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“B”. In addition, S&P removed the ratings from Credit Watch. In the third quarter of 2015, the Company decided
to no longer have the rating agencies provide a short-term rating on the Company.
The Company’s current credit ratings are as follows:
Moody’s
Standard
& Poor’s
Long-term ........................................ Ba1 BB+
During 2015 and 2014, the Company had average borrowings outstanding of approximately $428.4 million and
$450.9 million, respectively, at average annual interest rates of approximately 7.1% and 7.0%, respectively. The
Company incurred net interest expense of $30.7 million and $33.4 million, respectively, during 2015 and 2014.
At December 31, 2015 and 2014, the Company had working capital of $1,135.6 million and $639.9 million,
respectively. The Company maintains working capital levels consistent with its underlying business requirements
and consistently generates cash from operations in excess of required interest or principal payments.
The Company’s net cash provided by operating activities, as reported in the Company’s Consolidated Statements
of Cash Flows, was $74.8 million in 2015, compared to $372.4 million in 2014. The decline is largely due to
significant income tax payments made in the first quarter of 2015 and the absence of the cable division operating
results for the second half of 2015.
In 2015, the Company received a $447.1 million net distribution from Cable ONE as a result of the spin-off.
In December 2015, the Company sold one property located along the Potomac River in Alexandria, VA, for
approximately $22.9 million. A second property in Alexandria is under contract for sale and is expected to close
in 2016.
On March 27, 2014, the Company completed the sale of its headquarters building for approximately $158.0
million. On April 1, 2014, the Company received a gross cash distribution of $95.0 million from Classified
Ventures’ sale of apartments.com.
On June 30, 2014, the Company and Berkshire Hathaway Inc. completed a previously announced transaction in
which Berkshire acquired a wholly-owned subsidiary of the Company that included WPLG, a Miami-based
television station, 2,107 Class A Berkshire shares and 1,278 Class B Berkshire shares owned by Graham
Holdings and $327.7 million in cash, in exchange for 1,620,190 shares of Graham Holdings Class B common
stock owned by Berkshire Hathaway (Berkshire exchange transaction).
In July 2014, the cable division sold its wireless spectrum licenses for $98.8 million.
On October 1, 2014, the Company and the remaining partners completed the sale of their entire stakes in
Classified Ventures. Total proceeds to the Company, net of transaction costs, were $408.5 million, of which
$16.5 million was held in escrow and received in the fourth quarter of 2015. The Company recorded a pre-tax
gain of $396.6 million on the sale of its interest in Classified Ventures in the fourth quarter of 2014. In the
second quarter of 2015, the Company received an additional $4.8 million from the sale of Classified Ventures.
The Company expects to fund its estimated capital needs primarily through existing cash balances and internally
generated funds and, to a lesser extent, borrowings under its revolving credit facility. In management’s opinion,
the Company will have ample liquidity to meet its various cash needs in 2016.
2015 FORM 10-K 62