| Business Segments | BUSINESS SEGMENTS Basis of Presentation. The Company’s organizational structure is based on a number of factors that management uses to evaluate, view and run its business operations, which include, but are not limited to, customers, the nature of products and services and use of resources. The business segments disclosed in the Consolidated Financial Statements are based on this organizational structure and information reviewed by the Company’s management to evaluate the business segment results. The Company has seven reportable segments: Kaplan International, Kaplan Higher Education, Kaplan Supplemental Education, Television Broadcasting, Manufacturing, Healthcare and Automotive. The Company defines its operating segments as those operations whose results the chief operating decision maker (CODM), who is our Chief Executive Officer, regularly reviews to analyze performance and allocate resources. The Company and CODM use both operating income before amortization of intangible assets and impairment of goodwill and other long-lived assets and earnings before interest, income taxes, depreciation, amortization and pension service cost (EBITDAP) to evaluate segment performance and allocate resources to the Company’s segments. The CODM uses reports provided during annual budget presentations, the three-year forecasting process, quarterly business reviews and monthly management reports and related communication when making decisions about allocating capital resources across segments. The accounting policies at the segments are the same as described in Note 2. In computing operating income before amortization by segment, the effects of amortization of intangible assets, impairment of goodwill and other long-lived assets, equity in earnings (losses) of affiliates, interest income, interest expense, non-operating pension and postretirement benefit income, other non-operating income and expense items and income taxes are excluded. In computing EBITDAP, the effects of pension service cost, depreciation, impairment of goodwill and other long-lived assets, equity in earnings (losses) of affiliates, interest income, interest expense, non-operating pension and postretirement benefit income, other non-operating income and expense items and income taxes are excluded. Intersegment sales are not material. Identifiable assets by segment are those assets used in the Company’s operations in each business segment. The investments in marketable equity securities and affiliates, and prepaid pension cost are not included in identifiable assets by segment. Investments in marketable equity securities are discussed in Note 4. Education. Education products and services are provided by Kaplan, Inc. KI includes professional training and postsecondary education businesses largely outside the U.S., as well as English-language programs. KHE includes the results as a service provider to higher education institutions. Supplemental Education includes Kaplan’s standardized test preparation, domestic professional and other continuing education businesses. As of December 31, 2024, Kaplan had a total outstanding accounts receivable balance of $95.3 million from Purdue Global related to amounts due for reimbursements for services, fees earned and a deferred fee. Included in this total, Kaplan has a $19.7 million long-term receivable balance due from Purdue Global at December 31, 2024, related to the advance of $20.0 million during the initial KU Transaction. Television Broadcasting. Television broadcasting operations are conducted through seven television stations serving the Detroit, Houston, San Antonio, Orlando, Jacksonville and Roanoke television markets. All stations are network-affiliated (except for WJXT in Jacksonville), with revenues derived primarily from sales of advertising time. In addition, the stations generate revenue from retransmission consent agreements for the right to carry their signals. Manufacturing. Manufacturing operations include Hoover, an Augusta, GA-based supplier of pressure impregnated kiln-dried lumber and plywood products for fire retardant and preservative application; Dekko, a Garrett, IN-based manufacturer of electrical workspace solutions, architectural lighting, and electrical components and assemblies; Joyce/Dayton, a Dayton, OH-based manufacturer of screw jacks and other linear motion systems; and Forney, a global supplier of products and systems that control and monitor combustion processes in electric utility and industrial applications. Healthcare. GHG provides home health, hospice and palliative services. GHG also provides other healthcare services, including nursing care and prescription services for patients receiving in-home infusion therapies; ABA therapy; physician services for allergy, asthma and immunology patients; in-home aesthetics; and healthcare software-as-a-service technology. Automotive. Automotive includes eight automotive dealerships and valet repair services in the Washington, D.C. metropolitan area and Richmond, VA, including Lexus of Rockville, Honda of Tysons Corner, Jeep of Bethesda, Ford of Manass as, Toyota of Woodbridge and Chrysler-Dodge-Jeep-Ram of W oodbridge, which were acquired in July 2022, and Toyota of Richmond, which was acquired in September 2023. The automotive group was awarded a Kia Open Point dealership in Bethesda, MD, which commenced operations at the end of December 2023. Other Businesses. Other businesses includes the following: • Society6, Saatchi Art and WGB following the restructuring of Leaf Group into three stand-alone businesses in the second quarter of 2023: ◦ Society6 (formerly included in Leaf Marketplace), an online commerce platform featuring original art and designs on an array of consumer products. ◦ Saatchi Art (formerly included in Leaf Marketplace), an online art gallery and in-person art fair business. ◦ WGB (formerly Leaf Media), an owner and operator of websites that educate and inform consumers across a wide variety of life topics. • Clyde’s Restaurant Group owns and operates 14 restaurants and entertainment venues in the Washington, D.C. metropolitan area. • Framebridge, a custom framing compa ny. • Code3, a marketing solutions provider; the Slate Group and Foreign Policy Group, which publish online and print magazines and websites; and three investment stage businesses, Decile, City Cast and Supporting Cast. Other businesses also includes CyberVista, which merged with another entity in October 2022 resulting in the deconsolidation of the subsidiary and Pinna, which merged with another entity in June 2023 resulting in the deconsolidation of the subsidiary. Corporate Office. Corporate office includes the expenses of the Company’s corporate office, defined benefit pension expense, and certain continuing obligations related to prior business dispositions. Geographical Information. The Company’s non-U.S. revenues in 2024, 2023 and 2022 totaled approximately $1,042 million , $930 million and $776 million, respectively, primarily from Kaplan’s operations outside the U.S. Additionally, revenues in 2024, 2023 and 2022 totaled approximately $618 million , $543 million, and $448 million, respectively, from Kaplan’s operations in the U.K. The Company’s long-lived assets in non-U.S. countries (excluding goodwill and other intangible assets), totaled approximately $455 million and $492 million at December 31, 2024 and 2023, respectively. Company information broken down by operating segment and education division: Year Ended December 31, 2024 (in thousands) Education Television Broadcasting Manufacturing Healthcare Automotive Total Segments Operating Revenues $ 1,691,778 $ 535,678 $ 395,642 $ 611,109 $ 1,200,477 $ 4,434,684 Reconciliation of Revenue Other Businesses and Corporate Office Revenues (1) 358,822 Intersegment Elimination (2,602) Total Consolidated Revenues $ 4,790,904 Less: Significant Expenses (2) Cost of Revenue (3) 655,482 293,215 343,695 1,021,271 2,313,663 Payroll and Fringe Benefits Expense (4) 471,144 112,316 84,416 667,876 Occupancy Expense 116,839 7,573 124,412 Advertising and Marketing Expense 70,828 70,828 Networking and Programming Expense 126,474 126,474 Management Services (5) 8,054 8,054 Other Segment Items (6) 190,448 73,064 59,379 188,856 34,059 545,806 EBITDAP $ 187,037 $ 223,824 $ 43,048 $ 78,558 $ 45,104 $ 577,571 Pension Service Cost 17,733 6,055 2,877 19,303 116 $ 46,084 Depreciation Expense 35,058 11,174 10,983 6,859 6,959 $ 71,033 Income from Operations before Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets $ 134,246 $ 206,595 $ 29,188 $ 52,396 $ 38,029 $ 460,454 Other Businesses (7) (99,101) Corporate Costs (58,908) Amortization of Intangible Assets (37,119) Impairment of Goodwill and Other Long-Lived Assets (49,822) Income from Operations $ 215,504 Equity in Losses of Affiliates, Net (3,303) Interest Expense, Net (176,281) Non-Operating Pension and Postretirement Benefit Income, Net 794,949 Gain on Marketable Equity Securities, Net 181,295 Other Income, Net 12,546 Income Before Income Taxes $ 1,024,710 Capital Expenditures $ 25,989 $ 5,887 $ 15,951 $ 10,182 $ 4,063 $ 62,072 Reconciliation of Capital Expenditures Other Businesses and Corporate Office Capital Expenditures (8) 31,027 Total Capital Expenditures $ 93,099 ___________ (1) Revenue from segments below the quantitative thresholds is attributable to Other Businesses and the Corporate Office, as described above. None of these operating segments meet the quantitative thresholds for determining reportable segments. (2) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. (3) Cost of revenue reflects the amounts reported and provided to the CODM and does not necessarily reconcile to the Company's Consolidated Statement of Operations or align across reportable segments. Cost of revenue excludes charges related to depreciation, which is shown separately above. (4) Excludes pension service cost, which is shown separately above. Excludes any payroll and related benefits costs captured in cost of revenue. (5) Management and operating services provided by Christopher J. Ourisman and his team of industry professionals. (6) Other segment items for each reportable segment include: (a) Education (includes Kaplan International, Kaplan Higher Education and Kaplan Supplemental Education) - training and employment expense, travel meals and entertainment expense, operating fees and other general and administrative (G&A) expenses. (b) Television Broadcasting - other broadcast expenses, facilities expenses, third-party commission costs and other selling, general and administrative expenses (SG&A). (c) Manufacturing - payroll and fringe benefits expense (SG&A) and other SG&A expenses. (d) Healthcare - indirect costs (e.g. payroll and benefits expenses, general and administrative expenses) and other SG&A expenses. (e) Automotive - advertising and marketing expense and other G&A expenses. (7) Profit or loss from operating segments below the quantitative thresholds attributable to Other Businesses as described above. These operating segments did not meet any of the quantitative thresholds for determining reportable segments. (8) Capital Expenditures from operating segments below the quantitative thresholds are attributable to Other Businesses and the Corporate Office, as described above. None of these operating segments meet the quantitative thresholds for determining reportable segments. The Company’s education division comprises the following operating segments: Year Ended December 31, 2024 (in thousands) Kaplan International Higher Education Supplemental Education Kaplan Corporate and Other Intersegment Elimination Total Education Operating Revenues $ 1,074,207 $ 324,815 $ 291,630 $ 5,761 $ (4,635) $ 1,691,778 Less: Significant Expenses (1) Cost of Revenue (2) 361,508 247,196 51,574 — (4,796) 655,482 Payroll and Fringe Benefits Expense (3) 299,643 17,431 126,410 27,660 — 471,144 Occupancy Expense 107,813 696 2,703 5,627 — 116,839 Advertising and Marketing Expense 32,414 6,870 30,914 630 — 70,828 Other Segment Items (4) 141,743 1,427 41,760 5,368 150 190,448 EBITDAP $ 131,086 $ 51,195 $ 38,269 $ (33,524) $ 11 $ 187,037 Pension Service Cost 704 7,620 7,848 1,561 17,733 Depreciation Expense 28,683 2,825 3,487 63 35,058 Income (Loss) from Operations before Amortization of Intangible Assets and Impairment of Long-Lived Assets $ 101,699 $ 40,750 $ 26,934 $ (35,148) $ 11 $ 134,246 Capital Expenditures $ 22,560 $ 1,016 $ 2,413 $ — $ 25,989 ____________ (1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. (2) Cost of revenue reflects the amounts reported and provided to the CODM and does not necessarily reconcile to the Company's Consolidated Statement of Operations or align across reportable segments. Cost of revenue excludes charges related to depreciation, which is shown separately above. (3) Excludes pension service cost, which is shown separately above. Excludes any payroll and related benefits costs captured in cost of revenue. (4) Other segment items for each reportable segment include: (a) Kaplan international - travel meals and entertainment expense, training and employment expense, operating fees and other G&A expenses. (b) Higher education - training and employment expense, operating fees and other G&A expenses. (c) Supplemental education - training and employment expense, operating fees and other G&A expenses. Company information broken down by operating segment and education division: Year Ended December 31, 2023 (in thousands) Education Television Broadcasting Manufacturing Healthcare Automotive Total Segments Operating Revenues $ 1,587,581 $ 472,436 $ 447,910 $ 459,481 $ 1,079,893 $ 4,047,301 Reconciliation of Revenue Other Businesses and Corporate Office Revenues (1) 371,233 Intersegment Elimination (3,657) Total Consolidated Revenues $ 4,414,877 Less: Significant Expenses (2) Cost of Revenue (3) 623,731 323,906 257,639 913,790 2,119,066 Payroll and Fringe Benefits Expense (4) 432,730 119,311 75,018 627,059 Occupancy Expense 112,230 6,562 118,792 Advertising and Marketing Expense 64,427 64,427 Networking and Programming Expense 129,827 129,827 Management Services (5) 7,312 7,312 Other Segment Items (6) 188,345 68,355 66,426 154,764 32,728 510,618 EBITDAP $ 166,118 $ 154,943 $ 57,578 $ 47,078 $ 44,483 $ 470,200 Pension Service Cost 8,907 3,331 1,115 14,083 35 $ 27,471 Depreciation Expense 38,187 12,224 9,453 5,475 5,177 $ 70,516 Income from Operations before Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets $ 119,024 $ 139,388 $ 47,010 $ 27,520 $ 39,271 $ 372,213 Other Businesses (7) (98,115) Corporate Costs (55,600) Amortization of Intangible Assets (50,039) Impairment of Goodwill and Other Long-Lived Assets (99,066) Income from Operations $ 69,393 Equity in Losses of Affiliates, Net (5,183) Interest Expense, Net (56,179) Non-Operating Pension and Postretirement Benefit Income, Net 133,812 Gain on Marketable Equity Securities, Net 138,067 Other Income, Net 19,094 Income Before Income Taxes $ 299,004 Capital Expenditures $ 36,760 $ 9,220 $ 23,089 $ 12,992 $ 10,140 $ 92,201 Reconciliation of Capital Expenditures Other Businesses and Corporate Office Capital Expenditures (8) 15,085 Total Capital Expenditures $ 107,286 ___________ (1) Revenue from segments below the quantitative thresholds is attributable to Other Businesses and the Corporate Office, as described above. None of these operating segments meet the quantitative thresholds for determining reportable segments. (2) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. (3) Cost of revenue reflects the amounts reported and provided to the CODM and does not necessarily reconcile to the Company's Consolidated Statement of Operations or align across reportable segments. Cost of revenue excludes charges related to depreciation, which is shown separately above. (4) Excludes pension service cost, which is shown separately above. Excludes any payroll and related benefits costs captured in cost of revenue. (5) Management and operating services provided by Christopher J. Ourisman and his team of industry professionals. (6) Other segment items for each reportable segment include: (a) Education (includes Kaplan International, Kaplan Higher Education and Kaplan Supplemental Education) - training and employment expense, travel meals and entertainment expense, operating fees and other general and administrative (G&A) expenses. (b) Television Broadcasting - other broadcast expenses, facilities expenses, third-party commission costs and other selling, general and administrative expenses (SG&A). (c) Manufacturing - payroll and fringe benefits expense (SG&A) and other SG&A expenses. (d) Healthcare - indirect costs (e.g. payroll and benefits expenses, general and administrative expenses) and other SG&A expenses. (e) Automotive - advertising and marketing expense and other G&A expenses. (7) Profit or loss from operating segments below the quantitative thresholds attributable to Other Businesses as described above. These operating segments did not meet any of the quantitative thresholds for determining reportable segments. (8) Capital Expenditures from operating segments below the quantitative thresholds are attributable to Other Businesses and the Corporate Office, as described above. None of these operating segments meet the quantitative thresholds for determining reportable segments. The Company’s education division comprises the following operating segments: Year Ended December 31, 2023 (in thousands) Kaplan International Higher Education Supplemental Education Kaplan Corporate and Other Intersegment Elimination Total Education Operating Revenues $ 966,879 $ 326,961 $ 292,776 $ 11,012 $ (10,047) $ 1,587,581 Less: Significant Expenses (1) Cost of Revenue (2) 320,183 254,378 55,162 — (5,992) 623,731 Payroll and Fringe Benefits Expense (3) 267,878 17,334 127,396 22,823 (2,701) 432,730 Occupancy Expense 96,636 1,044 3,827 11,035 (312) 112,230 Advertising and Marketing Expense 30,654 5,123 28,226 424 — 64,427 Other Segment Items (4) 135,172 1,987 46,381 5,818 (1,013) 188,345 EBITDAP $ 116,356 $ 47,095 $ 31,784 $ (29,088) $ (29) $ 166,118 Pension Service Cost 325 3,737 4,147 698 8,907 Depreciation Expense 28,501 4,416 5,165 105 38,187 Income (Loss) from Operations before Amortization of Intangible Assets and Impairment of Long-Lived Assets $ 87,530 $ 38,942 $ 22,472 $ (29,891) $ (29) $ 119,024 Capital Expenditures $ 31,111 $ 2,394 $ 3,209 $ 46 $ 36,760 ____________ (1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. (2) Cost of revenue reflects the amounts reported and provided to the CODM and does not necessarily reconcile to the Company's Consolidated Statement of Operations or align across reportable segments. Cost of revenue excludes charges related to depreciation, which is shown separately above. (3) Excludes pension service cost, which is shown separately above. Excludes any payroll and related benefits costs captured in cost of revenue. (4) Other segment items for each reportable segment include: (a) Kaplan international - travel meals and entertainment expense, training and employment expense, operating fees and other G&A expenses. (b) Higher education - training and employment expense, operating fees and other G&A expenses. (c) Supplemental education - training and employment expense, operating fees and other G&A expenses. Company information broken down by operating segment and education division: Year Ended December 31, 2022 (in thousands) Education Television Broadcasting Manufacturing Healthcare Automotive Total Segments Operating Revenues $ 1,427,915 $ 535,651 $ 486,643 $ 326,000 $ 734,185 $ 3,510,394 Reconciliation of Revenue Other Businesses revenues (1) 416,084 Intersegment Elimination (1,985) Total Consolidated Revenues $ 3,924,493 Less: Significant Expenses (2) Cost of Revenue (3) 565,637 363,782 169,208 603,125 1,701,752 Payroll and Fringe Benefits Expense (4) 394,972 119,140 56,520 570,632 Occupancy Expense 106,433 6,116 112,549 Advertising and Marketing Expense 58,026 58,026 Networking and Programming Expense 125,749 125,749 Management Services (5) 5,737 5,737 Other Segment Items (6) 160,696 67,595 58,279 122,962 24,323 433,855 EBITDAP $ 142,151 $ 223,167 $ 64,582 $ 33,830 $ 38,364 $ 502,094 Pension Service Cost 8,934 3,554 1,104 11,008 22 $ 24,622 Depreciation Expense 34,114 12,294 9,399 3,781 3,709 $ 63,297 Income from Operations before Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets $ 99,103 $ 207,319 $ 54,079 $ 19,041 $ 34,633 $ 414,175 Other Businesses (7) (86,270) Corporate Costs (56,166) Amortization of Intangible Assets (58,851) Impairment of Goodwill and Other Long-Lived Assets (128,990) Income from Operations $ 83,898 Equity in Losses of Affiliates, Net (2,837) Interest Expense, Net (51,177) Non-Operating Pension and Postretirement Benefit Income, Net 197,939 Loss on Marketable Equity Securities, Net (139,589) Other Income, Net 33,500 Income Before Income Taxes $ 121,734 Capital Expenditures $ 46,878 $ 5,832 $ 7,968 $ 2,745 $ 3,606 $ 67,029 Reconciliation of Capital Expenditures Other Businesses and Corporate Office Capital Expenditures (8) 15,373 Total Capital Expenditures $ 82,402 ____________ (1) Revenue from segments below the quantitative thresholds is attributable to Other Businesses, as described above. None of these operating segments meet the quantitative thresholds for determining reportable segments. (2) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. (3) Cost of revenue reflects the amounts reported and provided to the CODM and does not necessarily reconcile to the Company's Consolidated Statement of Operations or align across reportable segments. Cost of revenue excludes charges related to depreciation, which is shown separately above. (4) Excludes pension service cost, which is shown separately above. Excludes any payroll and related benefits costs captured in cost of revenue. (5) Management and operating services provided by Christopher J. Ourisman and his team of industry professionals. (6) Other segment items for each reportable segment include: (a) Education (includes Kaplan International, Kaplan Higher Education and Kaplan Supplemental Education) - training and employment expense, travel meals and entertainment expense, operating fees and other general and administrative (G&A) expenses. (b) Television Broadcasting - other broadcast expenses, facilities expenses, third-party commission costs and other selling, general and administrative expenses (SG&A). (c) Manufacturing - payroll and fringe benefits expense (SG&A) and other SG&A expenses. (d) Healthcare - indirect costs (e.g. payroll and benefits expenses, general and administrative expenses) and other SG&A expenses. (e) Automotive - advertising and marketing expense and other G&A expenses. (7) Profit or loss from operating segments below the quantitative thresholds attributable to Other Businesses as described above. These operating segments did not meet any of the quantitative thresholds for determining reportable segments. (8) Capital Expenditures from operating segments below the quantitative thresholds are attributable to Other Businesses and the Corporate Office, as described above. None of these operating segments meet the quantitative thresholds for determining reportable segments. The Company’s education division comprises the following operating segments: Year Ended December 31, 2022 (in thousands) Kaplan International Higher Education Supplemental Education Kaplan Corporate and Other Intersegment Elimination Total Education Operating Revenues $ 816,239 $ 310,407 $ 301,625 $ 9,853 $ (10,209) $ 1,427,915 Less: Significant Expenses (1) Cost of Revenue (2) 262,579 248,447 58,517 — (3,906) 565,637 Payroll and Fringe Benefits Expense (3) 234,602 21,254 131,243 12,582 (4,709) 394,972 Occupancy Expense 90,519 1,137 4,475 10,521 (219) 106,433 Advertising and Marketing Expense 26,715 3,657 26,910 744 — 58,026 Other Segment Items (4) 106,218 2,878 48,953 3,977 (1,330) 160,696 EBITDAP $ 95,606 $ 33,034 $ 31,527 $ (17,971) $ (45) $ 142,151 Pension Service Cost 270 3,842 4,114 708 8,934 Depreciation Expense 23,270 4,373 6,344 127 34,114 Income (Loss) from Operations before Amortization of Intangible Assets and Impairment of Long-Lived Assets $ 72,066 $ 24,819 $ 21,069 $ (18,806) $ (45) $ 99,103 Capital Expenditures $ 39,206 $ 1,398 $ 4,749 $ 1,525 $ 46,878 ____________ (1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. (2) Cost of revenue reflects the amounts reported and provided to the CODM and does not necessarily reconcile to the Company's Consolidated Statement of Operations or align across reportable segments. Cost of revenue excludes charges related to depreciation, which is shown separately above. (3) Excludes pension service cost, which is shown separately above. Excludes any payroll and related benefits costs captured in cost of revenue. (4) Other segment items for each reportable segment include: (a) Kaplan international - travel meals and entertainment expense, training and employment expense, operating fees and other G&A expenses. (b) Higher education - training and employment expense, operating fees and other G&A expenses. (c) Supplemental education - training and employment expense, operating fees and other G&A expenses. Asset information for the Company’s business segments is as follows: As of December 31 (in thousands) 2024 2023 Identifiable Assets Education $ 1,963,878 $ 2,021,471 Television broadcasting 402,200 419,557 Manufacturing 411,137 431,712 Healthcare 308,591 265,150 Automotive 582,105 597,267 Total Segments 3,667,911 3,735,157 Other businesses 338,089 368,542 Corporate office 139,126 93,760 Investments in Marketable Equity Securities 852,434 690,153 Investments in Affiliates 169,125 186,480 Prepaid Pension Cost 2,510,520 2,113,638 Total Assets $ 7,677,205 $ 7,187,730 Asset information for the Company’s education division is as follows: As of December 31 (in thousands) 2024 2023 Identifiable Assets Kaplan international $ 1,500,846 $ 1,537,989 Higher education 182,442 187,972 Supplemental education 238,836 249,519 Kaplan corporate and other 41,754 45,991 $ 1,963,878 $ 2,021,471 |
