Washington Post 2015 Annual Report Download - page 63

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A summary of Kaplan’s operating results is as follows:
Year Ended December 31
(in thousands) 2015 2014 % Change
Revenue
Higher education ........................... $ 849,625 $1,010,058 (16)
Test preparation ........................... 301,607 304,662 (1)
Kaplan international ........................ 770,273 840,915 (8)
Kaplan corporate and other ................... 6,502 6,094 7
Intersegment elimination .................... (486) (1,312) –
$1,927,521 $2,160,417 (11)
Operating Income (Loss)
Higher education ........................... $ 55,572 $ 83,069 (33)
Test preparation ........................... 16,798 (4,730) –
Kaplan international ........................ 53,661 69,153 (22)
Kaplan corporate and other ................... (87,230) (57,093) (53)
Amortization of intangible assets .............. (5,523) (7,738) 29
Impairment of goodwill and other long-lived
assets .................................. (256,830) (17,203) –
Intersegment elimination .................... 96 5–
$ (223,456) $ 65,463 –
Kaplan Higher Education (KHE) includes Kaplan’s domestic 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.
Since 2012, KHE has continued to close campuses, consolidate facilities and reduce its workforce. On
September 3, 2015, Kaplan completed the sale of substantially all of the remaining assets of its KHE Campuses
business. In connection with these and other plans, KHE incurred $12.9 million and $6.5 million in restructuring
costs in 2015 and 2014, respectively.
As a result of continued declines in student enrollments at KHE and the challenging industry operating
environment, Kaplan completed an interim impairment review of KHE’s remaining long-lived assets in the third
quarter of 2015 that resulted in a $248.6 million goodwill impairment charge. This goodwill impairment charge
followed long-lived asset impairment charges of $6.9 million and $13.6 million that were recorded in the second
quarter of 2015 and fourth quarter of 2014, respectively, in connection with the KHE Campuses business.
KHE results include revenue and operating losses (including restructuring charges) related to all KHE Campuses,
those sold to ECA or closed, including Mount Washington College and Bauder College, as follows:
Year Ended December 31
(in thousands) 2015 2014
Revenue ....................................... $178,734 $299,109
Operating loss .................................. $ (38,830) $ (28,549)
In 2015, KHE revenue declined 16% due to the campus sales and closings, and declines in average enrollments at
Kaplan University, reflecting weaker market demand. The KHE operating income decline in 2015 is due to
increased losses at the KHE Campuses business, the revenue declines, and increased restructuring costs. In 2015,
the decline was partially offset by improved results at the domestic professional training and other continuing
education businesses.
2015 FORM 10-K 48