Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Graham Holdings Company Reports 2023 and Fourth Quarter Earnings By: Graham Holdings Company via Business Wire February 23, 2024 at 16:33 PM EST Graham Holdings Company (NYSE: GHC) today reported its financial results for the fourth quarter and full year of 2023. The Company also filed its Form 10-K today for the year ended December 31, 2023 with the Securities and Exchange Commission. Division Operating Results Revenue for 2023 was $4,414.9 million, up 12% from $3,924.5 million in 2022. Revenues increased at education, healthcare and automotive, partially offset by declines at television broadcasting, manufacturing and other businesses. The Company reported operating income for 2023 of $69.4 million, compared to $83.9 million in 2022. The decrease in operating results is due to goodwill impairment charges at World of Good Brands (WGB, formerly Leaf Media) and Dekko and declines at television broadcasting and manufacturing, partially offset by increases at education, healthcare and automotive, and reduced losses at other businesses due to goodwill and other long-lived asset impairment charges in 2022 at Society6 and Saatchi Art (both formerly included in Leaf Marketplace). The Company reported adjusted operating cash flow (non-GAAP) for 2023 of $338.3 million, compared to $377.6 million in 2022. Adjusted operating cash flow declined at television broadcasting, manufacturing and other businesses, partially offset by increases at education, healthcare and automotive. For the fourth quarter of 2023, revenue was $1,166.8 million, up 10% from $1,064.0 million in 2022. Revenues increased at education, healthcare and automotive, partially offset by declines at television broadcasting, manufacturing and other businesses. The Company reported operating income of $40.8 million in the fourth quarter of 2023, compared to an operating loss of $54.9 million in 2022. The increase in operating results is due to goodwill and other long-lived asset impairment charges at Society6 and Saatchi Art in 2022 and increases at healthcare and automotive, partially offset by declines at education, television broadcasting and manufacturing. The Company reported adjusted operating cash flow (non-GAAP) for the fourth quarter of 2023 of $83.0 million, compared to $119.2 million in 2022. Adjusted operating cash flow declined at education, television broadcasting and manufacturing, partially offset by increases at healthcare and automotive. Acquisitions and Dispositions of Businesses There were no significant business acquisitions or dispositions during the fourth quarter of 2023. Debt, Cash and Marketable Equity Securities At December 31, 2023, the Company had $811.8 million in borrowings outstanding at an average interest rate of 6.4%, including $97.9 million outstanding on its $300 million revolving credit facility. Cash, marketable equity securities and other investments totaled $898.9 million at December 31, 2023. At December 31, 2022, the Company had $726.4 million in borrowings outstanding at an average interest rate of 5.7%, including $200.2 million outstanding on its $300 million revolving credit facility. Cash, marketable equity securities and other investments totaled $812.8 million at December 31, 2022. The Company recognized $24.6 million and $33.3 million in net gains on marketable equity securities in the fourth quarter of 2023 and 2022, respectively. Common Stock Repurchases During the fourth quarter of 2023, the Company purchased a total of 100,263 shares of its Class B common stock at a cost of $62.1 million. At December 31, 2023, there were 4,478,810 shares outstanding. On May 4, 2023, the Board of Directors authorized the Company to acquire up to 500,000 shares of Class B common stock; the Company has remaining authorization for 236,403 shares as of December 31, 2023. Pension Plan At December 31, 2023, the Company had a pension surplus of $2,113.6 million, reported in the Company’s Consolidated Balance Sheet as Prepaid Pension Cost, an increase from $1,658.0 million at December 31, 2022. Overall Company Results The Company reported net income attributable to common shares of $205.3 million ($43.82 per share) for the year ended December 31, 2023, compared to $67.1 million ($13.79 per share) for the year ended December 31, 2022. For the fourth quarter of 2023, the Company reported net income attributable to common shares of $53.3 million ($11.72 per share), compared to $6.2 million ($1.28 per share) for the same period of 2022. The results for 2023 and 2022 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 $200.5 million ($42.78 per share) for 2023, compared to $287.2 million ($59.03 per share) for 2022. Excluding these items, net income attributable to common shares was $49.7 million ($10.94 per share) for the fourth quarter of 2023, compared to $90.5 million ($18.80 per share) for the fourth quarter of 2022. * * * * * * * * * * * * Additional Commentary on Fourth Quarter 2023 Results Division Results Education For the fourth quarter of 2023, education division revenue totaled $395.5 million, up 9% from $361.8 million for the same period of 2022. Kaplan reported operating income for the fourth quarter of 2023 of $21.5 million, compared to $25.2 million in the fourth quarter of 2022. Kaplan International revenue increased 16% in the fourth quarter of 2023 (11% on a constant currency basis). The increase is due largely to growth at Pathways and Australia. Kaplan International reported operating income of $23.3 million for the fourth quarter of 2023, a small decline from $23.9 million in 2022. The decrease is due to lower earnings at UK Professional and increased incentive compensation costs, partially offset by improved results at Australia and Singapore. Higher Education revenue in the fourth quarter of 2023 was flat compared to the same period of 2022. Kaplan recorded $11.3 million in fees from Purdue Global in its Higher Education operating results for each of the fourth quarters of 2023 and 2022. Higher education results declined in the fourth quarter of 2023 due to increased other higher education development costs. Supplemental Education revenue declined 3% in the fourth quarter of 2023, driven mostly by softness in Real Estate, Securities and Medical Licensure test preparation, offset in part by growth in CFP, CFA, Architecture and Engineering and MCAT test preparation and publishing activities. Operating results improved in the fourth quarter of 2023 due to savings from reduced headcount, partially offset by lower revenues. In the fourth quarter of 2022, Kaplan implemented a Separation Incentive Program (SIP) to reduce the number of employees at Supplemental Education and Higher Education, which was funded by the assets of the Company’s pension plan. In connection with the SIP, the Company recorded $3.6 million in non-operating pension expense in the fourth quarter of 2022. Kaplan corporate and other expenses increased in the fourth quarter of 2023 due to higher incentive compensation costs compared to the fourth quarter of 2022. Television Broadcasting For the fourth quarter of 2023, revenue decreased 19% to $124.6 million, from $154.7 million in 2022, due primarily to a $34.0 million decline in political advertising revenue as well as a small decline in retransmission revenues, partially offset by increased digital advertising revenues. Operating income for the fourth quarter of 2023 declined 43% to $40.2 million, from $70.0 million in the same period of 2022, due to reduced revenues and higher network fees. Manufacturing Manufacturing revenues decreased 14% in the fourth quarter of 2023 due to lower revenues at Hoover, Dekko and Joyce, partially offset by increased revenues at Forney. The revenue decline at Hoover is due to lower wood prices and a decrease in overall product demand, partially offset by increased rates. Revenues declined at Dekko due largely to lower product demand, particularly in the commercial office electrical products sector. In the fourth quarter of 2023, Hoover results included wood gains on inventory sales, compared to modest losses in the fourth quarter of 2022. Operating results were down in the fourth quarter of 2023 due to a decline in results at Hoover, Dekko and Joyce, partially offset by improved results at Forney. Healthcare Healthcare revenues increased 34% in the fourth quarter of 2023, largely due to significant growth at CSI and from businesses acquired in 2022, along with growth in home health and hospice services. Graham Healthcare Group (GHG) recorded pension expense of $3.4 million related to the pension credit retention program in the fourth quarter of 2023. In the fourth quarter of 2022, GHG recorded pension expense of $10.5 million related to this program. Of this amount, $7.8 million related to the first three quarters of 2022; the Company concluded that this adjustment was not material to the Company’s operating results for the relevant interim periods. The improvement in GHG operating results in the fourth quarter of 2023 is due to higher pension expense in the fourth quarter of 2022 related to the GHG pension credit retention program and improved results at CSI, partially offset by increased net losses from newly acquired businesses and a decline in home health and hospice results. Adjusted operating cash flow (non-GAAP) at GHG increased to $12.7 million in the fourth quarter of 2023, from $10.5 million in the fourth quarter of 2022. GHG recorded equity in earnings of $3.1 million and $2.9 million for the fourth quarter of 2023 and 2022, respectively, related to its interests in home health and hospice joint ventures. Automotive Revenues for the fourth quarter of 2023 increased due to the acquisition of the Toyota of Richmond dealership and sales growth at the other dealerships, except for the Jeep dealership, which had lower revenues due a decline in new vehicle sales, and a small revenue decline at CDJR. Operating results for the fourth quarter of 2023 improved due largely to the Toyota of Richmond acquisition, partially offset by declines at the Jeep and CDJR dealerships. Other Businesses A summary of revenue by category for other businesses: Three Months Ended December 31 % (in thousands) 2023 2022 Change Operating Revenues Retail (1) $ 34,108 $ 41,335 (17 ) Media (2) 28,131 30,449 (8 ) Specialty (3) 38,304 36,150 6 $ 100,543 $ 107,934 (7 ) ____________ (1) Includes Society6 and Saatchi Art (formerly Leaf Marketplace) and Framebridge (2) Includes WGB (formerly Leaf Media), Code3, Slate, Foreign Policy, Pinna and City Cast (3) Includes Clyde’s Restaurant Group, Decile and CyberVista Overall, revenue from other businesses declined 7% in the fourth quarter of 2023. Retail revenue declined largely due to significantly lower revenue at Society6, partially offset by revenue growth at Framebridge and Saatchi Art. Media revenue declined due to lower revenue at WGB and Code3, partially offset by revenue growth at Slate, Foreign Policy and City Cast. Specialty revenue increased due to revenue growth at Clyde’s Restaurant Group (CRG). Excluding the former Leaf businesses, revenues from other businesses increased in the fourth quarter of 2023. Operating results improved in the fourth quarter of 2023 due to the $129.0 million in impairment charges at the former Leaf businesses recorded in the fourth quarter of 2022. Excluding the impairment charges, operating results declined in the fourth quarter of 2023, due to increased losses at the former Leaf businesses and Framebridge, partially offset by improved results at Code3, Slate, Foreign Policy and CRG and a reduction in losses due to the sales of Pinna and CyberVista. In the fourth quarter of 2023, the former Leaf businesses continued to incur transition-related costs in connection with the overall restructuring of Leaf into three stand-alone businesses. Adjusted operating cash flow losses (non-GAAP) at other businesses declined slightly to $20.0 million in the fourth quarter of 2023, from $20.3 million in the fourth quarter of 2022. In the fourth quarter of 2022, the former Leaf businesses recorded a net depreciation expense credit of $5.9 million that related to the period from June 2021 through September 30, 2022; the Company concluded that this adjustment was not material to the Company’s operating results for the relevant periods. Equity in Losses of Affiliates Overall, the Company recorded equity in losses of affiliates of $2.9 million for the fourth quarter of 2023, compared to $5.8 million for 2022. These amounts include $6.4 million and $9.0 million in net losses for 2023 and 2022, respectively, from affiliates whose operations are not managed by the Company. Net Interest Expense The Company incurred net interest expense of $23.0 million and $14.4 million for the fourth quarter of 2023 and 2022, respectively. The Company recorded interest expense of $8.7 million and $3.7 million in the fourth quarter of 2023 and 2022, respectively, to adjust the fair value of the mandatorily redeemable noncontrolling interest at GHG. Excluding these adjustments, the increase in net interest expense relates primarily to increased debt at the automotive dealerships and higher interest rates on the Company’s variable debt. Non-Operating Pension and Postretirement Benefit Income, Net The Company recorded net non-operating pension and postretirement benefit income of $36.5 million for the fourth quarter of 2023, compared to $45.9 million for the fourth quarter of 2022. In the fourth quarter of 2023, the Company recorded $0.2 million in expenses related to a non-operating SIP at the television broadcasting division. In the fourth quarter of 2022, the Company recorded $3.6 million in expenses related to a non-operating SIP at the education division. Other Non-Operating (Expense) Income For the fourth quarter of 2023, the Company recorded other non-operating expense, net, of $3.4 million, compared to non-operating income, net, of $27.1 million for the fourth quarter of 2022. The 2023 amounts included $3.0 million in foreign currency losses; a $0.5 million impairment on a cost method investment, and other items; partially offset by $1.3 million in gains related to sales of businesses and contingent consideration. The 2022 amounts included a non-cash gain of $18.4 million on the sale of CyberVista; a $6.3 million increase in the fair value of cost method investments; a $2.3 million gain on sale of a cost method investment; $1.3 million in gains related to sales of businesses and contingent consideration and other items; partially offset by a $1.3 million impairment on a cost method investment and other items. Earnings Per Share The calculation of diluted earnings per share for the fourth quarter of 2023 was based on 4,515,022 weighted average shares outstanding compared to 4,785,904 for the fourth quarter of 2022. 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 December 31 % (in thousands, except per share amounts) 2023 2022 Change Operating revenues $ 1,166,813 $ 1,064,032 10 Operating expenses 1,092,258 960,808 14 Depreciation of property, plant and equipment 22,729 14,752 54 Amortization of intangible assets 11,032 14,415 (23 ) Impairment of goodwill and other long-lived assets — 128,990 — Operating income (loss) 40,794 (54,933 ) — Equity in losses of affiliates, net (2,938 ) (5,757 ) (49 ) Interest income 2,384 1,012 — Interest expense (25,423 ) (15,434 ) 65 Non-operating pension and postretirement benefit income, net 36,499 45,876 (20 ) Gain on marketable equity securities, net 24,638 33,289 (26 ) Other (expense) income, net (3,364 ) 27,090 — Income before income taxes 72,590 31,143 — Provision for income taxes 16,900 24,500 (31 ) Net income 55,690 6,643 — Net income attributable to noncontrolling interests (2,431 ) (483 ) — Net Income Attributable to Graham Holdings Company Common Stockholders $ 53,259 $ 6,160 — Per Share Information Attributable to Graham Holdings Company Common Stockholders Basic net income per common share $ 11.76 $ 1.28 — Basic average number of common shares outstanding 4,498 4,771 Diluted net income per common share $ 11.72 $ 1.28 — Diluted average number of common shares outstanding 4,515 4,786 GRAHAM HOLDINGS COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Twelve Months Ended December 31 % (in thousands, except per share amounts) 2023 2022 Change Operating revenues $ 4,414,877 $ 3,924,493 12 Operating expenses 4,110,315 3,579,457 15 Depreciation of property, plant and equipment 86,064 73,297 17 Amortization of intangible assets 50,039 58,851 (15 ) Impairment of goodwill and other long-lived assets 99,066 128,990 (23 ) Operating income 69,393 83,898 (17 ) Equity in losses of affiliates, net (5,183 ) (2,837 ) 83 Interest income 7,122 3,226 — Interest expense (63,301 ) (54,403 ) 16 Non-operating pension and postretirement benefit income, net 133,812 197,939 (32 ) Gain (loss) on marketable equity securities, net 138,067 (139,589 ) — Other income, net 19,094 33,500 (43 ) Income before income taxes 299,004 121,734 — Provision for income taxes 87,300 51,300 70 Net income 211,704 70,434 — Net income attributable to noncontrolling interests (6,416 ) (3,355 ) 91 Net Income Attributable to Graham Holdings Company Common Stockholders $ 205,288 $ 67,079 — Per Share Information Attributable to Graham Holdings Company Common Stockholders Basic net income per common share $ 43.96 $ 13.83 — Basic average number of common shares outstanding 4,639 4,823 Diluted net income per common share $ 43.82 $ 13.79 — Diluted average number of common shares outstanding 4,654 4,836 GRAHAM HOLDINGS COMPANY BUSINESS DIVISION INFORMATION (Unaudited) Three Months Ended Twelve Months Ended December 31 % December 31 % (in thousands) 2023 2022 Change 2023 2022 Change Operating Revenues Education $ 395,476 $ 361,826 9 $ 1,587,581 $ 1,427,915 11 Television broadcasting 124,618 154,681 (19 ) 472,436 535,651 (12 ) Manufacturing 104,028 120,677 (14 ) 447,910 486,643 (8 ) Healthcare 127,976 95,184 34 459,481 326,000 41 Automotive 314,642 224,220 40 1,079,893 734,185 47 Other businesses 100,543 107,934 (7 ) 369,653 416,084 (11 ) Corporate office 365 — — 1,580 — — Intersegment elimination (835 ) (490 ) — (3,657 ) (1,985 ) — $ 1,166,813 $ 1,064,032 10 $ 4,414,877 $ 3,924,493 12 Operating Expenses Education $ 374,020 $ 336,655 11 $ 1,483,110 $ 1,344,982 10 Television broadcasting 84,400 84,713 0 338,498 333,772 1 Manufacturing 99,157 111,094 (11 ) 464,703 452,936 3 Healthcare 121,415 98,588 23 435,636 310,735 40 Automotive 303,924 215,080 41 1,040,635 699,552 49 Other businesses 127,854 258,045 (50 ) 529,379 644,437 (18 ) Corporate office 16,084 15,280 5 57,180 56,166 2 Intersegment elimination (835 ) (490 ) — (3,657 ) (1,985 ) — $ 1,126,019 $ 1,118,965 1 $ 4,345,484 $ 3,840,595 13 Operating Income (Loss) Education $ 21,456 $ 25,171 (15 ) $ 104,471 $ 82,933 26 Television broadcasting 40,218 69,968 (43 ) 133,938 201,879 (34 ) Manufacturing 4,871 9,583 (49 ) (16,793 ) 33,707 — Healthcare 6,561 (3,404 ) — 23,845 15,265 56 Automotive 10,718 9,140 17 39,258 34,633 13 Other businesses (27,311 ) (150,111 ) 82 (159,726 ) (228,353 ) 30 Corporate office (15,719 ) (15,280 ) (3 ) (55,600 ) (56,166 ) 1 $ 40,794 $ (54,933 ) — $ 69,393 $ 83,898 (17 ) Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets Education $ 2,943 $ 3,980 (26 ) $ 14,553 $ 16,170 (10 ) Television broadcasting 1,362 1,360 0 5,450 5,440 0 Manufacturing 3,120 4,969 (37 ) 63,803 20,372 — Healthcare 973 954 2 3,675 3,776 (3 ) Automotive 10 — — 13 — — Other businesses 2,624 132,142 (98 ) 61,611 142,083 (57 ) Corporate office — — — — — — $ 11,032 $ 143,405 (92 ) $ 149,105 $ 187,841 (21 ) Operating Income (Loss) before Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets Education $ 24,399 $ 29,151 (16 ) $ 119,024 $ 99,103 20 Television broadcasting 41,580 71,328 (42 ) 139,388 207,319 (33 ) Manufacturing 7,991 14,552 (45 ) 47,010 54,079 (13 ) Healthcare 7,534 (2,450 ) — 27,520 19,041 45 Automotive 10,728 9,140 17 39,271 34,633 13 Other businesses (24,687 ) (17,969 ) (37 ) (98,115 ) (86,270 ) (14 ) Corporate office (15,719 ) (15,280 ) (3 ) (55,600 ) (56,166 ) 1 $ 51,826 $ 88,472 (41 ) $ 218,498 $ 271,739 (20 ) Three Months Ended Twelve Months Ended December 31 % December 31 % (in thousands) 2023 2022 Change 2023 2022 Change Depreciation Education $ 9,759 $ 8,718 12 $ 38,187 $ 34,114 12 Television broadcasting 2,981 2,959 1 12,224 12,294 (1 ) Manufacturing 2,496 2,290 9 9,453 9,399 1 Healthcare 1,673 2,326 (28 ) 5,475 3,781 45 Automotive 1,612 1,113 45 5,177 3,709 40 Other businesses 4,059 (2,806 ) — 14,941 9,392 59 Corporate office 149 152 (2 ) 607 608 0 $ 22,729 $ 14,752 54 $ 86,064 $ 73,297 17 Pension Expense Education $ 2,227 $ 2,234 0 $ 8,907 $ 8,934 0 Television broadcasting 833 888 (6 ) 3,331 3,554 (6 ) Manufacturing 279 276 1 1,115 1,104 1 Healthcare 3,520 10,591 (67 ) 14,083 11,008 28 Automotive 9 5 80 35 22 59 Other businesses 661 524 26 2,508 2,073 21 Corporate office 952 1,468 (35 ) 3,808 5,872 (35 ) $ 8,481 $ 15,986 (47 ) $ 33,787 $ 32,567 4 Adjusted Operating Cash Flow (non-GAAP)(1) Education $ 36,385 $ 40,103 (9 ) $ 166,118 $ 142,151 17 Television broadcasting 45,394 75,175 (40 ) 154,943 223,167 (31 ) Manufacturing 10,766 17,118 (37 ) 57,578 64,582 (11 ) Healthcare 12,727 10,467 22 47,078 33,830 39 Automotive 12,349 10,258 20 44,483 38,364 16 Other businesses (19,967 ) (20,251 ) 1 (80,666 ) (74,805 ) (8 ) Corporate office (14,618 ) (13,660 ) (7 ) (51,185 ) (49,686 ) (3 ) $ 83,036 $ 119,210 (30 ) $ 338,349 $ 377,603 (10 ) ____________ (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 Twelve Months Ended December 31 % December 31 % (in thousands) 2023 2022 Change 2023 2022 Change Operating Revenues Kaplan international $ 252,164 $ 217,770 16 $ 966,879 $ 816,239 18 Higher education 76,404 76,417 0 326,961 310,407 5 Supplemental education 66,241 68,209 (3 ) 292,776 301,625 (3 ) Kaplan corporate and other 2,652 2,439 9 11,012 9,853 12 Intersegment elimination (1,985 ) (3,009 ) — (10,047 ) (10,209 ) — $ 395,476 $ 361,826 9 $ 1,587,581 $ 1,427,915 11 Operating Expenses Kaplan international $ 228,906 $ 193,834 18 $ 879,349 $ 744,173 18 Higher education 70,805 69,021 3 288,019 285,588 1 Supplemental education 60,761 64,811 (6 ) 270,304 280,556 (4 ) Kaplan corporate and other 12,469 7,807 60 40,903 28,659 43 Amortization of intangible assets 2,943 3,980 (26 ) 14,076 16,170 (13 ) Impairment of long-lived assets — — — 477 — — Intersegment elimination (1,864 ) (2,798 ) — (10,018 ) (10,164 ) — $ 374,020 $ 336,655 11 $ 1,483,110 $ 1,344,982 10 Operating Income (Loss) Kaplan international $ 23,258 $ 23,936 (3 ) $ 87,530 $ 72,066 21 Higher education 5,599 7,396 (24 ) 38,942 24,819 57 Supplemental education 5,480 3,398 61 22,472 21,069 7 Kaplan corporate and other (9,817 ) (5,368 ) (83 ) (29,891 ) (18,806 ) (59 ) Amortization of intangible assets (2,943 ) (3,980 ) 26 (14,076 ) (16,170 ) 13 Impairment of long-lived assets — — — (477 ) — — Intersegment elimination (121 ) (211 ) — (29 ) (45 ) — $ 21,456 $ 25,171 (15 ) $ 104,471 $ 82,933 26 Operating Income (Loss) before Amortization of Intangible Assets and Impairment of Long-Lived Assets Kaplan international $ 23,258 $ 23,936 (3 ) $ 87,530 $ 72,066 21 Higher education 5,599 7,396 (24 ) 38,942 24,819 57 Supplemental education 5,480 3,398 61 22,472 21,069 7 Kaplan corporate and other (9,817 ) (5,368 ) (83 ) (29,891 ) (18,806 ) (59 ) Intersegment elimination (121 ) (211 ) — (29 ) (45 ) — $ 24,399 $ 29,151 (16 ) $ 119,024 $ 99,103 20 Depreciation Kaplan international $ 7,669 $ 6,012 28 $ 28,501 $ 23,270 22 Higher education 985 1,117 (12 ) 4,416 4,373 1 Supplemental education 1,078 1,557 (31 ) 5,165 6,344 (19 ) Kaplan corporate and other 27 32 (16 ) 105 127 (17 ) $ 9,759 $ 8,718 12 $ 38,187 $ 34,114 12 Pension Expense Kaplan international $ 81 $ 68 19 $ 325 $ 270 20 Higher education 934 980 (5 ) 3,737 3,842 (3 ) Supplemental education 1,037 1,008 3 4,147 4,114 1 Kaplan corporate and other 175 178 (2 ) 698 708 (1 ) $ 2,227 $ 2,234 0 $ 8,907 $ 8,934 0 Adjusted Operating Cash Flow (non-GAAP)(1) Kaplan international $ 31,008 $ 30,016 3 $ 116,356 $ 95,606 22 Higher education 7,518 9,493 (21 ) 47,095 33,034 43 Supplemental education 7,595 5,963 27 31,784 31,527 1 Kaplan corporate and other (9,615 ) (5,158 ) (86 ) (29,088 ) (17,971 ) (62 ) Intersegment elimination (121 ) (211 ) — (29 ) (45 ) — $ 36,385 $ 40,103 (9 ) $ 166,118 $ 142,151 17 ____________ (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 Statement 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 December 31 2023 2022 (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 $ 72,590 $ 16,900 $ 55,690 $ 31,143 $ 24,500 $ 6,643 Attributable to noncontrolling interests (2,431 ) (483 ) Attributable to Graham Holdings Company Stockholders 53,259 6,160 Adjustments: Net credit related to fair value changes in contingent consideration from prior acquisitions (2,267 ) (330 ) (1,937 ) (1,317 ) (10 ) (1,307 ) Goodwill and other long-lived asset impairment charges — (3,874 ) 3,874 128,990 11,953 117,037 Charges related to non-operating Separation Incentive Programs 240 61 179 3,624 915 2,709 Net gains on marketable equity securities (24,639 ) (5,491 ) (19,148 ) (33,289 ) (8,266 ) (25,023 ) Net losses of affiliates whose operations are not managed by the Company 6,391 1,637 4,754 9,026 2,386 6,640 Gain on sale of CyberVista — — — (18,355 ) (4,832 ) (13,523 ) Non-operating loss (gain), net, from write-ups, sales and impairments of cost and equity method investments 500 111 389 (7,268 ) (1,889 ) (5,379 ) Interest expense related to the fair value adjustment of the mandatorily redeemable noncontrolling interest 8,701 377 8,324 3,690 537 3,153 Net Income, adjusted (non-GAAP) $ 49,694 $ 90,467 Per share information attributable to Graham Holdings Company Common Stockholders Diluted income per common share, as reported $ 11.72 $ 1.28 Adjustments: Net credit related to fair value changes in contingent consideration from prior acquisitions (0.43 ) (0.27 ) Goodwill and other long-lived asset impairment charges 0.85 24.32 Charges related to non-operating Separation Incentive Programs 0.04 0.56 Net gains on marketable equity securities (4.21 ) (5.20 ) Net losses of affiliates whose operations are not managed by the Company 1.05 1.38 Gain on sale of CyberVista — (2.81 ) Non-operating loss (gain), net, from write-ups, sales and impairments of cost and equity method investments 0.09 (1.12 ) Interest expense related to the fair value adjustment of the mandatorily redeemable noncontrolling interest 1.83 0.66 Diluted income per common share, adjusted (non-GAAP) $ 10.94 $ 18.80 The adjusted diluted per share amounts may not compute due to rounding. Twelve Months Ended December 31 2023 2022 (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 $ 299,004 $ 87,300 $ 211,704 $ 121,734 $ 51,300 $ 70,434 Attributable to noncontrolling interests (6,416 ) (3,355 ) Attributable to Graham Holdings Company Stockholders $ 205,288 $ 67,079 Adjustments: Net credit related to fair value changes in contingent consideration from prior acquisitions (6,955 ) (473 ) (6,482 ) (6,113 ) (34 ) (6,079 ) Goodwill and other long-lived asset impairment charges 99,066 10,204 88,862 128,990 11,953 117,037 Charges related to non-operating Separation Incentive Programs 9,886 2,542 7,344 3,624 915 2,709 Net (gains) losses on marketable equity securities (138,067 ) (35,351 ) (102,716 ) 139,589 36,747 102,842 Net losses of affiliates whose operations are not managed by the Company 16,047 4,178 11,869 11,832 3,115 8,717 Gain on sale of Pinna and CyberVista (10,033 ) (2,641 ) (7,392 ) (18,355 ) (4,832 ) (13,523 ) Non-operating gain, net, from write-ups, sales and impairments of cost and equity method investments (3,435 ) (896 ) (2,539 ) (9,507 ) (2,456 ) (7,051 ) Credit to interest expense resulting from gains realized related to the termination of interest rate swaps (4,581 ) (1,252 ) (3,329 ) — — — Interest expense related to the fair value adjustment of the mandatorily redeemable noncontrolling interest 10,122 529 9,593 16,489 1,068 15,421 Net Income, adjusted (non-GAAP) $ 200,498 $ 287,152 Per share information attributable to Graham Holdings Company Common Stockholders Diluted income per common share, as reported $ 43.82 $ 13.79 Adjustments: Net credit related to fair value changes in contingent consideration from prior acquisitions (1.38 ) (1.25 ) Goodwill and other long-lived asset impairment charges 18.97 24.06 Charges related to non-operating Separation Incentive Programs 1.57 0.56 Net (gains) losses on marketable equity securities (21.93 ) 21.14 Net losses of affiliates whose operations are not managed by the Company 2.53 1.79 Gain on sale of Pinna and CyberVista (1.59 ) (2.78 ) Non-operating gain, net, from write-ups, sales and impairments of cost and equity method investments (0.54 ) (1.45 ) Credit to interest expense resulting from gains realized related to the termination of interest rate swaps (0.72 ) — Interest expense related to the fair value adjustment of the mandatorily redeemable noncontrolling interest 2.05 3.17 Diluted income per common share, adjusted (non-GAAP) $ 42.78 $ 59.03 The adjusted diluted per share amounts may not compute due to rounding. 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Graham Holdings Company Reports 2023 and Fourth Quarter Earnings By: Graham Holdings Company via Business Wire February 23, 2024 at 16:33 PM EST Graham Holdings Company (NYSE: GHC) today reported its financial results for the fourth quarter and full year of 2023. The Company also filed its Form 10-K today for the year ended December 31, 2023 with the Securities and Exchange Commission. Division Operating Results Revenue for 2023 was $4,414.9 million, up 12% from $3,924.5 million in 2022. Revenues increased at education, healthcare and automotive, partially offset by declines at television broadcasting, manufacturing and other businesses. The Company reported operating income for 2023 of $69.4 million, compared to $83.9 million in 2022. The decrease in operating results is due to goodwill impairment charges at World of Good Brands (WGB, formerly Leaf Media) and Dekko and declines at television broadcasting and manufacturing, partially offset by increases at education, healthcare and automotive, and reduced losses at other businesses due to goodwill and other long-lived asset impairment charges in 2022 at Society6 and Saatchi Art (both formerly included in Leaf Marketplace). The Company reported adjusted operating cash flow (non-GAAP) for 2023 of $338.3 million, compared to $377.6 million in 2022. Adjusted operating cash flow declined at television broadcasting, manufacturing and other businesses, partially offset by increases at education, healthcare and automotive. For the fourth quarter of 2023, revenue was $1,166.8 million, up 10% from $1,064.0 million in 2022. Revenues increased at education, healthcare and automotive, partially offset by declines at television broadcasting, manufacturing and other businesses. The Company reported operating income of $40.8 million in the fourth quarter of 2023, compared to an operating loss of $54.9 million in 2022. The increase in operating results is due to goodwill and other long-lived asset impairment charges at Society6 and Saatchi Art in 2022 and increases at healthcare and automotive, partially offset by declines at education, television broadcasting and manufacturing. The Company reported adjusted operating cash flow (non-GAAP) for the fourth quarter of 2023 of $83.0 million, compared to $119.2 million in 2022. Adjusted operating cash flow declined at education, television broadcasting and manufacturing, partially offset by increases at healthcare and automotive. Acquisitions and Dispositions of Businesses There were no significant business acquisitions or dispositions during the fourth quarter of 2023. Debt, Cash and Marketable Equity Securities At December 31, 2023, the Company had $811.8 million in borrowings outstanding at an average interest rate of 6.4%, including $97.9 million outstanding on its $300 million revolving credit facility. Cash, marketable equity securities and other investments totaled $898.9 million at December 31, 2023. At December 31, 2022, the Company had $726.4 million in borrowings outstanding at an average interest rate of 5.7%, including $200.2 million outstanding on its $300 million revolving credit facility. Cash, marketable equity securities and other investments totaled $812.8 million at December 31, 2022. The Company recognized $24.6 million and $33.3 million in net gains on marketable equity securities in the fourth quarter of 2023 and 2022, respectively. Common Stock Repurchases During the fourth quarter of 2023, the Company purchased a total of 100,263 shares of its Class B common stock at a cost of $62.1 million. At December 31, 2023, there were 4,478,810 shares outstanding. On May 4, 2023, the Board of Directors authorized the Company to acquire up to 500,000 shares of Class B common stock; the Company has remaining authorization for 236,403 shares as of December 31, 2023. Pension Plan At December 31, 2023, the Company had a pension surplus of $2,113.6 million, reported in the Company’s Consolidated Balance Sheet as Prepaid Pension Cost, an increase from $1,658.0 million at December 31, 2022. Overall Company Results The Company reported net income attributable to common shares of $205.3 million ($43.82 per share) for the year ended December 31, 2023, compared to $67.1 million ($13.79 per share) for the year ended December 31, 2022. For the fourth quarter of 2023, the Company reported net income attributable to common shares of $53.3 million ($11.72 per share), compared to $6.2 million ($1.28 per share) for the same period of 2022. The results for 2023 and 2022 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 $200.5 million ($42.78 per share) for 2023, compared to $287.2 million ($59.03 per share) for 2022. Excluding these items, net income attributable to common shares was $49.7 million ($10.94 per share) for the fourth quarter of 2023, compared to $90.5 million ($18.80 per share) for the fourth quarter of 2022. * * * * * * * * * * * * Additional Commentary on Fourth Quarter 2023 Results Division Results Education For the fourth quarter of 2023, education division revenue totaled $395.5 million, up 9% from $361.8 million for the same period of 2022. Kaplan reported operating income for the fourth quarter of 2023 of $21.5 million, compared to $25.2 million in the fourth quarter of 2022. Kaplan International revenue increased 16% in the fourth quarter of 2023 (11% on a constant currency basis). The increase is due largely to growth at Pathways and Australia. Kaplan International reported operating income of $23.3 million for the fourth quarter of 2023, a small decline from $23.9 million in 2022. The decrease is due to lower earnings at UK Professional and increased incentive compensation costs, partially offset by improved results at Australia and Singapore. Higher Education revenue in the fourth quarter of 2023 was flat compared to the same period of 2022. Kaplan recorded $11.3 million in fees from Purdue Global in its Higher Education operating results for each of the fourth quarters of 2023 and 2022. Higher education results declined in the fourth quarter of 2023 due to increased other higher education development costs. Supplemental Education revenue declined 3% in the fourth quarter of 2023, driven mostly by softness in Real Estate, Securities and Medical Licensure test preparation, offset in part by growth in CFP, CFA, Architecture and Engineering and MCAT test preparation and publishing activities. Operating results improved in the fourth quarter of 2023 due to savings from reduced headcount, partially offset by lower revenues. In the fourth quarter of 2022, Kaplan implemented a Separation Incentive Program (SIP) to reduce the number of employees at Supplemental Education and Higher Education, which was funded by the assets of the Company’s pension plan. In connection with the SIP, the Company recorded $3.6 million in non-operating pension expense in the fourth quarter of 2022. Kaplan corporate and other expenses increased in the fourth quarter of 2023 due to higher incentive compensation costs compared to the fourth quarter of 2022. Television Broadcasting For the fourth quarter of 2023, revenue decreased 19% to $124.6 million, from $154.7 million in 2022, due primarily to a $34.0 million decline in political advertising revenue as well as a small decline in retransmission revenues, partially offset by increased digital advertising revenues. Operating income for the fourth quarter of 2023 declined 43% to $40.2 million, from $70.0 million in the same period of 2022, due to reduced revenues and higher network fees. Manufacturing Manufacturing revenues decreased 14% in the fourth quarter of 2023 due to lower revenues at Hoover, Dekko and Joyce, partially offset by increased revenues at Forney. The revenue decline at Hoover is due to lower wood prices and a decrease in overall product demand, partially offset by increased rates. Revenues declined at Dekko due largely to lower product demand, particularly in the commercial office electrical products sector. In the fourth quarter of 2023, Hoover results included wood gains on inventory sales, compared to modest losses in the fourth quarter of 2022. Operating results were down in the fourth quarter of 2023 due to a decline in results at Hoover, Dekko and Joyce, partially offset by improved results at Forney. Healthcare Healthcare revenues increased 34% in the fourth quarter of 2023, largely due to significant growth at CSI and from businesses acquired in 2022, along with growth in home health and hospice services. Graham Healthcare Group (GHG) recorded pension expense of $3.4 million related to the pension credit retention program in the fourth quarter of 2023. In the fourth quarter of 2022, GHG recorded pension expense of $10.5 million related to this program. Of this amount, $7.8 million related to the first three quarters of 2022; the Company concluded that this adjustment was not material to the Company’s operating results for the relevant interim periods. The improvement in GHG operating results in the fourth quarter of 2023 is due to higher pension expense in the fourth quarter of 2022 related to the GHG pension credit retention program and improved results at CSI, partially offset by increased net losses from newly acquired businesses and a decline in home health and hospice results. Adjusted operating cash flow (non-GAAP) at GHG increased to $12.7 million in the fourth quarter of 2023, from $10.5 million in the fourth quarter of 2022. GHG recorded equity in earnings of $3.1 million and $2.9 million for the fourth quarter of 2023 and 2022, respectively, related to its interests in home health and hospice joint ventures. Automotive Revenues for the fourth quarter of 2023 increased due to the acquisition of the Toyota of Richmond dealership and sales growth at the other dealerships, except for the Jeep dealership, which had lower revenues due a decline in new vehicle sales, and a small revenue decline at CDJR. Operating results for the fourth quarter of 2023 improved due largely to the Toyota of Richmond acquisition, partially offset by declines at the Jeep and CDJR dealerships. Other Businesses A summary of revenue by category for other businesses: Three Months Ended December 31 % (in thousands) 2023 2022 Change Operating Revenues Retail (1) $ 34,108 $ 41,335 (17 ) Media (2) 28,131 30,449 (8 ) Specialty (3) 38,304 36,150 6 $ 100,543 $ 107,934 (7 ) ____________ (1) Includes Society6 and Saatchi Art (formerly Leaf Marketplace) and Framebridge (2) Includes WGB (formerly Leaf Media), Code3, Slate, Foreign Policy, Pinna and City Cast (3) Includes Clyde’s Restaurant Group, Decile and CyberVista Overall, revenue from other businesses declined 7% in the fourth quarter of 2023. Retail revenue declined largely due to significantly lower revenue at Society6, partially offset by revenue growth at Framebridge and Saatchi Art. Media revenue declined due to lower revenue at WGB and Code3, partially offset by revenue growth at Slate, Foreign Policy and City Cast. Specialty revenue increased due to revenue growth at Clyde’s Restaurant Group (CRG). Excluding the former Leaf businesses, revenues from other businesses increased in the fourth quarter of 2023. Operating results improved in the fourth quarter of 2023 due to the $129.0 million in impairment charges at the former Leaf businesses recorded in the fourth quarter of 2022. Excluding the impairment charges, operating results declined in the fourth quarter of 2023, due to increased losses at the former Leaf businesses and Framebridge, partially offset by improved results at Code3, Slate, Foreign Policy and CRG and a reduction in losses due to the sales of Pinna and CyberVista. In the fourth quarter of 2023, the former Leaf businesses continued to incur transition-related costs in connection with the overall restructuring of Leaf into three stand-alone businesses. Adjusted operating cash flow losses (non-GAAP) at other businesses declined slightly to $20.0 million in the fourth quarter of 2023, from $20.3 million in the fourth quarter of 2022. In the fourth quarter of 2022, the former Leaf businesses recorded a net depreciation expense credit of $5.9 million that related to the period from June 2021 through September 30, 2022; the Company concluded that this adjustment was not material to the Company’s operating results for the relevant periods. Equity in Losses of Affiliates Overall, the Company recorded equity in losses of affiliates of $2.9 million for the fourth quarter of 2023, compared to $5.8 million for 2022. These amounts include $6.4 million and $9.0 million in net losses for 2023 and 2022, respectively, from affiliates whose operations are not managed by the Company. Net Interest Expense The Company incurred net interest expense of $23.0 million and $14.4 million for the fourth quarter of 2023 and 2022, respectively. The Company recorded interest expense of $8.7 million and $3.7 million in the fourth quarter of 2023 and 2022, respectively, to adjust the fair value of the mandatorily redeemable noncontrolling interest at GHG. Excluding these adjustments, the increase in net interest expense relates primarily to increased debt at the automotive dealerships and higher interest rates on the Company’s variable debt. Non-Operating Pension and Postretirement Benefit Income, Net The Company recorded net non-operating pension and postretirement benefit income of $36.5 million for the fourth quarter of 2023, compared to $45.9 million for the fourth quarter of 2022. In the fourth quarter of 2023, the Company recorded $0.2 million in expenses related to a non-operating SIP at the television broadcasting division. In the fourth quarter of 2022, the Company recorded $3.6 million in expenses related to a non-operating SIP at the education division. Other Non-Operating (Expense) Income For the fourth quarter of 2023, the Company recorded other non-operating expense, net, of $3.4 million, compared to non-operating income, net, of $27.1 million for the fourth quarter of 2022. The 2023 amounts included $3.0 million in foreign currency losses; a $0.5 million impairment on a cost method investment, and other items; partially offset by $1.3 million in gains related to sales of businesses and contingent consideration. The 2022 amounts included a non-cash gain of $18.4 million on the sale of CyberVista; a $6.3 million increase in the fair value of cost method investments; a $2.3 million gain on sale of a cost method investment; $1.3 million in gains related to sales of businesses and contingent consideration and other items; partially offset by a $1.3 million impairment on a cost method investment and other items. Earnings Per Share The calculation of diluted earnings per share for the fourth quarter of 2023 was based on 4,515,022 weighted average shares outstanding compared to 4,785,904 for the fourth quarter of 2022. 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 December 31 % (in thousands, except per share amounts) 2023 2022 Change Operating revenues $ 1,166,813 $ 1,064,032 10 Operating expenses 1,092,258 960,808 14 Depreciation of property, plant and equipment 22,729 14,752 54 Amortization of intangible assets 11,032 14,415 (23 ) Impairment of goodwill and other long-lived assets — 128,990 — Operating income (loss) 40,794 (54,933 ) — Equity in losses of affiliates, net (2,938 ) (5,757 ) (49 ) Interest income 2,384 1,012 — Interest expense (25,423 ) (15,434 ) 65 Non-operating pension and postretirement benefit income, net 36,499 45,876 (20 ) Gain on marketable equity securities, net 24,638 33,289 (26 ) Other (expense) income, net (3,364 ) 27,090 — Income before income taxes 72,590 31,143 — Provision for income taxes 16,900 24,500 (31 ) Net income 55,690 6,643 — Net income attributable to noncontrolling interests (2,431 ) (483 ) — Net Income Attributable to Graham Holdings Company Common Stockholders $ 53,259 $ 6,160 — Per Share Information Attributable to Graham Holdings Company Common Stockholders Basic net income per common share $ 11.76 $ 1.28 — Basic average number of common shares outstanding 4,498 4,771 Diluted net income per common share $ 11.72 $ 1.28 — Diluted average number of common shares outstanding 4,515 4,786 GRAHAM HOLDINGS COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Twelve Months Ended December 31 % (in thousands, except per share amounts) 2023 2022 Change Operating revenues $ 4,414,877 $ 3,924,493 12 Operating expenses 4,110,315 3,579,457 15 Depreciation of property, plant and equipment 86,064 73,297 17 Amortization of intangible assets 50,039 58,851 (15 ) Impairment of goodwill and other long-lived assets 99,066 128,990 (23 ) Operating income 69,393 83,898 (17 ) Equity in losses of affiliates, net (5,183 ) (2,837 ) 83 Interest income 7,122 3,226 — Interest expense (63,301 ) (54,403 ) 16 Non-operating pension and postretirement benefit income, net 133,812 197,939 (32 ) Gain (loss) on marketable equity securities, net 138,067 (139,589 ) — Other income, net 19,094 33,500 (43 ) Income before income taxes 299,004 121,734 — Provision for income taxes 87,300 51,300 70 Net income 211,704 70,434 — Net income attributable to noncontrolling interests (6,416 ) (3,355 ) 91 Net Income Attributable to Graham Holdings Company Common Stockholders $ 205,288 $ 67,079 — Per Share Information Attributable to Graham Holdings Company Common Stockholders Basic net income per common share $ 43.96 $ 13.83 — Basic average number of common shares outstanding 4,639 4,823 Diluted net income per common share $ 43.82 $ 13.79 — Diluted average number of common shares outstanding 4,654 4,836 GRAHAM HOLDINGS COMPANY BUSINESS DIVISION INFORMATION (Unaudited) Three Months Ended Twelve Months Ended December 31 % December 31 % (in thousands) 2023 2022 Change 2023 2022 Change Operating Revenues Education $ 395,476 $ 361,826 9 $ 1,587,581 $ 1,427,915 11 Television broadcasting 124,618 154,681 (19 ) 472,436 535,651 (12 ) Manufacturing 104,028 120,677 (14 ) 447,910 486,643 (8 ) Healthcare 127,976 95,184 34 459,481 326,000 41 Automotive 314,642 224,220 40 1,079,893 734,185 47 Other businesses 100,543 107,934 (7 ) 369,653 416,084 (11 ) Corporate office 365 — — 1,580 — — Intersegment elimination (835 ) (490 ) — (3,657 ) (1,985 ) — $ 1,166,813 $ 1,064,032 10 $ 4,414,877 $ 3,924,493 12 Operating Expenses Education $ 374,020 $ 336,655 11 $ 1,483,110 $ 1,344,982 10 Television broadcasting 84,400 84,713 0 338,498 333,772 1 Manufacturing 99,157 111,094 (11 ) 464,703 452,936 3 Healthcare 121,415 98,588 23 435,636 310,735 40 Automotive 303,924 215,080 41 1,040,635 699,552 49 Other businesses 127,854 258,045 (50 ) 529,379 644,437 (18 ) Corporate office 16,084 15,280 5 57,180 56,166 2 Intersegment elimination (835 ) (490 ) — (3,657 ) (1,985 ) — $ 1,126,019 $ 1,118,965 1 $ 4,345,484 $ 3,840,595 13 Operating Income (Loss) Education $ 21,456 $ 25,171 (15 ) $ 104,471 $ 82,933 26 Television broadcasting 40,218 69,968 (43 ) 133,938 201,879 (34 ) Manufacturing 4,871 9,583 (49 ) (16,793 ) 33,707 — Healthcare 6,561 (3,404 ) — 23,845 15,265 56 Automotive 10,718 9,140 17 39,258 34,633 13 Other businesses (27,311 ) (150,111 ) 82 (159,726 ) (228,353 ) 30 Corporate office (15,719 ) (15,280 ) (3 ) (55,600 ) (56,166 ) 1 $ 40,794 $ (54,933 ) — $ 69,393 $ 83,898 (17 ) Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets Education $ 2,943 $ 3,980 (26 ) $ 14,553 $ 16,170 (10 ) Television broadcasting 1,362 1,360 0 5,450 5,440 0 Manufacturing 3,120 4,969 (37 ) 63,803 20,372 — Healthcare 973 954 2 3,675 3,776 (3 ) Automotive 10 — — 13 — — Other businesses 2,624 132,142 (98 ) 61,611 142,083 (57 ) Corporate office — — — — — — $ 11,032 $ 143,405 (92 ) $ 149,105 $ 187,841 (21 ) Operating Income (Loss) before Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets Education $ 24,399 $ 29,151 (16 ) $ 119,024 $ 99,103 20 Television broadcasting 41,580 71,328 (42 ) 139,388 207,319 (33 ) Manufacturing 7,991 14,552 (45 ) 47,010 54,079 (13 ) Healthcare 7,534 (2,450 ) — 27,520 19,041 45 Automotive 10,728 9,140 17 39,271 34,633 13 Other businesses (24,687 ) (17,969 ) (37 ) (98,115 ) (86,270 ) (14 ) Corporate office (15,719 ) (15,280 ) (3 ) (55,600 ) (56,166 ) 1 $ 51,826 $ 88,472 (41 ) $ 218,498 $ 271,739 (20 ) Three Months Ended Twelve Months Ended December 31 % December 31 % (in thousands) 2023 2022 Change 2023 2022 Change Depreciation Education $ 9,759 $ 8,718 12 $ 38,187 $ 34,114 12 Television broadcasting 2,981 2,959 1 12,224 12,294 (1 ) Manufacturing 2,496 2,290 9 9,453 9,399 1 Healthcare 1,673 2,326 (28 ) 5,475 3,781 45 Automotive 1,612 1,113 45 5,177 3,709 40 Other businesses 4,059 (2,806 ) — 14,941 9,392 59 Corporate office 149 152 (2 ) 607 608 0 $ 22,729 $ 14,752 54 $ 86,064 $ 73,297 17 Pension Expense Education $ 2,227 $ 2,234 0 $ 8,907 $ 8,934 0 Television broadcasting 833 888 (6 ) 3,331 3,554 (6 ) Manufacturing 279 276 1 1,115 1,104 1 Healthcare 3,520 10,591 (67 ) 14,083 11,008 28 Automotive 9 5 80 35 22 59 Other businesses 661 524 26 2,508 2,073 21 Corporate office 952 1,468 (35 ) 3,808 5,872 (35 ) $ 8,481 $ 15,986 (47 ) $ 33,787 $ 32,567 4 Adjusted Operating Cash Flow (non-GAAP)(1) Education $ 36,385 $ 40,103 (9 ) $ 166,118 $ 142,151 17 Television broadcasting 45,394 75,175 (40 ) 154,943 223,167 (31 ) Manufacturing 10,766 17,118 (37 ) 57,578 64,582 (11 ) Healthcare 12,727 10,467 22 47,078 33,830 39 Automotive 12,349 10,258 20 44,483 38,364 16 Other businesses (19,967 ) (20,251 ) 1 (80,666 ) (74,805 ) (8 ) Corporate office (14,618 ) (13,660 ) (7 ) (51,185 ) (49,686 ) (3 ) $ 83,036 $ 119,210 (30 ) $ 338,349 $ 377,603 (10 ) ____________ (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 Twelve Months Ended December 31 % December 31 % (in thousands) 2023 2022 Change 2023 2022 Change Operating Revenues Kaplan international $ 252,164 $ 217,770 16 $ 966,879 $ 816,239 18 Higher education 76,404 76,417 0 326,961 310,407 5 Supplemental education 66,241 68,209 (3 ) 292,776 301,625 (3 ) Kaplan corporate and other 2,652 2,439 9 11,012 9,853 12 Intersegment elimination (1,985 ) (3,009 ) — (10,047 ) (10,209 ) — $ 395,476 $ 361,826 9 $ 1,587,581 $ 1,427,915 11 Operating Expenses Kaplan international $ 228,906 $ 193,834 18 $ 879,349 $ 744,173 18 Higher education 70,805 69,021 3 288,019 285,588 1 Supplemental education 60,761 64,811 (6 ) 270,304 280,556 (4 ) Kaplan corporate and other 12,469 7,807 60 40,903 28,659 43 Amortization of intangible assets 2,943 3,980 (26 ) 14,076 16,170 (13 ) Impairment of long-lived assets — — — 477 — — Intersegment elimination (1,864 ) (2,798 ) — (10,018 ) (10,164 ) — $ 374,020 $ 336,655 11 $ 1,483,110 $ 1,344,982 10 Operating Income (Loss) Kaplan international $ 23,258 $ 23,936 (3 ) $ 87,530 $ 72,066 21 Higher education 5,599 7,396 (24 ) 38,942 24,819 57 Supplemental education 5,480 3,398 61 22,472 21,069 7 Kaplan corporate and other (9,817 ) (5,368 ) (83 ) (29,891 ) (18,806 ) (59 ) Amortization of intangible assets (2,943 ) (3,980 ) 26 (14,076 ) (16,170 ) 13 Impairment of long-lived assets — — — (477 ) — — Intersegment elimination (121 ) (211 ) — (29 ) (45 ) — $ 21,456 $ 25,171 (15 ) $ 104,471 $ 82,933 26 Operating Income (Loss) before Amortization of Intangible Assets and Impairment of Long-Lived Assets Kaplan international $ 23,258 $ 23,936 (3 ) $ 87,530 $ 72,066 21 Higher education 5,599 7,396 (24 ) 38,942 24,819 57 Supplemental education 5,480 3,398 61 22,472 21,069 7 Kaplan corporate and other (9,817 ) (5,368 ) (83 ) (29,891 ) (18,806 ) (59 ) Intersegment elimination (121 ) (211 ) — (29 ) (45 ) — $ 24,399 $ 29,151 (16 ) $ 119,024 $ 99,103 20 Depreciation Kaplan international $ 7,669 $ 6,012 28 $ 28,501 $ 23,270 22 Higher education 985 1,117 (12 ) 4,416 4,373 1 Supplemental education 1,078 1,557 (31 ) 5,165 6,344 (19 ) Kaplan corporate and other 27 32 (16 ) 105 127 (17 ) $ 9,759 $ 8,718 12 $ 38,187 $ 34,114 12 Pension Expense Kaplan international $ 81 $ 68 19 $ 325 $ 270 20 Higher education 934 980 (5 ) 3,737 3,842 (3 ) Supplemental education 1,037 1,008 3 4,147 4,114 1 Kaplan corporate and other 175 178 (2 ) 698 708 (1 ) $ 2,227 $ 2,234 0 $ 8,907 $ 8,934 0 Adjusted Operating Cash Flow (non-GAAP)(1) Kaplan international $ 31,008 $ 30,016 3 $ 116,356 $ 95,606 22 Higher education 7,518 9,493 (21 ) 47,095 33,034 43 Supplemental education 7,595 5,963 27 31,784 31,527 1 Kaplan corporate and other (9,615 ) (5,158 ) (86 ) (29,088 ) (17,971 ) (62 ) Intersegment elimination (121 ) (211 ) — (29 ) (45 ) — $ 36,385 $ 40,103 (9 ) $ 166,118 $ 142,151 17 ____________ (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 Statement 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 December 31 2023 2022 (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 $ 72,590 $ 16,900 $ 55,690 $ 31,143 $ 24,500 $ 6,643 Attributable to noncontrolling interests (2,431 ) (483 ) Attributable to Graham Holdings Company Stockholders 53,259 6,160 Adjustments: Net credit related to fair value changes in contingent consideration from prior acquisitions (2,267 ) (330 ) (1,937 ) (1,317 ) (10 ) (1,307 ) Goodwill and other long-lived asset impairment charges — (3,874 ) 3,874 128,990 11,953 117,037 Charges related to non-operating Separation Incentive Programs 240 61 179 3,624 915 2,709 Net gains on marketable equity securities (24,639 ) (5,491 ) (19,148 ) (33,289 ) (8,266 ) (25,023 ) Net losses of affiliates whose operations are not managed by the Company 6,391 1,637 4,754 9,026 2,386 6,640 Gain on sale of CyberVista — — — (18,355 ) (4,832 ) (13,523 ) Non-operating loss (gain), net, from write-ups, sales and impairments of cost and equity method investments 500 111 389 (7,268 ) (1,889 ) (5,379 ) Interest expense related to the fair value adjustment of the mandatorily redeemable noncontrolling interest 8,701 377 8,324 3,690 537 3,153 Net Income, adjusted (non-GAAP) $ 49,694 $ 90,467 Per share information attributable to Graham Holdings Company Common Stockholders Diluted income per common share, as reported $ 11.72 $ 1.28 Adjustments: Net credit related to fair value changes in contingent consideration from prior acquisitions (0.43 ) (0.27 ) Goodwill and other long-lived asset impairment charges 0.85 24.32 Charges related to non-operating Separation Incentive Programs 0.04 0.56 Net gains on marketable equity securities (4.21 ) (5.20 ) Net losses of affiliates whose operations are not managed by the Company 1.05 1.38 Gain on sale of CyberVista — (2.81 ) Non-operating loss (gain), net, from write-ups, sales and impairments of cost and equity method investments 0.09 (1.12 ) Interest expense related to the fair value adjustment of the mandatorily redeemable noncontrolling interest 1.83 0.66 Diluted income per common share, adjusted (non-GAAP) $ 10.94 $ 18.80 The adjusted diluted per share amounts may not compute due to rounding. Twelve Months Ended December 31 2023 2022 (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 $ 299,004 $ 87,300 $ 211,704 $ 121,734 $ 51,300 $ 70,434 Attributable to noncontrolling interests (6,416 ) (3,355 ) Attributable to Graham Holdings Company Stockholders $ 205,288 $ 67,079 Adjustments: Net credit related to fair value changes in contingent consideration from prior acquisitions (6,955 ) (473 ) (6,482 ) (6,113 ) (34 ) (6,079 ) Goodwill and other long-lived asset impairment charges 99,066 10,204 88,862 128,990 11,953 117,037 Charges related to non-operating Separation Incentive Programs 9,886 2,542 7,344 3,624 915 2,709 Net (gains) losses on marketable equity securities (138,067 ) (35,351 ) (102,716 ) 139,589 36,747 102,842 Net losses of affiliates whose operations are not managed by the Company 16,047 4,178 11,869 11,832 3,115 8,717 Gain on sale of Pinna and CyberVista (10,033 ) (2,641 ) (7,392 ) (18,355 ) (4,832 ) (13,523 ) Non-operating gain, net, from write-ups, sales and impairments of cost and equity method investments (3,435 ) (896 ) (2,539 ) (9,507 ) (2,456 ) (7,051 ) Credit to interest expense resulting from gains realized related to the termination of interest rate swaps (4,581 ) (1,252 ) (3,329 ) — — — Interest expense related to the fair value adjustment of the mandatorily redeemable noncontrolling interest 10,122 529 9,593 16,489 1,068 15,421 Net Income, adjusted (non-GAAP) $ 200,498 $ 287,152 Per share information attributable to Graham Holdings Company Common Stockholders Diluted income per common share, as reported $ 43.82 $ 13.79 Adjustments: Net credit related to fair value changes in contingent consideration from prior acquisitions (1.38 ) (1.25 ) Goodwill and other long-lived asset impairment charges 18.97 24.06 Charges related to non-operating Separation Incentive Programs 1.57 0.56 Net (gains) losses on marketable equity securities (21.93 ) 21.14 Net losses of affiliates whose operations are not managed by the Company 2.53 1.79 Gain on sale of Pinna and CyberVista (1.59 ) (2.78 ) Non-operating gain, net, from write-ups, sales and impairments of cost and equity method investments (0.54 ) (1.45 ) Credit to interest expense resulting from gains realized related to the termination of interest rate swaps (0.72 ) — Interest expense related to the fair value adjustment of the mandatorily redeemable noncontrolling interest 2.05 3.17 Diluted income per common share, adjusted (non-GAAP) $ 42.78 $ 59.03 The adjusted diluted per share amounts may not compute due to rounding. View source version on businesswire.com: https://www.businesswire.com/news/home/20240222861262/en/Contacts Wallace R. Cooney (703) 345-6470
Graham Holdings Company (NYSE: GHC) today reported its financial results for the fourth quarter and full year of 2023. The Company also filed its Form 10-K today for the year ended December 31, 2023 with the Securities and Exchange Commission. Division Operating Results Revenue for 2023 was $4,414.9 million, up 12% from $3,924.5 million in 2022. Revenues increased at education, healthcare and automotive, partially offset by declines at television broadcasting, manufacturing and other businesses. The Company reported operating income for 2023 of $69.4 million, compared to $83.9 million in 2022. The decrease in operating results is due to goodwill impairment charges at World of Good Brands (WGB, formerly Leaf Media) and Dekko and declines at television broadcasting and manufacturing, partially offset by increases at education, healthcare and automotive, and reduced losses at other businesses due to goodwill and other long-lived asset impairment charges in 2022 at Society6 and Saatchi Art (both formerly included in Leaf Marketplace). The Company reported adjusted operating cash flow (non-GAAP) for 2023 of $338.3 million, compared to $377.6 million in 2022. Adjusted operating cash flow declined at television broadcasting, manufacturing and other businesses, partially offset by increases at education, healthcare and automotive. For the fourth quarter of 2023, revenue was $1,166.8 million, up 10% from $1,064.0 million in 2022. Revenues increased at education, healthcare and automotive, partially offset by declines at television broadcasting, manufacturing and other businesses. The Company reported operating income of $40.8 million in the fourth quarter of 2023, compared to an operating loss of $54.9 million in 2022. The increase in operating results is due to goodwill and other long-lived asset impairment charges at Society6 and Saatchi Art in 2022 and increases at healthcare and automotive, partially offset by declines at education, television broadcasting and manufacturing. The Company reported adjusted operating cash flow (non-GAAP) for the fourth quarter of 2023 of $83.0 million, compared to $119.2 million in 2022. Adjusted operating cash flow declined at education, television broadcasting and manufacturing, partially offset by increases at healthcare and automotive. Acquisitions and Dispositions of Businesses There were no significant business acquisitions or dispositions during the fourth quarter of 2023. Debt, Cash and Marketable Equity Securities At December 31, 2023, the Company had $811.8 million in borrowings outstanding at an average interest rate of 6.4%, including $97.9 million outstanding on its $300 million revolving credit facility. Cash, marketable equity securities and other investments totaled $898.9 million at December 31, 2023. At December 31, 2022, the Company had $726.4 million in borrowings outstanding at an average interest rate of 5.7%, including $200.2 million outstanding on its $300 million revolving credit facility. Cash, marketable equity securities and other investments totaled $812.8 million at December 31, 2022. The Company recognized $24.6 million and $33.3 million in net gains on marketable equity securities in the fourth quarter of 2023 and 2022, respectively. Common Stock Repurchases During the fourth quarter of 2023, the Company purchased a total of 100,263 shares of its Class B common stock at a cost of $62.1 million. At December 31, 2023, there were 4,478,810 shares outstanding. On May 4, 2023, the Board of Directors authorized the Company to acquire up to 500,000 shares of Class B common stock; the Company has remaining authorization for 236,403 shares as of December 31, 2023. Pension Plan At December 31, 2023, the Company had a pension surplus of $2,113.6 million, reported in the Company’s Consolidated Balance Sheet as Prepaid Pension Cost, an increase from $1,658.0 million at December 31, 2022. Overall Company Results The Company reported net income attributable to common shares of $205.3 million ($43.82 per share) for the year ended December 31, 2023, compared to $67.1 million ($13.79 per share) for the year ended December 31, 2022. For the fourth quarter of 2023, the Company reported net income attributable to common shares of $53.3 million ($11.72 per share), compared to $6.2 million ($1.28 per share) for the same period of 2022. The results for 2023 and 2022 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 $200.5 million ($42.78 per share) for 2023, compared to $287.2 million ($59.03 per share) for 2022. Excluding these items, net income attributable to common shares was $49.7 million ($10.94 per share) for the fourth quarter of 2023, compared to $90.5 million ($18.80 per share) for the fourth quarter of 2022. * * * * * * * * * * * * Additional Commentary on Fourth Quarter 2023 Results Division Results Education For the fourth quarter of 2023, education division revenue totaled $395.5 million, up 9% from $361.8 million for the same period of 2022. Kaplan reported operating income for the fourth quarter of 2023 of $21.5 million, compared to $25.2 million in the fourth quarter of 2022. Kaplan International revenue increased 16% in the fourth quarter of 2023 (11% on a constant currency basis). The increase is due largely to growth at Pathways and Australia. Kaplan International reported operating income of $23.3 million for the fourth quarter of 2023, a small decline from $23.9 million in 2022. The decrease is due to lower earnings at UK Professional and increased incentive compensation costs, partially offset by improved results at Australia and Singapore. Higher Education revenue in the fourth quarter of 2023 was flat compared to the same period of 2022. Kaplan recorded $11.3 million in fees from Purdue Global in its Higher Education operating results for each of the fourth quarters of 2023 and 2022. Higher education results declined in the fourth quarter of 2023 due to increased other higher education development costs. Supplemental Education revenue declined 3% in the fourth quarter of 2023, driven mostly by softness in Real Estate, Securities and Medical Licensure test preparation, offset in part by growth in CFP, CFA, Architecture and Engineering and MCAT test preparation and publishing activities. Operating results improved in the fourth quarter of 2023 due to savings from reduced headcount, partially offset by lower revenues. In the fourth quarter of 2022, Kaplan implemented a Separation Incentive Program (SIP) to reduce the number of employees at Supplemental Education and Higher Education, which was funded by the assets of the Company’s pension plan. In connection with the SIP, the Company recorded $3.6 million in non-operating pension expense in the fourth quarter of 2022. Kaplan corporate and other expenses increased in the fourth quarter of 2023 due to higher incentive compensation costs compared to the fourth quarter of 2022. Television Broadcasting For the fourth quarter of 2023, revenue decreased 19% to $124.6 million, from $154.7 million in 2022, due primarily to a $34.0 million decline in political advertising revenue as well as a small decline in retransmission revenues, partially offset by increased digital advertising revenues. Operating income for the fourth quarter of 2023 declined 43% to $40.2 million, from $70.0 million in the same period of 2022, due to reduced revenues and higher network fees. Manufacturing Manufacturing revenues decreased 14% in the fourth quarter of 2023 due to lower revenues at Hoover, Dekko and Joyce, partially offset by increased revenues at Forney. The revenue decline at Hoover is due to lower wood prices and a decrease in overall product demand, partially offset by increased rates. Revenues declined at Dekko due largely to lower product demand, particularly in the commercial office electrical products sector. In the fourth quarter of 2023, Hoover results included wood gains on inventory sales, compared to modest losses in the fourth quarter of 2022. Operating results were down in the fourth quarter of 2023 due to a decline in results at Hoover, Dekko and Joyce, partially offset by improved results at Forney. Healthcare Healthcare revenues increased 34% in the fourth quarter of 2023, largely due to significant growth at CSI and from businesses acquired in 2022, along with growth in home health and hospice services. Graham Healthcare Group (GHG) recorded pension expense of $3.4 million related to the pension credit retention program in the fourth quarter of 2023. In the fourth quarter of 2022, GHG recorded pension expense of $10.5 million related to this program. Of this amount, $7.8 million related to the first three quarters of 2022; the Company concluded that this adjustment was not material to the Company’s operating results for the relevant interim periods. The improvement in GHG operating results in the fourth quarter of 2023 is due to higher pension expense in the fourth quarter of 2022 related to the GHG pension credit retention program and improved results at CSI, partially offset by increased net losses from newly acquired businesses and a decline in home health and hospice results. Adjusted operating cash flow (non-GAAP) at GHG increased to $12.7 million in the fourth quarter of 2023, from $10.5 million in the fourth quarter of 2022. GHG recorded equity in earnings of $3.1 million and $2.9 million for the fourth quarter of 2023 and 2022, respectively, related to its interests in home health and hospice joint ventures. Automotive Revenues for the fourth quarter of 2023 increased due to the acquisition of the Toyota of Richmond dealership and sales growth at the other dealerships, except for the Jeep dealership, which had lower revenues due a decline in new vehicle sales, and a small revenue decline at CDJR. Operating results for the fourth quarter of 2023 improved due largely to the Toyota of Richmond acquisition, partially offset by declines at the Jeep and CDJR dealerships. Other Businesses A summary of revenue by category for other businesses: Three Months Ended December 31 % (in thousands) 2023 2022 Change Operating Revenues Retail (1) $ 34,108 $ 41,335 (17 ) Media (2) 28,131 30,449 (8 ) Specialty (3) 38,304 36,150 6 $ 100,543 $ 107,934 (7 ) ____________ (1) Includes Society6 and Saatchi Art (formerly Leaf Marketplace) and Framebridge (2) Includes WGB (formerly Leaf Media), Code3, Slate, Foreign Policy, Pinna and City Cast (3) Includes Clyde’s Restaurant Group, Decile and CyberVista Overall, revenue from other businesses declined 7% in the fourth quarter of 2023. Retail revenue declined largely due to significantly lower revenue at Society6, partially offset by revenue growth at Framebridge and Saatchi Art. Media revenue declined due to lower revenue at WGB and Code3, partially offset by revenue growth at Slate, Foreign Policy and City Cast. Specialty revenue increased due to revenue growth at Clyde’s Restaurant Group (CRG). Excluding the former Leaf businesses, revenues from other businesses increased in the fourth quarter of 2023. Operating results improved in the fourth quarter of 2023 due to the $129.0 million in impairment charges at the former Leaf businesses recorded in the fourth quarter of 2022. Excluding the impairment charges, operating results declined in the fourth quarter of 2023, due to increased losses at the former Leaf businesses and Framebridge, partially offset by improved results at Code3, Slate, Foreign Policy and CRG and a reduction in losses due to the sales of Pinna and CyberVista. In the fourth quarter of 2023, the former Leaf businesses continued to incur transition-related costs in connection with the overall restructuring of Leaf into three stand-alone businesses. Adjusted operating cash flow losses (non-GAAP) at other businesses declined slightly to $20.0 million in the fourth quarter of 2023, from $20.3 million in the fourth quarter of 2022. In the fourth quarter of 2022, the former Leaf businesses recorded a net depreciation expense credit of $5.9 million that related to the period from June 2021 through September 30, 2022; the Company concluded that this adjustment was not material to the Company’s operating results for the relevant periods. Equity in Losses of Affiliates Overall, the Company recorded equity in losses of affiliates of $2.9 million for the fourth quarter of 2023, compared to $5.8 million for 2022. These amounts include $6.4 million and $9.0 million in net losses for 2023 and 2022, respectively, from affiliates whose operations are not managed by the Company. Net Interest Expense The Company incurred net interest expense of $23.0 million and $14.4 million for the fourth quarter of 2023 and 2022, respectively. The Company recorded interest expense of $8.7 million and $3.7 million in the fourth quarter of 2023 and 2022, respectively, to adjust the fair value of the mandatorily redeemable noncontrolling interest at GHG. Excluding these adjustments, the increase in net interest expense relates primarily to increased debt at the automotive dealerships and higher interest rates on the Company’s variable debt. Non-Operating Pension and Postretirement Benefit Income, Net The Company recorded net non-operating pension and postretirement benefit income of $36.5 million for the fourth quarter of 2023, compared to $45.9 million for the fourth quarter of 2022. In the fourth quarter of 2023, the Company recorded $0.2 million in expenses related to a non-operating SIP at the television broadcasting division. In the fourth quarter of 2022, the Company recorded $3.6 million in expenses related to a non-operating SIP at the education division. Other Non-Operating (Expense) Income For the fourth quarter of 2023, the Company recorded other non-operating expense, net, of $3.4 million, compared to non-operating income, net, of $27.1 million for the fourth quarter of 2022. The 2023 amounts included $3.0 million in foreign currency losses; a $0.5 million impairment on a cost method investment, and other items; partially offset by $1.3 million in gains related to sales of businesses and contingent consideration. The 2022 amounts included a non-cash gain of $18.4 million on the sale of CyberVista; a $6.3 million increase in the fair value of cost method investments; a $2.3 million gain on sale of a cost method investment; $1.3 million in gains related to sales of businesses and contingent consideration and other items; partially offset by a $1.3 million impairment on a cost method investment and other items. Earnings Per Share The calculation of diluted earnings per share for the fourth quarter of 2023 was based on 4,515,022 weighted average shares outstanding compared to 4,785,904 for the fourth quarter of 2022. 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 December 31 % (in thousands, except per share amounts) 2023 2022 Change Operating revenues $ 1,166,813 $ 1,064,032 10 Operating expenses 1,092,258 960,808 14 Depreciation of property, plant and equipment 22,729 14,752 54 Amortization of intangible assets 11,032 14,415 (23 ) Impairment of goodwill and other long-lived assets — 128,990 — Operating income (loss) 40,794 (54,933 ) — Equity in losses of affiliates, net (2,938 ) (5,757 ) (49 ) Interest income 2,384 1,012 — Interest expense (25,423 ) (15,434 ) 65 Non-operating pension and postretirement benefit income, net 36,499 45,876 (20 ) Gain on marketable equity securities, net 24,638 33,289 (26 ) Other (expense) income, net (3,364 ) 27,090 — Income before income taxes 72,590 31,143 — Provision for income taxes 16,900 24,500 (31 ) Net income 55,690 6,643 — Net income attributable to noncontrolling interests (2,431 ) (483 ) — Net Income Attributable to Graham Holdings Company Common Stockholders $ 53,259 $ 6,160 — Per Share Information Attributable to Graham Holdings Company Common Stockholders Basic net income per common share $ 11.76 $ 1.28 — Basic average number of common shares outstanding 4,498 4,771 Diluted net income per common share $ 11.72 $ 1.28 — Diluted average number of common shares outstanding 4,515 4,786 GRAHAM HOLDINGS COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Twelve Months Ended December 31 % (in thousands, except per share amounts) 2023 2022 Change Operating revenues $ 4,414,877 $ 3,924,493 12 Operating expenses 4,110,315 3,579,457 15 Depreciation of property, plant and equipment 86,064 73,297 17 Amortization of intangible assets 50,039 58,851 (15 ) Impairment of goodwill and other long-lived assets 99,066 128,990 (23 ) Operating income 69,393 83,898 (17 ) Equity in losses of affiliates, net (5,183 ) (2,837 ) 83 Interest income 7,122 3,226 — Interest expense (63,301 ) (54,403 ) 16 Non-operating pension and postretirement benefit income, net 133,812 197,939 (32 ) Gain (loss) on marketable equity securities, net 138,067 (139,589 ) — Other income, net 19,094 33,500 (43 ) Income before income taxes 299,004 121,734 — Provision for income taxes 87,300 51,300 70 Net income 211,704 70,434 — Net income attributable to noncontrolling interests (6,416 ) (3,355 ) 91 Net Income Attributable to Graham Holdings Company Common Stockholders $ 205,288 $ 67,079 — Per Share Information Attributable to Graham Holdings Company Common Stockholders Basic net income per common share $ 43.96 $ 13.83 — Basic average number of common shares outstanding 4,639 4,823 Diluted net income per common share $ 43.82 $ 13.79 — Diluted average number of common shares outstanding 4,654 4,836 GRAHAM HOLDINGS COMPANY BUSINESS DIVISION INFORMATION (Unaudited) Three Months Ended Twelve Months Ended December 31 % December 31 % (in thousands) 2023 2022 Change 2023 2022 Change Operating Revenues Education $ 395,476 $ 361,826 9 $ 1,587,581 $ 1,427,915 11 Television broadcasting 124,618 154,681 (19 ) 472,436 535,651 (12 ) Manufacturing 104,028 120,677 (14 ) 447,910 486,643 (8 ) Healthcare 127,976 95,184 34 459,481 326,000 41 Automotive 314,642 224,220 40 1,079,893 734,185 47 Other businesses 100,543 107,934 (7 ) 369,653 416,084 (11 ) Corporate office 365 — — 1,580 — — Intersegment elimination (835 ) (490 ) — (3,657 ) (1,985 ) — $ 1,166,813 $ 1,064,032 10 $ 4,414,877 $ 3,924,493 12 Operating Expenses Education $ 374,020 $ 336,655 11 $ 1,483,110 $ 1,344,982 10 Television broadcasting 84,400 84,713 0 338,498 333,772 1 Manufacturing 99,157 111,094 (11 ) 464,703 452,936 3 Healthcare 121,415 98,588 23 435,636 310,735 40 Automotive 303,924 215,080 41 1,040,635 699,552 49 Other businesses 127,854 258,045 (50 ) 529,379 644,437 (18 ) Corporate office 16,084 15,280 5 57,180 56,166 2 Intersegment elimination (835 ) (490 ) — (3,657 ) (1,985 ) — $ 1,126,019 $ 1,118,965 1 $ 4,345,484 $ 3,840,595 13 Operating Income (Loss) Education $ 21,456 $ 25,171 (15 ) $ 104,471 $ 82,933 26 Television broadcasting 40,218 69,968 (43 ) 133,938 201,879 (34 ) Manufacturing 4,871 9,583 (49 ) (16,793 ) 33,707 — Healthcare 6,561 (3,404 ) — 23,845 15,265 56 Automotive 10,718 9,140 17 39,258 34,633 13 Other businesses (27,311 ) (150,111 ) 82 (159,726 ) (228,353 ) 30 Corporate office (15,719 ) (15,280 ) (3 ) (55,600 ) (56,166 ) 1 $ 40,794 $ (54,933 ) — $ 69,393 $ 83,898 (17 ) Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets Education $ 2,943 $ 3,980 (26 ) $ 14,553 $ 16,170 (10 ) Television broadcasting 1,362 1,360 0 5,450 5,440 0 Manufacturing 3,120 4,969 (37 ) 63,803 20,372 — Healthcare 973 954 2 3,675 3,776 (3 ) Automotive 10 — — 13 — — Other businesses 2,624 132,142 (98 ) 61,611 142,083 (57 ) Corporate office — — — — — — $ 11,032 $ 143,405 (92 ) $ 149,105 $ 187,841 (21 ) Operating Income (Loss) before Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets Education $ 24,399 $ 29,151 (16 ) $ 119,024 $ 99,103 20 Television broadcasting 41,580 71,328 (42 ) 139,388 207,319 (33 ) Manufacturing 7,991 14,552 (45 ) 47,010 54,079 (13 ) Healthcare 7,534 (2,450 ) — 27,520 19,041 45 Automotive 10,728 9,140 17 39,271 34,633 13 Other businesses (24,687 ) (17,969 ) (37 ) (98,115 ) (86,270 ) (14 ) Corporate office (15,719 ) (15,280 ) (3 ) (55,600 ) (56,166 ) 1 $ 51,826 $ 88,472 (41 ) $ 218,498 $ 271,739 (20 ) Three Months Ended Twelve Months Ended December 31 % December 31 % (in thousands) 2023 2022 Change 2023 2022 Change Depreciation Education $ 9,759 $ 8,718 12 $ 38,187 $ 34,114 12 Television broadcasting 2,981 2,959 1 12,224 12,294 (1 ) Manufacturing 2,496 2,290 9 9,453 9,399 1 Healthcare 1,673 2,326 (28 ) 5,475 3,781 45 Automotive 1,612 1,113 45 5,177 3,709 40 Other businesses 4,059 (2,806 ) — 14,941 9,392 59 Corporate office 149 152 (2 ) 607 608 0 $ 22,729 $ 14,752 54 $ 86,064 $ 73,297 17 Pension Expense Education $ 2,227 $ 2,234 0 $ 8,907 $ 8,934 0 Television broadcasting 833 888 (6 ) 3,331 3,554 (6 ) Manufacturing 279 276 1 1,115 1,104 1 Healthcare 3,520 10,591 (67 ) 14,083 11,008 28 Automotive 9 5 80 35 22 59 Other businesses 661 524 26 2,508 2,073 21 Corporate office 952 1,468 (35 ) 3,808 5,872 (35 ) $ 8,481 $ 15,986 (47 ) $ 33,787 $ 32,567 4 Adjusted Operating Cash Flow (non-GAAP)(1) Education $ 36,385 $ 40,103 (9 ) $ 166,118 $ 142,151 17 Television broadcasting 45,394 75,175 (40 ) 154,943 223,167 (31 ) Manufacturing 10,766 17,118 (37 ) 57,578 64,582 (11 ) Healthcare 12,727 10,467 22 47,078 33,830 39 Automotive 12,349 10,258 20 44,483 38,364 16 Other businesses (19,967 ) (20,251 ) 1 (80,666 ) (74,805 ) (8 ) Corporate office (14,618 ) (13,660 ) (7 ) (51,185 ) (49,686 ) (3 ) $ 83,036 $ 119,210 (30 ) $ 338,349 $ 377,603 (10 ) ____________ (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 Twelve Months Ended December 31 % December 31 % (in thousands) 2023 2022 Change 2023 2022 Change Operating Revenues Kaplan international $ 252,164 $ 217,770 16 $ 966,879 $ 816,239 18 Higher education 76,404 76,417 0 326,961 310,407 5 Supplemental education 66,241 68,209 (3 ) 292,776 301,625 (3 ) Kaplan corporate and other 2,652 2,439 9 11,012 9,853 12 Intersegment elimination (1,985 ) (3,009 ) — (10,047 ) (10,209 ) — $ 395,476 $ 361,826 9 $ 1,587,581 $ 1,427,915 11 Operating Expenses Kaplan international $ 228,906 $ 193,834 18 $ 879,349 $ 744,173 18 Higher education 70,805 69,021 3 288,019 285,588 1 Supplemental education 60,761 64,811 (6 ) 270,304 280,556 (4 ) Kaplan corporate and other 12,469 7,807 60 40,903 28,659 43 Amortization of intangible assets 2,943 3,980 (26 ) 14,076 16,170 (13 ) Impairment of long-lived assets — — — 477 — — Intersegment elimination (1,864 ) (2,798 ) — (10,018 ) (10,164 ) — $ 374,020 $ 336,655 11 $ 1,483,110 $ 1,344,982 10 Operating Income (Loss) Kaplan international $ 23,258 $ 23,936 (3 ) $ 87,530 $ 72,066 21 Higher education 5,599 7,396 (24 ) 38,942 24,819 57 Supplemental education 5,480 3,398 61 22,472 21,069 7 Kaplan corporate and other (9,817 ) (5,368 ) (83 ) (29,891 ) (18,806 ) (59 ) Amortization of intangible assets (2,943 ) (3,980 ) 26 (14,076 ) (16,170 ) 13 Impairment of long-lived assets — — — (477 ) — — Intersegment elimination (121 ) (211 ) — (29 ) (45 ) — $ 21,456 $ 25,171 (15 ) $ 104,471 $ 82,933 26 Operating Income (Loss) before Amortization of Intangible Assets and Impairment of Long-Lived Assets Kaplan international $ 23,258 $ 23,936 (3 ) $ 87,530 $ 72,066 21 Higher education 5,599 7,396 (24 ) 38,942 24,819 57 Supplemental education 5,480 3,398 61 22,472 21,069 7 Kaplan corporate and other (9,817 ) (5,368 ) (83 ) (29,891 ) (18,806 ) (59 ) Intersegment elimination (121 ) (211 ) — (29 ) (45 ) — $ 24,399 $ 29,151 (16 ) $ 119,024 $ 99,103 20 Depreciation Kaplan international $ 7,669 $ 6,012 28 $ 28,501 $ 23,270 22 Higher education 985 1,117 (12 ) 4,416 4,373 1 Supplemental education 1,078 1,557 (31 ) 5,165 6,344 (19 ) Kaplan corporate and other 27 32 (16 ) 105 127 (17 ) $ 9,759 $ 8,718 12 $ 38,187 $ 34,114 12 Pension Expense Kaplan international $ 81 $ 68 19 $ 325 $ 270 20 Higher education 934 980 (5 ) 3,737 3,842 (3 ) Supplemental education 1,037 1,008 3 4,147 4,114 1 Kaplan corporate and other 175 178 (2 ) 698 708 (1 ) $ 2,227 $ 2,234 0 $ 8,907 $ 8,934 0 Adjusted Operating Cash Flow (non-GAAP)(1) Kaplan international $ 31,008 $ 30,016 3 $ 116,356 $ 95,606 22 Higher education 7,518 9,493 (21 ) 47,095 33,034 43 Supplemental education 7,595 5,963 27 31,784 31,527 1 Kaplan corporate and other (9,615 ) (5,158 ) (86 ) (29,088 ) (17,971 ) (62 ) Intersegment elimination (121 ) (211 ) — (29 ) (45 ) — $ 36,385 $ 40,103 (9 ) $ 166,118 $ 142,151 17 ____________ (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 Statement 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 December 31 2023 2022 (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 $ 72,590 $ 16,900 $ 55,690 $ 31,143 $ 24,500 $ 6,643 Attributable to noncontrolling interests (2,431 ) (483 ) Attributable to Graham Holdings Company Stockholders 53,259 6,160 Adjustments: Net credit related to fair value changes in contingent consideration from prior acquisitions (2,267 ) (330 ) (1,937 ) (1,317 ) (10 ) (1,307 ) Goodwill and other long-lived asset impairment charges — (3,874 ) 3,874 128,990 11,953 117,037 Charges related to non-operating Separation Incentive Programs 240 61 179 3,624 915 2,709 Net gains on marketable equity securities (24,639 ) (5,491 ) (19,148 ) (33,289 ) (8,266 ) (25,023 ) Net losses of affiliates whose operations are not managed by the Company 6,391 1,637 4,754 9,026 2,386 6,640 Gain on sale of CyberVista — — — (18,355 ) (4,832 ) (13,523 ) Non-operating loss (gain), net, from write-ups, sales and impairments of cost and equity method investments 500 111 389 (7,268 ) (1,889 ) (5,379 ) Interest expense related to the fair value adjustment of the mandatorily redeemable noncontrolling interest 8,701 377 8,324 3,690 537 3,153 Net Income, adjusted (non-GAAP) $ 49,694 $ 90,467 Per share information attributable to Graham Holdings Company Common Stockholders Diluted income per common share, as reported $ 11.72 $ 1.28 Adjustments: Net credit related to fair value changes in contingent consideration from prior acquisitions (0.43 ) (0.27 ) Goodwill and other long-lived asset impairment charges 0.85 24.32 Charges related to non-operating Separation Incentive Programs 0.04 0.56 Net gains on marketable equity securities (4.21 ) (5.20 ) Net losses of affiliates whose operations are not managed by the Company 1.05 1.38 Gain on sale of CyberVista — (2.81 ) Non-operating loss (gain), net, from write-ups, sales and impairments of cost and equity method investments 0.09 (1.12 ) Interest expense related to the fair value adjustment of the mandatorily redeemable noncontrolling interest 1.83 0.66 Diluted income per common share, adjusted (non-GAAP) $ 10.94 $ 18.80 The adjusted diluted per share amounts may not compute due to rounding. Twelve Months Ended December 31 2023 2022 (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 $ 299,004 $ 87,300 $ 211,704 $ 121,734 $ 51,300 $ 70,434 Attributable to noncontrolling interests (6,416 ) (3,355 ) Attributable to Graham Holdings Company Stockholders $ 205,288 $ 67,079 Adjustments: Net credit related to fair value changes in contingent consideration from prior acquisitions (6,955 ) (473 ) (6,482 ) (6,113 ) (34 ) (6,079 ) Goodwill and other long-lived asset impairment charges 99,066 10,204 88,862 128,990 11,953 117,037 Charges related to non-operating Separation Incentive Programs 9,886 2,542 7,344 3,624 915 2,709 Net (gains) losses on marketable equity securities (138,067 ) (35,351 ) (102,716 ) 139,589 36,747 102,842 Net losses of affiliates whose operations are not managed by the Company 16,047 4,178 11,869 11,832 3,115 8,717 Gain on sale of Pinna and CyberVista (10,033 ) (2,641 ) (7,392 ) (18,355 ) (4,832 ) (13,523 ) Non-operating gain, net, from write-ups, sales and impairments of cost and equity method investments (3,435 ) (896 ) (2,539 ) (9,507 ) (2,456 ) (7,051 ) Credit to interest expense resulting from gains realized related to the termination of interest rate swaps (4,581 ) (1,252 ) (3,329 ) — — — Interest expense related to the fair value adjustment of the mandatorily redeemable noncontrolling interest 10,122 529 9,593 16,489 1,068 15,421 Net Income, adjusted (non-GAAP) $ 200,498 $ 287,152 Per share information attributable to Graham Holdings Company Common Stockholders Diluted income per common share, as reported $ 43.82 $ 13.79 Adjustments: Net credit related to fair value changes in contingent consideration from prior acquisitions (1.38 ) (1.25 ) Goodwill and other long-lived asset impairment charges 18.97 24.06 Charges related to non-operating Separation Incentive Programs 1.57 0.56 Net (gains) losses on marketable equity securities (21.93 ) 21.14 Net losses of affiliates whose operations are not managed by the Company 2.53 1.79 Gain on sale of Pinna and CyberVista (1.59 ) (2.78 ) Non-operating gain, net, from write-ups, sales and impairments of cost and equity method investments (0.54 ) (1.45 ) Credit to interest expense resulting from gains realized related to the termination of interest rate swaps (0.72 ) — Interest expense related to the fair value adjustment of the mandatorily redeemable noncontrolling interest 2.05 3.17 Diluted income per common share, adjusted (non-GAAP) $ 42.78 $ 59.03 The adjusted diluted per share amounts may not compute due to rounding. 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