Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Graham Holdings Company Reports Third Quarter Earnings By: Graham Holdings Company via Business Wire October 30, 2024 at 08:30 AM EDT Graham Holdings Company (NYSE: GHC) today reported its financial results for the third quarter and first nine months of 2024. The Company also filed its Form 10-Q today for the quarter ended September 30, 2024 with the Securities and Exchange Commission. Division Operating Results Revenue for the third quarter of 2024 was $1,207.2 million, up 9% from $1,111.5 million in the third quarter of 2023. Revenues increased at education, television broadcasting, healthcare and automotive, partially offset by declines at manufacturing and other businesses. The Company reported operating income of $81.6 million for the third quarter of 2024, compared to an operating loss of $57.1 million for the third quarter of 2023. The improvement in operating results is due to goodwill and other long-lived asset impairment charges at World of Good Brands (WGB) and Dekko in the third quarter of 2023 and increases at education, television broadcasting, healthcare and automotive, partially offset by declines at manufacturing and other businesses, excluding the impairments. The Company reported adjusted operating cash flow (non-GAAP) of $126.1 million for the third quarter of 2024, compared to $83.7 million for the third quarter of 2023. Adjusted operating cash flow improved at education, television broadcasting, healthcare and automotive, partially offset by declines at manufacturing and other businesses. Capital expenditures totaled $23.8 million and $26.7 million for the third quarter of 2024 and 2023, respectively. Revenue for the first nine months of 2024 was $3,545.1 million, up 9% from $3,248.1 million in the first nine months of 2023. Revenues increased at education, television broadcasting, healthcare and automotive, partially offset by declines at manufacturing and other businesses. The Company recorded operated income of $143.0 million for the first nine months of 2024, compared to $28.6 million for the first nine months of 2023. Excluding goodwill and other long-lived asset impairment charges, the improvement in operating results is due to increases at education, television broadcasting, healthcare and automotive, partially offset by declines at manufacturing and other businesses. The Company reported adjusted operating cash flow (non-GAAP) of $307.4 million for the first nine months of 2024, compared to $255.3 million for the first nine months of 2023. Adjusted operating cash flow improved at education, television broadcasting, healthcare, automotive and other businesses, partially offset by declines at manufacturing. Capital expenditures totaled $66.0 million and $71.6 million for the first nine months of 2024 and 2023, respectively. Acquisitions and Dispositions of Businesses There were no significant business acquisitions or dispositions during the first nine months of 2024. Debt, Cash and Marketable Equity Securities At September 30, 2024, the Company had $765.2 million in borrowings outstanding at an average interest rate of 6.2%, including $66.9 million outstanding on its $300 million revolving credit facility. Cash, marketable equity securities and other investments totaled $1,114.0 million at September 30, 2024. Overall, the Company recognized $30.5 million and $154.3 million in net gains on marketable equity securities in the third quarter and first nine months of 2024, respectively, compared to $16.8 million and $113.4 million in net gains on marketable equity securities in the third quarter and first nine months of 2023, respectively. Common Stock Repurchases During the third quarter and first nine months of 2024, the Company purchased a total of 64,490 and 133,276 shares, respectively, of its Class B common stock at a cost of $48.7 million and $98.2 million, respectively. At September 30, 2024, there were 4,347,533 shares outstanding. On September 12, 2024, the Board of Directors authorized the Company to acquire up to 500,000 shares of its Class B common stock; the Company has remaining authorization for 486,132 shares as of September 30, 2024. Overall Company Results The Company reported net income attributable to common shares of $72.5 million ($16.42 per share) for the third quarter of 2024, compared to a net loss of $23.0 million ($5.02 per share) for the third quarter of 2023. For the first nine months of 2024, the Company recorded net income attributable to common shares of $175.8 million ($39.49 per share), compared to $152.0 million ($32.14 per share) for the first nine months of 2023. The results for the third quarter and first nine months of 2024 and 2023 were affected by a number of items as described in the Non-GAAP Financial Information schedule attached to this release. Excluding these items, net income attributable to common shares was $76.1 million ($17.25 per share) for the third quarter of 2024, compared to $48.9 million ($10.45 per share) for the third quarter of 2023. Excluding these items, net income attributable to common shares was $183.5 million ($41.20 per share) for the first nine months of 2024, compared to $150.8 million ($31.87 per share) for the first nine months of 2023. Subsequent Event In October 2024, the Company purchased an irrevocable group annuity contract from an insurance company for $461.3 million to settle $457.9 million of the outstanding defined benefit pension obligation related to certain retirees and beneficiaries. The purchase of the group annuity contract was funded from the assets of the Company’s pension plan. As a result of this transaction, the Company was relieved of all responsibility for these pension obligations and the insurance company is now required to pay and administer the retirement benefits owed to approximately 1,850 retirees and beneficiaries, with no change to the amount, timing or form of monthly retirement benefit payments. As a result, the Company estimates that it will record a one-time pre-tax settlement gain of approximately $700 million in the fourth quarter of 2024. * * * * * * * * * * * * Forward-Looking Statements All public statements made by the Company and its representatives that are not statements of historical fact, including certain statements in this press release, in the Company’s Annual Report on Form 10-K and in the Company’s 2023 Annual Report to Stockholders, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on expectations, forecasts, and assumptions by the Company’s management and involve a number of risks, uncertainties, and other factors that could cause actual results to differ from those stated, including, without limitation, comments about expectations related to acquisitions or dispositions or related business activities, the Company’s business strategies and objectives, the prospects for growth in the Company’s various business operations, the Company’s future financial performance, and the risks and uncertainties described in Item 1A of the Company’s Annual Report on Form 10-K. Accordingly, undue reliance should not be placed on any forward-looking statement made by or on behalf of the Company. The Company assumes no obligation to update any forward-looking statement after the date on which such statement is made, even if new information subsequently becomes available. GRAHAM HOLDINGS COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended September 30 % (in thousands, except per share amounts) 2024 2023 Change Operating revenues $ 1,207,162 $ 1,111,519 9 Operating expenses 1,095,797 1,036,344 6 Depreciation of property, plant and equipment 21,332 22,207 (4 ) Amortization of intangible assets 8,385 11,759 (29 ) Impairment of goodwill and other long-lived assets — 98,321 — Operating income (loss) 81,648 (57,112 ) — Equity in losses of affiliates, net (13,361 ) (791 ) — Interest income 2,277 1,986 15 Interest expense (25,896 ) (11,810 ) — Non-operating pension and postretirement benefit income, net 38,307 35,653 7 Gain on marketable equity securities, net 30,496 16,759 82 Other (expenses) income, net (465 ) 3,581 — Income (loss) before income taxes 113,006 (11,734 ) — Provision for income taxes 38,500 9,400 — Net income (loss) 74,506 (21,134 ) — Net income attributable to noncontrolling interests (2,003 ) (1,897 ) 6 Net Income (Loss) Attributable to Graham Holdings Company Common Stockholders $ 72,503 $ (23,031 ) — Per Share Information Attributable to Graham Holdings Company Common Stockholders Basic net income (loss) per common share $ 16.54 $ (5.02 ) — Basic average number of common shares outstanding 4,352 4,602 Diluted net income (loss) per common share $ 16.42 $ (5.02 ) — Diluted average number of common shares outstanding 4,384 4,602 GRAHAM HOLDINGS COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Nine Months Ended September 30 % (in thousands, except per share amounts) 2024 2023 Change Operating revenues $ 3,545,104 $ 3,248,064 9 Operating expenses 3,280,590 3,018,057 9 Depreciation of property, plant and equipment 66,032 63,335 4 Amortization of intangible assets 29,194 39,007 (25 ) Impairment of goodwill and other long-lived assets 26,287 99,066 (73 ) Operating income 143,001 28,599 — Equity in losses of affiliates, net (8,470 ) (2,245 ) — Interest income 6,566 4,738 39 Interest expense (136,607 ) (37,878 ) — Non-operating pension and postretirement benefit income, net 105,379 97,313 8 Gain on marketable equity securities, net 154,276 113,429 36 Other income, net 2,973 22,458 (87 ) Income before income taxes 267,118 226,414 18 Provision for income taxes 86,100 70,400 22 Net income 181,018 156,014 16 Net income attributable to noncontrolling interests (5,175 ) (3,985 ) 30 Net Income Attributable to Graham Holdings Company Common Stockholders $ 175,843 $ 152,029 16 Per Share Information Attributable to Graham Holdings Company Common Stockholders Basic net income per common share $ 39.74 $ 32.23 23 Basic average number of common shares outstanding 4,395 4,686 Diluted net income per common share $ 39.49 $ 32.14 23 Diluted average number of common shares outstanding 4,423 4,700 GRAHAM HOLDINGS COMPANY BUSINESS DIVISION INFORMATION (Unaudited) Three Months Ended Nine Months Ended September 30 % September 30 % (in thousands) 2024 2023 Change 2024 2023 Change Operating Revenues Education $ 438,090 $ 411,837 6 $ 1,283,587 $ 1,192,105 8 Television broadcasting 145,422 116,112 25 373,958 347,818 8 Manufacturing 95,385 109,216 (13 ) 300,914 343,882 (12 ) Healthcare 155,413 116,164 34 431,142 331,505 30 Automotive 289,392 272,018 6 902,046 765,251 18 Other businesses 83,464 86,653 (4 ) 253,753 269,110 (6 ) Corporate office 576 365 58 1,727 1,215 42 Intersegment elimination (580 ) (846 ) — (2,023 ) (2,822 ) — $ 1,207,162 $ 1,111,519 9 $ 3,545,104 $ 3,248,064 9 Operating Expenses Education $ 403,200 $ 381,978 6 $ 1,182,833 $ 1,109,090 7 Television broadcasting 83,508 84,165 (1 ) 251,283 254,098 (1 ) Manufacturing 90,890 150,190 (39 ) 289,085 365,546 (21 ) Healthcare 141,153 110,193 28 398,054 314,221 27 Automotive 280,328 263,781 6 873,127 736,711 19 Other businesses 112,358 164,206 (32 ) 364,563 401,525 (9 ) Corporate office 14,657 14,964 (2 ) 45,181 41,096 10 Intersegment elimination (580 ) (846 ) — (2,023 ) (2,822 ) — $ 1,125,514 $ 1,168,631 (4 ) $ 3,402,103 $ 3,219,465 6 Operating Income (Loss) Education $ 34,890 $ 29,859 17 $ 100,754 $ 83,015 21 Television broadcasting 61,914 31,947 94 122,675 93,720 31 Manufacturing 4,495 (40,974 ) — 11,829 (21,664 ) — Healthcare 14,260 5,971 — 33,088 17,284 91 Automotive 9,064 8,237 10 28,919 28,540 1 Other businesses (28,894 ) (77,553 ) 63 (110,810 ) (132,415 ) 16 Corporate office (14,081 ) (14,599 ) 4 (43,454 ) (39,881 ) (9 ) $ 81,648 $ (57,112 ) — $ 143,001 $ 28,599 — Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets Education $ 2,421 $ 3,210 (25 ) $ 8,267 $ 11,610 (29 ) Television broadcasting 1,360 1,363 0 4,070 4,088 0 Manufacturing 2,619 51,489 (95 ) 8,387 60,683 (86 ) Healthcare 159 866 (82 ) 1,393 2,702 (48 ) Automotive 5 3 67 10 3 — Other businesses 1,821 53,149 (97 ) 33,354 58,987 (43 ) Corporate office — — — — — — $ 8,385 $ 110,080 (92 ) $ 55,481 $ 138,073 (60 ) Operating Income (Loss) before Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets Education $ 37,311 $ 33,069 13 $ 109,021 $ 94,625 15 Television broadcasting 63,274 33,310 90 126,745 97,808 30 Manufacturing 7,114 10,515 (32 ) 20,216 39,019 (48 ) Healthcare 14,419 6,837 — 34,481 19,986 73 Automotive 9,069 8,240 10 28,929 28,543 1 Other businesses (27,073 ) (24,404 ) (11 ) (77,456 ) (73,428 ) (5 ) Corporate office (14,081 ) (14,599 ) 4 (43,454 ) (39,881 ) (9 ) $ 90,033 $ 52,968 70 $ 198,482 $ 166,672 19 Three Months Ended Nine Months Ended September 30 % September 30 % (in thousands) 2024 2023 Change 2024 2023 Change Depreciation Education $ 8,576 $ 10,000 (14 ) $ 26,736 $ 28,428 (6 ) Television broadcasting 2,756 3,120 (12 ) 8,494 9,243 (8 ) Manufacturing 2,818 2,388 18 8,227 6,957 18 Healthcare 1,754 1,411 24 5,031 3,802 32 Automotive 1,774 1,304 36 5,203 3,565 46 Other businesses 3,522 3,832 (8 ) 11,909 10,882 9 Corporate office 132 152 (13 ) 432 458 (6 ) $ 21,332 $ 22,207 (4 ) $ 66,032 $ 63,335 4 Pension Expense Education $ 4,445 $ 2,226 100 $ 13,267 $ 6,680 99 Television broadcasting 1,528 833 83 4,583 2,498 83 Manufacturing 978 280 — 1,897 836 — Healthcare 4,804 3,521 36 14,413 10,563 36 Automotive 29 16 81 86 26 — Other businesses 1,963 662 — 5,577 1,847 — Corporate office 1,014 952 7 3,043 2,856 7 $ 14,761 $ 8,490 74 $ 42,866 $ 25,306 69 Adjusted Operating Cash Flow (non-GAAP)(1) Education $ 50,332 $ 45,295 11 $ 149,024 $ 129,733 15 Television broadcasting 67,558 37,263 81 139,822 109,549 28 Manufacturing 10,910 13,183 (17 ) 30,340 46,812 (35 ) Healthcare 20,977 11,769 78 53,925 34,351 57 Automotive 10,872 9,560 14 34,218 32,134 6 Other businesses (21,588 ) (19,910 ) (8 ) (59,970 ) (60,699 ) 1 Corporate office (12,935 ) (13,495 ) 4 (39,979 ) (36,567 ) (9 ) $ 126,126 $ 83,665 51 $ 307,380 $ 255,313 20 ____________ (1) Adjusted Operating Cash Flow (non-GAAP) is calculated as Operating Income (Loss) before Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets plus Depreciation Expense and Pension Expense. GRAHAM HOLDINGS COMPANY EDUCATION DIVISION INFORMATION (Unaudited) Three Months Ended Nine Months Ended September 30 % September 30 % (in thousands) 2024 2023 Change 2024 2023 Change Operating Revenues Kaplan international $ 277,009 $ 249,976 11 $ 813,833 $ 714,715 14 Higher education 85,655 81,925 5 246,818 250,557 (1 ) Supplemental education 76,134 78,332 (3 ) 221,389 226,535 (2 ) Kaplan corporate and other 158 3,101 (95 ) 5,739 8,360 (31 ) Intersegment elimination (866 ) (1,497 ) — (4,192 ) (8,062 ) — $ 438,090 $ 411,837 6 $ 1,283,587 $ 1,192,105 8 Operating Expenses Kaplan international $ 251,471 $ 227,756 10 $ 731,159 $ 650,443 12 Higher education 74,270 73,460 1 215,560 217,214 (1 ) Supplemental education 64,948 68,603 (5 ) 199,951 209,543 (5 ) Kaplan corporate and other 10,875 10,513 3 32,096 28,434 13 Amortization of intangible assets 2,421 3,210 (25 ) 8,267 11,133 (26 ) Impairment of long-lived assets — — — — 477 — Intersegment elimination (785 ) (1,564 ) — (4,200 ) (8,154 ) — $ 403,200 $ 381,978 6 $ 1,182,833 $ 1,109,090 7 Operating Income (Loss) Kaplan international $ 25,538 $ 22,220 15 $ 82,674 $ 64,272 29 Higher education 11,385 8,465 34 31,258 33,343 (6 ) Supplemental education 11,186 9,729 15 21,438 16,992 26 Kaplan corporate and other (10,717 ) (7,412 ) (45 ) (26,357 ) (20,074 ) (31 ) Amortization of intangible assets (2,421 ) (3,210 ) 25 (8,267 ) (11,133 ) 26 Impairment of long-lived assets — — — — (477 ) — Intersegment elimination (81 ) 67 — 8 92 — $ 34,890 $ 29,859 17 $ 100,754 $ 83,015 21 Operating Income (Loss) before Amortization of Intangible Assets and Impairment of Long-Lived Assets Kaplan international $ 25,538 $ 22,220 15 $ 82,674 $ 64,272 29 Higher education 11,385 8,465 34 31,258 33,343 (6 ) Supplemental education 11,186 9,729 15 21,438 16,992 26 Kaplan corporate and other (10,717 ) (7,412 ) (45 ) (26,357 ) (20,074 ) (31 ) Intersegment elimination (81 ) 67 — 8 92 — $ 37,311 $ 33,069 13 $ 109,021 $ 94,625 15 Depreciation Kaplan international $ 7,202 $ 7,599 (5 ) $ 21,735 $ 20,832 4 Higher education 589 1,258 (53 ) 2,291 3,431 (33 ) Supplemental education 777 1,117 (30 ) 2,653 4,087 (35 ) Kaplan corporate and other 8 26 (69 ) 57 78 (27 ) $ 8,576 $ 10,000 (14 ) $ 26,736 $ 28,428 (6 ) Pension Expense Kaplan international $ 198 $ 83 — $ 527 $ 244 — Higher education 1,903 958 99 5,729 2,803 — Supplemental education 1,962 1,063 85 5,874 3,110 89 Kaplan corporate and other 382 122 — 1,137 523 — $ 4,445 $ 2,226 100 $ 13,267 $ 6,680 99 Adjusted Operating Cash Flow (non-GAAP)(1) Kaplan international $ 32,938 $ 29,902 10 $ 104,936 $ 85,348 23 Higher education 13,877 10,681 30 39,278 39,577 (1 ) Supplemental education 13,925 11,909 17 29,965 24,189 24 Kaplan corporate and other (10,327 ) (7,264 ) (42 ) (25,163 ) (19,473 ) (29 ) Intersegment elimination (81 ) 67 — 8 92 — $ 50,332 $ 45,295 11 $ 149,024 $ 129,733 15 ____________ (1) Adjusted Operating Cash Flow (non-GAAP) is calculated as Operating Income (Loss) before Amortization of Intangible Assets and Impairment of Long-Lived Assets plus Depreciation Expense and Pension Expense. NON-GAAP FINANCIAL INFORMATION GRAHAM HOLDINGS COMPANY (Unaudited) In addition to the results reported in accordance with accounting principles generally accepted in the United States (GAAP) included in this press release, the Company has provided information regarding Adjusted Operating Cash Flow and Net income excluding certain items described below, reconciled to the most directly comparable GAAP measures. Management believes that these non-GAAP measures, when read in conjunction with the Company’s GAAP financials, provide useful information to investors by offering: the ability to make meaningful period-to-period comparisons of the Company’s ongoing results; the ability to identify trends in the Company’s underlying business; and a better understanding of how management plans and measures the Company’s underlying business. Adjusted Operating Cash Flow and Net income, excluding certain items, should not be considered substitutes or alternatives to computations calculated in accordance with and required by GAAP. These non-GAAP financial measures should be read only in conjunction with financial information presented on a GAAP basis. The gains and losses on marketable equity securities relate to the change in the fair value (quoted prices) of its portfolio of equity securities. The mandatorily redeemable noncontrolling interest represents the ownership portion of a group of minority shareholders at a subsidiary of the Company's Healthcare business. The Company measures the redemption value of this minority ownership on a quarterly basis with changes in the fair value recorded as interest expense or income, which is included in net income for the period. The effect of gains and losses on marketable equity securities and net interest expense related to fair value adjustments of the mandatorily redeemable noncontrolling interest are not directly related to the core performance of the Company’s business operations since these items do not directly relate to the sale of the Company’s services or products. The accounting principles generally accepted in the United States (“GAAP”) require that the Company include the gains and losses on marketable equity securities and net interest expense related to fair value adjustments of the mandatorily redeemable noncontrolling interest in net income on the Condensed Consolidated Statements of Operations. The Company excludes the gains and losses on marketable equity securities and net interest expense related to fair value adjustments of the mandatorily redeemable noncontrolling interest from the non-GAAP adjusted net income because these items are independent of the Company’s core operations and not indicative of the performance of the Company’s business operations. The following tables reconcile the non-GAAP financial measures for Net income, excluding certain items, to the most directly comparable GAAP measures: Three Months Ended September 30 2024 2023 (in thousands, except per share amounts) Income before income taxes Income Taxes Net (Loss) Income (Loss) Income before income taxes Income Taxes Net Income Amounts attributable to Graham Holdings Company Common Stockholders As reported $ 113,006 $ 38,500 $ 74,506 $ (11,734 ) $ 9,400 $ (21,134 ) Attributable to noncontrolling interests (2,003 ) (1,897 ) Attributable to Graham Holdings Company Stockholders 72,503 (23,031 ) Adjustments: Goodwill and other long-lived asset impairment charges — (626 ) 626 98,321 13,876 84,445 Charges related to non-operating Separation Incentive Programs 3,665 938 2,727 — — — Interest expense related to the fair value adjustment of the mandatorily redeemable noncontrolling interest 9,730 (3,501 ) 13,231 1,132 105 1,027 Net gains on marketable equity securities (30,496 ) (7,808 ) (22,688 ) (16,758 ) (4,411 ) (12,347 ) Net losses of affiliates whose operations are not managed by the Company 2,307 590 1,717 2,836 746 2,090 Gain on sale of certain businesses and websites (3,763 ) (1,197 ) (2,566 ) — — — Credit to interest expense resulting from gains realized related to the termination of interest rate swaps — — — (4,581 ) (1,252 ) (3,329 ) Net non-operating loss from impairment and write-up equity and cost method investments 14,236 3,642 10,594 — — — Net Income, adjusted (non-GAAP) $ 76,144 $ 48,855 Per share information attributable to Graham Holdings Company Common Stockholders Diluted (loss) income per common share, as reported $ 16.42 $ (5.02 ) Adjustments: Goodwill and other long-lived asset impairment charges 0.14 18.18 Charges related to non-operating Separation Incentive Programs 0.62 — Interest expense related to the fair value adjustment of the mandatorily redeemable noncontrolling interest 3.00 0.22 Net gains on marketable equity securities (5.14 ) (2.66 ) Net losses of affiliates whose operations are not managed by the Company 0.39 0.45 Gain on sale of certain businesses and websites (0.58 ) — Credit to interest expense resulting from gains realized related to the termination of interest rate swaps — (0.72 ) Net non-operating loss from impairment and write-up equity and cost method investments 2.40 — Diluted income per common share, adjusted (non-GAAP) $ 17.25 $ 10.45 The adjusted diluted per share amounts may not compute due to rounding. Nine Months Ended September 30 2024 2023 (in thousands, except per share amounts) Income before income taxes Income Taxes Net Income Income before income taxes Income Taxes Net Income Amounts attributable to Graham Holdings Company Common Stockholders As reported $ 267,118 $ 86,100 $ 181,018 $ 226,414 $ 70,400 $ 156,014 Attributable to noncontrolling interests (5,175 ) (3,985 ) Attributable to Graham Holdings Company Stockholders $ 175,843 $ 152,029 Adjustments: Net credit related to fair value changes in contingent consideration from prior acquisitions — — — (4,688 ) (143 ) (4,545 ) Goodwill and other long-lived asset impairment charges 26,287 5,067 21,220 99,066 14,078 84,988 Charges related to non-operating Voluntary Retirement Incentive Program and Separation Incentive Programs 20,493 5,246 15,247 9,646 2,481 7,165 Interest expense related to the fair value adjustment of the mandatorily redeemable noncontrolling interest 85,145 8,740 76,405 1,421 152 1,269 Net gains on marketable equity securities (154,276 ) (39,502 ) (114,774 ) (113,429 ) (29,861 ) (83,568 ) Net losses of affiliates whose operations are not managed by the Company 4,922 1,260 3,662 9,657 2,542 7,115 Gain on sale of certain businesses and websites (7,246 ) (1,956 ) (5,290 ) — — — Gain on sale of Pinna — — — (10,033 ) (2,641 ) (7,392 ) Non-operating loss (gain) from impairment, write-up and sales of equity and cost method investments 14,980 3,833 11,147 (3,935 ) (1,008 ) (2,927 ) Credit to interest expense resulting from gains realized related to the termination of interest rate swaps — — — (4,581 ) (1,252 ) (3,329 ) Net Income, adjusted (non-GAAP) $ 183,460 $ 150,805 Per share information attributable to Graham Holdings Company Common Stockholders Diluted income per common share, as reported $ 39.49 $ 32.14 Adjustments: Net credit related to fair value changes in contingent consideration from prior acquisitions — (0.98 ) Goodwill and other long-lived asset impairment charges 4.77 18.30 Charges related to non-operating Voluntary Retirement Incentive Program and Separation Incentive Programs 3.42 1.54 Interest expense related to the fair value adjustment of the mandatorily redeemable noncontrolling interest 17.16 0.27 Net gains on marketable equity securities (25.77 ) (17.99 ) Net losses of affiliates whose operations are not managed by the Company 0.82 1.53 Gain on sale of certain businesses and websites (1.19 ) — Gain on sale of Pinna — (1.59 ) Non-operating loss (gain) from impairment, write-up and sales of equity and cost method investments 2.50 (0.63 ) Credit to interest expense resulting from gains realized related to the termination of interest rate swaps — (0.72 ) Diluted income per common share, adjusted (non-GAAP) $ 41.20 $ 31.87 The adjusted diluted per share amounts may not compute due to rounding. 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Graham Holdings Company Reports Third Quarter Earnings By: Graham Holdings Company via Business Wire October 30, 2024 at 08:30 AM EDT Graham Holdings Company (NYSE: GHC) today reported its financial results for the third quarter and first nine months of 2024. The Company also filed its Form 10-Q today for the quarter ended September 30, 2024 with the Securities and Exchange Commission. Division Operating Results Revenue for the third quarter of 2024 was $1,207.2 million, up 9% from $1,111.5 million in the third quarter of 2023. Revenues increased at education, television broadcasting, healthcare and automotive, partially offset by declines at manufacturing and other businesses. The Company reported operating income of $81.6 million for the third quarter of 2024, compared to an operating loss of $57.1 million for the third quarter of 2023. The improvement in operating results is due to goodwill and other long-lived asset impairment charges at World of Good Brands (WGB) and Dekko in the third quarter of 2023 and increases at education, television broadcasting, healthcare and automotive, partially offset by declines at manufacturing and other businesses, excluding the impairments. The Company reported adjusted operating cash flow (non-GAAP) of $126.1 million for the third quarter of 2024, compared to $83.7 million for the third quarter of 2023. Adjusted operating cash flow improved at education, television broadcasting, healthcare and automotive, partially offset by declines at manufacturing and other businesses. Capital expenditures totaled $23.8 million and $26.7 million for the third quarter of 2024 and 2023, respectively. Revenue for the first nine months of 2024 was $3,545.1 million, up 9% from $3,248.1 million in the first nine months of 2023. Revenues increased at education, television broadcasting, healthcare and automotive, partially offset by declines at manufacturing and other businesses. The Company recorded operated income of $143.0 million for the first nine months of 2024, compared to $28.6 million for the first nine months of 2023. Excluding goodwill and other long-lived asset impairment charges, the improvement in operating results is due to increases at education, television broadcasting, healthcare and automotive, partially offset by declines at manufacturing and other businesses. The Company reported adjusted operating cash flow (non-GAAP) of $307.4 million for the first nine months of 2024, compared to $255.3 million for the first nine months of 2023. Adjusted operating cash flow improved at education, television broadcasting, healthcare, automotive and other businesses, partially offset by declines at manufacturing. Capital expenditures totaled $66.0 million and $71.6 million for the first nine months of 2024 and 2023, respectively. Acquisitions and Dispositions of Businesses There were no significant business acquisitions or dispositions during the first nine months of 2024. Debt, Cash and Marketable Equity Securities At September 30, 2024, the Company had $765.2 million in borrowings outstanding at an average interest rate of 6.2%, including $66.9 million outstanding on its $300 million revolving credit facility. Cash, marketable equity securities and other investments totaled $1,114.0 million at September 30, 2024. Overall, the Company recognized $30.5 million and $154.3 million in net gains on marketable equity securities in the third quarter and first nine months of 2024, respectively, compared to $16.8 million and $113.4 million in net gains on marketable equity securities in the third quarter and first nine months of 2023, respectively. Common Stock Repurchases During the third quarter and first nine months of 2024, the Company purchased a total of 64,490 and 133,276 shares, respectively, of its Class B common stock at a cost of $48.7 million and $98.2 million, respectively. At September 30, 2024, there were 4,347,533 shares outstanding. On September 12, 2024, the Board of Directors authorized the Company to acquire up to 500,000 shares of its Class B common stock; the Company has remaining authorization for 486,132 shares as of September 30, 2024. Overall Company Results The Company reported net income attributable to common shares of $72.5 million ($16.42 per share) for the third quarter of 2024, compared to a net loss of $23.0 million ($5.02 per share) for the third quarter of 2023. For the first nine months of 2024, the Company recorded net income attributable to common shares of $175.8 million ($39.49 per share), compared to $152.0 million ($32.14 per share) for the first nine months of 2023. The results for the third quarter and first nine months of 2024 and 2023 were affected by a number of items as described in the Non-GAAP Financial Information schedule attached to this release. Excluding these items, net income attributable to common shares was $76.1 million ($17.25 per share) for the third quarter of 2024, compared to $48.9 million ($10.45 per share) for the third quarter of 2023. Excluding these items, net income attributable to common shares was $183.5 million ($41.20 per share) for the first nine months of 2024, compared to $150.8 million ($31.87 per share) for the first nine months of 2023. Subsequent Event In October 2024, the Company purchased an irrevocable group annuity contract from an insurance company for $461.3 million to settle $457.9 million of the outstanding defined benefit pension obligation related to certain retirees and beneficiaries. The purchase of the group annuity contract was funded from the assets of the Company’s pension plan. As a result of this transaction, the Company was relieved of all responsibility for these pension obligations and the insurance company is now required to pay and administer the retirement benefits owed to approximately 1,850 retirees and beneficiaries, with no change to the amount, timing or form of monthly retirement benefit payments. As a result, the Company estimates that it will record a one-time pre-tax settlement gain of approximately $700 million in the fourth quarter of 2024. * * * * * * * * * * * * Forward-Looking Statements All public statements made by the Company and its representatives that are not statements of historical fact, including certain statements in this press release, in the Company’s Annual Report on Form 10-K and in the Company’s 2023 Annual Report to Stockholders, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on expectations, forecasts, and assumptions by the Company’s management and involve a number of risks, uncertainties, and other factors that could cause actual results to differ from those stated, including, without limitation, comments about expectations related to acquisitions or dispositions or related business activities, the Company’s business strategies and objectives, the prospects for growth in the Company’s various business operations, the Company’s future financial performance, and the risks and uncertainties described in Item 1A of the Company’s Annual Report on Form 10-K. Accordingly, undue reliance should not be placed on any forward-looking statement made by or on behalf of the Company. The Company assumes no obligation to update any forward-looking statement after the date on which such statement is made, even if new information subsequently becomes available. GRAHAM HOLDINGS COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended September 30 % (in thousands, except per share amounts) 2024 2023 Change Operating revenues $ 1,207,162 $ 1,111,519 9 Operating expenses 1,095,797 1,036,344 6 Depreciation of property, plant and equipment 21,332 22,207 (4 ) Amortization of intangible assets 8,385 11,759 (29 ) Impairment of goodwill and other long-lived assets — 98,321 — Operating income (loss) 81,648 (57,112 ) — Equity in losses of affiliates, net (13,361 ) (791 ) — Interest income 2,277 1,986 15 Interest expense (25,896 ) (11,810 ) — Non-operating pension and postretirement benefit income, net 38,307 35,653 7 Gain on marketable equity securities, net 30,496 16,759 82 Other (expenses) income, net (465 ) 3,581 — Income (loss) before income taxes 113,006 (11,734 ) — Provision for income taxes 38,500 9,400 — Net income (loss) 74,506 (21,134 ) — Net income attributable to noncontrolling interests (2,003 ) (1,897 ) 6 Net Income (Loss) Attributable to Graham Holdings Company Common Stockholders $ 72,503 $ (23,031 ) — Per Share Information Attributable to Graham Holdings Company Common Stockholders Basic net income (loss) per common share $ 16.54 $ (5.02 ) — Basic average number of common shares outstanding 4,352 4,602 Diluted net income (loss) per common share $ 16.42 $ (5.02 ) — Diluted average number of common shares outstanding 4,384 4,602 GRAHAM HOLDINGS COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Nine Months Ended September 30 % (in thousands, except per share amounts) 2024 2023 Change Operating revenues $ 3,545,104 $ 3,248,064 9 Operating expenses 3,280,590 3,018,057 9 Depreciation of property, plant and equipment 66,032 63,335 4 Amortization of intangible assets 29,194 39,007 (25 ) Impairment of goodwill and other long-lived assets 26,287 99,066 (73 ) Operating income 143,001 28,599 — Equity in losses of affiliates, net (8,470 ) (2,245 ) — Interest income 6,566 4,738 39 Interest expense (136,607 ) (37,878 ) — Non-operating pension and postretirement benefit income, net 105,379 97,313 8 Gain on marketable equity securities, net 154,276 113,429 36 Other income, net 2,973 22,458 (87 ) Income before income taxes 267,118 226,414 18 Provision for income taxes 86,100 70,400 22 Net income 181,018 156,014 16 Net income attributable to noncontrolling interests (5,175 ) (3,985 ) 30 Net Income Attributable to Graham Holdings Company Common Stockholders $ 175,843 $ 152,029 16 Per Share Information Attributable to Graham Holdings Company Common Stockholders Basic net income per common share $ 39.74 $ 32.23 23 Basic average number of common shares outstanding 4,395 4,686 Diluted net income per common share $ 39.49 $ 32.14 23 Diluted average number of common shares outstanding 4,423 4,700 GRAHAM HOLDINGS COMPANY BUSINESS DIVISION INFORMATION (Unaudited) Three Months Ended Nine Months Ended September 30 % September 30 % (in thousands) 2024 2023 Change 2024 2023 Change Operating Revenues Education $ 438,090 $ 411,837 6 $ 1,283,587 $ 1,192,105 8 Television broadcasting 145,422 116,112 25 373,958 347,818 8 Manufacturing 95,385 109,216 (13 ) 300,914 343,882 (12 ) Healthcare 155,413 116,164 34 431,142 331,505 30 Automotive 289,392 272,018 6 902,046 765,251 18 Other businesses 83,464 86,653 (4 ) 253,753 269,110 (6 ) Corporate office 576 365 58 1,727 1,215 42 Intersegment elimination (580 ) (846 ) — (2,023 ) (2,822 ) — $ 1,207,162 $ 1,111,519 9 $ 3,545,104 $ 3,248,064 9 Operating Expenses Education $ 403,200 $ 381,978 6 $ 1,182,833 $ 1,109,090 7 Television broadcasting 83,508 84,165 (1 ) 251,283 254,098 (1 ) Manufacturing 90,890 150,190 (39 ) 289,085 365,546 (21 ) Healthcare 141,153 110,193 28 398,054 314,221 27 Automotive 280,328 263,781 6 873,127 736,711 19 Other businesses 112,358 164,206 (32 ) 364,563 401,525 (9 ) Corporate office 14,657 14,964 (2 ) 45,181 41,096 10 Intersegment elimination (580 ) (846 ) — (2,023 ) (2,822 ) — $ 1,125,514 $ 1,168,631 (4 ) $ 3,402,103 $ 3,219,465 6 Operating Income (Loss) Education $ 34,890 $ 29,859 17 $ 100,754 $ 83,015 21 Television broadcasting 61,914 31,947 94 122,675 93,720 31 Manufacturing 4,495 (40,974 ) — 11,829 (21,664 ) — Healthcare 14,260 5,971 — 33,088 17,284 91 Automotive 9,064 8,237 10 28,919 28,540 1 Other businesses (28,894 ) (77,553 ) 63 (110,810 ) (132,415 ) 16 Corporate office (14,081 ) (14,599 ) 4 (43,454 ) (39,881 ) (9 ) $ 81,648 $ (57,112 ) — $ 143,001 $ 28,599 — Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets Education $ 2,421 $ 3,210 (25 ) $ 8,267 $ 11,610 (29 ) Television broadcasting 1,360 1,363 0 4,070 4,088 0 Manufacturing 2,619 51,489 (95 ) 8,387 60,683 (86 ) Healthcare 159 866 (82 ) 1,393 2,702 (48 ) Automotive 5 3 67 10 3 — Other businesses 1,821 53,149 (97 ) 33,354 58,987 (43 ) Corporate office — — — — — — $ 8,385 $ 110,080 (92 ) $ 55,481 $ 138,073 (60 ) Operating Income (Loss) before Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets Education $ 37,311 $ 33,069 13 $ 109,021 $ 94,625 15 Television broadcasting 63,274 33,310 90 126,745 97,808 30 Manufacturing 7,114 10,515 (32 ) 20,216 39,019 (48 ) Healthcare 14,419 6,837 — 34,481 19,986 73 Automotive 9,069 8,240 10 28,929 28,543 1 Other businesses (27,073 ) (24,404 ) (11 ) (77,456 ) (73,428 ) (5 ) Corporate office (14,081 ) (14,599 ) 4 (43,454 ) (39,881 ) (9 ) $ 90,033 $ 52,968 70 $ 198,482 $ 166,672 19 Three Months Ended Nine Months Ended September 30 % September 30 % (in thousands) 2024 2023 Change 2024 2023 Change Depreciation Education $ 8,576 $ 10,000 (14 ) $ 26,736 $ 28,428 (6 ) Television broadcasting 2,756 3,120 (12 ) 8,494 9,243 (8 ) Manufacturing 2,818 2,388 18 8,227 6,957 18 Healthcare 1,754 1,411 24 5,031 3,802 32 Automotive 1,774 1,304 36 5,203 3,565 46 Other businesses 3,522 3,832 (8 ) 11,909 10,882 9 Corporate office 132 152 (13 ) 432 458 (6 ) $ 21,332 $ 22,207 (4 ) $ 66,032 $ 63,335 4 Pension Expense Education $ 4,445 $ 2,226 100 $ 13,267 $ 6,680 99 Television broadcasting 1,528 833 83 4,583 2,498 83 Manufacturing 978 280 — 1,897 836 — Healthcare 4,804 3,521 36 14,413 10,563 36 Automotive 29 16 81 86 26 — Other businesses 1,963 662 — 5,577 1,847 — Corporate office 1,014 952 7 3,043 2,856 7 $ 14,761 $ 8,490 74 $ 42,866 $ 25,306 69 Adjusted Operating Cash Flow (non-GAAP)(1) Education $ 50,332 $ 45,295 11 $ 149,024 $ 129,733 15 Television broadcasting 67,558 37,263 81 139,822 109,549 28 Manufacturing 10,910 13,183 (17 ) 30,340 46,812 (35 ) Healthcare 20,977 11,769 78 53,925 34,351 57 Automotive 10,872 9,560 14 34,218 32,134 6 Other businesses (21,588 ) (19,910 ) (8 ) (59,970 ) (60,699 ) 1 Corporate office (12,935 ) (13,495 ) 4 (39,979 ) (36,567 ) (9 ) $ 126,126 $ 83,665 51 $ 307,380 $ 255,313 20 ____________ (1) Adjusted Operating Cash Flow (non-GAAP) is calculated as Operating Income (Loss) before Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets plus Depreciation Expense and Pension Expense. GRAHAM HOLDINGS COMPANY EDUCATION DIVISION INFORMATION (Unaudited) Three Months Ended Nine Months Ended September 30 % September 30 % (in thousands) 2024 2023 Change 2024 2023 Change Operating Revenues Kaplan international $ 277,009 $ 249,976 11 $ 813,833 $ 714,715 14 Higher education 85,655 81,925 5 246,818 250,557 (1 ) Supplemental education 76,134 78,332 (3 ) 221,389 226,535 (2 ) Kaplan corporate and other 158 3,101 (95 ) 5,739 8,360 (31 ) Intersegment elimination (866 ) (1,497 ) — (4,192 ) (8,062 ) — $ 438,090 $ 411,837 6 $ 1,283,587 $ 1,192,105 8 Operating Expenses Kaplan international $ 251,471 $ 227,756 10 $ 731,159 $ 650,443 12 Higher education 74,270 73,460 1 215,560 217,214 (1 ) Supplemental education 64,948 68,603 (5 ) 199,951 209,543 (5 ) Kaplan corporate and other 10,875 10,513 3 32,096 28,434 13 Amortization of intangible assets 2,421 3,210 (25 ) 8,267 11,133 (26 ) Impairment of long-lived assets — — — — 477 — Intersegment elimination (785 ) (1,564 ) — (4,200 ) (8,154 ) — $ 403,200 $ 381,978 6 $ 1,182,833 $ 1,109,090 7 Operating Income (Loss) Kaplan international $ 25,538 $ 22,220 15 $ 82,674 $ 64,272 29 Higher education 11,385 8,465 34 31,258 33,343 (6 ) Supplemental education 11,186 9,729 15 21,438 16,992 26 Kaplan corporate and other (10,717 ) (7,412 ) (45 ) (26,357 ) (20,074 ) (31 ) Amortization of intangible assets (2,421 ) (3,210 ) 25 (8,267 ) (11,133 ) 26 Impairment of long-lived assets — — — — (477 ) — Intersegment elimination (81 ) 67 — 8 92 — $ 34,890 $ 29,859 17 $ 100,754 $ 83,015 21 Operating Income (Loss) before Amortization of Intangible Assets and Impairment of Long-Lived Assets Kaplan international $ 25,538 $ 22,220 15 $ 82,674 $ 64,272 29 Higher education 11,385 8,465 34 31,258 33,343 (6 ) Supplemental education 11,186 9,729 15 21,438 16,992 26 Kaplan corporate and other (10,717 ) (7,412 ) (45 ) (26,357 ) (20,074 ) (31 ) Intersegment elimination (81 ) 67 — 8 92 — $ 37,311 $ 33,069 13 $ 109,021 $ 94,625 15 Depreciation Kaplan international $ 7,202 $ 7,599 (5 ) $ 21,735 $ 20,832 4 Higher education 589 1,258 (53 ) 2,291 3,431 (33 ) Supplemental education 777 1,117 (30 ) 2,653 4,087 (35 ) Kaplan corporate and other 8 26 (69 ) 57 78 (27 ) $ 8,576 $ 10,000 (14 ) $ 26,736 $ 28,428 (6 ) Pension Expense Kaplan international $ 198 $ 83 — $ 527 $ 244 — Higher education 1,903 958 99 5,729 2,803 — Supplemental education 1,962 1,063 85 5,874 3,110 89 Kaplan corporate and other 382 122 — 1,137 523 — $ 4,445 $ 2,226 100 $ 13,267 $ 6,680 99 Adjusted Operating Cash Flow (non-GAAP)(1) Kaplan international $ 32,938 $ 29,902 10 $ 104,936 $ 85,348 23 Higher education 13,877 10,681 30 39,278 39,577 (1 ) Supplemental education 13,925 11,909 17 29,965 24,189 24 Kaplan corporate and other (10,327 ) (7,264 ) (42 ) (25,163 ) (19,473 ) (29 ) Intersegment elimination (81 ) 67 — 8 92 — $ 50,332 $ 45,295 11 $ 149,024 $ 129,733 15 ____________ (1) Adjusted Operating Cash Flow (non-GAAP) is calculated as Operating Income (Loss) before Amortization of Intangible Assets and Impairment of Long-Lived Assets plus Depreciation Expense and Pension Expense. NON-GAAP FINANCIAL INFORMATION GRAHAM HOLDINGS COMPANY (Unaudited) In addition to the results reported in accordance with accounting principles generally accepted in the United States (GAAP) included in this press release, the Company has provided information regarding Adjusted Operating Cash Flow and Net income excluding certain items described below, reconciled to the most directly comparable GAAP measures. Management believes that these non-GAAP measures, when read in conjunction with the Company’s GAAP financials, provide useful information to investors by offering: the ability to make meaningful period-to-period comparisons of the Company’s ongoing results; the ability to identify trends in the Company’s underlying business; and a better understanding of how management plans and measures the Company’s underlying business. Adjusted Operating Cash Flow and Net income, excluding certain items, should not be considered substitutes or alternatives to computations calculated in accordance with and required by GAAP. These non-GAAP financial measures should be read only in conjunction with financial information presented on a GAAP basis. The gains and losses on marketable equity securities relate to the change in the fair value (quoted prices) of its portfolio of equity securities. The mandatorily redeemable noncontrolling interest represents the ownership portion of a group of minority shareholders at a subsidiary of the Company's Healthcare business. The Company measures the redemption value of this minority ownership on a quarterly basis with changes in the fair value recorded as interest expense or income, which is included in net income for the period. The effect of gains and losses on marketable equity securities and net interest expense related to fair value adjustments of the mandatorily redeemable noncontrolling interest are not directly related to the core performance of the Company’s business operations since these items do not directly relate to the sale of the Company’s services or products. The accounting principles generally accepted in the United States (“GAAP”) require that the Company include the gains and losses on marketable equity securities and net interest expense related to fair value adjustments of the mandatorily redeemable noncontrolling interest in net income on the Condensed Consolidated Statements of Operations. The Company excludes the gains and losses on marketable equity securities and net interest expense related to fair value adjustments of the mandatorily redeemable noncontrolling interest from the non-GAAP adjusted net income because these items are independent of the Company’s core operations and not indicative of the performance of the Company’s business operations. The following tables reconcile the non-GAAP financial measures for Net income, excluding certain items, to the most directly comparable GAAP measures: Three Months Ended September 30 2024 2023 (in thousands, except per share amounts) Income before income taxes Income Taxes Net (Loss) Income (Loss) Income before income taxes Income Taxes Net Income Amounts attributable to Graham Holdings Company Common Stockholders As reported $ 113,006 $ 38,500 $ 74,506 $ (11,734 ) $ 9,400 $ (21,134 ) Attributable to noncontrolling interests (2,003 ) (1,897 ) Attributable to Graham Holdings Company Stockholders 72,503 (23,031 ) Adjustments: Goodwill and other long-lived asset impairment charges — (626 ) 626 98,321 13,876 84,445 Charges related to non-operating Separation Incentive Programs 3,665 938 2,727 — — — Interest expense related to the fair value adjustment of the mandatorily redeemable noncontrolling interest 9,730 (3,501 ) 13,231 1,132 105 1,027 Net gains on marketable equity securities (30,496 ) (7,808 ) (22,688 ) (16,758 ) (4,411 ) (12,347 ) Net losses of affiliates whose operations are not managed by the Company 2,307 590 1,717 2,836 746 2,090 Gain on sale of certain businesses and websites (3,763 ) (1,197 ) (2,566 ) — — — Credit to interest expense resulting from gains realized related to the termination of interest rate swaps — — — (4,581 ) (1,252 ) (3,329 ) Net non-operating loss from impairment and write-up equity and cost method investments 14,236 3,642 10,594 — — — Net Income, adjusted (non-GAAP) $ 76,144 $ 48,855 Per share information attributable to Graham Holdings Company Common Stockholders Diluted (loss) income per common share, as reported $ 16.42 $ (5.02 ) Adjustments: Goodwill and other long-lived asset impairment charges 0.14 18.18 Charges related to non-operating Separation Incentive Programs 0.62 — Interest expense related to the fair value adjustment of the mandatorily redeemable noncontrolling interest 3.00 0.22 Net gains on marketable equity securities (5.14 ) (2.66 ) Net losses of affiliates whose operations are not managed by the Company 0.39 0.45 Gain on sale of certain businesses and websites (0.58 ) — Credit to interest expense resulting from gains realized related to the termination of interest rate swaps — (0.72 ) Net non-operating loss from impairment and write-up equity and cost method investments 2.40 — Diluted income per common share, adjusted (non-GAAP) $ 17.25 $ 10.45 The adjusted diluted per share amounts may not compute due to rounding. Nine Months Ended September 30 2024 2023 (in thousands, except per share amounts) Income before income taxes Income Taxes Net Income Income before income taxes Income Taxes Net Income Amounts attributable to Graham Holdings Company Common Stockholders As reported $ 267,118 $ 86,100 $ 181,018 $ 226,414 $ 70,400 $ 156,014 Attributable to noncontrolling interests (5,175 ) (3,985 ) Attributable to Graham Holdings Company Stockholders $ 175,843 $ 152,029 Adjustments: Net credit related to fair value changes in contingent consideration from prior acquisitions — — — (4,688 ) (143 ) (4,545 ) Goodwill and other long-lived asset impairment charges 26,287 5,067 21,220 99,066 14,078 84,988 Charges related to non-operating Voluntary Retirement Incentive Program and Separation Incentive Programs 20,493 5,246 15,247 9,646 2,481 7,165 Interest expense related to the fair value adjustment of the mandatorily redeemable noncontrolling interest 85,145 8,740 76,405 1,421 152 1,269 Net gains on marketable equity securities (154,276 ) (39,502 ) (114,774 ) (113,429 ) (29,861 ) (83,568 ) Net losses of affiliates whose operations are not managed by the Company 4,922 1,260 3,662 9,657 2,542 7,115 Gain on sale of certain businesses and websites (7,246 ) (1,956 ) (5,290 ) — — — Gain on sale of Pinna — — — (10,033 ) (2,641 ) (7,392 ) Non-operating loss (gain) from impairment, write-up and sales of equity and cost method investments 14,980 3,833 11,147 (3,935 ) (1,008 ) (2,927 ) Credit to interest expense resulting from gains realized related to the termination of interest rate swaps — — — (4,581 ) (1,252 ) (3,329 ) Net Income, adjusted (non-GAAP) $ 183,460 $ 150,805 Per share information attributable to Graham Holdings Company Common Stockholders Diluted income per common share, as reported $ 39.49 $ 32.14 Adjustments: Net credit related to fair value changes in contingent consideration from prior acquisitions — (0.98 ) Goodwill and other long-lived asset impairment charges 4.77 18.30 Charges related to non-operating Voluntary Retirement Incentive Program and Separation Incentive Programs 3.42 1.54 Interest expense related to the fair value adjustment of the mandatorily redeemable noncontrolling interest 17.16 0.27 Net gains on marketable equity securities (25.77 ) (17.99 ) Net losses of affiliates whose operations are not managed by the Company 0.82 1.53 Gain on sale of certain businesses and websites (1.19 ) — Gain on sale of Pinna — (1.59 ) Non-operating loss (gain) from impairment, write-up and sales of equity and cost method investments 2.50 (0.63 ) Credit to interest expense resulting from gains realized related to the termination of interest rate swaps — (0.72 ) Diluted income per common share, adjusted (non-GAAP) $ 41.20 $ 31.87 The adjusted diluted per share amounts may not compute due to rounding. View source version on businesswire.com: https://www.businesswire.com/news/home/20241030647370/en/Contacts Wallace R. Cooney (703) 345-6470
Graham Holdings Company (NYSE: GHC) today reported its financial results for the third quarter and first nine months of 2024. The Company also filed its Form 10-Q today for the quarter ended September 30, 2024 with the Securities and Exchange Commission. Division Operating Results Revenue for the third quarter of 2024 was $1,207.2 million, up 9% from $1,111.5 million in the third quarter of 2023. Revenues increased at education, television broadcasting, healthcare and automotive, partially offset by declines at manufacturing and other businesses. The Company reported operating income of $81.6 million for the third quarter of 2024, compared to an operating loss of $57.1 million for the third quarter of 2023. The improvement in operating results is due to goodwill and other long-lived asset impairment charges at World of Good Brands (WGB) and Dekko in the third quarter of 2023 and increases at education, television broadcasting, healthcare and automotive, partially offset by declines at manufacturing and other businesses, excluding the impairments. The Company reported adjusted operating cash flow (non-GAAP) of $126.1 million for the third quarter of 2024, compared to $83.7 million for the third quarter of 2023. Adjusted operating cash flow improved at education, television broadcasting, healthcare and automotive, partially offset by declines at manufacturing and other businesses. Capital expenditures totaled $23.8 million and $26.7 million for the third quarter of 2024 and 2023, respectively. Revenue for the first nine months of 2024 was $3,545.1 million, up 9% from $3,248.1 million in the first nine months of 2023. Revenues increased at education, television broadcasting, healthcare and automotive, partially offset by declines at manufacturing and other businesses. The Company recorded operated income of $143.0 million for the first nine months of 2024, compared to $28.6 million for the first nine months of 2023. Excluding goodwill and other long-lived asset impairment charges, the improvement in operating results is due to increases at education, television broadcasting, healthcare and automotive, partially offset by declines at manufacturing and other businesses. The Company reported adjusted operating cash flow (non-GAAP) of $307.4 million for the first nine months of 2024, compared to $255.3 million for the first nine months of 2023. Adjusted operating cash flow improved at education, television broadcasting, healthcare, automotive and other businesses, partially offset by declines at manufacturing. Capital expenditures totaled $66.0 million and $71.6 million for the first nine months of 2024 and 2023, respectively. Acquisitions and Dispositions of Businesses There were no significant business acquisitions or dispositions during the first nine months of 2024. Debt, Cash and Marketable Equity Securities At September 30, 2024, the Company had $765.2 million in borrowings outstanding at an average interest rate of 6.2%, including $66.9 million outstanding on its $300 million revolving credit facility. Cash, marketable equity securities and other investments totaled $1,114.0 million at September 30, 2024. Overall, the Company recognized $30.5 million and $154.3 million in net gains on marketable equity securities in the third quarter and first nine months of 2024, respectively, compared to $16.8 million and $113.4 million in net gains on marketable equity securities in the third quarter and first nine months of 2023, respectively. Common Stock Repurchases During the third quarter and first nine months of 2024, the Company purchased a total of 64,490 and 133,276 shares, respectively, of its Class B common stock at a cost of $48.7 million and $98.2 million, respectively. At September 30, 2024, there were 4,347,533 shares outstanding. On September 12, 2024, the Board of Directors authorized the Company to acquire up to 500,000 shares of its Class B common stock; the Company has remaining authorization for 486,132 shares as of September 30, 2024. Overall Company Results The Company reported net income attributable to common shares of $72.5 million ($16.42 per share) for the third quarter of 2024, compared to a net loss of $23.0 million ($5.02 per share) for the third quarter of 2023. For the first nine months of 2024, the Company recorded net income attributable to common shares of $175.8 million ($39.49 per share), compared to $152.0 million ($32.14 per share) for the first nine months of 2023. The results for the third quarter and first nine months of 2024 and 2023 were affected by a number of items as described in the Non-GAAP Financial Information schedule attached to this release. Excluding these items, net income attributable to common shares was $76.1 million ($17.25 per share) for the third quarter of 2024, compared to $48.9 million ($10.45 per share) for the third quarter of 2023. Excluding these items, net income attributable to common shares was $183.5 million ($41.20 per share) for the first nine months of 2024, compared to $150.8 million ($31.87 per share) for the first nine months of 2023. Subsequent Event In October 2024, the Company purchased an irrevocable group annuity contract from an insurance company for $461.3 million to settle $457.9 million of the outstanding defined benefit pension obligation related to certain retirees and beneficiaries. The purchase of the group annuity contract was funded from the assets of the Company’s pension plan. As a result of this transaction, the Company was relieved of all responsibility for these pension obligations and the insurance company is now required to pay and administer the retirement benefits owed to approximately 1,850 retirees and beneficiaries, with no change to the amount, timing or form of monthly retirement benefit payments. As a result, the Company estimates that it will record a one-time pre-tax settlement gain of approximately $700 million in the fourth quarter of 2024. * * * * * * * * * * * * Forward-Looking Statements All public statements made by the Company and its representatives that are not statements of historical fact, including certain statements in this press release, in the Company’s Annual Report on Form 10-K and in the Company’s 2023 Annual Report to Stockholders, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on expectations, forecasts, and assumptions by the Company’s management and involve a number of risks, uncertainties, and other factors that could cause actual results to differ from those stated, including, without limitation, comments about expectations related to acquisitions or dispositions or related business activities, the Company’s business strategies and objectives, the prospects for growth in the Company’s various business operations, the Company’s future financial performance, and the risks and uncertainties described in Item 1A of the Company’s Annual Report on Form 10-K. Accordingly, undue reliance should not be placed on any forward-looking statement made by or on behalf of the Company. The Company assumes no obligation to update any forward-looking statement after the date on which such statement is made, even if new information subsequently becomes available. GRAHAM HOLDINGS COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended September 30 % (in thousands, except per share amounts) 2024 2023 Change Operating revenues $ 1,207,162 $ 1,111,519 9 Operating expenses 1,095,797 1,036,344 6 Depreciation of property, plant and equipment 21,332 22,207 (4 ) Amortization of intangible assets 8,385 11,759 (29 ) Impairment of goodwill and other long-lived assets — 98,321 — Operating income (loss) 81,648 (57,112 ) — Equity in losses of affiliates, net (13,361 ) (791 ) — Interest income 2,277 1,986 15 Interest expense (25,896 ) (11,810 ) — Non-operating pension and postretirement benefit income, net 38,307 35,653 7 Gain on marketable equity securities, net 30,496 16,759 82 Other (expenses) income, net (465 ) 3,581 — Income (loss) before income taxes 113,006 (11,734 ) — Provision for income taxes 38,500 9,400 — Net income (loss) 74,506 (21,134 ) — Net income attributable to noncontrolling interests (2,003 ) (1,897 ) 6 Net Income (Loss) Attributable to Graham Holdings Company Common Stockholders $ 72,503 $ (23,031 ) — Per Share Information Attributable to Graham Holdings Company Common Stockholders Basic net income (loss) per common share $ 16.54 $ (5.02 ) — Basic average number of common shares outstanding 4,352 4,602 Diluted net income (loss) per common share $ 16.42 $ (5.02 ) — Diluted average number of common shares outstanding 4,384 4,602 GRAHAM HOLDINGS COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Nine Months Ended September 30 % (in thousands, except per share amounts) 2024 2023 Change Operating revenues $ 3,545,104 $ 3,248,064 9 Operating expenses 3,280,590 3,018,057 9 Depreciation of property, plant and equipment 66,032 63,335 4 Amortization of intangible assets 29,194 39,007 (25 ) Impairment of goodwill and other long-lived assets 26,287 99,066 (73 ) Operating income 143,001 28,599 — Equity in losses of affiliates, net (8,470 ) (2,245 ) — Interest income 6,566 4,738 39 Interest expense (136,607 ) (37,878 ) — Non-operating pension and postretirement benefit income, net 105,379 97,313 8 Gain on marketable equity securities, net 154,276 113,429 36 Other income, net 2,973 22,458 (87 ) Income before income taxes 267,118 226,414 18 Provision for income taxes 86,100 70,400 22 Net income 181,018 156,014 16 Net income attributable to noncontrolling interests (5,175 ) (3,985 ) 30 Net Income Attributable to Graham Holdings Company Common Stockholders $ 175,843 $ 152,029 16 Per Share Information Attributable to Graham Holdings Company Common Stockholders Basic net income per common share $ 39.74 $ 32.23 23 Basic average number of common shares outstanding 4,395 4,686 Diluted net income per common share $ 39.49 $ 32.14 23 Diluted average number of common shares outstanding 4,423 4,700 GRAHAM HOLDINGS COMPANY BUSINESS DIVISION INFORMATION (Unaudited) Three Months Ended Nine Months Ended September 30 % September 30 % (in thousands) 2024 2023 Change 2024 2023 Change Operating Revenues Education $ 438,090 $ 411,837 6 $ 1,283,587 $ 1,192,105 8 Television broadcasting 145,422 116,112 25 373,958 347,818 8 Manufacturing 95,385 109,216 (13 ) 300,914 343,882 (12 ) Healthcare 155,413 116,164 34 431,142 331,505 30 Automotive 289,392 272,018 6 902,046 765,251 18 Other businesses 83,464 86,653 (4 ) 253,753 269,110 (6 ) Corporate office 576 365 58 1,727 1,215 42 Intersegment elimination (580 ) (846 ) — (2,023 ) (2,822 ) — $ 1,207,162 $ 1,111,519 9 $ 3,545,104 $ 3,248,064 9 Operating Expenses Education $ 403,200 $ 381,978 6 $ 1,182,833 $ 1,109,090 7 Television broadcasting 83,508 84,165 (1 ) 251,283 254,098 (1 ) Manufacturing 90,890 150,190 (39 ) 289,085 365,546 (21 ) Healthcare 141,153 110,193 28 398,054 314,221 27 Automotive 280,328 263,781 6 873,127 736,711 19 Other businesses 112,358 164,206 (32 ) 364,563 401,525 (9 ) Corporate office 14,657 14,964 (2 ) 45,181 41,096 10 Intersegment elimination (580 ) (846 ) — (2,023 ) (2,822 ) — $ 1,125,514 $ 1,168,631 (4 ) $ 3,402,103 $ 3,219,465 6 Operating Income (Loss) Education $ 34,890 $ 29,859 17 $ 100,754 $ 83,015 21 Television broadcasting 61,914 31,947 94 122,675 93,720 31 Manufacturing 4,495 (40,974 ) — 11,829 (21,664 ) — Healthcare 14,260 5,971 — 33,088 17,284 91 Automotive 9,064 8,237 10 28,919 28,540 1 Other businesses (28,894 ) (77,553 ) 63 (110,810 ) (132,415 ) 16 Corporate office (14,081 ) (14,599 ) 4 (43,454 ) (39,881 ) (9 ) $ 81,648 $ (57,112 ) — $ 143,001 $ 28,599 — Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets Education $ 2,421 $ 3,210 (25 ) $ 8,267 $ 11,610 (29 ) Television broadcasting 1,360 1,363 0 4,070 4,088 0 Manufacturing 2,619 51,489 (95 ) 8,387 60,683 (86 ) Healthcare 159 866 (82 ) 1,393 2,702 (48 ) Automotive 5 3 67 10 3 — Other businesses 1,821 53,149 (97 ) 33,354 58,987 (43 ) Corporate office — — — — — — $ 8,385 $ 110,080 (92 ) $ 55,481 $ 138,073 (60 ) Operating Income (Loss) before Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets Education $ 37,311 $ 33,069 13 $ 109,021 $ 94,625 15 Television broadcasting 63,274 33,310 90 126,745 97,808 30 Manufacturing 7,114 10,515 (32 ) 20,216 39,019 (48 ) Healthcare 14,419 6,837 — 34,481 19,986 73 Automotive 9,069 8,240 10 28,929 28,543 1 Other businesses (27,073 ) (24,404 ) (11 ) (77,456 ) (73,428 ) (5 ) Corporate office (14,081 ) (14,599 ) 4 (43,454 ) (39,881 ) (9 ) $ 90,033 $ 52,968 70 $ 198,482 $ 166,672 19 Three Months Ended Nine Months Ended September 30 % September 30 % (in thousands) 2024 2023 Change 2024 2023 Change Depreciation Education $ 8,576 $ 10,000 (14 ) $ 26,736 $ 28,428 (6 ) Television broadcasting 2,756 3,120 (12 ) 8,494 9,243 (8 ) Manufacturing 2,818 2,388 18 8,227 6,957 18 Healthcare 1,754 1,411 24 5,031 3,802 32 Automotive 1,774 1,304 36 5,203 3,565 46 Other businesses 3,522 3,832 (8 ) 11,909 10,882 9 Corporate office 132 152 (13 ) 432 458 (6 ) $ 21,332 $ 22,207 (4 ) $ 66,032 $ 63,335 4 Pension Expense Education $ 4,445 $ 2,226 100 $ 13,267 $ 6,680 99 Television broadcasting 1,528 833 83 4,583 2,498 83 Manufacturing 978 280 — 1,897 836 — Healthcare 4,804 3,521 36 14,413 10,563 36 Automotive 29 16 81 86 26 — Other businesses 1,963 662 — 5,577 1,847 — Corporate office 1,014 952 7 3,043 2,856 7 $ 14,761 $ 8,490 74 $ 42,866 $ 25,306 69 Adjusted Operating Cash Flow (non-GAAP)(1) Education $ 50,332 $ 45,295 11 $ 149,024 $ 129,733 15 Television broadcasting 67,558 37,263 81 139,822 109,549 28 Manufacturing 10,910 13,183 (17 ) 30,340 46,812 (35 ) Healthcare 20,977 11,769 78 53,925 34,351 57 Automotive 10,872 9,560 14 34,218 32,134 6 Other businesses (21,588 ) (19,910 ) (8 ) (59,970 ) (60,699 ) 1 Corporate office (12,935 ) (13,495 ) 4 (39,979 ) (36,567 ) (9 ) $ 126,126 $ 83,665 51 $ 307,380 $ 255,313 20 ____________ (1) Adjusted Operating Cash Flow (non-GAAP) is calculated as Operating Income (Loss) before Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets plus Depreciation Expense and Pension Expense. GRAHAM HOLDINGS COMPANY EDUCATION DIVISION INFORMATION (Unaudited) Three Months Ended Nine Months Ended September 30 % September 30 % (in thousands) 2024 2023 Change 2024 2023 Change Operating Revenues Kaplan international $ 277,009 $ 249,976 11 $ 813,833 $ 714,715 14 Higher education 85,655 81,925 5 246,818 250,557 (1 ) Supplemental education 76,134 78,332 (3 ) 221,389 226,535 (2 ) Kaplan corporate and other 158 3,101 (95 ) 5,739 8,360 (31 ) Intersegment elimination (866 ) (1,497 ) — (4,192 ) (8,062 ) — $ 438,090 $ 411,837 6 $ 1,283,587 $ 1,192,105 8 Operating Expenses Kaplan international $ 251,471 $ 227,756 10 $ 731,159 $ 650,443 12 Higher education 74,270 73,460 1 215,560 217,214 (1 ) Supplemental education 64,948 68,603 (5 ) 199,951 209,543 (5 ) Kaplan corporate and other 10,875 10,513 3 32,096 28,434 13 Amortization of intangible assets 2,421 3,210 (25 ) 8,267 11,133 (26 ) Impairment of long-lived assets — — — — 477 — Intersegment elimination (785 ) (1,564 ) — (4,200 ) (8,154 ) — $ 403,200 $ 381,978 6 $ 1,182,833 $ 1,109,090 7 Operating Income (Loss) Kaplan international $ 25,538 $ 22,220 15 $ 82,674 $ 64,272 29 Higher education 11,385 8,465 34 31,258 33,343 (6 ) Supplemental education 11,186 9,729 15 21,438 16,992 26 Kaplan corporate and other (10,717 ) (7,412 ) (45 ) (26,357 ) (20,074 ) (31 ) Amortization of intangible assets (2,421 ) (3,210 ) 25 (8,267 ) (11,133 ) 26 Impairment of long-lived assets — — — — (477 ) — Intersegment elimination (81 ) 67 — 8 92 — $ 34,890 $ 29,859 17 $ 100,754 $ 83,015 21 Operating Income (Loss) before Amortization of Intangible Assets and Impairment of Long-Lived Assets Kaplan international $ 25,538 $ 22,220 15 $ 82,674 $ 64,272 29 Higher education 11,385 8,465 34 31,258 33,343 (6 ) Supplemental education 11,186 9,729 15 21,438 16,992 26 Kaplan corporate and other (10,717 ) (7,412 ) (45 ) (26,357 ) (20,074 ) (31 ) Intersegment elimination (81 ) 67 — 8 92 — $ 37,311 $ 33,069 13 $ 109,021 $ 94,625 15 Depreciation Kaplan international $ 7,202 $ 7,599 (5 ) $ 21,735 $ 20,832 4 Higher education 589 1,258 (53 ) 2,291 3,431 (33 ) Supplemental education 777 1,117 (30 ) 2,653 4,087 (35 ) Kaplan corporate and other 8 26 (69 ) 57 78 (27 ) $ 8,576 $ 10,000 (14 ) $ 26,736 $ 28,428 (6 ) Pension Expense Kaplan international $ 198 $ 83 — $ 527 $ 244 — Higher education 1,903 958 99 5,729 2,803 — Supplemental education 1,962 1,063 85 5,874 3,110 89 Kaplan corporate and other 382 122 — 1,137 523 — $ 4,445 $ 2,226 100 $ 13,267 $ 6,680 99 Adjusted Operating Cash Flow (non-GAAP)(1) Kaplan international $ 32,938 $ 29,902 10 $ 104,936 $ 85,348 23 Higher education 13,877 10,681 30 39,278 39,577 (1 ) Supplemental education 13,925 11,909 17 29,965 24,189 24 Kaplan corporate and other (10,327 ) (7,264 ) (42 ) (25,163 ) (19,473 ) (29 ) Intersegment elimination (81 ) 67 — 8 92 — $ 50,332 $ 45,295 11 $ 149,024 $ 129,733 15 ____________ (1) Adjusted Operating Cash Flow (non-GAAP) is calculated as Operating Income (Loss) before Amortization of Intangible Assets and Impairment of Long-Lived Assets plus Depreciation Expense and Pension Expense. NON-GAAP FINANCIAL INFORMATION GRAHAM HOLDINGS COMPANY (Unaudited) In addition to the results reported in accordance with accounting principles generally accepted in the United States (GAAP) included in this press release, the Company has provided information regarding Adjusted Operating Cash Flow and Net income excluding certain items described below, reconciled to the most directly comparable GAAP measures. Management believes that these non-GAAP measures, when read in conjunction with the Company’s GAAP financials, provide useful information to investors by offering: the ability to make meaningful period-to-period comparisons of the Company’s ongoing results; the ability to identify trends in the Company’s underlying business; and a better understanding of how management plans and measures the Company’s underlying business. Adjusted Operating Cash Flow and Net income, excluding certain items, should not be considered substitutes or alternatives to computations calculated in accordance with and required by GAAP. These non-GAAP financial measures should be read only in conjunction with financial information presented on a GAAP basis. The gains and losses on marketable equity securities relate to the change in the fair value (quoted prices) of its portfolio of equity securities. The mandatorily redeemable noncontrolling interest represents the ownership portion of a group of minority shareholders at a subsidiary of the Company's Healthcare business. The Company measures the redemption value of this minority ownership on a quarterly basis with changes in the fair value recorded as interest expense or income, which is included in net income for the period. The effect of gains and losses on marketable equity securities and net interest expense related to fair value adjustments of the mandatorily redeemable noncontrolling interest are not directly related to the core performance of the Company’s business operations since these items do not directly relate to the sale of the Company’s services or products. The accounting principles generally accepted in the United States (“GAAP”) require that the Company include the gains and losses on marketable equity securities and net interest expense related to fair value adjustments of the mandatorily redeemable noncontrolling interest in net income on the Condensed Consolidated Statements of Operations. The Company excludes the gains and losses on marketable equity securities and net interest expense related to fair value adjustments of the mandatorily redeemable noncontrolling interest from the non-GAAP adjusted net income because these items are independent of the Company’s core operations and not indicative of the performance of the Company’s business operations. The following tables reconcile the non-GAAP financial measures for Net income, excluding certain items, to the most directly comparable GAAP measures: Three Months Ended September 30 2024 2023 (in thousands, except per share amounts) Income before income taxes Income Taxes Net (Loss) Income (Loss) Income before income taxes Income Taxes Net Income Amounts attributable to Graham Holdings Company Common Stockholders As reported $ 113,006 $ 38,500 $ 74,506 $ (11,734 ) $ 9,400 $ (21,134 ) Attributable to noncontrolling interests (2,003 ) (1,897 ) Attributable to Graham Holdings Company Stockholders 72,503 (23,031 ) Adjustments: Goodwill and other long-lived asset impairment charges — (626 ) 626 98,321 13,876 84,445 Charges related to non-operating Separation Incentive Programs 3,665 938 2,727 — — — Interest expense related to the fair value adjustment of the mandatorily redeemable noncontrolling interest 9,730 (3,501 ) 13,231 1,132 105 1,027 Net gains on marketable equity securities (30,496 ) (7,808 ) (22,688 ) (16,758 ) (4,411 ) (12,347 ) Net losses of affiliates whose operations are not managed by the Company 2,307 590 1,717 2,836 746 2,090 Gain on sale of certain businesses and websites (3,763 ) (1,197 ) (2,566 ) — — — Credit to interest expense resulting from gains realized related to the termination of interest rate swaps — — — (4,581 ) (1,252 ) (3,329 ) Net non-operating loss from impairment and write-up equity and cost method investments 14,236 3,642 10,594 — — — Net Income, adjusted (non-GAAP) $ 76,144 $ 48,855 Per share information attributable to Graham Holdings Company Common Stockholders Diluted (loss) income per common share, as reported $ 16.42 $ (5.02 ) Adjustments: Goodwill and other long-lived asset impairment charges 0.14 18.18 Charges related to non-operating Separation Incentive Programs 0.62 — Interest expense related to the fair value adjustment of the mandatorily redeemable noncontrolling interest 3.00 0.22 Net gains on marketable equity securities (5.14 ) (2.66 ) Net losses of affiliates whose operations are not managed by the Company 0.39 0.45 Gain on sale of certain businesses and websites (0.58 ) — Credit to interest expense resulting from gains realized related to the termination of interest rate swaps — (0.72 ) Net non-operating loss from impairment and write-up equity and cost method investments 2.40 — Diluted income per common share, adjusted (non-GAAP) $ 17.25 $ 10.45 The adjusted diluted per share amounts may not compute due to rounding. Nine Months Ended September 30 2024 2023 (in thousands, except per share amounts) Income before income taxes Income Taxes Net Income Income before income taxes Income Taxes Net Income Amounts attributable to Graham Holdings Company Common Stockholders As reported $ 267,118 $ 86,100 $ 181,018 $ 226,414 $ 70,400 $ 156,014 Attributable to noncontrolling interests (5,175 ) (3,985 ) Attributable to Graham Holdings Company Stockholders $ 175,843 $ 152,029 Adjustments: Net credit related to fair value changes in contingent consideration from prior acquisitions — — — (4,688 ) (143 ) (4,545 ) Goodwill and other long-lived asset impairment charges 26,287 5,067 21,220 99,066 14,078 84,988 Charges related to non-operating Voluntary Retirement Incentive Program and Separation Incentive Programs 20,493 5,246 15,247 9,646 2,481 7,165 Interest expense related to the fair value adjustment of the mandatorily redeemable noncontrolling interest 85,145 8,740 76,405 1,421 152 1,269 Net gains on marketable equity securities (154,276 ) (39,502 ) (114,774 ) (113,429 ) (29,861 ) (83,568 ) Net losses of affiliates whose operations are not managed by the Company 4,922 1,260 3,662 9,657 2,542 7,115 Gain on sale of certain businesses and websites (7,246 ) (1,956 ) (5,290 ) — — — Gain on sale of Pinna — — — (10,033 ) (2,641 ) (7,392 ) Non-operating loss (gain) from impairment, write-up and sales of equity and cost method investments 14,980 3,833 11,147 (3,935 ) (1,008 ) (2,927 ) Credit to interest expense resulting from gains realized related to the termination of interest rate swaps — — — (4,581 ) (1,252 ) (3,329 ) Net Income, adjusted (non-GAAP) $ 183,460 $ 150,805 Per share information attributable to Graham Holdings Company Common Stockholders Diluted income per common share, as reported $ 39.49 $ 32.14 Adjustments: Net credit related to fair value changes in contingent consideration from prior acquisitions — (0.98 ) Goodwill and other long-lived asset impairment charges 4.77 18.30 Charges related to non-operating Voluntary Retirement Incentive Program and Separation Incentive Programs 3.42 1.54 Interest expense related to the fair value adjustment of the mandatorily redeemable noncontrolling interest 17.16 0.27 Net gains on marketable equity securities (25.77 ) (17.99 ) Net losses of affiliates whose operations are not managed by the Company 0.82 1.53 Gain on sale of certain businesses and websites (1.19 ) — Gain on sale of Pinna — (1.59 ) Non-operating loss (gain) from impairment, write-up and sales of equity and cost method investments 2.50 (0.63 ) Credit to interest expense resulting from gains realized related to the termination of interest rate swaps — (0.72 ) Diluted income per common share, adjusted (non-GAAP) $ 41.20 $ 31.87 The adjusted diluted per share amounts may not compute due to rounding. 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