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GRAHAM HOLDINGS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND NATURE OF OPERATIONS
Graham Holdings Company (the Company), is a diversified education and media company. The Company’s
Kaplan subsidiary provides a wide variety of educational services, both domestically and outside the United
States. The Company’s media operations comprise the ownership and operation of five television broadcasting
stations.
On July 1, 2015, the Company completed the spin-off of its wholly owned subsidiary, Cable One, Inc. (Cable
ONE), by way of a distribution of all of the issued and outstanding shares of Cable ONE common stock, on a pro
rata basis, to the Company’s stockholders. The operating results of Cable ONE have been presented in income
from discontinued operations, net of tax, for all periods presented.
On September 3, 2015, Kaplan completed the sale of substantially all of the assets of its Kaplan Higher
Education (KHE) Campuses business, consisting of 38 nationally accredited ground campuses and certain related
assets, to Education Corporation of America (ECA) in exchange for a preferred equity interest in ECA. The loss
on the sale of the KHE Campuses business is included in other (expense) income, net, in the Consolidated
Statement of Operations.
Education – Kaplan, Inc. provides an extensive range of educational services for students and professionals.
Kaplan’s various businesses comprise three categories: Higher Education (KHE), Test Preparation (KTP) and
Kaplan International.
Media – The Company’s diversified media operations comprise television broadcasting, several websites and
print publications, and a marketing solutions provider.
Television broadcasting. The Company owns five VHF television stations located in Houston, TX; Detroit, MI;
Orlando, FL; San Antonio, TX; and Jacksonville, FL. Other than the Company’s Jacksonville station, WJXT, the
Company’s television stations are affiliated with one of the major national networks.
Other – The Company’s other business operations include home health and hospice services and manufacturing.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation. The accompanying Consolidated Financial
Statements have been prepared in accordance with generally accepted accounting principles (GAAP) in the
United States and include the assets, liabilities, results of operations and cash flows of the Company and its
majority-owned and controlled subsidiaries. All significant intercompany accounts and transactions have been
eliminated in consolidation.
Reclassifications. Certain amounts in previously issued financial statements have been reclassified to conform
with the 2015 presentation, which includes the reclassification of the results of operations of certain businesses as
discontinued operations for all periods presented.
Use of Estimates. The preparation of financial statements in conformity with GAAP requires management to
make estimates and judgments that affect the amounts reported in the financial statements. Management bases its
estimates and assumptions on historical experience and on various other factors that are believed to be reasonable
under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results reported in
future periods may be affected by changes in those estimates. On an ongoing basis, the Company evaluates its
estimates and assumptions.
2015 FORM 10-K 76