ARLINGTON, VA - Graham Holdings Company (NYSE: GHC) today reported its financial results for the third quarter and first nine months of 2024. The Company also filed its Form 10-Q today for the quarter ended September 30, 2024 with the Securities and Exchange Commission.

Revenue for the third quarter of 2024 was $1,207.2 million, up 9% from $1,111.5 million in the third quarter of 2023. Revenues increased at education, television broadcasting, healthcare and automotive, partially offset by declines at manufacturing and other businesses. The Company reported operating income of $81.6 million for the third quarter of 2024, compared to an operating loss of $57.1 million for the third quarter of 2023. The improvement in operating results is due to goodwill and other long-lived asset impairment charges at World of Good Brands (WGB) and Dekko in the third quarter of 2023 and increases at education, television broadcasting, healthcare and automotive, partially offset by declines at manufacturing and other businesses, excluding the impairments. The Company reported adjusted operating cash flow (non-GAAP) of $126.1 million for the third quarter of 2024, compared to $83.7 million for the third quarter of 2023. Adjusted operating cash flow improved at education, television broadcasting, healthcare and automotive, partially offset by declines at manufacturing and other businesses. Capital expenditures totaled $23.8 million and $26.7 million for the third quarter of 2024 and 2023, respectively.

Revenue for the first nine months of 2024 was $3,545.1 million, up 9% from $3,248.1 million in the first nine months of 2023. Revenues increased at education, television broadcasting, healthcare and automotive, partially offset by declines at manufacturing and other businesses. The Company recorded operated income of $143.0 million for the first nine months of 2024, compared to $28.6 million for the first nine months of 2023. Excluding goodwill and other long-lived asset impairment charges, the improvement in operating results is due to increases at education, television broadcasting, healthcare and automotive, partially offset by declines at manufacturing and other businesses. The Company reported adjusted operating cash flow (non-GAAP) of $307.4 million for the first nine months of 2024, compared to $255.3 million for the first nine months of 2023. Adjusted operating cash flow improved at education, television broadcasting, healthcare, automotive and other businesses, partially offset by declines at manufacturing. Capital expenditures totaled $66.0 million and $71.6 million for the first nine months of 2024 and 2023, respectively.

There were no significant business acquisitions or dispositions during the first nine months of 2024.

At September 30, 2024, the Company had $765.2 million in borrowings outstanding at an average interest rate of 6.2%, including $66.9 million outstanding on its $300 million revolving credit facility. Cash, marketable equity securities and other investments totaled $1,114.0 million at September 30, 2024.

Overall, the Company recognized $30.5 million and $154.3 million in net gains on marketable equity securities in the third quarter and first nine months of 2024, respectively, compared to $16.8 million and $113.4 million in net gains on marketable equity securities in the third quarter and first nine months of 2023, respectively.

During the third quarter and first nine months of 2024, the Company purchased a total of 64,490 and 133,276 shares, respectively, of its Class B common stock at a cost of $48.7 million and $98.2 million, respectively. At September 30, 2024, there were 4,347,533 shares outstanding. On September 12, 2024, the Board of Directors authorized the Company to acquire up to 500,000 shares of its Class B common stock; the Company has remaining authorization for 486,132 shares as of September 30, 2024.

The Company reported net income attributable to common shares of $72.5 million ($16.42 per share) for the third quarter of 2024, compared to a net loss of $23.0 million ($5.02 per share) for the third quarter of 2023. For the first nine months of 2024, the Company recorded net income attributable to common shares of $175.8 million ($39.49 per share), compared to $152.0 million ($32.14 per share) for the first nine months of 2023.

The results for the third quarter and first nine months of 2024 and 2023 were affected by a number of items as described in the Non-GAAP Financial Information schedule attached to this release. Excluding these items, net income attributable to common shares was $76.1 million ($17.25 per share) for the third quarter of 2024, compared to $48.9 million ($10.45 per share) for the third quarter of 2023. Excluding these items, net income attributable to common shares was $183.5 million ($41.20 per share) for the first nine months of 2024, compared to $150.8 million ($31.87 per share) for the first nine months of 2023.

In October 2024, the Company purchased an irrevocable group annuity contract from an insurance company for $461.3 million to settle $457.9 million of the outstanding defined benefit pension obligation related to certain retirees and beneficiaries. The purchase of the group annuity contract was funded from the assets of the Company’s pension plan. As a result of this transaction, the Company was relieved of all responsibility for these pension obligations and the insurance company is now required to pay and administer the retirement benefits owed to approximately 1,850 retirees and beneficiaries, with no change to the amount, timing or form of monthly retirement benefit payments. As a result, the Company estimates that it will record a one-time pre-tax settlement gain of approximately $700 million in the fourth quarter of 2024.

* * * * * * * * * * * *

All public statements made by the Company and its representatives that are not statements of historical fact, including certain statements in this press release, in the Company’s Annual Report on Form 10-K and in the Company’s 2023 Annual Report to Stockholders, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on expectations, forecasts, and assumptions by the Company’s management and involve a number of risks, uncertainties, and other factors that could cause actual results to differ from those stated, including, without limitation, comments about expectations related to acquisitions or dispositions or related business activities, the Company’s business strategies and objectives, the prospects for growth in the Company’s various business operations, the Company’s future financial performance, and the risks and uncertainties described in Item 1A of the Company’s Annual Report on Form 10-K. Accordingly, undue reliance should not be placed on any forward-looking statement made by or on behalf of the Company. The Company assumes no obligation to update any forward-looking statement after the date on which such statement is made, even if new information subsequently becomes available.

____________

(1)			Adjusted Operating Cash Flow (non-GAAP) is calculated as Operating Income (Loss) before Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets plus Depreciation Expense and Pension Expense.

GRAHAM HOLDINGS COMPANY
EDUCATION DIVISION INFORMATION
(Unaudited)
						Three Months Ended																		Nine Months Ended
						September 30												%						September 30												%
(in thousands)						2024						2023						Change						2024						2023						Change
Operating Revenues
Kaplan international						$	277,009					$	249,976					11						$	813,833					$	714,715					14
Higher education						85,655						81,925						5						246,818						250,557						(1)
Supplemental education						76,134						78,332						(3)						221,389						226,535						(2)
Kaplan corporate and other						158						3,101						(95)						5,739						8,360						(31)
Intersegment elimination						(866)						(1,497)						—						(4,192)						(8,062)						—
						$	438,090					$	411,837					6						$	1,283,587					$	1,192,105					8
Operating Expenses
Kaplan international						$	251,471					$	227,756					10						$	731,159					$	650,443					12
Higher education						74,270						73,460						1						215,560						217,214						(1)
Supplemental education						64,948						68,603						(5)						199,951						209,543						(5)
Kaplan corporate and other						10,875						10,513						3						32,096						28,434						13
Amortization of intangible assets						2,421						3,210						(25)						8,267						11,133						(26)
Impairment of long-lived assets						—						—						—						—						477						—
Intersegment elimination						(785)						(1,564)						—						(4,200)						(8,154)						—
						$	403,200					$	381,978					6						$	1,182,833					$	1,109,090					7
Operating Income (Loss)
Kaplan international						$	25,538					$	22,220					15						$	82,674					$	64,272					29
Higher education						11,385						8,465						34						31,258						33,343						(6)
Supplemental education						11,186						9,729						15						21,438						16,992						26
Kaplan corporate and other						(10,717)						(7,412)						(45)						(26,357)						(20,074)						(31)
Amortization of intangible assets						(2,421)						(3,210)						25						(8,267)						(11,133)						26
Impairment of long-lived assets						—						—						—						—						(477)						—
Intersegment elimination						(81)						67						—						8						92						—
						$	34,890					$	29,859					17						$	100,754					$	83,015					21
Operating Income (Loss) before Amortization of Intangible Assets and Impairment of Long-Lived Assets
Kaplan international						$	25,538					$	22,220					15						$	82,674					$	64,272					29
Higher education						11,385						8,465						34						31,258						33,343						(6)
Supplemental education						11,186						9,729						15						21,438						16,992						26
Kaplan corporate and other						(10,717)						(7,412)						(45)						(26,357)						(20,074)						(31)
Intersegment elimination						(81)						67						—						8						92						—
						$	37,311					$	33,069					13						$	109,021					$	94,625					15
Depreciation
Kaplan international						$	7,202					$	7,599					(5)						$	21,735					$	20,832					4
Higher education						589						1,258						(53)						2,291						3,431						(33)
Supplemental education						777						1,117						(30)						2,653						4,087						(35)
Kaplan corporate and other						8						26						(69)						57						78						(27)
						$	8,576					$	10,000					(14)						$	26,736					$	28,428					(6)
Pension Expense
Kaplan international						$	198					$	83					—						$	527					$	244					—
Higher education						1,903						958						99						5,729						2,803						—
Supplemental education						1,962						1,063						85						5,874						3,110						89
Kaplan corporate and other						382						122						—						1,137						523						—
						$	4,445					$	2,226					100						$	13,267					$	6,680					99
Adjusted Operating Cash Flow (non-GAAP)(1)
Kaplan international						$	32,938					$	29,902					10						$	104,936					$	85,348					23
Higher education						13,877						10,681						30						39,278						39,577						(1)
Supplemental education						13,925						11,909						17						29,965						24,189						24
Kaplan corporate and other						(10,327)						(7,264)						(42)						(25,163)						(19,473)						(29)
Intersegment elimination						(81)						67						—						8						92						—
						$	50,332					$	45,295					11						$	149,024					$	129,733					15

____________

(1)			Adjusted Operating Cash Flow (non-GAAP) is calculated as Operating Income (Loss) before Amortization of Intangible Assets and Impairment of Long-Lived Assets plus Depreciation Expense and Pension Expense.

NON-GAAP FINANCIAL INFORMATION

(Unaudited)

In addition to the results reported in accordance with accounting principles generally accepted in the United States (GAAP) included in this press release, the Company has provided information regarding Adjusted Operating Cash Flow and Net income excluding certain items described below, reconciled to the most directly comparable GAAP measures. Management believes that these non-GAAP measures, when read in conjunction with the Company’s GAAP financials, provide useful information to investors by offering:

•the ability to make meaningful period-to-period comparisons of the Company’s ongoing results;

•the ability to identify trends in the Company’s underlying business; and

•a better understanding of how management plans and measures the Company’s underlying business.

Adjusted Operating Cash Flow and Net income, excluding certain items, should not be considered substitutes or alternatives to computations calculated in accordance with and required by GAAP. These non-GAAP financial measures should be read only in conjunction with financial information presented on a GAAP basis.

The gains and losses on marketable equity securities relate to the change in the fair value (quoted prices) of its portfolio of equity securities. The mandatorily redeemable noncontrolling interest represents the ownership portion of a group of minority shareholders at a subsidiary of the Company's Healthcare business. The Company measures the redemption value of this minority ownership on a quarterly basis with changes in the fair value recorded as interest expense or income, which is included in net income for the period. The effect of gains and losses on marketable equity securities and net interest expense related to fair value adjustments of the mandatorily redeemable noncontrolling interest are not directly related to the core performance of the Company’s business operations since these items do not directly relate to the sale of the Company’s services or products. The accounting principles generally accepted in the United States (“GAAP”) require that the Company include the gains and losses on marketable equity securities and net interest expense related to fair value adjustments of the mandatorily redeemable noncontrolling interest in net income on the Condensed Consolidated Statements of Operations. The Company excludes the gains and losses on marketable equity securities and net interest expense related to fair value adjustments of the mandatorily redeemable noncontrolling interest from the non-GAAP adjusted net income because these items are independent of the Company’s core operations and not indicative of the performance of the Company’s business operations.

The following tables reconcile the non-GAAP financial measures for Net income, excluding certain items, to the most directly comparable GAAP measures: