upon Adoption 59,994 37,421 89,685 Six Months Ended June 30, 2016 As Reported $ 126,012 $ — $ 145,614 Adjustment (31,261 ) 31,261 — Upon Adoption 94,751 31,261 145,614 Twelve Months Ended December 31, 2016 As Reported $ 303,534 $ — $ 250,658 Adjustment (80,665 ) 80,665 — Upon Adoption 222,869 80,665 250,658 |
Investments
Investments | 6 Months Ended |
Jun. 30, 2017 | |
Investments [Abstract] | |
Investments | INVESTMENTS As of June 30, 2017 and December 31, 2016 , the Company had commercial paper and money market investments of $262.8 million and $485.1 million , respectively, that are classified as cash, cash equivalents and restricted cash in the Company’s Condensed Consolidated Balance Sheets. Investments in marketable equity securities comprised the following: As of June 30, December 31, (in thousands) Total cost $ 269,343 $ 269,343 Gross unrealized gains 178,420 154,886 Total Fair Value $ 447,763 $ 424,229 There were no purchases of marketable equity securities during the first six months of 2017 . The Company settled on $18.3 million of marketable equity securities purchases during the first six months of 2016 , of which $17.9 million were purchased in the first six months. There were no sales of marketable equity securities for the first six months of 2017 . The total proceeds from the sales of marketable equity securities for the first six months of 2016 were $22.8 million , with realized gains of $6.3 million . As of June 30, 2017 , the Company held interests in several affiliates; Residential Healthcare (Residential) held a 40% interest in Residential Home Health Illinois, a 42.5% interest in Residential Hospice Illinois and a 40% interest in the joint venture formed between Residential and a Michigan hospital; and Celtic Healthcare (Celtic) held a 40% interest in the joint venture formed between Celtic Healthcare and Allegheny Health Network (AHN). For the three and six months ended June 30, 2017 , the Company recorded $5.0 million and $9.6 million , respectively, in revenue for services provided to the affiliates of Celtic and Residential. Additionally, Kaplan International Holdings Limited (KIHL) held a 45% interest in a joint venture formed with York University. KIHL agreed to loan the joint venture £25 million , of which, £11.0 million was advanced in 2016. The loan will be repayable over 25 years at an interest rate of 7% and the loan is guaranteed by the University of York. |
Acquisitions and Dispositions o
Acquisitions and Dispositions of Businesses | 6 Months Ended |
Jun. 30, 2017 | |
Acqusitions and Dispositions [Abstract] | |
Acquisitions and Dispositions of Businesses | ACQUISITIONS AND DISPOSITIONS OF BUSINESSES Acquisitions . In the first six months of 2017 , the Company acquired six businesses, two in its education division, two in its television broadcasting division and two in other businesses for $318.7 million in cash and contingent consideration, and the assumption of $59.1 million in certain pension and postretirement obligations. At the end of June 2017, Graham Healthcare Group (GHG) acquired a 100% interest in Hometown Home Health and Hospice, a Lapeer, MI-based healthcare services provider by purchasing all of its issued and outstanding shares . This acquisition expands GHG’s service area in Michigan. GHG is included in other businesses. In April 2017, the Company acquired 97.72% of the issued and outstanding shares of Hoover Treated Wood Products, Inc., a Thomson, GA-based supplier of pressure impregnated kiln-dried lumber and plywood products for fire retardant and preservative applications for $206.8 million , net of cash acquired. The fair value of the redeemable noncontrolling interest in Hoover was $3.7 million at the acquisition date, determined using a market approach. This acquisition is consistent with the Company’s ongoing strategy of investing in companies with a history of profitability and strong management. Hoover is included in other businesses. In February 2017, Kaplan acquired a 100% interest in Genesis Training Institute, a Dubai-based provider of professional development training in the United Arab Emirates, by purchasing all of its issued and outstanding shares. Additionally, Kaplan acquired a 100% interest in Red Marker Pty Ltd, an Australia-based regulatory technology company by purchasing all of its outstanding shares. These acquisitions are expected to provide certain strategic benefits in the future. On January 17, 2017, the Company closed on its agreement with Nexstar Broadcasting Group, Inc. and Media General, Inc. to acquire the assets of WCWJ, a CW affiliate television station in Jacksonville, FL and WSLS, an NBC affiliate television station in Roanoke, VA for cash and the assumption of certain pension obligations. The acquisition of WCWJ and WSLS will complement the other stations that GMG operates. During 2016 , the Company acquired five businesses, three businesses included in its education division and two businesses in other businesses. In January 2016, Kaplan acquired a 100% interest in Mander Portman Woodward, a leading provider of high-quality, bespoke education to UK and international students in London, Cambridge and Birmingham, by purchasing all of its issued and outstanding shares. In February 2016, Kaplan acquired a 100% interest in Osborne Books, an educational publisher of learning resources for accounting qualifications in the UK, by purchasing all of its issued and outstanding shares. The primary rationale for these acquisitions was based on several strategic benefits expected to be realized in the future. Both of these acquisitions are included in Kaplan International. In September 2016, Group Dekko, Inc. (Dekko) acquired a 100% interest in Electri-Cable Assemblies (ECA), a Shelton, CT-based manufacturer of power, data and electrical solutions for the office furniture industry, by purchasing all of its issued and outstanding shares. Dekko’s primary reasons for the acquisition were to complement existing product offerings and provide opportunities for synergies across the businesses. Dekko is included in other businesses. Acquisition-related costs of $3.5 million related to these 2017 acquisitions were expensed as incurred. The aggregate purchase price of the 2017 and 2016 acquisitions was allocated as follows (2017 on a preliminary basis): Purchase Price Allocation As of (in thousands) June 30, 2017 December 31, 2016 Accounts receivable $ 13,074 $ 8,538 Inventory 25,754 878 Other current assets 593 1,420 Property, plant and equipment 30,961 3,940 Goodwill 138,000 184,118 Indefinite-lived intangible assets 41,600 53,110 Amortized intangible assets 159,107 28,267 Pension and other postretirement benefits liabilities (59,116 ) — Other liabilities (10,614 ) (21,892 ) Deferred income taxes (30,923 ) (11,009 ) Redeemable noncontrolling interest (3,666 ) — Aggregate purchase price, net of cash acquired $ 304,770 $ 247,370 The 2017 fair values recorded were based upon preliminary valuations and the estimates and assumptions used in such valuations are subject to change, which could be significant, within the measurement period (up to one year from the acquisition date). The recording of deferred tax assets or liabilities, working capital and the final amount of residual goodwill and other intangibles are not yet finalized. Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The goodwill recorded due to these acquisitions is attributable to the assembled workforces of the acquired companies and expected synergies. The Company expects to deduct $10.0 million and $22.2 million of goodwill for income tax purposes for the acquisitions completed in 2017 and 2016 , respectively. The acquired companies were consolidated into the Company’s financial statements starting on their respective acquisition dates. The Company’s Condensed Consolidated Statements of Operations include aggregate revenues for the companies acquired in 2017 of $63.4 million and a nominal operating loss for the second quarter of 2017 , and aggregate revenues and an operating loss of $68.9 million and $0.2 million , respectively, for the first six months of 2017 . The following unaudited pro forma financial information presents the Company’s results as if the 2017 acquisitions had occurred at the beginning of 2016 . The unaudited pro forma information also includes the 2016 acquisitions as if they occurred at the beginning of 2015: Three Months Ended Six Months Ended (in thousands) 2017 2016 2017 2016 Operating revenues $ 680,759 $ 695,357 $ 1,322,559 $ 1,361,804 Net income 46,718 62,638 71,330 101,717 These pro forma results were based on estimates and assumptions, which the Company believes are reasonable, and include the historical results of operations of the acquired companies and adjustments for depreciation and amortization of identified assets and the effect of pre-acquisition transaction related expenses incurred by the Company and the acquired entities. The pro forma information does not include efficiencies, cost reductions and synergies expected to result from the acquisitions. They are not the results that would have been realized had these entities been part of the Company during the periods presented and are not necessarily indicative of the Company’s consolidated results of operations in future periods. Sale of Businesses. In February 2017, GHG completed the sale of Celtic Healthcare of Maryland. In January 2016, Kaplan completed the sale of Colloquy, which was included in Kaplan Corporate and Other. Other. In June 2016, Residential and a Michigan hospital formed a joint venture to provide home health services to patients in western Michigan. In connection with this transaction, Residential contributed its western Michigan home health operations to the joint venture and then sold 60% of the newly formed venture to its Michigan hospital partner. Although Residential manages the operations of the joint venture, Residential holds a 40% interest in the joint venture, so the operating results of the joint venture are not consolidated and the pro rata operating results are included in the Company’s equity in earnings of affiliates. In June 2016, the Company purchased the outstanding 20% redeemable noncontrolling interest in Residential. At that time, the Company recorded an increase to redeemable noncontrolling interest of $3.0 million , with a corresponding decrease to capital in excess of par value, to reflect the redemption value of the redeemable noncontrolling interest at $24.0 million . Following this transaction, Celtic and Residential combined their business operations to form GHG. The redeemable noncontrolling interest shareholders in Celtic exchanged their 20% interest in Celtic for a 10% mandatorily redeemable noncontrolling interest in the combined entity and the Company recorded a $4.1 million net increase to the mandatorily redeemable noncontrolling interest to reflect the estimated fair value of the mandatorily redeemable noncontrolling interest. The minority shareholders have an option to put their shares to the Company starting in 2020, and are required to put a percentage of their shares in 2022 and 2024, with the remaining shares required to be put by the minority shareholders in 2026. The redemption value is based on an EBITDA multiple, adjusted for working capital and other items, computed annually, with no limit on the amount payable. The Company now owns 90% of GHG. Because the noncontrolling interest is now mandatorily redeemable by the Company by 2026, it is reported as a noncurrent liability at June 30, 2017. Kaplan University Transaction. On April 27, 2017, certain Kaplan subsidiaries entered into a Contribution and Transfer Agreement (Transfer Agreement) to contribute Kaplan University (KU), its institutional assets and operations to a new, nonprofit, public-benefit corporation (New University) affiliated with Purdue University (Purdue) in exchange for a Transition and Operations Support Agreement (TOSA) to provide key non-academic operations support to New University for an initial term of 30 years with a buy-out option after six years. The transfer does not include any of the assets of Kaplan University School of Professional and Continuing Education (KU-PACE), which provides professional training and exam preparation for professional certifications and licensures, nor does it include the transfer of other Kaplan businesses such as Kaplan Test Preparation and Kaplan International. Consummation of the transactions contemplated by the Transfer Agreement is subject to various closing conditions, including, among others, regulatory approvals from the U.S. Department of Education, the Indiana Commission for Higher Education and HLC, which is the regional accreditor of both Purdue and KU, and certain other state educational agencies and accreditors of programs. Kaplan is unable to predict with certainty when and if such approvals will be obtained; however, all approvals may not be received until the first quarter of 2018. If the transaction is not consummated by April 30, 2018, either party may terminate the Transfer Agreement. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | GOODWILL AND OTHER INTANGIBLE ASSETS In the second quarter of 2017, as a result of a challenging operating environment, the Forney reporting unit recorded a goodwill and other long-lived asset impairment charge of $9.2 million . The Company performed an interim review of the goodwill and other long-lived assets of the reporting unit by utilizing a discounted cash flow model to estimate the fair value. The carrying value of the reporting unit exceeded the estimated fair value, resulting in a goodwill impairment charge for the amount by which the carrying value exceeded the reporting unit’s estimated fair value. Amortization of intangible assets for the three months ended June 30, 2017 and 2016 was $10.5 million and $6.3 million , respectively. Amortization of intangible assets for the six months ended June 30, 2017 and 2016 was $17.4 million and $12.5 million , respectively. Amortization of intangible assets is estimated to be approximately $22 million for the remainder of 2017 , $37 million in 2018 , $36 million in 2019 , $33 million in 2020 , $27 million in 2021 and $93 million thereafter. The changes in the carrying amount of goodwill, by segment, were as follows: (in thousands) Education Television Broadcasting Other Businesses Total Balance as of December 31, 2016 Goodwill $ 1,111,003 $ 168,345 $ 202,141 $ 1,481,489 Accumulated impairment losses (350,850 ) — (7,685 ) (358,535 ) 760,153 168,345 194,456 1,122,954 Acquisitions 18,986 24,256 94,758 138,000 Impairment — — (7,616 ) (7,616 ) Dispositions — — (412 ) (412 ) Foreign currency exchange rate changes 26,968 — — 26,968 Balance as of June 30, 2017 Goodwill 1,156,957 192,601 296,487 1,646,045 Accumulated impairment losses (350,850 ) — (15,301 ) (366,151 ) $ 806,107 $ 192,601 $ 281,186 $ 1,279,894 The changes in carrying amount of goodwill at the Company’s education division were as follows: (in thousands) Higher Education Test Preparation Kaplan International Total Balance as of December 31, 2016 Goodwill $ 389,720 $ 166,098 $ 555,185 $ 1,111,003 Accumulated impairment losses (248,591 ) (102,259 ) — (350,850 ) 141,129 63,839 555,185 760,153 Acquisitions — — 18,986 18,986 Foreign currency exchange rate changes 70 — 26,898 26,968 Balance as of June 30, 2017 Goodwill 389,790 166,098 601,069 1,156,957 Accumulated impairment losses (248,591 ) (102,259 ) — (350,850 ) $ 141,199 $ 63,839 $ 601,069 $ 806,107 Other intangible assets consist of the following: As of June 30, 2017 As of December 31, 2016 (in thousands) Useful Life Range Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Accumulated Net Amortized Intangible Assets Student and customer relationships 1–10 years (1) $ 224,280 $ 66,780 $ 157,500 $ 129,616 $ 55,863 $ 73,753 Trade names and trademarks 2–10 years 56,995 31,920 25,075 55,240 29,670 25,570 Network affiliation agreements 15 years 42,600 1,302 41,298 — — — Databases and technology 3–6 years (1) 19,505 3,321 16,184 5,601 4,368 1,233 Noncompete agreements 2–5 years 2,180 1,480 700 1,730 1,404 326 Other 1–8 years 13,730 6,150 7,580 12,030 4,973 7,057 $ 359,290 $ 110,953 $ 248,337 $ 204,217 $ 96,278 $ 107,939 Indefinite-Lived Intangible Assets Trade names and trademarks $ 82,810 $ 65,192 FCC licenses 26,600 — Licensure and accreditation 650 834 $ 110,060 $ 66,026 ____________ (1) As of December 31, 2016, the student and customer relationships’ minimum useful life was 2 years and the databases and technology’s maximum useful life was 5 years. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | DEBT The Company’s borrowings consist of the following: As of June 30, December 31, (in thousands) 7.25% unsecured notes due February 1, 2019 (1) $ 399,279 $ 399,052 UK Credit facility (2) 96,815 91,316 Other indebtedness 115 1,479 Total Debt $ 496,209 $ 491,847 Less: current portion (6,492 ) (6,128 ) Total Long-Term Debt $ 489,717 $ 485,719 ___________ _ (1) The carrying value is net of $0.1 million of unamortized debt issuance costs as of June 30, 2017 and December 31, 2016 , respectively. (2) The carrying value is net of $0.5 million of unamortized debt issuance costs as of June 30, 2017 and December 31, 2016 , respectively. The Company’s other indebtedness at June 30, 2017 is at an interest rate of 2% and matures in 2025 . On July 14, 2016, Kaplan entered into a Facility Agreement (the Kaplan Credit Agreement) among Kaplan International Holdings Limited, as borrower, the lenders party thereto, HSBC BANK PLC as Facility Agent, and other agents party thereto. The Kaplan Credit Agreement provides for a four-year credit facility in an aggregate principal amount of £75 million . Borrowings bear interest at a rate per annum of LIBOR plus an applicable interest rate margin between 1.25% and 1.75% , in each case determined on a quarterly basis by reference to a pricing grid based upon the Company’s total leverage ratio. The Kaplan Credit Agreement requires that 6.66% of the amount of the loan be repaid on the first three anniversaries of funding, with the remaining balance due on July 1, 2020. The Kaplan Credit Agreement contains terms and conditions, including remedies in the event of a default by the Company, typical of facilities of this type and requires the Company to maintain a leverage ratio of not greater than 3.5 to 1.0 and a consolidated interest coverage ratio of at least 3.5 to 1.0 based upon the ratio of consolidated adjusted EBITDA to consolidated interest expense as determined pursuant to the Kaplan Credit Agreement. As of June 30, 2017 , the Company is in compliance with all financial covenants. On July 25, 2016, Kaplan borrowed £75 million under the Kaplan Credit Agreement. On the same date, Kaplan entered into an interest rate swap agreement with a total notional value of £75 million and a maturity date of July 1, 2020. The interest rate swap agreement will pay Kaplan variable interest on the £75 million notional amount at the three-month LIBOR, and Kaplan will pay the counterparties a fixed rate of 0.51% , effectively resulting in a total fixed interest rate of 2.01% on the outstanding borrowings at the current applicable margin of 1.50% . The interest rate swap agreement was entered into to convert the variable rate British pound borrowing under the Kaplan Credit Agreement into a fixed rate borrowing. The Company provided a guarantee on any borrowings under the Kaplan Credit Agreement. Based on the terms of the interest rate swap agreement and the underlying borrowing, the interest rate swap agreement was determined to be effective, and thus qualifies as a cash flow hedge. As such, changes in the fair value of the interest rate swap are recorded in other comprehensive income on the accompanying Condensed Consolidated Balance Sheets until earnings are affected by the variability of cash flows. During the three months ended June 30, 2017 and 2016 , the Company had average borrowings outstanding of approximately $495.6 million and $400.0 million , respectively, at average annual interest rates of approximately 6.2% and 7.2% , respectively. During the three months ended June 30, 2017 and 2016 , the Company incurred net interest expense of $7.9 million and $7.3 million , respectively. During the six months ended June 30, 2017 and 2016 , the Company had average borrowings outstanding of approximately $494.5 million and $399.9 million , respectively, at average annual interest rates of approximately 6.2% and 7.2% , respectively. During the six months ended June 30, 2017 and 2016 , the Company incurred net interest expense of $14.6 million . At June 30, 2017 , the fair value of the Company’s 7.25% unsecured notes, based on quoted market prices (Level 2 fair value assessment), totaled $431.0 million , compared with the carrying amount of $399.3 million . At December 31, 2016 , the fair value of the Company’s 7.25% unsecured notes, based on quoted market prices (Level 2 fair value assessment), totaled $438.7 million , compared with the carrying amount of $399.1 million . The carrying value of the Company’s other unsecured debt at June 30, 2017 approximates fair value. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS The Company’s financial assets and liabilities measured at fair value on a recurring basis were as follows: As of June 30, 2017 (in thousands) Level 1 Level 2 Level 3 Total Assets Money market investments (1) $ — $ 262,797 $ — $ 262,797 Marketable equity securities (3) 447,763 — — 447,763 Other current investments (4) 6,207 16,023 — 22,230 Total Financial Assets $ 453,970 $ 278,820 $ — $ 732,790 Liabilities Deferred compensation plan liabilities (5) $ — $ 44,840 $ — $ 44,840 Interest rate swap (6) — 515 — 515 Mandatorily redeemable noncontrolling interest (7) — — 12,584 12,584 Total Financial Liabilities $ — $ 45,355 $ 12,584 $ 57,939 As of December 31, 2016 (in thousands) Level 1 Level 2 Level 3 Total Assets Money market investments (1) $ — $ 435,258 $ — $ 435,258 Commercial paper (2) 49,882 — — 49,882 Marketable equity securities (3) 424,229 — — 424,229 Other current investments (4) 6,957 17,055 — 24,012 Total Financial Assets $ 481,068 $ 452,313 $ — $ 933,381 Liabilities Deferred compensation plan liabilities (5) $ — $ 46,300 $ — $ 46,300 Interest rate swap (6) — 365 — 365 Mandatorily redeemable noncontrolling interest (7) — — 12,584 12,584 Total Financial Liabilities $ — $ 46,665 $ 12,584 $ 59,249 ____________ (1) The Company’s money market investments are included in cash, cash equivalents and restricted cash and the value considers the liquidity of the counterparty. (2) The Company’s commercial paper investments with original maturities of three months or less are included in cash and cash equivalents. (3) The Company’s investments in marketable equity securities are classified as available-for-sale. (4) Includes U.S. Government Securities, corporate bonds, mutual funds and time deposits. These investments are valued using a market approach based on the quoted market prices of the security or inputs that include quoted market prices for similar instruments and are classified as either Level 1 or Level 2 in the valuation hierarchy. (5) Includes Graham Holdings Company’s Deferred Compensation Plan and supplemental savings plan benefits under the Graham Holdings Company’s Supplemental Executive Retirement Plan, which are included in accrued compensation and related benefits. These plans measure the market value of a participant’s balance in a notional investment account that is comprised primarily of mutual funds, which are based on observable market prices. However, since the deferred compensation obligations are not exchanged in an active market, they are classified as Level 2 in the fair value hierarchy. Realized and unrealized gains (losses) on deferred compensation are included in operating income. (6) Included in Other Liabilities. The Company utilized a market approach model using the notional amount of the interest rate swap multiplied by the observable inputs of time to maturity and market interest rates. (7) The fair value of the mandatorily redeemable noncontrolling interest is based on an EBITDA multiple, adjusted for working capital and other items, which approximates fair value. In the second quarter of 2017 , the Company recorded a goodwill and other long-lived asset impairment charge of $9.2 million . The remeasurement of the goodwill and other long-lived assets is classified as a Level 3 fair value assessment due to the significance of unobservable inputs developed in the determination of the fair value. The Company used a discounted cash flow model to determine the estimated fair value of the reporting unit and made estimates and assumptions regarding future cash flows, discount rates and long-term growth rates. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE The Company’s unvested restricted stock awards contain nonforfeitable rights to dividends and, therefore, are considered participating securities for purposes of computing earnings per share pursuant to the two-class method. The diluted earnings per share computed under the two-class method is lower than the diluted earnings per share computed under the treasury stock method, resulting in the presentation of the lower amount in diluted earnings per share. The computation of the earnings per share under the two-class method excludes the income attributable to the unvested restricted stock awards from the numerator and excludes the dilutive impact of those underlying shares from the denominator. The following reflects the Company’s net income and share data used in the basic and diluted earnings per share computations using the two-class method: Three Months Ended Six Months Ended (in thousands, except per share amounts) 2017 2016 2017 2016 Numerator: Numerator for basic earnings per share: Net income attributable to Graham Holdings Company common stockholders $ 41,996 $ 60,766 $ 63,082 $ 98,546 Less: Dividends paid-common stock outstanding and unvested restricted shares (7,080 ) (6,775 ) (21,282 ) (20,533 ) Undistributed earnings 34,916 53,991 41,800 78,013 Percent allocated to common stockholders 99.06 % 98.68 % 99.06 % 98.68 % 34,588 53,277 41,407 76,981 Add: Dividends paid-common stock outstanding 7,013 6,685 21,082 20,264 Numerator for basic earnings per share $ 41,601 $ 59,962 $ 62,489 $ 97,245 Add: Additional undistributed earnings due to dilutive stock options 3 4 3 5 Numerator for diluted earnings per share $ 41,604 $ 59,966 $ 62,492 $ 97,250 Denominator: Denominator for basic earnings per share: Weighted average shares outstanding 5,539 5,544 5,537 5,584 Add: Effect of dilutive stock options 38 30 36 29 Denominator for diluted earnings per share 5,577 5,574 5,573 5,613 Graham Holdings Company Common Stockholders: Basic earnings per share $ 7.51 $ 10.82 $ 11.29 $ 17.42 Diluted earnings per share $ 7.46 $ 10.76 $ 11.21 $ 17.33 Diluted earnings per share excludes the following weighted average potential common shares, as the effect would be antidilutive, as computed under the treasury stock method: Three Months Ended Six Months Ended (in thousands) 2017 2016 2017 2016 Weighted average restricted stock 29 41 28 39 The diluted earnings per share amounts for the three and six months ended June 30, 2017 and June 30, 2016 exclude the effects of 104,000 and 102,000 stock options outstanding, as their inclusion would have been antidilutive due to a market condition. The diluted earnings per share amounts for the three and six months ended June 30, 2017 and June 30, 2016 exclude the effects of 5,250 and 6,100 restricted stock awards, respectively, as their inclusion would have been antidilutive due to a performance condition. In the three and six months ended June 30, 2017 , the Company declared regular dividends totaling $1.27 and $3.81 , respectively. In the three and six months ended June 30, 2016 , the Company declared regular dividends totaling $1.21 , and $3.63 respectively. |
Pension and Postretirement Plan
Pension and Postretirement Plans | 6 Months Ended |
Jun. 30, 2017 | |
Retirement Benefits, Description [Abstract] | |
Pension and Postretirement Plans | PENSION AND POSTRETIREMENT PLANS Defined Benefit Plans. The total benefit arising from the Company’s defined benefit pension plans consists of the following components: Three Months Ended June 30 Six Months Ended June 30 (in thousands) 2017 2016 2017 2016 Service cost $ 4,591 $ 5,040 $ 9,505 $ 10,382 Interest cost 11,979 12,845 23,965 25,918 Expected return on assets (30,403 ) (30,226 ) (60,740 ) (60,774 ) Amortization of prior service cost 43 75 86 149 Recognized actuarial gain (1,039 ) — (2,333 ) — Net Periodic Benefit $ (14,829 ) $ (12,266 ) $ (29,517 ) $ (24,325 ) The total cost arising from the Company’s Supplemental Executive Retirement Plan (SERP) consists of the following components: Three Months Ended June 30 Six Months Ended June 30 (in thousands) 2017 2016 2017 2016 Service cost $ 215 $ 246 $ 429 $ 492 Interest cost 1,058 1,096 2,116 2,192 Amortization of prior service cost 114 114 228 228 Recognized actuarial loss 443 665 887 1,330 Net Periodic Cost $ 1,830 $ 2,121 $ 3,660 $ 4,242 Defined Benefit Plan Assets. The Company’s defined benefit pension obligations are funded by a portfolio made up of a U.S. stock index fund, a relatively small number of stocks and high-quality fixed-income securities that are held by a third-party trustee. The assets of the Company’s pension plan were allocated as follows: As of June 30, December 31, U.S. equities 52 % 53 % U.S. stock index fund 31 % 30 % U.S. fixed income 10 % 11 % International equities 7 % 6 % 100 % 100 % The Company manages approximately 45% of the pension assets internally, of which the majority is invested in a U.S. stock index fund with the remaining investments in Berkshire Hathaway stock and short-term fixed income securities. The remaining 55% of plan assets are managed by two investment companies. The goal for the investments is to produce moderate long-term growth in the value of these assets, while protecting them against large decreases in value. Both investment managers may invest in a combination of equity and fixed-income securities and cash. The managers are not permitted to invest in securities of the Company or in alternative investments. The investment managers cannot invest more than 20% of the assets at the time of purchase in the stock of Berkshire Hathaway or more than 10% of the assets in the securities of any other single issuer, except for obligations of the U.S. Government, without receiving prior approval from the Plan administrator. As of June 30, 2017 , the investment managers can invest no more than 23% of the assets they manage in specified international exchanges, at the time the investment is made, and no less than 10% of the assets could be invested in fixed-income securities. In determining the expected rate of return on plan assets, the Company considers the relative weighting of plan assets, the historical performance of total plan assets and individual asset classes and economic and other indicators of future performance. In addition, the Company may consult with and consider the input of financial and other professionals in developing appropriate return benchmarks. The Company evaluated its defined benefit pension plan asset portfolio for the existence of significant concentrations (defined as greater than 10% of plan assets) of credit risk as of June 30, 2017 . Types of concentrations that were evaluated include, but are not limited to, investment concentrations in a single entity, type of industry, foreign country and individual fund. At June 30, 2017 and December 31, 2016 , the pension plan held investments in one common stock and one U.S. stock index fund that exceeded 10% of total plan assets. These investments were valued at $1,008.9 million and $978.8 million at June 30, 2017 and December 31, 2016 , respectively, or approximately 47% and 48% , respectively, of total plan assets. Other Postretirement Plans. The total cost arising from the Company’s other postretirement plans consists of the following components: Three Months Ended June 30 Six Months Ended June 30 (in thousands) 2017 2016 2017 2016 Service cost $ 257 $ 347 $ 514 $ 693 Interest cost 194 307 389 615 Amortization of prior service credit (37 ) (84 ) (74 ) (168 ) Recognized actuarial gain (972 ) (376 ) (1,945 ) (751 ) Net Periodic (Benefit) Cost $ (558 ) $ 194 $ (1,116 ) $ 389 |
Other Non-Operating Income
Other Non-Operating Income | 6 Months Ended |
Jun. 30, 2017 | |
Other Nonoperating Income (Expense) [Abstract] | |
Other Non-Operating Income | OTHER NON-OPERATING INCOME A summary of non-operating income is as follows: Three Months Ended Six Months Ended (in thousands) 2017 2016 2017 2016 Foreign currency gain (loss), net $ 3,466 $ (24,084 ) $ 5,194 $ (29,527 ) (Loss) gain on sales of businesses — — (342 ) 18,931 Gain on sale of land — 34,072 — 34,072 Gain on sales of marketable equity securities (see Note 2) — 4,502 — 6,256 Gain on the formation of a joint venture — 3,232 — 3,232 Other, net 603 1,278 66 1,132 Total Other Non-Operating Income $ 4,069 $ 19,000 $ 4,918 $ 34,096 In the second quarter of 2016, the Company sold the remaining portion of the Robinson Terminal real estate retained from the sale of the Publishing Subsidiaries, for a gain of $34.1 million . In June 2016, Residential contributed assets to a joint venture entered into with a Michigan hospital in exchange for a 40% equity interest and other assets, resulting in a $3.2 million gain (see Note 3). The Company used an income and market approach to value the equity interest. The measurement of the equity interest in the joint venture is classified as a Level 3 fair value assessment due to the significance of unobservable inputs developed in the determination of the fair value. In the first quarter of 2016, Kaplan sold Colloquy, which was a part of Kaplan corporate and other, for a gain of $18.9 million . |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The other comprehensive income (loss) consists of the following components: Three Months Ended June 30 2017 2016 Before-Tax Income After-Tax Before-Tax Income After-Tax (in thousands) Amount Tax Amount Amount Tax Amount Foreign currency translation adjustments: Translation adjustments arising during the period $ 9,638 $ — $ 9,638 $ (5,121 ) $ — $ (5,121 ) Unrealized gains (losses) on available-for-sale securities: Unrealized gains (losses) for the period, net 13,976 (5,591 ) 8,385 (5,307 ) 2,123 (3,184 ) Reclassification of realized gain on sale of available-for-sale securities included in net income — — — (4,502 ) 1,801 (2,701 ) 13,976 (5,591 ) 8,385 (9,809 ) 3,924 (5,885 ) Pension and other postretirement plans: Amortization of net prior service cost included in net income 120 (48 ) 72 105 (43 ) 62 Amortization of net actuarial (gain) loss included in net income (1,568 ) 627 (941 ) 289 (115 ) 174 (1,448 ) 579 (869 ) 394 (158 ) 236 Cash flow hedge: Loss for the period (19 ) 4 (15 ) — — — Other Comprehensive Income (Loss) $ 22,147 $ (5,008 ) $ 17,139 $ (14,536 ) $ 3,766 $ (10,770 ) Six Months Ended June 30 2017 2016 Before-Tax Income After-Tax Before-Tax Income After-Tax (in thousands) Amount Tax Amount Amount Tax Amount Foreign currency translation adjustments: Translation adjustments arising during the period $ 23,306 $ — $ 23,306 $ (1,276 ) $ — $ (1,276 ) Unrealized gains (losses) on available-for-sale securities: Unrealized gains (losses) for the period, net 23,534 (9,414 ) 14,120 (4,964 ) 1,986 (2,978 ) Reclassification of realized gain on sale of available-for-sale securities included in net income — — — (6,256 ) 2,502 (3,754 ) 23,534 (9,414 ) 14,120 (11,220 ) 4,488 (6,732 ) Pension and other postretirement plans: Amortization of net prior service cost included in net income 240 (96 ) 144 209 (84 ) 125 Amortization of net actuarial (gain) loss included in net income (3,391 ) 1,356 (2,035 ) 579 (231 ) 348 (3,151 ) 1,260 (1,891 ) 788 (315 ) 473 Cash flow hedge: Loss for the period (143 ) 29 (114 ) — — — Other Comprehensive Income (Loss) $ 43,546 $ (8,125 ) $ 35,421 $ (11,708 ) $ 4,173 $ (7,535 ) The accumulated balances related to each component of other comprehensive income (loss) are as follows: (in thousands, net of taxes) Cumulative Foreign Currency Translation Adjustment Unrealized Gain on Available-for- Sale Securities Unrealized Gain on Pensions and Other Postretirement Plans Cash Flow Hedge Accumulated Other Comprehensive Income Balance as of December 31, 2016 $ (26,998 ) $ 92,931 $ 170,830 $ (277 ) $ 236,486 Other comprehensive income (loss) before reclassifications 23,306 14,120 — (172 ) 37,254 Net amount reclassified from accumulated other comprehensive income (loss) — — (1,891 ) 58 (1,833 ) Other comprehensive income (loss), net of tax 23,306 14,120 (1,891 ) (114 ) 35,421 Balance as of June 30, 2017 $ (3,692 ) $ 107,051 $ 168,939 $ (391 ) $ 271,907 The amounts and line items of reclassifications out of Accumulated Other Comprehensive Income (Loss) are as follows: Three Months Ended Six Months Ended Affected Line Item in the Condensed Consolidated Statement of Operations (in thousands) 2017 2016 2017 2016 Unrealized Gains on Available-for-sale Securities: Realized gain for the period $ — $ (4,502 ) $ — $ (6,256 ) Other income, net — 1,801 — 2,502 Provision for Income Taxes — (2,701 ) — (3,754 ) Net of Tax Pension and Other Postretirement Plans: Amortization of net prior service cost 120 105 240 209 (1) Amortization of net actuarial (gain) loss (1,568 ) 289 (3,391 ) 579 (1) (1,448 ) 394 (3,151 ) 788 Before tax 579 (158 ) 1,260 (315 ) Provision for Income Taxes (869 ) 236 (1,891 ) 473 Net of Tax Cash Flow Hedge 41 — 72 — Interest expense (8 ) — (14 ) — Provision for Income Taxes 33 — 58 — Net of Tax Total reclassification for the period $ (836 ) $ (2,465 ) $ (1,833 ) $ (3,281 ) Net of Tax ____________ (1) These accumulated other comprehensive income components are included in the computation of net periodic pension and postretirement plan cost (see Note 8). |
Contingencies
Contingencies | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | CONTINGENCIES Litigation, Legal and Other Matters. The Company and its subsidiaries are involved in various legal, regulatory and other proceedings that arise in the ordinary course of its business. Although the outcomes of these proceedings against the Company cannot be predicted with certainty, based on currently available information, management believes that there are no existing claims or proceedings that are likely to have a material effect on the Company’s business, financial condition, results of operations or cash flows. However, based on currently available information, management believes it is reasonably possible that future losses from existing legal, regulatory and other proceedings in excess of the amounts accrued could reach approximately $20 million . Kaplan subsidiaries were subject to two unsealed cases filed by former employees that include, among other allegations, claims under the False Claims Act relating to eligibility for Title IV funding. The U.S. Government declined to intervene in all cases, and, as previously reported, court decisions either dismissed the cases in their entirety or narrowed the scope of their allegations. The two cases are captioned: United States of America ex rel. Carlos Urquilla-Diaz et al. v. Kaplan University et al. (“Diaz”, unsealed March 25, 2008) and United States of America ex rel. Charles Jajdelski v. Kaplan Higher Education Corp . et al. (“Jajdelski”, unsealed January 6, 2009). On August 17, 2011, the U.S. District Court for the Southern District of Florida issued a series of rulings in the Diaz case, which actually included three separate complainants: Diaz, Wilcox and Gillespie. The court dismissed the Wilcox complaint in its entirety; dismissed all False Claims Act allegations in the Diaz complaint, leaving only an individual employment claim; and dismissed in part the Gillespie complaint limiting the scope and time frame of its False Claims Act allegations regarding compliance with the U.S. Federal Rehabilitation Act. On July 16, 2013, the court entered summary judgment in favor of the Company on all remaining claims in the Gillespie complaint and on March 11, 2015, the U.S. Court of Appeals for the Eleventh Judicial Circuit affirmed that dismissal ending the Gillespie claims in Kaplan’s favor. On October 31, 2012, the court entered summary judgment in favor of the Company as to the sole remaining employment claim in the Diaz complaint. And, on March 11, 2015, the appellate court affirmed the summary judgment on all issues in the Diaz case except the court reversed and remanded Diaz’s claim that incentive compensation for admissions representatives was improperly based solely on enrollments in violation of the Title IV regulations. On July 13, 2017, the District Court again granted summary judgment on this final issue in the Diaz case in Kaplan’s favor, ending the case at the U.S. District Court level. The plaintiff has 60 days to appeal. On July 7, 2011, the U.S. District Court for the District of Nevada dismissed the Jajdelski complaint in its entirety and entered a final judgment in favor of Kaplan. On February 13, 2013, the U.S. Circuit Court for the Ninth Judicial Circuit affirmed the dismissal in part and reversed the dismissal on one allegation under the False Claims Act relating to eligibility for Title IV funding based on claims of false attendance. The surviving claim was remanded to the District Court, where Kaplan was again granted summary judgment on March 9, 2015. Plaintiff has appealed this judgment and briefing is complete. In March 2017, the Appellate Court denied the appeal and ruled fully in Kaplan’s favor and Jajdelski filed a motion to re-hear the matter. On May 12, 2017, the Court of Appeals issued its Mandate ending the case and relinquishing jurisdiction. Despite the sale of the nationally accredited Kaplan Higher Education Campuses business, Kaplan retains liability for these claims. Department of Education (ED) Program Reviews. ED has undertaken program reviews at various KHE locations. Currently, there are five open program reviews, four of which are at campuses that were formerly a part of the KHE Campuses business, including the ED’s final reports on the program reviews at former KHE Hammond, IN, San Antonio, TX, Broomall, PA, and Pittsburgh, PA, locations. Kaplan retains responsibility for any financial obligation resulting from the ED program reviews at the KHE Campuses business that were open at the time of sale. On February 23, 2015, the ED began a review of Kaplan University. The review will assess Kaplan’s administration of its Title IV, HEA programs and will initially focus on the 2013 to 2014 and 2014 to 2015 award years. On December 17, 2015, Kaplan University received a notice from the ED that it had been placed on provisional certification status until September 30, 2018, in connection with the open and ongoing ED program review. The ED has not notified Kaplan University of any negative findings. However, at this time, Kaplan cannot predict the outcome of this review, when it will be completed or any liability or other limitations that the ED may place on Kaplan University as a result of this review. During the period of provisional certification, Kaplan University must obtain prior ED approval to open a new location, add an educational program, acquire another school or make any other significant change. The Company does not expect the open program reviews to have a material impact on KHE; however, the results of open program reviews and their impact on Kaplan’s operations are uncertain. |
Business Segments
Business Segments | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Business Segments | BUSINESS SEGMENTS The Company has four reportable segments: Kaplan Higher Education, Kaplan Test Preparation, Kaplan International and television broadcasting. The following table summarizes financial information related to each of the Company’s business segments: Three Months Ended June 30 Six Months Ended June 30 (in thousands) 2017 2016 2017 2016 Operating Revenues Education $ 386,499 $ 419,213 $ 759,396 $ 820,289 Television broadcasting 106,102 96,520 197,598 188,538 Other businesses 183,486 113,269 301,810 221,985 Corporate office — — — — Intersegment elimination — (69 ) — (139 ) $ 676,087 $ 628,933 $ 1,258,804 $ 1,230,673 Income (Loss) from Operations Education $ 32,925 $ 32,892 $ 41,956 $ 47,380 Television broadcasting 39,264 44,215 65,233 85,435 Other businesses (8,918 ) (5,062 ) (19,482 ) (10,792 ) Corporate office 5,090 2,095 9,708 3,989 $ 68,361 $ 74,140 $ 97,415 $ 126,012 Equity in Earnings (Losses) of Affiliates, Net 1,331 (891 ) 1,980 113 Interest Expense, Net (7,862 ) (7,250 ) (14,628 ) (14,607 ) Other Income, Net 4,069 19,000 4,918 34,096 Income Before Income Taxes $ 65,899 $ 84,999 $ 89,685 $ 145,614 Depreciation of Property, Plant and Equipment Education $ 8,325 $ 10,242 $ 16,909 $ 21,345 Television broadcasting 2,991 2,450 5,585 4,827 Other businesses 4,264 3,073 7,448 6,100 Corporate office 291 280 581 534 $ 15,871 $ 16,045 $ 30,523 $ 32,806 Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets Education $ 1,323 $ 1,704 $ 2,443 $ 3,385 Television broadcasting 970 63 1,872 126 Other businesses 17,462 4,511 22,276 9,029 Corporate office — — — — $ 19,755 $ 6,278 $ 26,591 $ 12,540 Net Pension (Credit) Expense Education $ 2,153 $ 3,018 $ 4,859 $ 6,127 Television broadcasting 479 418 972 857 Other businesses 415 306 898 560 Corporate office (17,876 ) (16,008 ) (36,246 ) (31,869 ) $ (14,829 ) $ (12,266 ) $ (29,517 ) $ (24,325 ) Asset information for the Company’s business segments are as follows: As of (in thousands) June 30, December 31, Identifiable Assets Education $ 1,494,736 $ 1,479,267 Television broadcasting 451,296 336,631 Other businesses 946,499 796,935 Corporate office 250,071 455,209 $ 3,142,602 $ 3,068,042 Investments in Marketable Equity Securities 447,763 424,229 Investments in Affiliates 67,812 58,806 Prepaid Pension Cost 850,262 881,593 Total Assets $ 4,508,439 $ 4,432,670 The Company’s education division comprises the following operating segments: Three Months Ended Six Months Ended June 30 June 30 (in thousands) 2017 2016 2017 2016 Operating Revenues Higher education $ 139,204 $ 157,980 $ 283,514 $ 323,529 Test preparation 75,730 79,349 140,298 145,811 Kaplan international 171,747 182,325 336,309 351,612 Kaplan corporate and other 57 18 71 143 Intersegment elimination (239 ) (459 ) (796 ) (806 ) $ 386,499 $ 419,213 $ 759,396 $ 820,289 Income (Loss) from Operations Higher education $ 17,711 $ 17,237 $ 30,315 $ 38,543 Test preparation 5,741 7,036 2,877 4,726 Kaplan international 15,954 16,479 23,661 21,376 Kaplan corporate and other (6,451 ) (7,811 ) (14,920 ) (17,216 ) Intersegment elimination (30 ) (49 ) 23 (49 ) $ 32,925 $ 32,892 $ 41,956 $ 47,380 Depreciation of Property, Plant and Equipment Higher education $ 3,249 $ 3,993 $ 6,680 $ 8,168 Test preparation 1,332 1,615 2,673 3,396 Kaplan international 3,609 4,319 7,291 9,379 Kaplan corporate and other 135 315 265 402 $ 8,325 $ 10,242 $ 16,909 $ 21,345 Amortization of Intangible Assets $ 1,323 $ 1,704 $ 2,443 $ 3,385 Pension Expense Higher education $ 2,044 $ 1,905 $ 4,088 $ 3,810 Test preparation 911 768 1,822 1,536 Kaplan international 87 67 174 134 Kaplan corporate and other (889 ) 278 (1,225 ) 647 $ 2,153 $ 3,018 $ 4,859 $ 6,127 Asset information for the Company’s education division is as follows: As of (in thousands) June 30, December 31, Identifiable assets Higher education $ 339,304 $ 373,127 Test preparation 133,482 133,709 Kaplan international 1,000,943 950,922 Kaplan corporate and other 21,007 21,509 $ 1,494,736 $ 1,479,267 |
Organization, Basis of Presen18
Organization, Basis of Presentation And Recent Accounting Pronouncements (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation – The accompanying condensed consolidated financial statements have been prepared in accordance with: (i) generally accepted accounting principles in the United States of America (GAAP) for interim financial information; (ii) the instructions to Form 10-Q; and (iii) the guidance of Rule 10-01 of Regulation S-X under the Securities and Exchange Act of 1934, as amended, for financial statements required to be filed with the Securities and Exchange Commission (SEC). They include the assets, liabilities, results of operations and cash flows of the Company, including its domestic and foreign subsidiaries that are more than 50% owned or otherwise controlled by the Company. As permitted under such rules, certain notes and other financial information normally required by GAAP have been condensed or omitted. Management believes the accompanying condensed consolidated financial statements reflect all normal and recurring adjustments necessary for a fair statement of the Company’s financial position, results of operations, and cash flows as of and for the periods presented herein. The Company’s results of operations for the three and six months ended June 30, 2017 and 2016 may not be indicative of the Company’s future results. These condensed consolidated financial statements are unaudited and should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 . The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. |
Use of Estimates in the Preparation of the Condensed Consolidated Financial Statements | Use of Estimates in the Preparation of the Condensed Consolidated Financial Statements – The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and judgments that affect the amounts reported herein. Management bases its estimates and assumptions on historical experience and on various other factors that are believed to be reasonable under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in those estimates. |
Recently Adopted and Issued Accounting Pronouncements | Recently Adopted and Issued Accounting Pronouncements – In May 2014, the Financial Accounting Standards Board (FASB) issued comprehensive new guidance that supersedes all existing revenue recognition guidance. In August 2015, the FASB issued an amendment to the guidance that defers the effective date by one year. The new guidance requires revenue to be recognized when the Company transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The new guidance also significantly expands the disclosure requirements for revenue recognition. The guidance is effective for interim and fiscal years beginning after December 15, 2017. Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016. The standard permits two implementation approaches, full retrospective, requiring retrospective application of the new guidance with a restatement of prior years, or modified retrospective, requiring prospective application of the new guidance with disclosure of results under the old guidance in the first year of adoption. The Company anticipates adopting the standard using the modified retrospective approach. The Company is in the process of evaluating the impact of this new guidance on its Condensed Consolidated Financial Statements and believes such evaluation will extend over future periods because of the significance of the changes to the Company’s policies and business processes. In January 2016, the FASB issued new guidance that substantially revises the recognition, measurement and presentation of financial assets and financial liabilities. The new guidance, among other things, requires, (i) equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, with some exceptions, (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, (iii) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, (iv) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements, and (v) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. The guidance is effective for interim and fiscal years beginning after December 15, 2017. Early adoption is not permitted. The Company is in the process of evaluating the impact of this new guidance on its Condensed Consolidated Financial Statements. In February 2016, the FASB issued new guidance that requires, among other things, a lessee to recognize a right-of-use asset representing an entity’s right to use the underlying asset for the lease term and a liability for lease payments on its balance sheet, regardless of classification of a lease as operating or financing. For leases with a term of twelve months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and liabilities and account for the lease similar to existing guidance for operating leases today. This new guidance supersedes all prior guidance. The guidance is effective for interim and fiscal years beginning after December 15, 2018. Early adoption is permitted. The standard requires lessees and lessors to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The Company is in the process of evaluating the impact of this new guidance on its Condensed Consolidated Financial Statements. In March 2016, the FASB issued new guidance that simplifies the accounting for stock-based compensation. The new guidance (i) requires all excess tax benefits and tax deficiencies to be recognized in the income statement with the tax effects of vested or exercised awards treated as discrete items. Additionally, excess tax benefits will be recognized regardless of whether the benefit reduces taxes payable in the current period, effectively eliminating the APIC pool, (ii) concludes excess tax benefits should be classified as an operating activity in the statement of cash flows, (iii) requires an entity to make an entity-wide accounting policy election to either estimate a forfeiture rate for awards or account for forfeitures as they occur, (iv) changes the threshold for equity classification for cash settlements of awards for withholding requirements to the maximum statutory tax rate in the applicable jurisdiction and (v) concludes cash paid by an employer when directly withholding shares for tax-withholding purposes should be classified as a financing activity in the statement of cash flows. The guidance is effective for interim and fiscal years beginning after December 15, 2016. The Company adopted the new guidance as of January 1, 2017. As a result of adoption, the Company recognized a $5.9 million excess tax benefit as a discrete item in its tax provision related to the vesting of restricted stock awards in the first quarter of 2017. This tax benefit is classified as an operating activity on the Condensed Consolidated Statement of Cash Flows. Additionally, the Company elected to account for forfeitures of stock awards as they occur and not estimate a forfeiture rate. The Company does not expect the forfeiture rate election to have a material impact on its financial statements. In November 2016, the FASB issued new guidance that clarifies how restricted cash and restricted cash equivalents should be presented in the statement of cash flows. The guidance requires the cash flow statement to show changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents, which eliminates the presentation of transfers between cash and cash equivalents and restricted cash and cash equivalents. The guidance is effective for interim and fiscal years beginning after December 15, 2017, with early adoption permitted. The Company adopted the new guidance retrospectively as of December 31, 2016. The prior period has been adjusted to reflect this adoption, as detailed below: Six Months Ended June 30, 2016 As Previously As (in thousands) Reported Adjustment Adopted Cash Flows from Operating Activities Increase in Restricted Cash $ (11,133 ) $ 11,133 $ — Net Cash Provided by Operating Activities 135,468 11,133 146,601 Net Decrease in Cash and Cash Equivalents and Restricted Cash (153,867 ) 11,133 (142,734 ) Cash and Cash Equivalents and Restricted Cash at Beginning of Period 754,207 20,745 774,952 Cash and Cash Equivalents and Restricted Cash at End of Period 600,340 31,878 632,218 In January 2017, the FASB issued new guidance which simplifies the subsequent measurement of goodwill. The new guidance eliminates Step 2 from the goodwill impairment test, which required entities to determine the implied fair value of goodwill as of the test date to measure a goodwill impairment charge. Instead, an entity should continue to test goodwill for impairment by comparing the fair value of a reporting unit with its carrying amount (Step 1), and an impairment charge will be recognized for the amount by which the carrying amount exceeds the reporting unit ’ s fair value. The guidance is effective for interim and fiscal years beginning after December 15, 2019, with early adoption permitted. The Company early adopted this guidance in the second quarter of 2017. In March 2017, the FASB issued new guidance that changes the presentation of net periodic pension cost and net periodic postretirement benefit cost for defined benefit plans. The guidance requires an issuer to disaggregate the service cost component of net periodic pension and postretirement benefit cost from other components. Under the new guidance, service cost will be included in the same line item(s) as other compensation costs arising from services rendered by employees during the period, while the other components will be recognized after income from operations. The guidance is effective for interim and fiscal years beginning after December 15, 2017. The guidance must be applied retrospectively; however, a practical expedient is available which permits an employer to use amounts previously disclosed in its pension and postretirement plans footnote for the prior comparative periods. The Company will adopt the new standard in the first quarter of 2018, and expects the following changes to its financial statements upon adoption, as detailed below: Income from Operations Non-operating pension and postretirement benefit income Income Before Income Taxes (in thousands) Three Months Ended June 30, 2017 As Reported $ 68,361 $ — $ 65,899 Adjustment (18,620 ) 18,620 — Upon Adoption 49,741 18,620 65,899 Three Months Ended June 30, 2016 As Reported $ 74,140 $ — $ 84,999 Adjustment (15,584 ) 15,584 — Upon Adoption 58,556 15,584 84,999 Six Months Ended June 30, 2017 As Reported $ 97,415 $ — $ 89,685 Adjustment (37,421 ) 37,421 — Upon Adoption 59,994 37,421 89,685 Six Months Ended June 30, 2016 As Reported $ 126,012 $ — $ 145,614 Adjustment (31,261 ) 31,261 — Upon Adoption 94,751 31,261 145,614 Twelve Months Ended December 31, 2016 As Reported $ 303,534 $ — $ 250,658 Adjustment (80,665 ) 80,665 — Upon Adoption 222,869 80,665 250,658 |
Organization, Basis of Presen19
Organization, Basis of Presentation and Recent Accounting Pronouncements (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
New Accounting Pronouncement, Early Adoption [Line Items] | |
New Accounting Pronouncement, Early Adoption | The prior period has been adjusted to reflect this adoption, as detailed below: Six Months Ended June 30, 2016 As Previously As (in thousands) Reported Adjustment Adopted Cash Flows from Operating Activities Increase in Restricted Cash $ (11,133 ) $ 11,133 $ — Net Cash Provided by Operating Activities 135,468 11,133 146,601 Net Decrease in Cash and Cash Equivalents and Restricted Cash (153,867 ) 11,133 (142,734 ) Cash and Cash Equivalents and Restricted Cash at Beginning of Period 754,207 20,745 774,952 Cash and Cash Equivalents and Restricted Cash at End of Period 600,340 31,878 632,218 |
Schedule of Prospective Adoption of New Accounting Pronouncements | The Company will adopt the new standard in the first quarter of 2018, and expects the following changes to its financial statements upon adoption, as detailed below: Income from Operations Non-operating pension and postretirement benefit income Income Before Income Taxes (in thousands) Three Months Ended June 30, 2017 As Reported $ 68,361 $ — $ 65,899 Adjustment (18,620 ) 18,620 — Upon Adoption 49,741 18,620 65,899 Three Months Ended June 30, 2016 As Reported $ 74,140 $ — $ 84,999 Adjustment (15,584 ) 15,584 — Upon Adoption 58,556 15,584 84,999 Six Months Ended June 30, 2017 As Reported $ 97,415 $ — $ 89,685 Adjustment (37,421 ) 37,421 — Upon Adoption 59,994 37,421 89,685 Six Months Ended June 30, 2016 As Reported $ 126,012 $ — $ 145,614 Adjustment (31,261 ) 31,261 — Upon Adoption 94,751 31,261 145,614 Twelve Months Ended December 31, 2016 As Reported $ 303,534 $ — $ 250,658 Adjustment (80,665 ) 80,665 — Upon Adoption 222,869 80,665 250,658 |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Investments [Abstract] | |
Investments in Marketable Equity Securities | Investments in marketable equity securities comprised the following: As of June 30, December 31, (in thousands) Total cost $ 269,343 $ 269,343 Gross unrealized gains 178,420 154,886 Total Fair Value $ 447,763 $ 424,229 |
Acquisitions and Dispositions21
Acquisitions and Dispositions of Businesses (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Acqusitions and Dispositions [Abstract] | |
Schedule of assets acquired and liabilities assumed | The aggregate purchase price of the 2017 and 2016 acquisitions was allocated as follows (2017 on a preliminary basis): Purchase Price Allocation As of (in thousands) June 30, 2017 December 31, 2016 Accounts receivable $ 13,074 $ 8,538 Inventory 25,754 878 Other current assets 593 1,420 Property, plant and equipment 30,961 3,940 Goodwill 138,000 184,118 Indefinite-lived intangible assets 41,600 53,110 Amortized intangible assets 159,107 28,267 Pension and other postretirement benefits liabilities (59,116 ) — Other liabilities (10,614 ) (21,892 ) Deferred income taxes (30,923 ) (11,009 ) Redeemable noncontrolling interest (3,666 ) — Aggregate purchase price, net of cash acquired $ 304,770 $ 247,370 |
Acquisition Pro Forma Financial Information | The following unaudited pro forma financial information presents the Company’s results as if the 2017 acquisitions had occurred at the beginning of 2016 . The unaudited pro forma information also includes the 2016 acquisitions as if they occurred at the beginning of 2015: Three Months Ended Six Months Ended (in thousands) 2017 2016 2017 2016 Operating revenues $ 680,759 $ 695,357 $ 1,322,559 $ 1,361,804 Net income 46,718 62,638 71,330 101,717 |
Goodwill and Other Intangible22
Goodwill and Other Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill, by segment, were as follows: (in thousands) Education Television Broadcasting Other Businesses Total Balance as of December 31, 2016 Goodwill $ 1,111,003 $ 168,345 $ 202,141 $ 1,481,489 Accumulated impairment losses (350,850 ) — (7,685 ) (358,535 ) 760,153 168,345 194,456 1,122,954 Acquisitions 18,986 24,256 94,758 138,000 Impairment — — (7,616 ) (7,616 ) Dispositions — — (412 ) (412 ) Foreign currency exchange rate changes 26,968 — — 26,968 Balance as of June 30, 2017 Goodwill 1,156,957 192,601 296,487 1,646,045 Accumulated impairment losses (350,850 ) — (15,301 ) (366,151 ) $ 806,107 $ 192,601 $ 281,186 $ 1,279,894 |
Other Intangible Assets | Other intangible assets consist of the following: As of June 30, 2017 As of December 31, 2016 (in thousands) Useful Life Range Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Accumulated Net Amortized Intangible Assets Student and customer relationships 1–10 years (1) $ 224,280 $ 66,780 $ 157,500 $ 129,616 $ 55,863 $ 73,753 Trade names and trademarks 2–10 years 56,995 31,920 25,075 55,240 29,670 25,570 Network affiliation agreements 15 years 42,600 1,302 41,298 — — — Databases and technology 3–6 years (1) 19,505 3,321 16,184 5,601 4,368 1,233 Noncompete agreements 2–5 years 2,180 1,480 700 1,730 1,404 326 Other 1–8 years 13,730 6,150 7,580 12,030 4,973 7,057 $ 359,290 $ 110,953 $ 248,337 $ 204,217 $ 96,278 $ 107,939 Indefinite-Lived Intangible Assets Trade names and trademarks $ 82,810 $ 65,192 FCC licenses 26,600 — Licensure and accreditation 650 834 $ 110,060 $ 66,026 ____________ (1) As of December 31, 2016, the student and customer relationships’ minimum useful life was 2 years and the databases and technology’s maximum useful life was 5 years. |
Education [Member] | |
Changes in Carrying Amount of Goodwill | The changes in carrying amount of goodwill at the Company’s education division were as follows: (in thousands) Higher Education Test Preparation Kaplan International Total Balance as of December 31, 2016 Goodwill $ 389,720 $ 166,098 $ 555,185 $ 1,111,003 Accumulated impairment losses (248,591 ) (102,259 ) — (350,850 ) 141,129 63,839 555,185 760,153 Acquisitions — — 18,986 18,986 Foreign currency exchange rate changes 70 — 26,898 26,968 Balance as of June 30, 2017 Goodwill 389,790 166,098 601,069 1,156,957 Accumulated impairment losses (248,591 ) (102,259 ) — (350,850 ) $ 141,199 $ 63,839 $ 601,069 $ 806,107 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Components of Debt | The Company’s borrowings consist of the following: As of June 30, December 31, (in thousands) 7.25% unsecured notes due February 1, 2019 (1) $ 399,279 $ 399,052 UK Credit facility (2) 96,815 91,316 Other indebtedness 115 1,479 Total Debt $ 496,209 $ 491,847 Less: current portion (6,492 ) (6,128 ) Total Long-Term Debt $ 489,717 $ 485,719 ___________ _ (1) The carrying value is net of $0.1 million of unamortized debt issuance costs as of June 30, 2017 and December 31, 2016 , respectively. (2) The carrying value is net of $0.5 million of unamortized debt issuance costs as of June 30, 2017 and December 31, 2016 , respectively. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The Company’s financial assets and liabilities measured at fair value on a recurring basis were as follows: As of June 30, 2017 (in thousands) Level 1 Level 2 Level 3 Total Assets Money market investments (1) $ — $ 262,797 $ — $ 262,797 Marketable equity securities (3) 447,763 — — 447,763 Other current investments (4) 6,207 16,023 — 22,230 Total Financial Assets $ 453,970 $ 278,820 $ — $ 732,790 Liabilities Deferred compensation plan liabilities (5) $ — $ 44,840 $ — $ 44,840 Interest rate swap (6) — 515 — 515 Mandatorily redeemable noncontrolling interest (7) — — 12,584 12,584 Total Financial Liabilities $ — $ 45,355 $ 12,584 $ 57,939 As of December 31, 2016 (in thousands) Level 1 Level 2 Level 3 Total Assets Money market investments (1) $ — $ 435,258 $ — $ 435,258 Commercial paper (2) 49,882 — — 49,882 Marketable equity securities (3) 424,229 — — 424,229 Other current investments (4) 6,957 17,055 — 24,012 Total Financial Assets $ 481,068 $ 452,313 $ — $ 933,381 Liabilities Deferred compensation plan liabilities (5) $ — $ 46,300 $ — $ 46,300 Interest rate swap (6) — 365 — 365 Mandatorily redeemable noncontrolling interest (7) — — 12,584 12,584 Total Financial Liabilities $ — $ 46,665 $ 12,584 $ 59,249 ____________ (1) The Company’s money market investments are included in cash, cash equivalents and restricted cash and the value considers the liquidity of the counterparty. (2) The Company’s commercial paper investments with original maturities of three months or less are included in cash and cash equivalents. (3) The Company’s investments in marketable equity securities are classified as available-for-sale. (4) Includes U.S. Government Securities, corporate bonds, mutual funds and time deposits. These investments are valued using a market approach based on the quoted market prices of the security or inputs that include quoted market prices for similar instruments and are classified as either Level 1 or Level 2 in the valuation hierarchy. (5) Includes Graham Holdings Company’s Deferred Compensation Plan and supplemental savings plan benefits under the Graham Holdings Company’s Supplemental Executive Retirement Plan, which are included in accrued compensation and related benefits. These plans measure the market value of a participant’s balance in a notional investment account that is comprised primarily of mutual funds, which are based on observable market prices. However, since the deferred compensation obligations are not exchanged in an active market, they are classified as Level 2 in the fair value hierarchy. Realized and unrealized gains (losses) on deferred compensation are included in operating income. (6) Included in Other Liabilities. The Company utilized a market approach model using the notional amount of the interest rate swap multiplied by the observable inputs of time to maturity and market interest rates. (7) The fair value of the mandatorily redeemable noncontrolling interest is based on an EBITDA multiple, adjusted for working capital and other items, which approximates fair value. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Summary of Earnings Per Share, Basic and Diluted | The following reflects the Company’s net income and share data used in the basic and diluted earnings per share computations using the two-class method: Three Months Ended Six Months Ended (in thousands, except per share amounts) 2017 2016 2017 2016 Numerator: Numerator for basic earnings per share: Net income attributable to Graham Holdings Company common stockholders $ 41,996 $ 60,766 $ 63,082 $ 98,546 Less: Dividends paid-common stock outstanding and unvested restricted shares (7,080 ) (6,775 ) (21,282 ) (20,533 ) Undistributed earnings 34,916 53,991 41,800 78,013 Percent allocated to common stockholders 99.06 % 98.68 % 99.06 % 98.68 % 34,588 53,277 41,407 76,981 Add: Dividends paid-common stock outstanding 7,013 6,685 21,082 20,264 Numerator for basic earnings per share $ 41,601 $ 59,962 $ 62,489 $ 97,245 Add: Additional undistributed earnings due to dilutive stock options 3 4 3 5 Numerator for diluted earnings per share $ 41,604 $ 59,966 $ 62,492 $ 97,250 Denominator: Denominator for basic earnings per share: Weighted average shares outstanding 5,539 5,544 5,537 5,584 Add: Effect of dilutive stock options 38 30 36 29 Denominator for diluted earnings per share 5,577 5,574 5,573 5,613 Graham Holdings Company Common Stockholders: Basic earnings per share $ 7.51 $ 10.82 $ 11.29 $ 17.42 Diluted earnings per share $ 7.46 $ 10.76 $ 11.21 $ 17.33 |
Antidilutive Weighted Average Restricted Stock and Options | Diluted earnings per share excludes the following weighted average potential common shares, as the effect would be antidilutive, as computed under the treasury stock method: Three Months Ended Six Months Ended (in thousands) 2017 2016 2017 2016 Weighted average restricted stock 29 41 28 39 |
Pension and Postretirement Pl26
Pension and Postretirement Plans (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Defined Benefit Pension Plan [Member] | |
Schedule of Net Benefit Costs | Defined Benefit Plans. The total benefit arising from the Company’s defined benefit pension plans consists of the following components: Three Months Ended June 30 Six Months Ended June 30 (in thousands) 2017 2016 2017 2016 Service cost $ 4,591 $ 5,040 $ 9,505 $ 10,382 Interest cost 11,979 12,845 23,965 25,918 Expected return on assets (30,403 ) (30,226 ) (60,740 ) (60,774 ) Amortization of prior service cost 43 75 86 149 Recognized actuarial gain (1,039 ) — (2,333 ) — Net Periodic Benefit $ (14,829 ) $ (12,266 ) $ (29,517 ) $ (24,325 ) |
Schedule of Allocation of Plan Assets | The assets of the Company’s pension plan were allocated as follows: As of June 30, December 31, U.S. equities 52 % 53 % U.S. stock index fund 31 % 30 % U.S. fixed income 10 % 11 % International equities 7 % 6 % 100 % 100 % |
Supplemental Executive Retirement Plan (SERP) [Member] | |
Schedule of Net Benefit Costs | The total cost arising from the Company’s Supplemental Executive Retirement Plan (SERP) consists of the following components: Three Months Ended June 30 Six Months Ended June 30 (in thousands) 2017 2016 2017 2016 Service cost $ 215 $ 246 $ 429 $ 492 Interest cost 1,058 1,096 2,116 2,192 Amortization of prior service cost 114 114 228 228 Recognized actuarial loss 443 665 887 1,330 Net Periodic Cost $ 1,830 $ 2,121 $ 3,660 $ 4,242 |
Other Postretirement Benefit Plan, Defined Benefit [Member] | |
Schedule of Net Benefit Costs | Other Postretirement Plans. The total cost arising from the Company’s other postretirement plans consists of the following components: Three Months Ended June 30 Six Months Ended June 30 (in thousands) 2017 2016 2017 2016 Service cost $ 257 $ 347 $ 514 $ 693 Interest cost 194 307 389 615 Amortization of prior service credit (37 ) (84 ) (74 ) (168 ) Recognized actuarial gain (972 ) (376 ) (1,945 ) (751 ) Net Periodic (Benefit) Cost $ (558 ) $ 194 $ (1,116 ) $ 389 |
Other Non-Operating Income (Tab
Other Non-Operating Income (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Other Nonoperating Income (Expense) [Abstract] | |
Summary of non-operating income | A summary of non-operating income is as follows: Three Months Ended Six Months Ended (in thousands) 2017 2016 2017 2016 Foreign currency gain (loss), net $ 3,466 $ (24,084 ) $ 5,194 $ (29,527 ) (Loss) gain on sales of businesses — — (342 ) 18,931 Gain on sale of land — 34,072 — 34,072 Gain on sales of marketable equity securities (see Note 2) — 4,502 — 6,256 Gain on the formation of a joint venture — 3,232 — 3,232 Other, net 603 1,278 66 1,132 Total Other Non-Operating Income $ 4,069 $ 19,000 $ 4,918 $ 34,096 |
Accumulated Other Comprehensi28
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Summary of Other Comprehensive (Loss) Income | The other comprehensive income (loss) consists of the following components: Three Months Ended June 30 2017 2016 Before-Tax Income After-Tax Before-Tax Income After-Tax (in thousands) Amount Tax Amount Amount Tax Amount Foreign currency translation adjustments: Translation adjustments arising during the period $ 9,638 $ — $ 9,638 $ (5,121 ) $ — $ (5,121 ) Unrealized gains (losses) on available-for-sale securities: Unrealized gains (losses) for the period, net 13,976 (5,591 ) 8,385 (5,307 ) 2,123 (3,184 ) Reclassification of realized gain on sale of available-for-sale securities included in net income — — — (4,502 ) 1,801 (2,701 ) 13,976 (5,591 ) 8,385 (9,809 ) 3,924 (5,885 ) Pension and other postretirement plans: Amortization of net prior service cost included in net income 120 (48 ) 72 105 (43 ) 62 Amortization of net actuarial (gain) loss included in net income (1,568 ) 627 (941 ) 289 (115 ) 174 (1,448 ) 579 (869 ) 394 (158 ) 236 Cash flow hedge: Loss for the period (19 ) 4 (15 ) — — — Other Comprehensive Income (Loss) $ 22,147 $ (5,008 ) $ 17,139 $ (14,536 ) $ 3,766 $ (10,770 ) Six Months Ended June 30 2017 2016 Before-Tax Income After-Tax Before-Tax Income After-Tax (in thousands) Amount Tax Amount Amount Tax Amount Foreign currency translation adjustments: Translation adjustments arising during the period $ 23,306 $ — $ 23,306 $ (1,276 ) $ — $ (1,276 ) Unrealized gains (losses) on available-for-sale securities: Unrealized gains (losses) for the period, net 23,534 (9,414 ) 14,120 (4,964 ) 1,986 (2,978 ) Reclassification of realized gain on sale of available-for-sale securities included in net income — — — (6,256 ) 2,502 (3,754 ) 23,534 (9,414 ) 14,120 (11,220 ) 4,488 (6,732 ) Pension and other postretirement plans: Amortization of net prior service cost included in net income 240 (96 ) 144 209 (84 ) 125 Amortization of net actuarial (gain) loss included in net income (3,391 ) 1,356 (2,035 ) 579 (231 ) 348 (3,151 ) 1,260 (1,891 ) 788 (315 ) 473 Cash flow hedge: Loss for the period (143 ) 29 (114 ) — — — Other Comprehensive Income (Loss) $ 43,546 $ (8,125 ) $ 35,421 $ (11,708 ) $ 4,173 $ (7,535 ) |
Summary of Changes in Accumulated Other Comprehensive (Loss) Income | The accumulated balances related to each component of other comprehensive income (loss) are as follows: (in thousands, net of taxes) Cumulative Foreign Currency Translation Adjustment Unrealized Gain on Available-for- Sale Securities Unrealized Gain on Pensions and Other Postretirement Plans Cash Flow Hedge Accumulated Other Comprehensive Income Balance as of December 31, 2016 $ (26,998 ) $ 92,931 $ 170,830 $ (277 ) $ 236,486 Other comprehensive income (loss) before reclassifications 23,306 14,120 — (172 ) 37,254 Net amount reclassified from accumulated other comprehensive income (loss) — — (1,891 ) 58 (1,833 ) Other comprehensive income (loss), net of tax 23,306 14,120 (1,891 ) (114 ) 35,421 Balance as of June 30, 2017 $ (3,692 ) $ 107,051 $ 168,939 $ (391 ) $ 271,907 |
Summary of Amounts and Line Items of reclassifications Out of Accumulated Other Comprehensive (Loss) Income | The amounts and line items of reclassifications out of Accumulated Other Comprehensive Income (Loss) are as follows: Three Months Ended Six Months Ended Affected Line Item in the Condensed Consolidated Statement of Operations (in thousands) 2017 2016 2017 2016 Unrealized Gains on Available-for-sale Securities: Realized gain for the period $ — $ (4,502 ) $ — $ (6,256 ) Other income, net — 1,801 — 2,502 Provision for Income Taxes — (2,701 ) — (3,754 ) Net of Tax Pension and Other Postretirement Plans: Amortization of net prior service cost 120 105 240 209 (1) Amortization of net actuarial (gain) loss (1,568 ) 289 (3,391 ) 579 (1) (1,448 ) 394 (3,151 ) 788 Before tax 579 (158 ) 1,260 (315 ) Provision for Income Taxes (869 ) 236 (1,891 ) 473 Net of Tax Cash Flow Hedge 41 — 72 — Interest expense (8 ) — (14 ) — Provision for Income Taxes 33 — 58 — Net of Tax Total reclassification for the period $ (836 ) $ (2,465 ) $ (1,833 ) $ (3,281 ) Net of Tax ____________ (1) These accumulated other comprehensive income components are included in the computation of net periodic pension and postretirement plan cost (see Note 8). |
Business Segments (Tables)
Business Segments (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting Information [Line Items] | |
Summary of Segment Reporting Information, by Operating Segment | The following table summarizes financial information related to each of the Company’s business segments: Three Months Ended June 30 Six Months Ended June 30 (in thousands) 2017 2016 2017 2016 Operating Revenues Education $ 386,499 $ 419,213 $ 759,396 $ 820,289 Television broadcasting 106,102 96,520 197,598 188,538 Other businesses 183,486 113,269 301,810 221,985 Corporate office — — — — Intersegment elimination — (69 ) — (139 ) $ 676,087 $ 628,933 $ 1,258,804 $ 1,230,673 Income (Loss) from Operations Education $ 32,925 $ 32,892 $ 41,956 $ 47,380 Television broadcasting 39,264 44,215 65,233 85,435 Other businesses (8,918 ) (5,062 ) (19,482 ) (10,792 ) Corporate office 5,090 2,095 9,708 3,989 $ 68,361 $ 74,140 $ 97,415 $ 126,012 Equity in Earnings (Losses) of Affiliates, Net 1,331 (891 ) 1,980 113 Interest Expense, Net (7,862 ) (7,250 ) (14,628 ) (14,607 ) Other Income, Net 4,069 19,000 4,918 34,096 Income Before Income Taxes $ 65,899 $ 84,999 $ 89,685 $ 145,614 Depreciation of Property, Plant and Equipment Education $ 8,325 $ 10,242 $ 16,909 $ 21,345 Television broadcasting 2,991 2,450 5,585 4,827 Other businesses 4,264 3,073 7,448 6,100 Corporate office 291 280 581 534 $ 15,871 $ 16,045 $ 30,523 $ 32,806 Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets Education $ 1,323 $ 1,704 $ 2,443 $ 3,385 Television broadcasting 970 63 1,872 126 Other businesses 17,462 4,511 22,276 9,029 Corporate office — — — — $ 19,755 $ 6,278 $ 26,591 $ 12,540 Net Pension (Credit) Expense Education $ 2,153 $ 3,018 $ 4,859 $ 6,127 Television broadcasting 479 418 972 857 Other businesses 415 306 898 560 Corporate office (17,876 ) (16,008 ) (36,246 ) (31,869 ) $ (14,829 ) $ (12,266 ) $ (29,517 ) $ (24,325 ) Asset information for the Company’s business segments are as follows: As of (in thousands) June 30, December 31, Identifiable Assets Education $ 1,494,736 $ 1,479,267 Television broadcasting 451,296 336,631 Other businesses 946,499 796,935 Corporate office 250,071 455,209 $ 3,142,602 $ 3,068,042 Investments in Marketable Equity Securities 447,763 424,229 Investments in Affiliates 67,812 58,806 Prepaid Pension Cost 850,262 881,593 Total Assets $ 4,508,439 $ 4,432,670 |
Education [Member] | |
Segment Reporting Information [Line Items] | |
Summary of Segment Reporting Information, by Operating Segment | The Company’s education division comprises the following operating segments: Three Months Ended Six Months Ended June 30 June 30 (in thousands) 2017 2016 2017 2016 Operating Revenues Higher education $ 139,204 $ 157,980 $ 283,514 $ 323,529 Test preparation 75,730 79,349 140,298 145,811 Kaplan international 171,747 182,325 336,309 351,612 Kaplan corporate and other 57 18 71 143 Intersegment elimination (239 ) (459 ) (796 ) (806 ) $ 386,499 $ 419,213 $ 759,396 $ 820,289 Income (Loss) from Operations Higher education $ 17,711 $ 17,237 $ 30,315 $ 38,543 Test preparation 5,741 7,036 2,877 4,726 Kaplan international 15,954 16,479 23,661 21,376 Kaplan corporate and other (6,451 ) (7,811 ) (14,920 ) (17,216 ) Intersegment elimination (30 ) (49 ) 23 (49 ) $ 32,925 $ 32,892 $ 41,956 $ 47,380 Depreciation of Property, Plant and Equipment Higher education $ 3,249 $ 3,993 $ 6,680 $ 8,168 Test preparation 1,332 1,615 2,673 3,396 Kaplan international 3,609 4,319 7,291 9,379 Kaplan corporate and other 135 315 265 402 $ 8,325 $ 10,242 $ 16,909 $ 21,345 Amortization of Intangible Assets $ 1,323 $ 1,704 $ 2,443 $ 3,385 Pension Expense Higher education $ 2,044 $ 1,905 $ 4,088 $ 3,810 Test preparation 911 768 1,822 1,536 Kaplan international 87 67 174 134 Kaplan corporate and other (889 ) 278 (1,225 ) 647 $ 2,153 $ 3,018 $ 4,859 $ 6,127 Asset information for the Company’s education division is as follows: As of (in thousands) June 30, December 31, Identifiable assets Higher education $ 339,304 $ 373,127 Test preparation 133,482 133,709 Kaplan international 1,000,943 950,922 Kaplan corporate and other 21,007 21,509 $ 1,494,736 $ 1,479,267 |
Organization, Basis of Presen30
Organization, Basis of Presentation and Recent Accounting Pronouncements (Organization and Basis of Presentation) (Narrative) (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2017USD ($)TelevisionStation | |
Percentage of ownership indicating control for consolidation purposes | more than 50% | ||
Impairment of goodwill | $ 7,616 | ||
Television Broadcasting [Member] | |||
Number of television broadcast stations | TelevisionStation | 7 | ||
Impairment of goodwill | $ 0 | ||
Education [Member] | |||
Impairment of goodwill | $ 0 | ||
Education [Member] | Higher Education [Member] | |||
Impairment of goodwill | $ 248,600 | ||
Q3 2015 [Member] | Education [Member] | Higher Education [Member] | |||
Immaterial Error Correction Amount | $ 5,600 |
Organization, Basis of Presen31
Organization, Basis of Presentation and Recent Accounting Pronouncements (Recent Accounting Pronouncements) (Narrative) (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Excess tax benefit recognized | $ 5.9 |
Organization, Basis of Presen32
Organization, Basis of Presentation and Recent Accounting Pronouncements (Recent Accounting Pronouncements) (Details 1) - USD ($) $ in Thousands | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
New Accounting Pronouncement, Early Adoption [Line Items] | ||||
Net Cash Provided by Operating Activities | $ 131,568 | $ 146,601 | ||
Net Decrease in Cash and Cash Equivalents and Restricted Cash | (215,670) | (142,734) | ||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 455,146 | 632,218 | $ 670,816 | $ 774,952 |
As previously reported [Member] | ||||
New Accounting Pronouncement, Early Adoption [Line Items] | ||||
Increase in Restricted Cash | (11,133) | |||
Net Cash Provided by Operating Activities | 135,468 | |||
Net Decrease in Cash and Cash Equivalents and Restricted Cash | (153,867) | |||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 600,340 | 754,207 | ||
Adjustment [Member] | ||||
New Accounting Pronouncement, Early Adoption [Line Items] | ||||
Increase in Restricted Cash | 11,133 | |||
Net Cash Provided by Operating Activities | 11,133 | |||
Net Decrease in Cash and Cash Equivalents and Restricted Cash | 11,133 | |||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 31,878 | 20,745 | ||
As Adopted [Member] | ||||
New Accounting Pronouncement, Early Adoption [Line Items] | ||||
Increase in Restricted Cash | 0 | |||
Net Cash Provided by Operating Activities | 146,601 | |||
Net Decrease in Cash and Cash Equivalents and Restricted Cash | (142,734) | |||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 632,218 | $ 774,952 |
Organization, Basis of Presen33
Organization, Basis of Presentation and Recent Accounting Pronouncements (Recent Accounting Pronouncements)(Details 2) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Item Effected [Line Items] | |||||
Income from Operations | $ 68,361 | $ 74,140 | $ 97,415 | $ 126,012 | |
Income before income taxes | 65,899 | 84,999 | 89,685 | 145,614 | |
As reported [Member] | |||||
Item Effected [Line Items] | |||||
Income from Operations | 68,361 | 74,140 | 97,415 | 126,012 | $ 303,534 |
Non-operating pension and postretirement benefit income | 0 | 0 | 0 | 0 | 0 |
Income before income taxes | 65,899 | 84,999 | 89,685 | 145,614 | 250,658 |
Adjustment [Member] | |||||
Item Effected [Line Items] | |||||
Income from Operations | (18,620) | (15,584) | (37,421) | (31,261) | (80,665) |
Non-operating pension and postretirement benefit income | 18,620 | 15,584 | 37,421 | 31,261 | 80,665 |
Income before income taxes | 0 | 0 | 0 | 0 | 0 |
Upon Adoption [Member] | |||||
Item Effected [Line Items] | |||||
Income from Operations | 49,741 | 58,556 | 59,994 | 94,751 | 222,869 |
Non-operating pension and postretirement benefit income | 18,620 | 15,584 | 37,421 | 31,261 | 80,665 |
Income before income taxes | $ 65,899 | $ 84,999 | $ 89,685 | $ 145,614 | $ 250,658 |
Investments (Narrative) (Detail
Investments (Narrative) (Details) ÂŁ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017GBP (ÂŁ) | Dec. 31, 2016USD ($) | Dec. 31, 2016GBP (ÂŁ) | |
Schedule of Investments [Line Items] | ||||||
Commercial paper and money market investments | $ 262,800,000 | $ 262,800,000 | $ 485,100,000 | |||
Marketable equity securities | 447,763,000 | 447,763,000 | $ 424,229,000 | |||
Cash paid for new marketable equity securities | 0 | $ 18,274,000 | ||||
Marketable equity securities purchased | 0 | 17,900,000 | ||||
Proceeds from sales of marketable equity securities | 0 | 22,800,000 | ||||
Gain on sales of marketable equity securities | $ 6,300,000 | |||||
Celtic and Residential [Member] | ||||||
Schedule of Investments [Line Items] | ||||||
Revenue from Related Parties | $ 5,000,000 | $ 9,600,000 | ||||
Residential Home Health Illinois [Member] | Residential Healthcare Group Inc [Member] | ||||||
Schedule of Investments [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | 40.00% | 40.00% | 40.00% | |||
Residential Hospice Illinois [Member] | Residential Healthcare Group Inc [Member] | ||||||
Schedule of Investments [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | 42.50% | 42.50% | 42.50% | |||
Residential Healthcare Michigan hospital joint venture [Member] | Residential Healthcare Group Inc [Member] | ||||||
Schedule of Investments [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | 40.00% | 40.00% | 40.00% | |||
Celtic Healthcare Allegheny Health Network Joint Venture [Member] | Celtic Healthcare [Member] | ||||||
Schedule of Investments [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | 40.00% | 40.00% | 40.00% | |||
York Joint Venture [Member] | York University [Member] | ||||||
Schedule of Investments [Line Items] | ||||||
Advances to Affiliate | ÂŁ | ÂŁ 11 | |||||
Loan commitment to affiliate | ÂŁ | ÂŁ 25 | |||||
Loan Receivable, Payment Terms | 25 years | |||||
Loan Receivable Fixed Interest Rate | 7.00% | |||||
Equity Method Investment, Ownership Percentage | 45.00% | 45.00% | 45.00% |
Investments (Investments in Mar
Investments (Investments in Marketable Equity Securities) (Details 1) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Investments [Abstract] | ||
Total cost | $ 269,343 | $ 269,343 |
Gross unrealized gains | 178,420 | 154,886 |
Total Fair Value | $ 447,763 | $ 424,229 |
Acquisitions and Dispositions36
Acquisitions and Dispositions of Businesses (Acquisitions) (Narrative) (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Apr. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2017USD ($)business | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($)business | Feb. 28, 2017 | Sep. 30, 2016 | Feb. 29, 2016 | Jan. 31, 2016 | |
Business Acquisition [Line Items] | |||||||||
Number of businesses acquired | business | 6 | 5 | |||||||
Acqusition purchase price | $ 318,700 | ||||||||
Pension and other post retirement benefits liabilities | $ (59,100) | (59,100) | |||||||
Business Acquisition, Transaction Costs | 3,500 | 3,500 | |||||||
Goodwill expected to be deductible for income tax purposes | 10,000 | 10,000 | $ 22,200 | ||||||
Revenues of acquired companies since acquisition date | $ 63,400 | 68,900 | |||||||
Operating loss of acquired companies since acquisition date | (200) | ||||||||
Purchase Price Net of Cash | $ 299,938 | $ 200,336 | |||||||
Other Businesses [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Number of businesses acquired | business | 2 | 2 | |||||||
Education [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Number of businesses acquired | business | 2 | 3 | |||||||
Television Broadcasting [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Number of businesses acquired | business | 2 | ||||||||
Hometown Home Health and Hospice [Member] | Other Businesses [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Percentage of interest acquired | 100.00% | ||||||||
Hoover Treated Wood Products [Member] | Other Businesses [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Percentage of interest acquired | 97.72% | ||||||||
Redeemable noncontrolling interest | $ 3,700 | ||||||||
Purchase Price Net of Cash | $ 206,800 | ||||||||
Genesis [Member] | Education [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Percentage of interest acquired | 100.00% | ||||||||
Red Marker [Member] | Education [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Percentage of interest acquired | 100.00% | ||||||||
Mander Portman Woodward [Member] | Education [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Percentage of interest acquired | 100.00% | ||||||||
Osborne Books [Member] | Education [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Percentage of interest acquired | 100.00% | ||||||||
Electri-Cable Assemblies [Member] | Other Businesses [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Percentage of interest acquired | 100.00% |
Acquisitions and Dispositions37
Acquisitions and Dispositions of Businesses (Dispositions and Other) (Narrative) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Gain on the formation of a joint venture | $ 0 | $ 3,232 | $ 0 | $ 3,232 | |
Celtic Healthcare Inc [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Noncontrolling interest exchanged | 20.00% | ||||
Celtic Healthcare Inc [Member] | Celtic Healthcare Allegheny Health Network Joint Venture [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Equity Method Investment, Ownership Percentage | 40.00% | 40.00% | |||
Residential Healthcare [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Noncontrolling interest purchased | 20.00% | ||||
Noncontrolling Interest, Change in Redemption Value | $ 3,000 | ||||
Redeemable Noncontrolling Interest, Redemption Value | $ 24,000 | $ 24,000 | $ 24,000 | ||
Residential Healthcare [Member] | Residential Healthcare Michigan hospital joint venture [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Percentage of joint venture sold | 60.00% | ||||
Equity Method Investment, Ownership Percentage | 40.00% | 40.00% | 40.00% | ||
Gain on the formation of a joint venture | $ 3,200 | ||||
Graham Healthcare Group [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Noncontrolling Interest, Change in Redemption Value | $ 4,100 | ||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 10.00% | 10.00% | 10.00% | ||
Noncontrolling Interest, Ownership Percentage by Parent | 90.00% | 90.00% |
Acquisitions and Dispositions38
Acquisitions and Dispositions of Businesses (Assets Acquired and Liabilities Assumed) (Details 1) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||
Goodwill | $ 1,279,894 | $ 1,122,954 |
Pension and other post retirement benefits liabilities | (59,100) | |
Series of Individually Immaterial Business Acquisitions [Member] | ||
Business Acquisition [Line Items] | ||
Accounts receivable | 13,074 | 8,538 |
Inventory | 25,754 | 878 |
Other current assets | 593 | 1,420 |
Property, plant and equipment | 30,961 | 3,940 |
Goodwill | 138,000 | 184,118 |
Indefinite-lived intangible assets | 41,600 | 53,110 |
Amortized intangible assets | 159,107 | 28,267 |
Pension and other post retirement benefits liabilities | (59,116) | 0 |
Other liabilities | (10,614) | (21,892) |
Deferred income tax liability | (30,923) | (11,009) |
Redeemable noncontrolling interest | (3,666) | 0 |
Aggregate purchase price, net of cash acquired | $ 304,770 | $ 247,370 |
Acquisitions and Dispositions39
Acquisitions and Dispositions of Businesses (Pro Forma Financials) (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Acquisitions And Dispositions [Abstract] | ||||
Pro Forma Operating Revenues | $ 680,759 | $ 695,357 | $ 1,322,559 | $ 1,361,804 |
Pro Forma Net Income | $ 46,718 | $ 62,638 | $ 71,330 | $ 101,717 |
Goodwill and Other Intangible40
Goodwill and Other Intangible Assets (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Amortized Intangible Assets [Line Items] | ||||
Goodwill and other long-lived asset impairment charge | $ 9,224 | $ 0 | $ 9,224 | $ 0 |
Amortization of Intangible Assets | ||||
Amortization of intangible assets | 10,531 | $ 6,278 | 17,367 | $ 12,540 |
Estimated amortization of intangible assets, remainder of 2017 | 22,000 | 22,000 | ||
Estimated amortization of intangible assets, 2018 | 37,000 | 37,000 | ||
Estimated amortization of intangible assets, 2019 | 36,000 | 36,000 | ||
Estimated amortization of intangible assets, 2020 | 33,000 | 33,000 | ||
Estimated amortization of intangible assets, 2021 | 27,000 | 27,000 | ||
Estimated amortization of intangible assets, after 2021 | 93,000 | $ 93,000 | ||
Forney [Member] | ||||
Amortized Intangible Assets [Line Items] | ||||
Goodwill and other long-lived asset impairment charge | $ 9,200 |
Goodwill and Other Intangible41
Goodwill and Other Intangible Assets (Changes in Carrying Amount of Goodwill) (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Sep. 30, 2015 | Jun. 30, 2017 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 1,481,489 | |
Accumulated impairment losses, beginning balance | (358,535) | |
Goodwill, net, beginning balance | 1,122,954 | |
Acquisitions | 138,000 | |
Impairment | (7,616) | |
Dispositions | (412) | |
Foreign currency exchange rate changes | 26,968 | |
Goodwill, ending balance | 1,646,045 | |
Accumulated impairment losses, ending balance | (366,151) | |
Goodwill, net, ending balance | 1,279,894 | |
Education [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 1,111,003 | |
Accumulated impairment losses, beginning balance | (350,850) | |
Goodwill, net, beginning balance | 760,153 | |
Acquisitions | 18,986 | |
Impairment | 0 | |
Dispositions | 0 | |
Foreign currency exchange rate changes | 26,968 | |
Goodwill, ending balance | 1,156,957 | |
Accumulated impairment losses, ending balance | (350,850) | |
Goodwill, net, ending balance | 806,107 | |
Education [Member] | Higher Education [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 389,720 | |
Accumulated impairment losses, beginning balance | (248,591) | |
Goodwill, net, beginning balance | 141,129 | |
Acquisitions | 0 | |
Impairment | $ (248,600) | |
Foreign currency exchange rate changes | 70 | |
Goodwill, ending balance | 389,790 | |
Accumulated impairment losses, ending balance | (248,591) | |
Goodwill, net, ending balance | 141,199 | |
Education [Member] | Test Preparation [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 166,098 | |
Accumulated impairment losses, beginning balance | (102,259) | |
Goodwill, net, beginning balance | 63,839 | |
Acquisitions | 0 | |
Foreign currency exchange rate changes | 0 | |
Goodwill, ending balance | 166,098 | |
Accumulated impairment losses, ending balance | (102,259) | |
Goodwill, net, ending balance | 63,839 | |
Education [Member] | Kaplan International [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 555,185 | |
Accumulated impairment losses, beginning balance | 0 | |
Goodwill, net, beginning balance | 555,185 | |
Acquisitions | 18,986 | |
Foreign currency exchange rate changes | 26,898 | |
Goodwill, ending balance | 601,069 | |
Accumulated impairment losses, ending balance | 0 | |
Goodwill, net, ending balance | 601,069 | |
Television Broadcasting [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 168,345 | |
Accumulated impairment losses, beginning balance | 0 | |
Goodwill, net, beginning balance | 168,345 | |
Acquisitions | 24,256 | |
Impairment | 0 | |
Dispositions | 0 | |
Foreign currency exchange rate changes | 0 | |
Goodwill, ending balance | 192,601 | |
Accumulated impairment losses, ending balance | 0 | |
Goodwill, net, ending balance | 192,601 | |
Other Businesses [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 202,141 | |
Accumulated impairment losses, beginning balance | (7,685) | |
Goodwill, net, beginning balance | 194,456 | |
Acquisitions | 94,758 | |
Impairment | (7,616) | |
Dispositions | (412) | |
Foreign currency exchange rate changes | 0 | |
Goodwill, ending balance | 296,487 | |
Accumulated impairment losses, ending balance | (15,301) | |
Goodwill, net, ending balance | $ 281,186 |
Goodwill and Other Intangible42
Goodwill and Other Intangible Assets (Other Intangible Assets) (Details 2) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2016 | ||
Amortized Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 359,290 | $ 204,217 | |
Accumulated Amortization | 110,953 | 96,278 | |
Net Carrying Amount | 248,337 | 107,939 | |
Indefinite-Lived Intangible Assets [Line Items] | |||
Indefinite-Lived Intangible Assets, Net | 110,060 | 66,026 | |
Trade Names and Trademarks [Member] | |||
Indefinite-Lived Intangible Assets [Line Items] | |||
Indefinite-Lived Intangible Assets, Net | 82,810 | 65,192 | |
FCC licenses [Member] | |||
Indefinite-Lived Intangible Assets [Line Items] | |||
Indefinite-Lived Intangible Assets, Net | 26,600 | 0 | |
Licensure and Accreditation [Member] | |||
Indefinite-Lived Intangible Assets [Line Items] | |||
Indefinite-Lived Intangible Assets, Net | 650 | 834 | |
Student and Customer Relationships [Member] | |||
Amortized Intangible Assets [Line Items] | |||
Gross Carrying Amount | 224,280 | 129,616 | |
Accumulated Amortization | 66,780 | 55,863 | |
Net Carrying Amount | $ 157,500 | $ 73,753 | |
Student and Customer Relationships [Member] | Minimum [Member] | |||
Amortized Intangible Assets [Line Items] | |||
Useful Life | [1] | 1 year | 2 years |
Student and Customer Relationships [Member] | Maximum [Member] | |||
Amortized Intangible Assets [Line Items] | |||
Useful Life | [1] | 10 years | 10 years |
Trade Names and Trademarks [Member] | |||
Amortized Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 56,995 | $ 55,240 | |
Accumulated Amortization | 31,920 | 29,670 | |
Net Carrying Amount | $ 25,075 | $ 25,570 | |
Trade Names and Trademarks [Member] | Minimum [Member] | |||
Amortized Intangible Assets [Line Items] | |||
Useful Life | 2 years | 2 years | |
Trade Names and Trademarks [Member] | Maximum [Member] | |||
Amortized Intangible Assets [Line Items] | |||
Useful Life | 10 years | 10 years | |
Network Affiliation Agreements [Member] | |||
Amortized Intangible Assets [Line Items] | |||
Useful Life | 15 years | ||
Gross Carrying Amount | $ 42,600 | $ 0 | |
Accumulated Amortization | 1,302 | 0 | |
Net Carrying Amount | 41,298 | 0 | |
Databases and Technology [Member] | |||
Amortized Intangible Assets [Line Items] | |||
Gross Carrying Amount | 19,505 | 5,601 | |
Accumulated Amortization | 3,321 | 4,368 | |
Net Carrying Amount | $ 16,184 | $ 1,233 | |
Databases and Technology [Member] | Minimum [Member] | |||
Amortized Intangible Assets [Line Items] | |||
Useful Life | [1] | 3 years | 3 years |
Databases and Technology [Member] | Maximum [Member] | |||
Amortized Intangible Assets [Line Items] | |||
Useful Life | [1] | 6 years | 5 years |
Non-compete Agreements [Member] | |||
Amortized Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 2,180 | $ 1,730 | |
Accumulated Amortization | 1,480 | 1,404 | |
Net Carrying Amount | $ 700 | $ 326 | |
Non-compete Agreements [Member] | Minimum [Member] | |||
Amortized Intangible Assets [Line Items] | |||
Useful Life | 2 years | 2 years | |
Non-compete Agreements [Member] | Maximum [Member] | |||
Amortized Intangible Assets [Line Items] | |||
Useful Life | 5 years | 5 years | |
Other [Member] | |||
Amortized Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 13,730 | $ 12,030 | |
Accumulated Amortization | 6,150 | 4,973 | |
Net Carrying Amount | $ 7,580 | $ 7,057 | |
Other [Member] | Minimum [Member] | |||
Amortized Intangible Assets [Line Items] | |||
Useful Life | 1 year | 1 year | |
Other [Member] | Maximum [Member] | |||
Amortized Intangible Assets [Line Items] | |||
Useful Life | 8 years | 8 years | |
[1] | As of December 31, 2016, the student and customer relationships’ minimum useful life was 2 years and the databases and technology’s maximum useful life was 5 years. |
Debt (Narrative) (Details)
Debt (Narrative) (Details) $ in Thousands | Jul. 25, 2016GBP (ÂŁ) | Jul. 14, 2016GBP (ÂŁ) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
Debt Instrument [Line Items] | ||||||||
Average borrowings outstanding | $ 495,600 | $ 400,000 | $ 494,500 | $ 399,900 | ||||
Weighted average interest rate of borrowings | 6.20% | 7.20% | 6.20% | 7.20% | ||||
Net interest expense incurred | $ 7,900 | $ 7,300 | $ 14,600 | $ 14,600 | ||||
7.25% Unsecured Notes due February 1, 2019 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Unamortized debt issuance costs | $ 100 | $ 100 | $ 100 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 7.25% | 7.25% | ||||||
Fair value of debt instrument | $ 431,000 | $ 431,000 | 438,700 | |||||
Carrying value of debt instrument | [1] | $ 399,279 | $ 399,279 | 399,052 | ||||
Other Indebtedness [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Interest Rate, Stated Percentage | 2.00% | 2.00% | ||||||
Debt Instrument, Maturity year | Dec. 31, 2025 | |||||||
Kaplan Four-Year Credit Agreement dated July 14, 2016 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Unamortized debt issuance costs | $ 500 | $ 500 | 500 | |||||
Borrowings outstanding | [2] | $ 96,815 | $ 96,815 | $ 91,316 | ||||
Education [Member] | Interest Rate Swap [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Basis Spread on Variable Rate | 1.50% | |||||||
Derivative, Notional Amount | ÂŁ | ÂŁ 75,000,000 | |||||||
Derivative, Fixed Interest Rate | 0.51% | |||||||
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 2.01% | |||||||
Education [Member] | Kaplan Four-Year Credit Agreement dated July 14, 2016 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of Credit Facility, Current Borrowing Capacity | ÂŁ | ÂŁ 75,000,000 | |||||||
Borrowings outstanding | ÂŁ | ÂŁ 75,000,000 | |||||||
Debt Instrument, Term | 4 years | |||||||
Education [Member] | Kaplan Four-Year Credit Agreement dated July 14, 2016 [Member] | Debt Instrument, Redemption, first anniversary [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Redemption Price, Percentage of Principal Amount Redeemed | 6.66% | |||||||
Debt Instrument, Covenant, Leverage Ratio, Maximum | 3.5 | |||||||
Debt Instrument, Covenant, Interest Coverage Ratio, Minimum | 3.5 | |||||||
Education [Member] | Kaplan Four-Year Credit Agreement dated July 14, 2016 [Member] | Debt Instrument, Redemption, second anniversary [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument Price Percentage Of Outstanding Balance Redeemed | 6.66% | |||||||
Education [Member] | Kaplan Four-Year Credit Agreement dated July 14, 2016 [Member] | Debt Instrument, Redemption, third anniversary [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument Price Percentage Of Outstanding Balance Redeemed | 6.66% | |||||||
Education [Member] | Kaplan Four-Year Credit Agreement dated July 14, 2016 [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Basis Spread on Variable Rate | 1.25% | |||||||
Education [Member] | Kaplan Four-Year Credit Agreement dated July 14, 2016 [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Basis Spread on Variable Rate | 1.75% | |||||||
[1] | The carrying value is net of $0.1 million of unamortized debt issuance costs as of June 30, 2017 and December 31, 2016, respectively. | |||||||
[2] | The carrying value is net of $0.5 million of unamortized debt issuance costs as of June 30, 2017 and December 31, 2016, respectively. |
Debt (Details 1)
Debt (Details 1) $ in Thousands | Jun. 30, 2017USD ($) | Dec. 31, 2016USD ($) | Jul. 25, 2016GBP (ÂŁ) | |
Debt Instrument [Line Items] | ||||
Other indebtedness | $ 115 | $ 1,479 | ||
Total Debt | 496,209 | 491,847 | ||
Less: current portion | (6,492) | (6,128) | ||
Total Long-Term Debt | 489,717 | 485,719 | ||
7.25% Unsecured Notes due February 1, 2019 [Member] | ||||
Debt Instrument [Line Items] | ||||
Unsecured notes | [1] | 399,279 | 399,052 | |
Unamortized debt issuance costs | 100 | 100 | ||
Kaplan Four-Year Credit Agreement dated July 14, 2016 [Member] | ||||
Debt Instrument [Line Items] | ||||
UK Credit Facility | [2] | 96,815 | 91,316 | |
Unamortized debt issuance costs | $ 500 | $ 500 | ||
Education [Member] | Kaplan Four-Year Credit Agreement dated July 14, 2016 [Member] | ||||
Debt Instrument [Line Items] | ||||
UK Credit Facility | ÂŁ | ÂŁ 75,000,000 | |||
[1] | The carrying value is net of $0.1 million of unamortized debt issuance costs as of June 30, 2017 and December 31, 2016, respectively. | |||
[2] | The carrying value is net of $0.5 million of unamortized debt issuance costs as of June 30, 2017 and December 31, 2016, respectively. |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Goodwill and other long-lived asset impairment charge | $ 9,224 | $ 0 | $ 9,224 | $ 0 |
Impairment of goodwill | $ 7,616 |
Fair Value Measurements (Detail
Fair Value Measurements (Details 1) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 | |
Assets | |||
Marketable equity securities | $ 447,763 | $ 424,229 | |
7.25% Unsecured Notes due February 1, 2019 [Member] | |||
Liabilities | |||
Debt instrument | 431,000 | 438,700 | |
Fair Value, Measurements, Recurring [Member] | |||
Assets | |||
Money market investments | [1] | 262,797 | 435,258 |
Commercial paper | [2] | 49,882 | |
Marketable equity securities | [3] | 447,763 | 424,229 |
Other current investments | [4] | 22,230 | 24,012 |
Total Financial Assets | 732,790 | 933,381 | |
Liabilities | |||
Deferred compensation plan liabilities | [5] | 44,840 | 46,300 |
Interest rate swap | [6] | 515 | 365 |
Mandatorily redeemable noncontrolling interest | [7] | 12,584 | 12,584 |
Total Financial Liabilities | 57,939 | 59,249 | |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | |||
Assets | |||
Money market investments | [1] | 0 | 0 |
Commercial paper | [2] | 49,882 | |
Marketable equity securities | [3] | 447,763 | 424,229 |
Other current investments | [4] | 6,207 | 6,957 |
Total Financial Assets | 453,970 | 481,068 | |
Liabilities | |||
Deferred compensation plan liabilities | [5] | 0 | 0 |
Interest rate swap | [6] | 0 | 0 |
Mandatorily redeemable noncontrolling interest | [7] | 0 | 0 |
Total Financial Liabilities | 0 | 0 | |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | |||
Assets | |||
Money market investments | [1] | 262,797 | 435,258 |
Commercial paper | [2] | 0 | |
Marketable equity securities | [3] | 0 | 0 |
Other current investments | [4] | 16,023 | 17,055 |
Total Financial Assets | 278,820 | 452,313 | |
Liabilities | |||
Deferred compensation plan liabilities | [5] | 44,840 | 46,300 |
Interest rate swap | [6] | 515 | 365 |
Mandatorily redeemable noncontrolling interest | [7] | 0 | 0 |
Total Financial Liabilities | 45,355 | 46,665 | |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | |||
Assets | |||
Money market investments | [1] | 0 | 0 |
Commercial paper | [2] | 0 | |
Marketable equity securities | [3] | 0 | 0 |
Other current investments | [4] | 0 | 0 |
Total Financial Assets | 0 | 0 | |
Liabilities | |||
Deferred compensation plan liabilities | [5] | 0 | 0 |
Interest rate swap | [6] | 0 | 0 |
Mandatorily redeemable noncontrolling interest | [7] | 12,584 | 12,584 |
Total Financial Liabilities | $ 12,584 | $ 12,584 | |
[1] | The Company’s money market investments are included in cash, cash equivalents and restricted cash and the value considers the liquidity of the counterparty. | ||
[2] | The Company’s commercial paper investments with original maturities of three months or less are included in cash and cash equivalents. | ||
[3] | The Company’s investments in marketable equity securities are classified as available-for-sale. | ||
[4] | Includes U.S. Government Securities, corporate bonds, mutual funds and time deposits. These investments are valued using a market approach based on the quoted market prices of the security or inputs that include quoted market prices for similar instruments and are classified as either Level 1 or Level 2 in the valuation hierarchy. | ||
[5] | Includes Graham Holdings Company’s Deferred Compensation Plan and supplemental savings plan benefits under the Graham Holdings Company’s Supplemental Executive Retirement Plan, which are included in accrued compensation and related benefits. These plans measure the market value of a participant’s balance in a notional investment account that is comprised primarily of mutual funds, which are based on observable market prices. However, since the deferred compensation obligations are not exchanged in an active market, they are classified as Level 2 in the fair value hierarchy. Realized and unrealized gains (losses) on deferred compensation are included in operating income. | ||
[6] | Included in Other Liabilities. The Company utilized a market approach model using the notional amount of the interest rate swap multiplied by the observable inputs of time to maturity and market interest rates. | ||
[7] | The fair value of the mandatorily redeemable noncontrolling interest is based on an EBITDA multiple, adjusted for working capital and other items, which approximates fair value. |
Earnings Per Share (Narrative)
Earnings Per Share (Narrative) (Details) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Dividends declared per common share | $ 1.27 | $ 1.21 | $ 3.81 | $ 3.63 |
Stock Option Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Antidilutive securities, shares | 104,000 | 102,000 | 104,000 | 102,000 |
Restricted Stock Awards [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Antidilutive securities, shares | 5,250 | 6,100 | 5,250 | 6,100 |
Earnings Per Share (Details 1)
Earnings Per Share (Details 1) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Schedule of Earnings Per Share, Basic and Diluted, Including Two Class Method [Line Items] | ||||
Net Income attributable to Graham Holdings Company common stockholders | $ 41,996 | $ 60,766 | $ 63,082 | $ 98,546 |
Less: Dividends paid-common stock outstanding and unvested restricted shares | (7,080) | (6,775) | (21,282) | (20,533) |
Undistributed earnings | $ 34,916 | $ 53,991 | $ 41,800 | $ 78,013 |
Percent allocated to common stockholders | 99.06% | 98.68% | 99.06% | 98.68% |
Undistributed Earnings Allocated To Common Stockholders | $ 34,588 | $ 53,277 | $ 41,407 | $ 76,981 |
Add: Dividends paid-common stock outstanding | 7,013 | 6,685 | 21,082 | 20,264 |
Numerator for basic earnings per share | 41,601 | 59,962 | 62,489 | 97,245 |
Add: Additional undistributed earnings due to dilutive stock options | 3 | 4 | 3 | 5 |
Numerator for diluted earnings per share | $ 41,604 | $ 59,966 | $ 62,492 | $ 97,250 |
Weighted average shares outstanding (shares) | 5,539 | 5,544 | 5,537 | 5,584 |
Denominator for diluted earnings per share (shares) | 5,577 | 5,574 | 5,573 | 5,613 |
Graham Holdings Company Common Stockholders: | ||||
Basic income per common share in dollars per share | $ 7.51 | $ 10.82 | $ 11.29 | $ 17.42 |
Diluted income per common share in dollars per share | $ 7.46 | $ 10.76 | $ 11.21 | $ 17.33 |
Stock Option Plan [Member] | ||||
Schedule of Earnings Per Share, Basic and Diluted, Including Two Class Method [Line Items] | ||||
Add: Effect of dilutive stock options (shares) | 38 | 30 | 36 | 29 |
Earnings Per Share (Details 2)
Earnings Per Share (Details 2) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Earnings Per Share [Abstract] | ||||
Weighted average restricted stock | 29 | 41 | 28 | 39 |
Pension and Postretirement Pl50
Pension and Postretirement Plans (Narrative) (Details) - Defined Benefit Pension Plan [Member] $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017USD ($)Investmentcompanies | Dec. 31, 2016USD ($)Investment | |
Retirement Benefits Disclosure [Line Items] | ||
Percent of plan assets managed internally by the company | 45.00% | |
Percent of plan assets managed by investment companies | 55.00% | |
Number of investment companies actively managing plan assets | companies | 2 | |
Percentage of total plan assets | 100.00% | 100.00% |
Berkshire Hathaway Common Stock [Member] | ||
Retirement Benefits Disclosure [Line Items] | ||
Defined benefit plan, target allocation maximum percentage of assets, singular equity security, without prior approval by plan administrator | 20.00% | |
Foreign Investments [Member] | Maximum [Member] | ||
Retirement Benefits Disclosure [Line Items] | ||
Defined benefit plan, target allocation percentage of assets | 23.00% | |
Fixed income securities [Member] | Minimum [Member] | ||
Retirement Benefits Disclosure [Line Items] | ||
Defined benefit plan, target allocation percentage of assets | 10.00% | |
Single Equity Concentration [Member] | ||
Retirement Benefits Disclosure [Line Items] | ||
Defined benefit plan, target allocation maximum percentage of assets, singular equity security, without prior approval by plan administrator | 10.00% | |
Value of investments | $ | $ 1,008.9 | $ 978.8 |
Percentage of total plan assets | 47.00% | 48.00% |
Single Equity Concentration [Member] | Equity Securities [Member] | ||
Retirement Benefits Disclosure [Line Items] | ||
Number of investments the company's pension plan held which individually exceed 10% of total plan assets | 1 | 1 |
Single Equity Concentration [Member] | Equity Funds [Member] | ||
Retirement Benefits Disclosure [Line Items] | ||
Number of investments the company's pension plan held which individually exceed 10% of total plan assets | 1 | 1 |
Concentration In Single Entity, Type Of Industry, Foreign Country Or Individual Fund [Member] | Defined Benefit Plan Assets Total [Member] | ||
Retirement Benefits Disclosure [Line Items] | ||
Minimum percentage of plan assets considered as significant concentrations in pension plans | 10.00% | 10.00% |
Pension and Postretirement Pl51
Pension and Postretirement Plans (Total Benefit/Cost) (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Net Periodic Cost (Benefit) | $ (14,829) | $ (12,266) | $ (29,517) | $ (24,325) |
Defined Benefit Pension Plan [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 4,591 | 5,040 | 9,505 | 10,382 |
Interest cost | 11,979 | 12,845 | 23,965 | 25,918 |
Expected return on assets | (30,403) | (30,226) | (60,740) | (60,774) |
Amortization of prior service cost (credit) | 43 | 75 | 86 | 149 |
Recognized actuarial loss (gain) | (1,039) | 0 | (2,333) | 0 |
Net Periodic Cost (Benefit) | (14,829) | (12,266) | (29,517) | (24,325) |
Supplemental Executive Retirement Plan (SERP) [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 215 | 246 | 429 | 492 |
Interest cost | 1,058 | 1,096 | 2,116 | 2,192 |
Amortization of prior service cost (credit) | 114 | 114 | 228 | 228 |
Recognized actuarial loss (gain) | 443 | 665 | 887 | 1,330 |
Net Periodic Cost (Benefit) | 1,830 | 2,121 | 3,660 | 4,242 |
Other Postretirement Plans [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 257 | 347 | 514 | 693 |
Interest cost | 194 | 307 | 389 | 615 |
Amortization of prior service cost (credit) | (37) | (84) | (74) | (168) |
Recognized actuarial loss (gain) | (972) | (376) | (1,945) | (751) |
Net Periodic Cost (Benefit) | $ (558) | $ 194 | $ (1,116) | $ 389 |
Pension and Postretirement Pl52
Pension and Postretirement Plans (Asset Allocation) (Details 2) - Defined Benefit Pension Plans [Member] | Jun. 30, 2017 | Dec. 31, 2016 |
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan Assets Allocation (Percent) | 100.00% | 100.00% |
U.S. [Member] | Equity Securities [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan Assets Allocation (Percent) | 52.00% | 53.00% |
U.S. [Member] | Equity Funds [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan Assets Allocation (Percent) | 31.00% | 30.00% |
U.S. [Member] | Fixed income securities [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan Assets Allocation (Percent) | 10.00% | 11.00% |
International [Member] | Equity Securities [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan Assets Allocation (Percent) | 7.00% | 6.00% |
Other Non-Operating Income (Nar
Other Non-Operating Income (Narrative) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Mar. 31, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Schedule of Non-Operating Income (Expense) [Line Items] | ||||||
Document Fiscal Year Focus | 2,017 | |||||
Gain on sale of land | $ 0 | $ 34,072 | $ 0 | $ 34,072 | ||
Gain on the formation of a joint venture | 0 | 3,232 | 0 | 3,232 | ||
(Loss) gain on sales of businesses | $ 0 | $ 0 | $ (342) | $ 18,931 | ||
Residential Healthcare [Member] | Residential Healthcare Michigan hospital joint venture [Member] | ||||||
Schedule of Non-Operating Income (Expense) [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | 40.00% | 40.00% | 40.00% | |||
Gain on the formation of a joint venture | $ 3,200 | |||||
Celtic Healthcare Allegheny Health Network Joint Venture [Member] | Celtic Healthcare Inc [Member] | ||||||
Schedule of Non-Operating Income (Expense) [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | 40.00% | 40.00% | ||||
Residential Healthcare Michigan hospital joint venture [Member] | Residential Healthcare [Member] | ||||||
Schedule of Non-Operating Income (Expense) [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | 40.00% | 40.00% | ||||
Kaplan Corporate and Other [Member] | Education [Member] | Colloquy [Member] | ||||||
Schedule of Non-Operating Income (Expense) [Line Items] | ||||||
(Loss) gain on sales of businesses | $ 18,900 |
Other Non-Operating Income (Det
Other Non-Operating Income (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Schedule of Non-Operating Income (Expense) [Line Items] | ||||
Foreign currency gain (loss), net | $ 3,466 | $ (24,084) | $ 5,194 | $ (29,527) |
(Loss) gain on sales of businesses | 0 | 0 | (342) | 18,931 |
Gain on sale of land | 0 | 34,072 | 0 | 34,072 |
Gain on sales of marketable equity securities (see Note 2) | 0 | 4,502 | 0 | 6,256 |
Gain on the formation of a joint venture | 0 | 3,232 | 0 | 3,232 |
Other, net | 603 | 1,278 | 66 | 1,132 |
Total Other Non-Operating Income | $ 4,069 | $ 19,000 | $ 4,918 | $ 34,096 |
Accumulated Other Comprehensi55
Accumulated Other Comprehensive Income (Loss) (Components of OCI) (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | ||
Other Comprehensive Income (Loss) [Line Items] | |||||
Other Comprehensive Income (Loss), before tax | $ 22,147 | $ (14,536) | $ 43,546 | $ (11,708) | |
Other Comprehensive Income (Loss), income tax | (5,008) | 3,766 | (8,125) | 4,173 | |
Other Comprehensive Income (Loss), Net of Tax | 17,139 | (10,770) | 35,421 | (7,535) | |
Foreign Currency Translation Adjustment [Member] | |||||
Other Comprehensive Income (Loss) [Line Items] | |||||
Other Comprehensive Income (Loss), before Reclassifications, before Tax | 9,638 | (5,121) | 23,306 | (1,276) | |
Other Comprehensive Income (Loss) before Reclassifications, Tax | 0 | 0 | 0 | 0 | |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | 9,638 | (5,121) | 23,306 | (1,276) | |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 0 | ||||
Other Comprehensive Income (Loss), Net of Tax | 23,306 | ||||
Unrealized Gains (Losses) on Available-for-Sale Securities [Member] | |||||
Other Comprehensive Income (Loss) [Line Items] | |||||
Other Comprehensive Income (Loss), before Reclassifications, before Tax | 13,976 | (5,307) | 23,534 | (4,964) | |
Other Comprehensive Income (Loss) before Reclassifications, Tax | (5,591) | 2,123 | (9,414) | 1,986 | |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | 8,385 | (3,184) | 14,120 | (2,978) | |
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | 0 | (4,502) | 0 | (6,256) | |
Reclassification from AOCI, Current Period, Tax | 0 | 1,801 | 0 | 2,502 | |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 0 | (2,701) | 0 | (3,754) | |
Other Comprehensive Income (Loss), before tax | 13,976 | (9,809) | 23,534 | (11,220) | |
Other Comprehensive Income (Loss), income tax | (5,591) | 3,924 | (9,414) | 4,488 | |
Other Comprehensive Income (Loss), Net of Tax | 8,385 | (5,885) | 14,120 | (6,732) | |
Pension and Other Postretirement Plans [Member] | |||||
Other Comprehensive Income (Loss) [Line Items] | |||||
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | 0 | ||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | (1,448) | 394 | (3,151) | 788 | |
Reclassification from AOCI, Current Period, Tax | 579 | (158) | 1,260 | (315) | |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | (869) | 236 | (1,891) | 473 | |
Other Comprehensive Income (Loss), before tax | (1,448) | 394 | (3,151) | 788 | |
Other Comprehensive Income (Loss), income tax | 579 | (158) | 1,260 | (315) | |
Other Comprehensive Income (Loss), Net of Tax | (869) | 236 | (1,891) | 473 | |
Net Prior Service Cost [Member] | |||||
Other Comprehensive Income (Loss) [Line Items] | |||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | [1] | 120 | 105 | 240 | 209 |
Reclassification from AOCI, Current Period, Tax | (48) | (43) | (96) | (84) | |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 72 | 62 | 144 | 125 | |
Net Actuarial (Gain) Loss [Member] | |||||
Other Comprehensive Income (Loss) [Line Items] | |||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | [1] | (1,568) | 289 | (3,391) | 579 |
Reclassification from AOCI, Current Period, Tax | 627 | (115) | 1,356 | (231) | |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | (941) | 174 | (2,035) | 348 | |
Cash Flow Hedge [Member] | |||||
Other Comprehensive Income (Loss) [Line Items] | |||||
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | (172) | ||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 58 | ||||
Other Comprehensive Income (Loss), before tax | (19) | 0 | (143) | 0 | |
Other Comprehensive Income (Loss), income tax | 4 | 0 | 29 | 0 | |
Other Comprehensive Income (Loss), Net of Tax | $ (15) | $ 0 | $ (114) | $ 0 | |
[1] | These accumulated other comprehensive income components are included in the computation of net periodic pension and postretirement plan cost (see Note 8). |
Accumulated Other Comprehensi56
Accumulated Other Comprehensive Income (Loss) (AOCI balances) (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Accumulated Other Comprehensive Income, beginning balance | $ 2,452,941 | |||
Other Comprehensive Income (Loss), Net of Tax | $ 17,139 | $ (10,770) | 35,421 | $ (7,535) |
Accumulated Other Comprehensive Income, ending balance | 2,536,372 | 2,536,372 | ||
AOCI Including Portion Attributable to Noncontrolling Interest [Member] | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Accumulated Other Comprehensive Income, beginning balance | 236,486 | |||
Other comprehensive (loss) income before reclassifications | 37,254 | |||
Net amount reclassified from accumulated other comprehensive income | (1,833) | |||
Other Comprehensive Income (Loss), Net of Tax | 35,421 | |||
Accumulated Other Comprehensive Income, ending balance | 271,907 | 271,907 | ||
Cumulative Foreign Currency Translation Adjustment [Member] | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Accumulated Other Comprehensive Income, beginning balance | (26,998) | |||
Other comprehensive (loss) income before reclassifications | 9,638 | (5,121) | 23,306 | (1,276) |
Net amount reclassified from accumulated other comprehensive income | 0 | |||
Other Comprehensive Income (Loss), Net of Tax | 23,306 | |||
Accumulated Other Comprehensive Income, ending balance | (3,692) | (3,692) | ||
Unrealized Gain on Available-for-Sale Securities [Member] | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Accumulated Other Comprehensive Income, beginning balance | 92,931 | |||
Other comprehensive (loss) income before reclassifications | 8,385 | (3,184) | 14,120 | (2,978) |
Net amount reclassified from accumulated other comprehensive income | 0 | (2,701) | 0 | (3,754) |
Other Comprehensive Income (Loss), Net of Tax | 8,385 | (5,885) | 14,120 | (6,732) |
Accumulated Other Comprehensive Income, ending balance | 107,051 | 107,051 | ||
Unrealized Gain on Pensions and Other Postretirement Plans [Member] | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Accumulated Other Comprehensive Income, beginning balance | 170,830 | |||
Other comprehensive (loss) income before reclassifications | 0 | |||
Net amount reclassified from accumulated other comprehensive income | (869) | 236 | (1,891) | 473 |
Other Comprehensive Income (Loss), Net of Tax | (869) | 236 | (1,891) | 473 |
Accumulated Other Comprehensive Income, ending balance | 168,939 | 168,939 | ||
Cash Flow Hedge [Member] | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Accumulated Other Comprehensive Income, beginning balance | (277) | |||
Other comprehensive (loss) income before reclassifications | (172) | |||
Net amount reclassified from accumulated other comprehensive income | 58 | |||
Other Comprehensive Income (Loss), Net of Tax | (15) | $ 0 | (114) | $ 0 |
Accumulated Other Comprehensive Income, ending balance | $ (391) | $ (391) |
Accumulated Other Comprehensi57
Accumulated Other Comprehensive Income (Loss) (Reclassifications out of AOCI) (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | ||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||||
Other income, net | $ (4,069) | $ (19,000) | $ (4,918) | $ (34,096) | |
Interest expense | 9,035 | 7,971 | 17,164 | 15,919 | |
Provision for Income Taxes | 23,900 | 23,800 | 26,600 | 46,200 | |
Reclassification out of Accumulated Other Comprehensive Income [Member] | |||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||||
Income Net of Tax | (836) | (2,465) | (1,833) | (3,281) | |
Foreign Currency Translation Adjustment [Member] | |||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||||
Reclassifications, net of tax | 0 | ||||
Unrealized Gain on Available-for-Sale Securities [Member] | |||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||||
Reclassifications, before tax | 0 | (4,502) | 0 | (6,256) | |
Provision for Income Tax | 0 | 1,801 | 0 | 2,502 | |
Reclassifications, net of tax | 0 | (2,701) | 0 | (3,754) | |
Unrealized Gain on Available-for-Sale Securities [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | |||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||||
Other income, net | 0 | (4,502) | 0 | (6,256) | |
Provision for Income Taxes | 0 | 1,801 | 0 | 2,502 | |
Income Net of Tax | 0 | (2,701) | 0 | (3,754) | |
Pension and Other Postretirement Plans [Member] | |||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||||
Reclassifications, before tax | (1,448) | 394 | (3,151) | 788 | |
Provision for Income Tax | 579 | (158) | 1,260 | (315) | |
Reclassifications, net of tax | (869) | 236 | (1,891) | 473 | |
Net Prior Service Cost [Member] | |||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||||
Reclassifications, before tax | [1] | 120 | 105 | 240 | 209 |
Provision for Income Tax | (48) | (43) | (96) | (84) | |
Reclassifications, net of tax | 72 | 62 | 144 | 125 | |
Net Actuarial (Gain) Loss [Member] | |||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||||
Reclassifications, before tax | [1] | (1,568) | 289 | (3,391) | 579 |
Provision for Income Tax | 627 | (115) | 1,356 | (231) | |
Reclassifications, net of tax | (941) | 174 | (2,035) | 348 | |
Cash Flow Hedge [Member] | |||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||||
Reclassifications, net of tax | 58 | ||||
Cash Flow Hedge [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | |||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||||
Interest expense | 41 | 0 | 72 | 0 | |
Provision for Income Taxes | (8) | 0 | (14) | 0 | |
Income Net of Tax | $ 33 | $ 0 | $ 58 | $ 0 | |
[1] | These accumulated other comprehensive income components are included in the computation of net periodic pension and postretirement plan cost (see Note 8). |
Contingencies (Details)
Contingencies (Details) $ in Millions | Feb. 13, 2013allegations | Aug. 17, 2011Complaint | Jun. 30, 2017USD ($)claimCaseprogram_review |
Loss Contingencies [Line Items] | |||
Number of existing legal claims or proceedings that are likely to have a material effect on the Company's business | claim | 0 | ||
Maximum [Member] | |||
Loss Contingencies [Line Items] | |||
Loss contingency, estimate of possible loss | $ | $ 20 | ||
Education [Member] | Higher Education [Member] | |||
Loss Contingencies [Line Items] | |||
Number of pending program reviews | program_review | 5 | ||
Education [Member] | Sale of KHE Campuses business [Member] | Higher Education [Member] | |||
Loss Contingencies [Line Items] | |||
Number of pending program reviews | program_review | 4 | ||
Diaz Case [Member] | Education [Member] | |||
Loss Contingencies [Line Items] | |||
Separate complaints included In Diaz Case received rulings | Complaint | 3 | ||
Remaining employment claim in the Diaz complaint | Complaint | 1 | ||
Urquilla-Diaz And Jajdelski Case [Member] | Education [Member] | |||
Loss Contingencies [Line Items] | |||
Number of unsealed cases filed by former employees under the U.S. Federal False Claims Act | Case | 2 | ||
Jajdelski Case [Member] | Education [Member] | |||
Loss Contingencies [Line Items] | |||
Number of allegations not dismissed | allegations | 1 |
Business Segments (Narrative) (
Business Segments (Narrative) (Details) | 6 Months Ended |
Jun. 30, 2017Segment | |
Business Segments [Line Items] | |
Number of reportable segments | 4 |
Business Segments (Information
Business Segments (Information by Operating Segment) (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||||
Operating Revenues | $ 676,087 | $ 628,933 | $ 1,258,804 | $ 1,230,673 | |
Income (Loss) from Operations | 68,361 | 74,140 | 97,415 | 126,012 | |
Equity in earnings (losses) of affiliates, net | 1,331 | (891) | 1,980 | 113 | |
Interest Expense, Net | (7,862) | (7,250) | (14,628) | (14,607) | |
Other income, net | 4,069 | 19,000 | 4,918 | 34,096 | |
Income Before Income Taxes | 65,899 | 84,999 | 89,685 | 145,614 | |
Depreciation of property, plant and equipment | 15,871 | 16,045 | 30,523 | 32,806 | |
Amortization of Intangible Assets | 10,531 | 6,278 | 17,367 | 12,540 | |
Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets | 19,755 | 6,278 | 26,591 | 12,540 | |
Net Pension (Credit) Expense | (14,829) | (12,266) | (29,517) | (24,325) | |
Identifiable Assets | 3,142,602 | 3,142,602 | $ 3,068,042 | ||
Investments in Marketable Equity Securities | 447,763 | 447,763 | 424,229 | ||
Investments in Affiliates | 67,812 | 67,812 | 58,806 | ||
Prepaid Pension Cost | 850,262 | 850,262 | 881,593 | ||
Total Assets | 4,508,439 | 4,508,439 | 4,432,670 | ||
Operating Segments [Member] | Education [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating Revenues | 386,499 | 419,213 | 759,396 | 820,289 | |
Income (Loss) from Operations | 32,925 | 32,892 | 41,956 | 47,380 | |
Depreciation of property, plant and equipment | 8,325 | 10,242 | 16,909 | 21,345 | |
Amortization of Intangible Assets | 1,323 | 1,704 | 2,443 | 3,385 | |
Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets | 1,323 | 1,704 | 2,443 | 3,385 | |
Net Pension (Credit) Expense | 2,153 | 3,018 | 4,859 | 6,127 | |
Identifiable Assets | 1,494,736 | 1,494,736 | 1,479,267 | ||
Operating Segments [Member] | Education [Member] | Kaplan Corporate and Other [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating Revenues | 57 | 18 | 71 | 143 | |
Income (Loss) from Operations | (6,451) | (7,811) | (14,920) | (17,216) | |
Depreciation of property, plant and equipment | 135 | 315 | 265 | 402 | |
Net Pension (Credit) Expense | (889) | 278 | (1,225) | 647 | |
Identifiable Assets | 21,007 | 21,007 | 21,509 | ||
Operating Segments [Member] | Education [Member] | Reportable Subsegments [Member] | Higher Education [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating Revenues | 139,204 | 157,980 | 283,514 | 323,529 | |
Income (Loss) from Operations | 17,711 | 17,237 | 30,315 | 38,543 | |
Depreciation of property, plant and equipment | 3,249 | 3,993 | 6,680 | 8,168 | |
Net Pension (Credit) Expense | 2,044 | 1,905 | 4,088 | 3,810 | |
Identifiable Assets | 339,304 | 339,304 | 373,127 | ||
Operating Segments [Member] | Education [Member] | Reportable Subsegments [Member] | Test Preparation [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating Revenues | 75,730 | 79,349 | 140,298 | 145,811 | |
Income (Loss) from Operations | 5,741 | 7,036 | 2,877 | 4,726 | |
Depreciation of property, plant and equipment | 1,332 | 1,615 | 2,673 | 3,396 | |
Net Pension (Credit) Expense | 911 | 768 | 1,822 | 1,536 | |
Identifiable Assets | 133,482 | 133,482 | 133,709 | ||
Operating Segments [Member] | Education [Member] | Reportable Subsegments [Member] | Kaplan International [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating Revenues | 171,747 | 182,325 | 336,309 | 351,612 | |
Income (Loss) from Operations | 15,954 | 16,479 | 23,661 | 21,376 | |
Depreciation of property, plant and equipment | 3,609 | 4,319 | 7,291 | 9,379 | |
Net Pension (Credit) Expense | 87 | 67 | 174 | 134 | |
Identifiable Assets | 1,000,943 | 1,000,943 | 950,922 | ||
Operating Segments [Member] | Education [Member] | Intersubsegment Eliminations [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating Revenues | (239) | (459) | (796) | (806) | |
Income (Loss) from Operations | (30) | (49) | 23 | (49) | |
Operating Segments [Member] | Television Broadcasting [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating Revenues | 106,102 | 96,520 | 197,598 | 188,538 | |
Income (Loss) from Operations | 39,264 | 44,215 | 65,233 | 85,435 | |
Depreciation of property, plant and equipment | 2,991 | 2,450 | 5,585 | 4,827 | |
Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets | 970 | 63 | 1,872 | 126 | |
Net Pension (Credit) Expense | 479 | 418 | 972 | 857 | |
Identifiable Assets | 451,296 | 451,296 | 336,631 | ||
Operating Segments [Member] | Other Businesses [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating Revenues | 183,486 | 113,269 | 301,810 | 221,985 | |
Income (Loss) from Operations | (8,918) | (5,062) | (19,482) | (10,792) | |
Depreciation of property, plant and equipment | 4,264 | 3,073 | 7,448 | 6,100 | |
Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets | 17,462 | 4,511 | 22,276 | 9,029 | |
Net Pension (Credit) Expense | 415 | 306 | 898 | 560 | |
Identifiable Assets | 946,499 | 946,499 | 796,935 | ||
Corporate Office [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating Revenues | 0 | 0 | 0 | 0 | |
Income (Loss) from Operations | 5,090 | 2,095 | 9,708 | 3,989 | |
Depreciation of property, plant and equipment | 291 | 280 | 581 | 534 | |
Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets | 0 | 0 | 0 | 0 | |
Net Pension (Credit) Expense | (17,876) | (16,008) | (36,246) | (31,869) | |
Identifiable Assets | 250,071 | 250,071 | $ 455,209 | ||
Intersegment Elimination [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating Revenues | $ 0 | $ (69) | $ 0 | $ (139) |