Washington Post 2015 Annual Report Download - page 69

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A summary of Kaplan’s operating results is as follows:
Year Ended December 31
(in thousands) 2014 2013 % Change
Revenue
Higher education ................................... $1,010,058 $1,080,908 (7)
Test preparation ................................... 304,662 293,201 4
Kaplan international ................................ 840,915 783,588 7
Kaplan corporate and other ........................... 6,094 7,990 (24)
Intersegment elimination ............................ (1,312) (1,953) –
$2,160,417 $2,163,734 –
Operating Income (Loss)
Higher education ................................... $ 83,069 $ 71,584 16
Test preparation ................................... (4,730) 4,118 –
Kaplan international ................................ 69,153 51,653 34
Kaplan corporate and other ........................... (57,093) (64,948) 12
Amortization of intangible assets ...................... (7,738) (8,503) 9
Impairment of intangible and other long-lived assets ...... (17,203) (3,250) –
Intersegment elimination ............................ 5 335 –
$ 65,463 $ 50,989 28
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.
In 2012, KHE began implementing plans to close or merge 13 ground campuses, consolidate other facilities and
reduce its workforce. The last two of these campus closures were completed in the second quarter of 2014. In
April 2014, KHE announced plans to close two additional ground campuses, and in July 2014, KHE announced
plans to close another three campuses. KHE is in the process of teaching out the current students, and the campus
closures will be completed by the end of 2015. In July 2014, KHE also announced plans to further reduce its
workforce. In connection with these and other plans, KHE incurred $6.5 million and $19.5 million in
restructuring costs from severance, accelerated depreciation, lease obligations and other items in 2014 and 2013,
respectively.
In February 2015, Kaplan entered into a Purchase and Sale Agreement with ECA to sell substantially all of the
assets of its KHE Campuses business. The transaction closed on September 3, 2015. In addition, in the fourth
quarter of 2014, Kaplan recorded a $13.6 million other long-lived asset impairment charge in connection with its
KHE Campuses business. KHE results include revenue and operating income (loss) related to the KHE
Campuses business as follows:
Year Ended December 31
(in thousands) 2014 2013
Revenue ....................................... $274,487 $299,714
Operating income (loss) .......................... $(12,500) $ (28,343)
In 2014, KHE revenue declined 7% due largely to declines in average enrollments at KHE campuses and at
Kaplan University that reflect weaker market demand over the past year and lower average tuition. The declines
were most pronounced at KHE’s ground campuses due to the impact of campuses closed or in the process of
closing, as well as weakness in demand for KHE’s non-degree vocational programs. KHE operating income
improved in 2014 due largely to expense reductions associated with lower enrollments and recent restructuring
2015 FORM 10-K 54