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22015 ANNUAL REPORT
A change in leadership often raises questions about a
company. This may be especially relevant for one like
Graham Holdings, which has had remarkable stability
in its senior leadership and has operated under the
same guiding principles for a very long time. If you’re
reading this, it’s likely you’re already a shareholder
and have an understanding of the values, ethics,
and judgment of the past leaders. Understandably,
you’re going to wonder what’s going to change in the
years ahead. I’ve tried to anticipate your questions
and answer them. But at the risk of being a spoiler,
the axis on which the Graham Holdings world turns
won’t be drastically tipped.
There are two main pieces I’d like to cover: where
Graham Holdings is today and what we envision for the
future of the Company. Hopefully, this letter will provide
a clear assessment of the Company’s performance,
while laying out some principles for future operations.
The present:
What happened in 2015, and how do the changes this
year position us for the future?
It’s hard to call 2015 anything other than a year of
tremendous change and movement:
n Cable ONE began trading July 1 as an independent
company as a result of a spin-o and provided a
dividend of $450 million to Graham Holdings as
part of the spin-o transaction.
n Andy Rosen returned as CEO of Kaplan. As
Kaplan reshapes itself, I can think of no better
leader to be at the helm.
n We completed the sale of our U.S. vocational
campuses to Education Corporation of America.
This concluded a long process to help those cam-
puses, which were operating in an increasingly
tough regulatory and competitive environment,
find a good long-term home.
n In November, Don Graham transitioned from
the CEO role, and I took the reins. Don remains
active as Chairman of the Board.
n We added to our industrials sector with the purchase
of Group Dekko, an Indiana based custom manu-
facturer of electrical products and components
run by John May, an experienced CEO.
n Kaplan signed an agreement to purchase Mander
Portman Woodward, a group of sixth-form colleges
in the United Kingdom, and the transaction
closed in early 2016.
n A fresh look at our cost structure is expected to
yield over $50 million in annualized cost savings.
We expect to see the benefits of these actions
over the course of 2016.
For many years, Graham Holdings predominantly
consisted of high-margin media businesses. Over
the past 5 years that has changed dramatically,
To Our Shareholders
It’s hard to call 2015 anythIng
other than a year of tremendous
change and movement.