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PART I
Item 1. Business.
Graham Holdings Company (the Company) is a diversified education and media company. The Company’s Kaplan
subsidiary provides a wide variety of educational services, both domestically and outside the United States (U.S.). The
Company’s media operations comprise the ownership and operation of cable systems, television broadcasting (through
the ownership and operation of five television broadcast stations), Slate and Foreign Policy magazines. In November
2014, the Company announced its intention to spin-off its cable operations to the Company’s stockholders.
Information concerning the consolidated operating revenues, consolidated income from operations and identifiable assets
attributable to the principal segments of the Company’s business for the past three fiscal years is contained in Note 19 to
the Company’s Consolidated Financial Statements appearing elsewhere in this Annual Report on Form 10-K, as required
by Item 101(b) and 101(d) of Regulation S-K. Revenues for each segment are shown in Note 19 gross of intersegment
sales. Consolidated revenues are reported net of intersegment sales, which did not exceed 0.1% of consolidated
operating revenues.
The Company’s operations in geographic areas outside the U.S. consist primarily of Kaplan’s non-U.S. operations. During
the fiscal years 2014, 2013 and 2012, these operations accounted for approximately 20%, 19% and 19%, respectively,
of the Company’s consolidated revenues, and the identifiable assets attributable to non-U.S. operations represented
approximately 14% and 11% of the Company’s consolidated assets at December 31, 2014 and 2013, respectively.
Education
Kaplan, Inc., a subsidiary of the Company, provides an extensive range of education and related services worldwide for
students and professionals. Kaplan conducts its operations through three segments: Kaplan Higher Education, Kaplan Test
Preparation and Kaplan International. In addition, the results of the Kaplan Corporate segment include investment activities,
identifying and investing in high-growth-potential education technology companies, as well as Colloquy, which enables its
university partners to develop online educational programs by providing an array of research, marketing and design
services.
The following table presents revenues for each of Kaplan’s segments:
Year Ended December 31
(in thousands) 2014 2013 2012
Kaplan Higher Education ............................ $1,010,058 $1,080,908 $1,149,407
Kaplan Test Preparation ............................. 304,662 293,201 284,252
Kaplan International ................................ 840,915 783,588 741,826
Kaplan Corporate and Intersegment Eliminations ........... 4,782 6,037 9,047
Total Kaplan Revenue ............................. $2,160,417 $2,163,734 $2,184,532
Kaplan Higher Education
Kaplan Higher Education (KHE) provides a wide array of certificate, diploma and degree programs—on campus and
online—designed to meet the needs of students seeking to advance their education and career goals.
In 2014, Kaplan’s U.S.-based KHE division included the following businesses: Kaplan University and KHE Campuses.
Each of these businesses is described briefly below.
Kaplan University. Kaplan University specializes in online education, is accredited by the Higher Learning Commission
of the North Central Association of Colleges and Schools and holds other programmatic accreditations. Most of Kaplan
University’s programs are offered online, while some are offered in a traditional classroom format at 11 campuses in Iowa,
Maine, Maryland and Nebraska, and four Kaplan University Learning Centers in four states. Kaplan University also
includes Concord Law School, a fully online law school. At year-end 2014, Kaplan University had approximately 36,000
students enrolled in online programs and approximately 6,400 students enrolled in its classroom-based programs.
Also residing within Kaplan University is the School of Professional and Continuing Education (PACE). PACE offers a wide
range of education solutions to assist professionals in advancing their careers by obtaining professional licenses, designations
and certifications. This includes solutions for insurance, securities, mortgage and appraisal licensing exams and for advanced
designations, such as CFA
®
and CPA exams. PACE serves more than 3,000 business-to-business clients, including more than
70 Fortune 500 companies. In 2014, approximately 482,000 students used PACE’s exam preparation offerings.
2014 FORM 10-K 1