Washington Post 2015 Annual Report Download - page 140

Education. Education products and services are provided by Kaplan, Inc. KHE includes Kaplan’s
postsecondary education businesses, made up of fixed-facility colleges and online postsecondary and career
programs. KHE also includes the domestic professional training and other continuing education businesses. KTP
includes Kaplan’s standardized test preparation programs. Kaplan International includes professional training and
postsecondary education businesses largely outside the United States, as well as English-language programs.
In the third quarter of 2014, Kaplan completed the sale of three of its schools in China that were previously
included as part of Kaplan International. An additional school in China was sold in January 2015. The education
division’s operating results exclude these businesses as they are included in discontinued operations, net of tax,
for all periods presented.
In recent years, Kaplan has formulated and implemented restructuring plans at its various businesses that have
resulted in significant costs in the past three years, with the objective of establishing lower cost levels in future
periods. Across all Kaplan businesses, restructuring costs of $44.4 million, $16.8 million and $36.4 million were
recorded in 2015, 2014 and 2013, respectively, as follows:
Year Ended December 31
(in thousands) 2015 2014 2013
Accelerated depreciation .................. $17,956 $ 2,062 $16,856
Lease obligation losses .................... 8,240 1,750 9,351
Severance and Special Incentive Program
expense .............................. 17,968 5,075 6,289
Software asset write-offs .................. –7,689 –
Other .................................. 209 230 3,862
$44,373 $16,806 $36,358
KHE incurred restructuring costs of $12.9 million, $6.5 million and $19.5 million in 2015, 2014 and 2013,
respectively, primarily from severance and Special Incentive Program expense, lease obligation losses and
accelerated depreciation. These costs were incurred in connection with a plan announced in September 2012 for
KHE to close or consolidate operations at 13 ground campuses, additional plans announced in 2014 to close five
more campuses, along with plans to consolidate facilities and reduce its workforce, and the September 2015 sale
of the KHE Campuses business.
On February 12, 2015, Kaplan entered into a Purchase and Sale Agreement with Education Corporation of
America (ECA) to sell substantially all of the assets of its KHE Campuses business, consisting of 38 nationally
accredited ground campuses, and certain related assets, in exchange for a preferred equity interest in ECA. The
transaction closed on September 3, 2015. In addition, Kaplan recorded a $6.9 million and $13.6 million other
long-lived asset impairment charge in connection with its KHE Campuses business, in the second quarter of 2015
and fourth quarter of 2014, respectively.
Kaplan International incurred restructuring costs of $1.3 million, $0.2 million and $5.8 million in 2015, 2014 and
2013, respectively. These restructuring costs were largely in Australia and included severance charges, lease
obligations, and accelerated depreciation.
Kaplan Corporate incurred restructuring costs of $29.4 million in 2015 related to accelerated depreciation,
severance and Special Incentive Program expense and lease obligations losses.
Total accrued restructuring costs at Kaplan were $24.2 million and $12.7 million at the end of 2015 and 2014,
respectively.
125 GRAHAM HOLDINGS COMPANY