Washington Post 2012 Annual Report Download - page 52

The Affordable Care Act and the overall trend toward cost containment could result in insurers lowering payment rates,
limiting service coverage and engaging in other measures to reduce costs. Reimbursement for services by third-party
payers including Medicare, Medicaid and private health insurance providers, may not be available or may be reduced
as a result of changing regulations and policies. Managed-care organizations, hospitals, physician practices and other
third-party payers continue to consolidate in response to the evolving regulatory environment, thereby enhancing their
ability to influence the delivery of health care services and decreasing the number of organizations serving patients. This
consolidation could adversely impact Celtic’s business if it is unable to maintain its ability to participate in established
networks. Changes in existing laws or regulations, in their interpretation and enforcement, and the enactment of new laws
or regulations could have a material adverse effect on Celtic’s business operations.
Item 1B. Unresolved Staff Comments.
Not applicable.
Item 2. Properties.
Directly or through its subsidiaries, Kaplan owns a total of eight properties: a 30,000-square-foot, six-story building
located at 131 West 56th Street in New York City, which serves as an education center primarily for international
students; a redeveloped 47,410-square-foot, four-story brick building in Lincoln, NE, which is used by Kaplan University;
a 4,000-square-foot office condominium in Chapel Hill, NC, which it utilizes for its KTP business; a 15,000-square-foot,
three-story building in Berkeley, CA, used for its KTP and English-language businesses; a 131,000-square-foot, five-story
brick building in Manchester, NH, used by Hesser College; a 25,000-square-foot building in Hammond, IN, used by
Kaplan Career College (formerly Sawyer College); a 45,000-square-foot, three-story brick building in Houston, TX, used
by the Texas School of Business; and an 18,000-square-foot building in Dayton, OH, which is currently being marketed
for sale. Kaplan, Inc. and Kaplan University maintain corporate offices, together with a data center, call center and
employee-training facilities, in two 97,000-square-foot leased buildings located on adjacent lots in Fort Lauderdale, FL.
Both of those leases will expire in 2017. KHE leases 76,500 square feet of corporate office space in Chicago, IL, for a
lease term that expires in 2022. As of December 31, 2012, this location has been entirely subleased through the
remainder of the lease term. In December 2008, Kaplan University entered into an agreement to lease a two-story,
124,500-square-foot building in Orlando, FL, to house an additional support center. Kaplan is currently marketing
47,000 square feet for sublease in the Orlando facility. In June 2009, Kaplan, Inc. and KHE began sharing corporate
office space in a 78,000-square-foot office building in Alpharetta, GA, under a lease that expires in 2019. In October
2009, Kaplan University entered into an agreement to lease 88,800 square feet of corporate office space in Plantation,
FL. This lease expires in 2021. In December 2010, Kaplan, Inc. and its New York-based KTP business relocated to
consolidated space at 395 Hudson Street, occupying two floors and approximately 159,540 square feet of space.
Overseas, Dublin Business School’s facilities in Dublin, Ireland, are located in six buildings aggregating approximately
83,000 square feet of space that are rented under leases expiring between 2016 and 2029. Kaplan Publishing has an
office and distribution warehouse in Wokingham, Berkshire, U.K., of 27,000 square feet, under a lease expiring in
2016. Kaplan Financial’s largest leaseholds are office and instructional space in London, U.K., of 33,000 square feet
(expiring in 2033), 21,500 square feet (expiring in 2015) and 35,800 square feet (comprising seven separate leases,
expiring in 2015); office and instructional space in Birmingham, U.K., of 23,600 square feet (expiring in 2017); office
and instructional space in Manchester, U.K., of 26,900 square feet (comprising five separate leases, expiring in 2022);
office and instructional space in Wales, U.K., of 34,000 square feet (on an open-ended lease with termination on
12 months’ notice); and office and instructional space in Singapore of 67,000 square feet (comprising two separate
leases, expiring in 2013), 101,700 square feet (comprising two separate leases, expiring in 2019) and 51,000 square
feet (comprising two separate leases, expiring in 2015). Kaplan Law School has 20,200 square feet of space in
London, U.K. (comprising four separate leases, expiring in 2017). In addition, Kaplan has entered into two separate
leases in Glasgow, Scotland, for 58,000 square feet and 22,400 square feet, respectively, of dormitory space that
were constructed and opened to students in 2012. These leases will expire in 2032. In addition, Kaplan has signed an
agreement for the lease of approximately 143,000 square feet of dormitory space as the main tenant of a new student
residential building to be constructed in Nottingham, U.K., which is expected to be completed in 2014. In Australia,
Carrick leases three locations in Melbourne with an aggregate of approximately 118,600 square feet, two locations in
Sydney with an aggregate of 113,200 square feet, two locations in Adelaide with an aggregate of 27,200 square
feet; and one location in Brisbane with an aggregate of 39,000 square feet. These leases expire at various times from
2013 through 2021. Bradford College, in Adelaide, Australia, leases a 23,200-square-foot facility, whose lease expires
in 2020. All other Kaplan facilities in the U.S. and overseas (including administrative offices and instructional locations)
occupy leased premises that are for less space than those listed above.
40 THE WASHINGTON POST COMPANY