Washington Post 2013 Annual Report Download

Download and view the complete annual report

Please find the complete 2013 Washington Post annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 112

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112

2013 ANNUAL REPORT

Table of contents

  • Page 1
    2013 AnnuAl RepoRt

  • Page 2
    Revenue by pRincipAl opeRAtions n eDUCatioN 62% n CaBLe 23% n teLeViSioN BroaDCaStiNg 11% n other BUSiNeSSeS 4%

  • Page 3
    ...2013 2012 Change operating revenues income from operations Net income attributable to common shares Diluted earnings per common share from continuing operations Diluted earnings per common share Dividends per common share Common stockholders' equity per share Diluted average number of common shares...

  • Page 4
    ...PNS made $171 million in operating income, far outstripped 2011 ($117 million). and, 2014 should 3 3 3 3 3 3 our Company owns three large businesses. the largest profit-earner in 2013 (narrowly) was Post-Newsweek Stations. the year strengthened our belief that PNS has an excellent Ceo in emily Barr...

  • Page 5
    ... flow. they are more likely to buy internet service than video service, they churn away less and they pay on time. Cable oNe now installs 75% more new internet customers each month than new video customers. Bad debt is down 30% compared to 2012. Sales to business customers is our other focus-and for...

  • Page 6
    ...punishing companies in the sector, and on punishing them no matter how good a job they do at educating low-income students. in 2010, the administration proposed drastic new regulations for colleges like Kaplan-regulations that applied, for the most part, only to colleges 4 | grahaM hoLDiNgS CoMPaNY

  • Page 7
    ... our offerings of many programs that had been serving low-income students: KAPLAN HIGHER EDUCATION STUDENT ENROLLMENTS 2. the government wanted to see graduates repaying a portion of the principal on their student loans. this was a key part of its definition of "gainful employment." But at the same...

  • Page 8
    ... this report attended a college where we initiAted tHe KAplAn commitment. students wHo enRoll in ouR pRogRAms ARe given wHAt migHt be cAlled A tRiAl peRiod oF seveRAl weeKs, duRing wHicH tHey owe no tuition (And, tHeReFoRe, incuR no debt) unless tHey liKe wHAt tHey see. 6 | grahaM hoLDiNgS CoMPaNY

  • Page 9
    ...is so clear: 1. Kaplan's Mount Washington College is offering a bachelor's degree in business or information technology for a total (not annual) cost of under $25,000 if a student takes four years to complete the program, or under $20,000 if the student pursues the program without any breaks. 2. We...

  • Page 10
    ... steady source of profit for our Company and one that we can be proud of. Celtic healthcare had an excellent year under arnie Burchianti's and Kurt Baumgartel's management. We added some very small acquisitions in counties adjoining Celtic's Pennsylvania territories. home health and hospice care are...

  • Page 11
    ... Post Company, took some excellent pension-investing advice from Warren Buffett in the late 1970s, our pension fund is now more than $1.2 billion overfunded. (this, after we transferred more than $300 million in pension assets to Jeff Bezos to fund the pensions for active Washington Post employees...

  • Page 12
    .... and, he's famous for succeeding in many of those investments. i've heard the Post's great friend Warren Buffett call Jeff the ablest Ceo in america. founders of internet companies wants to take on the challenge. he knows it will be hard. So we and our board started asking if there might be a buyer...

  • Page 13
    ... technology. if you ask what a guy like Jeff Bezos needs from a company like this one, i would answer in two words: roz helderman. or, i could say David Fahrenthold or eli Saslow or Nikita Stewart or Karen DeYoung or tom Boswell-but i'll stick with roz. No one knew before roz started her reporting...

  • Page 14

  • Page 15
    ... Employer Identification No.) 1150 15th St., N.W., Washington, D.C. (Address of principal executive offices) 20071 (Zip Code) Registrant's Telephone Number, Including Area Code: (202) 334-6000 Securities Registered Pursuant to Section 12(b) of the Act: Title of each class Name of each exchange...

  • Page 16
    [THIS PAGE INTENTIONALLY LEFT BLANK]

  • Page 17
    GRAHAM HOLDINGS COMPANY 2013 FORM 10-K Item 1. Business ...Education ...Cable Operations ...Television Broadcasting ...Other Activities ...Competition ...Executive Officers ...Employees ...Forward-Looking Statements ...Available Information ...Risk Factors ...Unresolved Staff Comments ...Properties ...

  • Page 18
    [THIS PAGE INTENTIONALLY LEFT BLANK]

  • Page 19
    ...(through the ownership and operation of six television broadcast stations), Slate and Foreign Policy magazines. In the fourth quarter of 2013, the Company completed the sale of its newspaper publishing businesses, including The Washington Post (the Post) and its related website, to Nash Holdings LLC...

  • Page 20
    ...under Kaplan's institutional loan program totaled approximately 0.7% of KHE revenues in 2013. Direct student payments, funds received under various state and agency grant programs and corporate reimbursement under tuition assistance programs accounted for most of the remaining 2013 KHE revenues. The...

  • Page 21
    ... a new location or program or makes another substantive change. Provisional certification does not otherwise limit access to Title IV program funds by students attending the institution. As of December 31, 2013, no KHE OPEID is provisionally certified. In addition, if the ED finds that a school has...

  • Page 22
    ... final regulations that tie an education program's Title IV eligibility to whether the program leads to gainful employment. On June 30, 2012, the United States District Court for the District of Columbia overturned most of the final regulations on gainful employment. 4 GRAHAM HOLDINGS COMPANY

  • Page 23
    ... the ultimate outcome of gainful employment regulations and their impact on Kaplan's operations is uncertain. The new regulations could cause Kaplan to eliminate or limit enrollments in certain educational programs at some or all of its schools, could result in the loss of student access to Title IV...

  • Page 24
    ... third-party servicer or other agent of the institution has engaged in any fraud or other illegal conduct involving Title IV programs; • Submit in a timely way all required reports and financial statements; and • Not otherwise appear to lack administrative capability. 6 GRAHAM HOLDINGS COMPANY

  • Page 25
    ... not limited the amount of funding available for the various Title IV student loan programs, the availability of funding for the Title IV programs that provide for the payment of grants is primarily contingent upon the outcome of the annual U.S. Federal appropriations process. Congress also can make...

  • Page 26
    ... 2012. In November 2012, the ED issued a Program Review Report containing one finding and requesting that Kaplan University update its verification policy and report on certain students whose verifications were not properly coded. In January 2013, Kaplan submitted a 8 GRAHAM HOLDINGS COMPANY

  • Page 27
    ... adverse effect on Kaplan's ability to continue to operate this school. In August 2013, the ED conducted a program review of Kaplan's Mount Washington College (formerly Hesser College) campus in New Hampshire. In September 2013, the ED issued its Final Program Review Report finding no concerns...

  • Page 28
    ... international students who wish to study in Englishspeaking countries. In 2013, university preparation programs were being delivered in Australia, China, Kurdistan, Nigeria, Singapore, the U.K. and the U.S., servicing 12,000 students in partnership with 50 universities. 10 GRAHAM HOLDINGS COMPANY

  • Page 29
    ..., audit or review by the appropriate academic standards body. Failure to comply with these new rules has the potential to adversely impact the number of international students studying through Kaplan International. For Kaplan UK, both Kaplan Financial Limited and Holborn College now have HTS...

  • Page 30
    ... on either a part-time or full-time basis. Kaplan Singapore's students receive degrees from affiliated educational institutions in Australia and the U.K. In addition, this division offers pre-university and diploma programs. Kaplan Singapore's Financial business provides preparatory courses for...

  • Page 31
    ...,971 homes passed by the systems, had approximately 472,631 subscriptions to high-speed data (HSD) service and 177,483 subscriptions to VoIP (digital voice) service. Regulation of Cable and Related Matters Cable ONE's cable, Internet and voice operations are subject to various requirements imposed...

  • Page 32
    ... Internet may result in less demand for the Company's cable service offering. Some providers of cable service are marketing their own version of "over-the-top" video programming, thus enabling their subscribers to access cable programming outside of their home or business. In addition, online video...

  • Page 33
    ... should require all multichannel video program distributors, which include cable operators, to develop and provide a new, universal set-top box solution that allows access to both online and traditional video. In 2011, the FCC initiated a rulemaking proceeding to review a rule prohibiting encryption...

  • Page 34
    ... its operations and business. Intercarrier Compensation. The order and new rules adopted by the FCC in 2011 in connection with universal service reform also addressed intercarrier compensation and specified that "VoIP-PSTN traffic," that is, traffic exchanged over public switched telephone network...

  • Page 35
    ... access services, which includes Cable ONE. Cable ONE cannot predict whether or how compliance with the data collection requirements will affect its operations and business. Television Broadcasting Post-Newsweek Stations, Inc. (PNS), a subsidiary of the Company, owns six television stations located...

  • Page 36
    ... advertisers. In 2013, advertising revenue accounted for 86% of the total for PNS's operations. Advertising revenue is sensitive to a number of factors, some specific to a particular station or market and others more general in nature. Some examples include a station's audience share and market...

  • Page 37
    ... are expected to air a specified number of hours of programming intended to serve the educational and informational needs of children and to complete reports on a quarterly basis concerning children's programming. In addition, the FCC requires stations to limit the amount of advertising that appears...

  • Page 38
    ... technology company helping companies maximize their marketing efforts on social-media platforms such as Facebook, Twitter, LinkedIn, Instagram and Pinterest. Celtic Healthcare, Inc. Celtic Healthcare, Inc. (Celtic) is a Medicare-certified provider of home health and hospice services headquartered...

  • Page 39
    ... for-profit and nonprofit companies. Celtic competes primarily with privately owned and hospital-operated home health and hospice service providers. Executive Officers The executive officers of the Company, each of whom is elected annually by the Board of Directors, are as follows: Donald E. Graham...

  • Page 40
    ..., Graham Holdings Company at 1150 15th Street, NW, Washington, DC 20071. The contents of the Company's website are not incorporated by reference into this Form 10-K and shall not be deemed "filed" under the Securities Exchange Act of 1934. The SEC website (www.sec.gov) contains the reports, proxy...

  • Page 41
    ... Have a Material Adverse Effect on Kaplan's Business and Operations During the Company's 2013 fiscal year, funds provided under the student financial aid programs created under Title IV accounted for approximately $819 million of the revenues of the schools in KHE. Any legislative, regulatory or...

  • Page 42
    ... of operations. • Potential ED Rules Regarding Gainful Employment Could Have a Material Adverse Effect on Kaplan's Business and Operations In June 2011, the ED issued final regulations that tie an education program's Title IV eligibility to whether the program leads to gainful employment. The...

  • Page 43
    ... and retention, tuition revenues, operating income and cash flow. The Kaplan Commitment is expected to continue to have a material impact on Kaplan's operating results. • Student Loan Defaults Could Result in Loss of Eligibility to Participate in Title IV Programs A school may lose its eligibility...

  • Page 44
    ...required for an institution to become and remain eligible to participate in Title IV programs. In March 2011, and throughout 2012 and 2013, Kaplan University's institutional accreditor, HLC, sent Kaplan University requests for information asking for documents and a report detailing Kaplan University...

  • Page 45
    ... manner. Adverse media coverage regarding other educational institutions or regarding Kaplan directly could damage Kaplan's reputation, reduce student demand for Kaplan programs, adversely impact its revenues and operating profit or result in increased regulatory scrutiny. 2013 FORM 10-K 27

  • Page 46
    ... Student Enrollments A substantial portion of Kaplan International's revenue comes from programs that prepare international students to study and travel to English-speaking countries, principally the U.S., the U.K., Australia and Singapore. Kaplan International's 28 GRAHAM HOLDINGS COMPANY

  • Page 47
    ...from time to time, relating to such matters as cable system architecture, electronic program guides, cable modem technology and VoIP services. Other parts of the Company's business could also be subject to such claims. Addressing intellectual product claims is a time-consuming and expensive endeavor...

  • Page 48
    ... Texas School of Business. In the U.S., Kaplan, Inc. and KHE lease corporate offices, together with a data center, call center and employee-training facilities, in two 97,000-square-foot buildings located on adjacent lots in Fort Lauderdale, FL. Both of those leases will 30 GRAHAM HOLDINGS COMPANY

  • Page 49
    ... a small rental building adjacent to its plant. The sale of these properties is being negotiated. The offices of the Company's broadcasting operations are located in Detroit, MI, in the same facilities that house the offices and studios of WDIV, as well as in leased space in Chicago, IL. The Detroit...

  • Page 50
    ... student loan defaults, licensing and accreditation. Kaplan responded to the information requests and fully cooperated with the inquiry. The ED also conducted a program review at the Broomall campus, and Kaplan likewise cooperated with the program review. On July 22, 2011, the U.S. Attorney's Office...

  • Page 51
    ...2012 and 2013. The Company cannot predict the outcome of this inquiry. On July 20, 2011, Kaplan Higher Education Corporation received a subpoena from the Office of the Attorney General of the State of Delaware. The demand primarily sought information pertaining to Kaplan University's online students...

  • Page 52
    ... the Graham Holdings Company's Incentive Compensation Plan, which plan has been approved by the stockholders of the Company. At December 31, 2013, there were 19,603 shares of restricted stock outstanding under the 2011-2014 Award Cycle and 43,645 shares of restricted stock outstanding under the 2012...

  • Page 53
    ... case of the Company and on a quarterly basis in the case of the Standard & Poor's 500 Index and the custom peer group index of education companies. COMPARISON OF CUMULATIVE FIVE YEAR TOTAL RETURN $250 $200 $150 $100 $50 $0 2008 2009 2010 2011 2012 2013 Graham Holdings Company S&P 500 Index...

  • Page 54
    ... Executive Officer and Senior Vice President-Finance, in a manner that allows timely decisions regarding required disclosure. Management's Report on Internal Control Over Financial Reporting Management's report set forth on page 53 is incorporated herein by reference. 36 GRAHAM HOLDINGS COMPANY

  • Page 55
    ...2013, the Company's Chief Executive Officer submitted to the New York Stock Exchange the annual certification regarding compliance with the NYSE's corporate governance listing standards required by Section 303A.12(a) of the NYSE Listed Company Manual. Item 11. Executive Compensation. The information...

  • Page 56
    ... Hal S. Jones and Veronica Dillon, and each of them, to sign all reports required to be filed by the Registrant pursuant to the Securities Exchange Act of 1934 on behalf of the above-named directors and officers has been filed with the Securities and Exchange Commission. 38 GRAHAM HOLDINGS COMPANY

  • Page 57
    ... TO FINANCIAL INFORMATION GRAHAM HOLDINGS COMPANY Management's Discussion and Analysis of Results of Operations and Financial Condition (Unaudited) ...Financial Statements: Management's Report on Internal Control Over Financial Reporting ...Report of Independent Registered Public Accounting Firm...

  • Page 58
    ... reported a reduction in revenues and in operating income in 2013 due primarily to significant political and Olympics-related advertising included in 2012, offset in part by increased retransmission revenues. With the recent Celtic Healthcare and Forney acquisitions, the Company has invested...

  • Page 59
    ... Education Division. Education division revenue in 2013 totaled $2,177.5 million, a 1% decline from $2,196.5 million in 2012. Kaplan reported operating income of $51.3 million for 2013, compared to an operating loss of $105.4 million in 2012. Kaplan's 2013 operating results in comparison to 2012...

  • Page 60
    ...Company's newspaper publishing division, which publish online and print magazines and websites. The revenue increase of 77% in other businesses for 2013 is due to growth at SocialCode and Slate and revenue from the Company's recently acquired Celtic Healthcare and Forney businesses. Corporate Office...

  • Page 61
    ... the sale of a cost method investment (after-tax impact of $3.7 million, or $0.48 per share); and • $3.1 million in non-operating unrealized foreign currency gains (after-tax impact of $2.0 million, or $0.27 per share). Items included in the Company's income from continuing operations for 2011 are...

  • Page 62
    ... from $2,404.5 million in 2011. Excluding revenue from acquired businesses, education division revenue declined 10% in 2012. Kaplan reported an operating loss of $105.4 million for 2012, compared to operating income of $96.3 million in 2011. Kaplan's 2012 operating results were adversely impacted by...

  • Page 63
    ... Celtic Healthcare, Inc., a provider of home health and hospice services in the northeastern and mid-Atlantic regions that was acquired by the Company in November 2012. Also included are The Slate Group and FP Group, previously included as part of the Company's newspaper publishing division. 2013...

  • Page 64
    ... five business acquisitions. In November 2012, the Company completed its acquisition of a controlling interest in Celtic Healthcare, Inc. (Celtic), a provider of home health care and hospice services in the northeastern and midAtlantic regions. The operating results of Celtic are included in other...

  • Page 65
    ... to decline, and in the third quarter of 2011, the Company recorded an additional $23.1 million write-down of the investment. Common Stock Repurchases and Dividend Rate. During 2013, 2012 and 2011, the Company purchased a total of 33,024, 301,231 and 644,948 shares, respectively, of its Class...

  • Page 66
    ... requires management to make estimates and judgments that affect the amounts reported in the financial statements. On an ongoing basis, the Company evaluates its estimates and assumptions. The Company bases its estimates on During 2013 and 2012, the Company had average borrowings outstanding...

  • Page 67
    ...Note 2 to the Company's Consolidated Financial Statements. Revenue Recognition, Trade Accounts Receivable and Allowance for Doubtful Accounts. Education tuition revenue is recognized ratably over the period of instruction as services are delivered to students, net of any refunds, corporate discounts...

  • Page 68
    ... flows, discount rates, long-term growth rates and market values to determine each reporting unit's estimated fair value. The methodology used to estimate the fair value of the Company's reporting units on November 30, 2013, was consistent with the one used during the 2012 annual goodwill impairment...

  • Page 69
    ...business plans and take into account numerous factors, including historical experience, anticipated economic conditions, changes in the cable systems' cost structures, homes in each region's service area, number of subscribers based on penetration of homes passed by the systems and expected revenues...

  • Page 70
    ...is included in the pension cost for the last three months of 2013. Overall, the Company recorded an amortized loss amount of $2.8 million for 2013. During the last three months of 2013, there were additional pension asset gains. Primarily as a result of the actual return on plan assets exceeding the...

  • Page 71
    MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Management of Graham Holdings Company is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)). The Company's internal control over ...

  • Page 72
    ... of Graham Holdings Company and its subsidiaries at December 31, 2013 and 2012, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2013 in conformity with accounting principles generally accepted in the United States of America. Also...

  • Page 73
    GRAHAM HOLDINGS COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS Year Ended December 31 (in thousands, except per share amounts) Operating Revenues Education ...Subscriber ...Advertising ...Other ...Operating Costs and Expenses Operating ...Selling, general and administrative ...Depreciation of ...

  • Page 74
    GRAHAM HOLDINGS COMPANY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Year Ended December 31 (in thousands) Net Income ...Other Comprehensive Income (Loss), Before Tax Foreign currency translation adjustments: Translation adjustments arising during the year ...Adjustment for sales of businesses ...

  • Page 75
    ...other comprehensive income, net of taxes Cumulative foreign currency translation adjustment ...Unrealized gain on available-for-sale securities ...Unrealized gain on pensions and other postretirement plans ...Cash flow hedge ...Cost of 12,612,876 and 12,572,499 shares of Class B common stock held in...

  • Page 76
    ... ...Net pension expense (benefit) ...Early retirement program expense ...Stock-based compensation expense, net ...Foreign exchange loss (gain) ...Net gain on sales and disposition of businesses ...Net loss on sales or write-downs of marketable equity securities and cost method investments ...Equity...

  • Page 77
    ... Gain on Pensions and Other Cash Currency AvailableTranslation for-Sale Postretirement Flow Plans Hedge Adjustment Securities $ 73,826 $ (in thousands) As of January 2, 2011 ...Net income for the year ...Net loss attributable to redeemable noncontrolling interest ...Dividends paid on common stock...

  • Page 78
    ... COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. ORGANIZATION AND NATURE OF OPERATIONS Graham Holdings Company (the Company), formerly The Washington Post Company, is a diversified education and media company. The Company's Kaplan subsidiary provides a wide variety of educational services...

  • Page 79
    ... discounted cash flow models. Fair Value of Financial Instruments. The carrying amounts reported in the Company's Consolidated Financial Statements for cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities, the current portion of deferred revenue...

  • Page 80
    .... Cable revenues. Cable revenues are primarily derived from subscriber fees for video, high-speed Internet and phone services, and from advertising. Cable subscriber revenue is recognized monthly as services are delivered. Advertising revenue is recognized when the commercials or programs are...

  • Page 81
    ... the period. Diluted earnings per share is calculated similarly except that the weighted average number of common shares outstanding during the period includes the dilutive effect of the assumed exercise of options and restricted stock issuable under the Company's stock plans. The dilutive effect of...

  • Page 82
    ...and disposition of discontinued operations . . Income (Loss) from Discontinued Operations, Net of Tax ...4. INVESTMENTS On October 1, 2013, the Company completed the sale of most of its newspaper publishing businesses. The publishing businesses sold include The Washington Post, Express, The Gazette...

  • Page 83
    ... the common stock of the Company. The chairman, chief executive officer and largest shareholder of Berkshire, Mr. Warren Buffett, was a member of the Company's Board of Directors until May 2011, at which time Mr. Buffett retired from the Company's Board. The Company's investment in Berkshire common...

  • Page 84
    ... most of the Company's publishing business and related services, including publishing The Washington Post, Express, The Gazette Newspapers, Southern Maryland Newspapers, Greater Washington Publishing, Fairfax County Times and El Tiempo Latino and related websites. Slate magazine, TheRoot.com and...

  • Page 85
    ... goodwill at the Company's education division were as follows: (in thousands) As of December 31, 2011 Goodwill ...Accumulated impairment losses ...Acquisitions ...Impairment Losses ...Dispositions ...Foreign currency exchange rate changes and other ...As of December 31, 2012 Goodwill ...Accumulated...

  • Page 86
    ...200 $104,400 During 2013, 2012 and 2011, in addition to the income tax provision for continuing operations presented above, the Company also recorded tax expense or benefits on discontinued operations. Losses from discontinued operations and gains or losses on sales and dispositions of discontinued...

  • Page 87
    ...valuation allowances established against state income tax assets are recorded at the parent company and the education division and may increase or decrease within the next 12 months, based on operating results or the market value of investment holdings. As a result, the Company is unable to estimate...

  • Page 88
    ... value of these interest rate swaps are recorded in other comprehensive income on the accompanying condensed consolidated balance sheets until earnings are affected by the variability of cash flows. During 2013 and 2012, the Company had average borrowings outstanding of approximately $471.4 million...

  • Page 89
    ... outstanding. In 2012, the Company adopted a new incentive compensation plan (the 2012 Plan), which, among other provisions, authorizes the awarding of Class B common stock to key employees in the form of stock awards, stock options and other awards involving the actual transfer of shares. All stock...

  • Page 90
    ... unrecognized compensation expense related to these awards. That cost is expected to be recognized on a straight-line basis over a weighted average period of 2.1 years. Stock Options. The Company's 2003 employee stock option plan reserves 1,900,000 shares of the Company's Class B common stock for...

  • Page 91
    ...% Numerator: Numerator for basic earnings per share Income from continuing operations attributable to Graham Holdings Company common stockholders ...$189,891 $71,090 $150,464 Less: Dividends paid-common stock outstanding and unvested restricted shares ...- (146,432) (74,575) Undistributed earnings...

  • Page 92
    ... million. The early retirement program expense for these programs is funded from the assets of the Company's pension plans. In 2011, the Company offered a Voluntary Retirement Incentive Program to certain employees of Robinson Terminal Warehouse Corporation and The Washington Post and recorded early...

  • Page 93
    ... are as follows: Pension Plans As of December 31 2013 2012 Discount rate ...Rate of compensation increase ...SERP As of December 31 2013 2012 4.8% 4.0% 4.0% 4.0% 4.8% 4.0% 4.0% 4.0% The Company made no contributions to its pension plans in 2013, 2012 and 2011, and the Company does not expect to...

  • Page 94
    ... included in discontinued operations for 2013, 2012 and 2011. The curtailments and settlements are included in the gain on sale of Publishing Subsidiaries, which is also reported in discontinued operations. The costs for the Company's defined benefit pension plans are actuarially determined. Below...

  • Page 95
    ... Plans As of December 31 (in thousands) 2013 2012 In 2012, the Company offered a Voluntary Retirement Incentive Program to certain employees of The Washington Post newspaper and recorded early retirement expense of $0.4 million, which is included in discontinued operations. The discount rates...

  • Page 96
    ... in the gain on sale of Publishing Subsidiaries, which is also reported in discontinued operations. The costs for the Company's postretirement plans are actuarially determined. The discount rates utilized to determine periodic cost for the years ended December 31, 2013, 2012 and 2011, were 3.30...

  • Page 97
    ... Tax Foreign Currency Translation Adjustments Adjustment for sales of businesses with foreign operations ...$ - Unrealized Gains on Available-for-sale Securities Write-downs on available-for-sale securities, net of gains ...9,554 (3,822) 5,732 Pension and Other Postretirement Plans Amortization of...

  • Page 98
    ... student loan defaults, licensing and accreditation. Kaplan responded to the information requests and fully cooperated with the inquiry. The ED also conducted a program review at the Broomall campus, and Kaplan likewise cooperated with the program review. On July 22, 2011, the U.S. Attorney's Office...

  • Page 99
    ...2012 and 2013. The Company cannot predict the outcome of this inquiry. On July 20, 2011, Kaplan Higher Education Corporation received a subpoena from the Office of the Attorney General of the State of Delaware. The demand primarily sought information pertaining to Kaplan University's online students...

  • Page 100
    ...resources. The business segments disclosed in the Consolidated Financial Statements are based on this organizational structure and information reviewed by the Company's management to evaluate the business segment results. The Company has six reportable segments: KHE, KTP, Kaplan International, cable...

  • Page 101
    ...of the Company's newspaper publishing division, which publish online and print magazines and websites. Corporate Office. Corporate office includes the expenses of the Company's corporate office and a net pension credit. Geographical Information. The Company's non-U.S. revenues in 2013, 2012 and 2011...

  • Page 102
    Company information broken down by operating segment and education division: Year Ended December 31 (in thousands) Operating Revenues Education ...Cable ...Television broadcasting ...Other businesses ...Corporate office ...Intersegment elimination ...Income (Loss) from Operations Education ...Cable ...

  • Page 103
    ... Company's education division comprises the following operating segments: Year Ended December 31 (in thousands) Operating Revenues Higher education ...Test preparation ...Kaplan international ...Kaplan corporate and other ...Intersegment elimination ...Income (Loss) from Operations Higher education...

  • Page 104
    ... comprehensive income for the year ended December 31, 2013, is as follows: (in thousands, except per share amounts) Operating Revenues Education ...Subscriber ...Advertising ...Other ...Operating Costs and Expenses Operating ...Selling, general and administrative ...Depreciation of property, plant...

  • Page 105
    ...and comprehensive income for the year ended December 31, 2012, is as follows: (in thousands, except per share amount) Operating Revenues Education ...Subscriber ...Advertising ...Other ...Operating Costs and Expenses Operating ...Selling, general and administrative ...Depreciation of property, plant...

  • Page 106
    ... of a marketable equity security of $11.2 million ...• Gain on sale of cost method investment of $3.7 million ...• Gains, net, of $2.0 million for non-operating unrealized foreign currency gains (losses) ($1.7 million gain, $1.6 million loss and $1.9 million gain in the first, second and third...

  • Page 107
    ... on sale of cost method investment • gains, net, of $2.0 million ($0.27 per share) from non-operating unrealized foreign currency gains 2011 • charges of $17.9 million ($2.26 per share) related to severance and restructuring at the education division • impairment charge at one of the Company...

  • Page 108
    [THIS PAGE INTENTIONALLY LEFT BLANK ] 90 GRAHAM HOLDINGS COMPANY

  • Page 109
    ...2011). Graham Holdings Company 2012 Incentive Compensation Plan, as amended and restated effective November 29, 2013.* Washington Post Company Stock Option Plan as amended and restated effective May 31, 2003 (incorporated by reference to Exhibit 10.1 to The Washington Post Company's Quarterly Report...

  • Page 110
    ...the Washington Post Company, is a diversified education and media company whose principal operations include educational services, television broadcasting, cable systems and online, print and local TV news. Graham Holdings Company ghco.com Cable cable one CableONE.net Education Kaplan Kaplan.com...

  • Page 111
    ... 8, 2014, at 9 am, at graham holdings Company, 1150 15th Street, NW, Washington, DC 20071. STOCK TrADinG graham holdings Company Class B common stock is traded on the New York Stock exchange under the symbol ghC. Class a common stock is not traded publicly. STOCK TrAnSFEr AGEnT AnD rEGiSTrAr General...

  • Page 112
    1150 15th Street, NW WaShiNgtoN, DC 20071 (202) 334-6000 ghCo.CoM