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YoY shift: Neutral
Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is -0.02pp more bearish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
-0.11pp
Flat
Net-tone change vs last year's 10-K.
MD&A
+0.07pp
Flat
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K
Risk Factors (Item 1A) - words with the biggest YoY frequency increase
Negative rising
incident+4
adversely+2
negative+2
harm+2
negatively+1
Positive rising
No words rose this year.
Risk Factors (Item 1A)
14,206 words
Item 1A. Risk Factors.
SUMMARY RISK FACTORS
This risk factor summary does not contain all of the information that may be important to you, and you should read this risk factor summary together with the more detailed discussion of risks and uncertainties set forth following this section under the heading “Risk Factors,” as well as elsewhere in this Annual Report on Form 10-K. Additional risks, beyond those summarized below or discussed elsewhere in this Annual Report on Form 10-K, may apply to the Company’s business, activities or operations as currently conducted or as may be conducted in the future. These risks include, but are not limited to, the following:
Risks Related to the Company’s Education Business
• Changes in International Laws and Regulations, Related Policy Announcements, Travel Restrictions and Sanctions.
• Difficulties and Expenses in Managing Properties in England and Scotland.
• Difficulties in Managing Foreign Operations and Failure to Comply with Foreign Regulatory Requirements.
• Changes in U.K. and International Tax Laws.
• Possible Changes to the Department of Education.
• Failure to Comply with Statutory and Regulatory Requirements as a Third Party Servicer to Title IV Participating Institutions.
• Failure to Comply with the ED’s Title IV Incentive Compensation Rule.
• Failure to Comply with the ED’s Title IV Misrepresentation Regulations.
• Compliance Reviews, Program Reviews, Audits and Investigations, Including in Connection with Borrower Defense to Repayment Claims.
• Noncompliance with Regulations by KNA’s Client Institutions.
• Failure to Realize the Anticipated Benefits of the Purdue Global Transaction.
• Regulatory Changes and Developments.
• Reductions in the Use of Standardized Tests and Increased Competition.
• Changes in the Extent to Which Licensing and Proficiency Examinations Are Used.
Risks Related to the Company’s Television Broadcasting and Media Businesses
• Changing Perceptions About the Effectiveness of Television Broadcasting in Delivering Advertising and Competition from Digital Platforms.
• Increased Competition Resulting from Technological Innovations and Changing Consumer Behavior.
• Changes in the Nature and Extent of Government Regulations.
• Transition to New Technical Standards for Broadcast Television Stations.
• Changes in MVPD Subscriber Numbers, Retransmission Consent Fees, “Reverse Retransmission Consent” Payments to the Networks, and Broadcast Exclusivity.
Risks Related to the Company’s Healthcare Business
• Extensive Regulation of the Healthcare Industry.
• Ongoing Market Consolidation.
• Reviews and Audits by Government Agencies and Private Payors.
• Federal and State Changes to Reimbursement and Other Aspects of Medicare and Medicaid.
• Continued Nursing Staffing Shortages.
• Negative Impact on Medicare Reimbursement from Value-based Purchasing and Decreased Medicare Payments.
• Limited Ability to Control Rates Received for Services.
• Reliance on Plasma Supply and Third Party Manufacturing.
Risks Related to the Company’s Manufacturing Businesses
• Failure to Recruit and Retain Production Staff Needed to Meet Customer Demand.
• Potential Liability Claims.
Risks Related to the Company’s Automotive Businesses
• Termination or Non-renewal of Dealership Agreements and Limitations on the Company’s Ability to Acquire Additional Dealerships.
• Changes Affecting Automobile Manufacturers.
• Changes to State Dealer Franchise Laws and Technological Innovations.
• Changes in Economic Conditions and Vehicle Inventories.
Risks Related to the Company’s Other Businesses
• Failure by Saatchi Art to Attract and Retain Artists and Customers and Convert Visitors to Customers.
• Claims Related to Authenticity, Ownership or Intellectual Property Rights of Artwork Sold by Saatchi Art.
• Failure by Society6 to Attract and Retain Customers.
• Failure to Recruit and Retain Employees in the Company’s Restaurants.
• Food-Borne Illness Concerns and Damage to the Company’s Reputation.
• Concentration of the Company’s Restaurants in the Washington, D.C. Region.
Risks Related to the Company’s Stock Ownership and Operations
• As a Controlled Company, the Rights of Class B Common Stockholders Are Limited.
• Failure to Comply with Environmental and Health and Safety Laws.
• Failure to Successfully Integrate Acquired Businesses.
• Goodwill and Other Intangible Assets Impairment.
• Introduction of Additional Tariffs.
Risks Related to Cybersecurity, Privacy, Artificial Intelligence and Intellectual Property
• System Disruptions and Security Threats to the Company’s Information Technology Infrastructure or Those of Third Parties.
• Failure to Comply with Privacy Laws or Regulations.
• Artificial Intelligence Concerns.
• Potential Liability for Intellectual Property Infringement.
RISK FACTORS
The Company faces a number of risks and uncertainties in connection with its operations. Described below are the most material risks faced by the Company. These risks and uncertainties may not be the only ones faced by the Company. Additional risks and uncertainties not presently known, or currently deemed immaterial, may adversely affect the Company in the future. In addition to the other information included in this Annual Report on Form 10-K, investors should carefully consider the following risk factors. If any of the events or developments described below occurs, it could have a material adverse effect on the Company’s business, financial condition or results of operations.
Risks Related to the Company’s Education Business
• Changes in International Laws and Regulations and Travel Restrictions and Related Policy Announcements Have Materially Adversely Affected, and Together with Changes in Immigration Laws or Sanctions Could Continue to Materially Adversely Affect, International Student Enrollments and Kaplan’s Business.
Kaplan is subject to a wide range of laws and regulations relating to its international operations. These include domestic laws with extraterritorial reach, such as the U.S. Foreign Corrupt Practices Act, international laws such as the U.K. Bribery Act, as well as the local regulatory regimes of the countries in which Kaplan operates. These laws and regulations change frequently. Failure to comply with these laws and regulations could result in significant penalties or the revocation of Kaplan’s authority to operate in the applicable jurisdiction, each of which could have a material adverse effect on Kaplan’s operating results.
In response to the COVID-19 pandemic, many governments imposed student travel restrictions (applicable to exit and entry), made recommendations for their students to return home and closed physical campus locations, and many state and professional bodies postponed or canceled examination dates related to state examinations and professional education programs, all of which have materially adversely affected Kaplan International’s operations and resulted in significant losses at KLG during the pandemic. The emergence of new pandemics and consequential changes to travel and study arrangements in one or more countries could negatively affect KI and its operating results.
Further changes to the regulatory environment, including changes to government policy or practice in oversight and enforcement, or other factors, including war, civil unrest, geopolitical instability, imposition or extension of international sanctions, a natural disaster or a pandemic in either the students’ countries of origin or countries in which they desire to study, could continue to negatively affect Kaplan’s ability to attract and retain students and negatively affect Kaplan’s operating results. Increasingly, governments have begun imposing sales taxes on digital services, such as education, offered in their jurisdictions by foreign providers. Significant changes to the availability of government funding for education or training, visa policies for students and their dependents, or other administrative immigration requirements, or the tax environment, including changes to tax laws, policies and practices, in any one or more countries in which KI operates or makes its services available could negatively affect its operating results. KI’s operations, institutions and programs in the U.S. may be subject to state-level regulation and oversight by state regulatory agencies, whose approval or exemption from approval is necessary to allow an institution to operate in the state. These agencies may establish standards for instruction, qualifications of faculty, location and nature of facilities, financial policies and responsibilities and other operational matters. Institutions that seek to admit international students are required to be federally certified and legally authorized to operate in the state in which the institution is physically located in order to be allowed to issue the relevant documentation to permit international students to obtain a visa. Agencies at both local and national levels in other countries may also impose similar requirements on KI’s operations outside the U.S.
A substantial portion of KI’s revenue comes from programs that prepare international students to study and travel in English-speaking countries. In 2025, university preparation programs were principally delivered in Australia, New Zealand, Singapore and the U.K. KI’s ability to enroll students in these programs is directly dependent on its ability to comply with complex regulatory environments.
KI’s ability to enroll international students in programs in the U.K., U.S., Singapore, Australia, New Zealand, Canada and other countries and to recruit students for study with KI’s partners is directly dependent on the laws and regulations governing student immigration. Changes to Australian and Canadian student immigration rules have impacted, and will continue to impact, KI’s ability to recruit students for study at its own colleges and its partner universities. Overall, there continues to be a trend of tightening of student immigration regulations and access to student visas worldwide, including, most recently, an Australian Government international indicative student visa approval target for post-secondary education providers. The new U.S. presidential administration has implemented policy changes that have affected international student entry to, or ability to study in, the U.S., including increased visa vetting for individuals seeking to enter the U.S. and restrictions on conduct while in the U.S. The closure of U.S. visa offices in 2025 had a negative impact on KI’s ability to recruit international students and materially adversely affected KI’s recruitment for U.S. university partners. Negative perceptions regarding travel to the U.S., as well as
the legal and regulatory environment’s susceptibility to change by the new administration, could have a negative impact on KI’s ability to recruit international students, which could materially adversely affect Kaplan’s U.S. Pathways business as well as the U.S.-based KLG. Changes to visa policies and practices have had, and could continue to have, a negative impact on students’ ability to travel to the U.S. to begin their courses, which has significantly adversely affected, and could continue to significantly adversely affect, those KI businesses.
Changes to levels of direct and indirect government funding for international education programs would also materially affect the success of KI’s operations. For example, if access to student loans or other funding were to be lost for KI operations that admit students who are entitled to receive the benefit of this funding, Kaplan’s operating results could be materially adversely affected.
In the U.K., Level 7 (Masters’ level) apprenticeship training accounts for nearly 50% of the Kaplan Professional Education business. Starting January 1, 2026, government apprenticeship levy for Level 7 apprenticeships has been reduced. Level 7 apprenticeship funding is now available only for learners who are 21 years of age or under at the start of their apprenticeship. Employers are now expected to fund more L7 apprenticeships outside of the apprenticeships levy. This change is not expected to materially impact Kaplan Professional Education’s revenues for 2026. The Level 7 apprentices are on an apprenticeship program for 36 months, so the learners initiating their programs prior to January 1, 2026, will remain on their program. Learners who are not eligible for funding are expected to switch to either a commercial fee-pay option or to a Level 4 apprenticeship route. Kaplan Professional Education is considering additional strategies to reduce the potential impact. These include growing the fee-paying activities within the business (as opposed to accessing funding), spreading the apprenticeship portfolio over a wider range of sectors and taking on non-apprenticeship streams of government funding.
• Difficulties and Expenses in Connection with Managing Properties in England and Scotland Could Materially Impact Kaplan’s Expenses.
Kaplan has a number of real estate investments in England and Scotland, usually on long-term leases. As the tenant, Kaplan is required to keep the buildings in repair. Kaplan usually benefits from a package of contractor and subcontractor arrangements in relation to defects in the buildings due to poor construction or failure to adhere to property regulations during construction of the properties. If, however, the entities who have entered into these collateral agreements become insolvent or successfully assert another defense to a claim from Kaplan under the relevant agreement, Kaplan, as the tenant, may be expected to carry out work related to the relevant defect and/or bear the relevant cost of such work. The relevant costs may be material. Kaplan’s ability to enforce collateral agreements may also be impacted by other factors, including but not limited to, the operation of Scottish law on time periods permitted to bring a claim. Kaplan may be required to bear some or all of the costs of work at two of its residences, the scope of which, and Kaplan’s legal responsibility for undertaking it, is yet to be established.
• Difficulties in Managing Foreign Operations and Failure to Comply with Foreign Regulatory Requirements Have Negatively Impacted and Could Continue to Negatively Affect Kaplan’s Business.
Kaplan has operations and investments in a growing number of foreign countries and regions, including Australia, Canada, the People’s Republic of China, Colombia, France, Germany, Hong Kong, India, Ireland, Japan, New Zealand, Nigeria, Saudi Arabia, Singapore, the U.K. and the United Arab Emirates. Operating in foreign countries and regions presents a number of inherent risks, including the difficulties of complying with unfamiliar laws and regulations, effectively managing and staffing foreign operations, successfully navigating local customs and practices, preparing for potential political and economic instability and adapting to currency exchange rate fluctuations. Countries have also increasingly begun imposing national data protection laws, which increases compliance costs and creates additional legal risk in relation to operating internationally. New privacy or data protection legislation placing restrictions on the processing or export of personal information enacted in a jurisdiction where Kaplan operates could have a material and adverse effect should Kaplan be unable to process personal information needed to provide the services Kaplan offers or plans to offer. Failure to effectively manage these risks could have a material adverse effect on Kaplan’s operating results.
• Changes in U.K. and International Tax Laws Could Have a Material Adverse Effect on Kaplan International.
The UK Pathways Colleges located in England were required to register with the OfS to ensure they could continue operating as English higher education providers. The UK Pathways Colleges (excluding Glasgow and York) were entered on the OfS register of approved providers with Approved Fee Cap Status in August 2020. These colleges now operate under the regulatory oversight of the OfS. Colleges registered with the OfS under Approved Fee Cap status do not charge students Value Added Tax (VAT) on tuition fees based on a statutory exemption available to Approved Fee Cap providers. The York College forms part of the University of York’s Approved Fee Cap registration. If KI Pathways were to lose its Approved Fee Cap status with the OfS, KI Pathways Colleges’ financial results may be materially adversely impacted.
The Glasgow College is not currently included in the OfS registration as it is located in Scotland. Under a different statutory VAT exemption, bodies that qualify for VAT purposes as “colleges of a university” are able to exempt their tuition fees from VAT, and UK Pathways Glasgow International College applies this status. In 2019, a tax case was determined by the U.K. Supreme Court on the meaning of “college of a university.” The U.K. Supreme Court decided the case in the college’s favor. The result was more favorable to private providers working in collaboration with a university. The U.K. Supreme Court emphasized five principal tests for a private provider to meet, for it to be sufficiently integrated with a university, to qualify as a “college of a university,” even if it does not have a constitutional link to the university. Although the focus on these five tests has now been incorporated into official His Majesty’s Revenue and Customs (HMRC) guidance, it is not yet clear how HMRC will apply the Supreme Court judgment and the five key tests in practice. If HMRC’s application of the Supreme Court judgment and the five key tests deem Glasgow International College not to constitute a “college of a university” and not entitled to a VAT exemption, KI Pathways Colleges’ financial results may be materially adversely impacted if they are not to meet any new requirements.
Following the departure of the U.K. from the European Union (EU) on December 31, 2020, the U.K. may further develop its VAT rules in this complex area separate from the EU rules. Kaplan continues to closely monitor this area.
The U.K. government ended the VAT exemption for private schools, effective January 1, 2025. The resulting 20% effective increase in tuition, boarding and other costs materially impacted enrollment of new and existing students at MPW. The U.K. government has also increased employer’s national insurance contributions, a tax paid by U.K. employers to fund government benefits programs that increases the costs of employment for all U.K. businesses. The U.K. government may make other changes to U.K. tax rates and employment laws which would further increase the costs of KI’s activities in the U.K.
• Possible Changes to the Department of Education Could Negatively Impact the Company’s Operations and Businesses.
On March 20, 2025, the U.S. President issued an executive order directing the Secretary of Education to begin dismantling the ED and “returning authority” over education to states and local communities to the maximum extent permitted by law. The order signals an intent to potentially close or reduce many federal education functions. Certain eliminations of staff or functions could disrupt federal student aid, civil rights enforcement, and program funding at the federal level. Legal challenges and congressional inaction make its ultimate outcome uncertain. It is also unclear which functions will be deemed critical, and which could be phased out or downsized. Such changes could lead to operational interruptions to systems relied upon by Kaplan’s partner institutions that could impact their ability to comply with obligations to Kaplan. Operational interruptions could also interfere with Kaplan’s ability to deliver services.
• Failure to Comply with Statutory and Regulatory Requirements as a Third Party Servicer to Title IV Participating Institutions Could Result in Monetary Liabilities or Subject Kaplan to Other Material Adverse Consequences.
KNA provides services to Purdue Global, including financial aid services, and as such, KNA is a “Third Party Servicer” for Purdue Global pursuant to the Title IV regulations. As a result, KNA is subject to applicable statutory provisions of Title IV and ED regulations that, among other things, require Kaplan to be jointly and severally liable with Purdue Global to the ED for any violation by Purdue Global or KNA of any Title IV statute or ED regulation or requirement. Separately, if the ED expands the definition of what services or entities fall within the Third Party Servicer regulations, and/or, if KNA provides financial aid services to more than one Title IV participating institution, it will be required to arrange for an independent auditor to conduct an annual Title IV audit of KNA’s compliance with applicable ED requirements. KNA provides non-financial aid services to institutions such as Purdue University, Wake Forest University, and other Title IV participating institutions. As such, if the Third Party Servicer regulations or the interpretation of those regulations by the ED change, KNA could be considered a Third Party Servicer to its multiple client institutions as well.
KNA is also subject to other federal and state laws, including federal and state consumer protection laws and rules prohibiting unfair or deceptive marketing practices; data privacy, data protection and information security requirements established by federal, state and foreign governments, including, for example, the Federal Trade Commission; and applicable provisions of the Family Educational Rights and Privacy Act regarding the privacy of student records handled by KNA for its university clients.
Failure to comply with these and other federal and state laws and regulations could result in adverse consequences, including, for example:
• The imposition on Kaplan of fines, other sanctions or liabilities, including repayment obligations for Title IV funds to the ED or the termination or limitation of Kaplan’s eligibility to provide services as a Third Party Servicer to any Title IV participating institution if KNA fails to comply with statutory or regulatory requirements applicable to such service providers;
• Adverse effects on Kaplan’s business and operations from a reduction or loss in KNA’s revenues under the TOSA or any other agreement with any Title IV participating institution if a client institution loses or has limits placed on its Title IV eligibility, accreditation, operations or state licensure or is subject to fines, repayment obligations or other adverse actions owing to noncompliance by KNA (or the institution) with Title IV, accreditor, federal or state agency requirements;
• Liability under the TOSA or any other agreement with any Title IV participating institution for noncompliance with federal, state or accreditation requirements arising from KNA’s conduct; and
• Liability for noncompliance with Title IV or other federal or state requirements occurring prior to the transfer of Kaplan University to Purdue.
Although KNA endeavors to comply with all U.S. federal and state laws and regulations, KNA cannot guarantee that its implementation of the relevant rules will be upheld by the ED or other agencies or upon judicial review. The laws, regulations and other requirements applicable to KNA and its client institutions are subject to change and to interpretation. In addition, there are other factors related to KNA’s client institutions’ compliance with federal, state and accrediting agency requirements, some of which are outside of KNA’s control, that could have a material adverse effect on KNA’s client institutions’ revenues and, in turn, on KNA’s operating results.
• Failure to Comply with the ED’s Title IV Incentive Compensation Rule Could Subject Kaplan to Liabilities, Sanctions and Fines.
An institution participating in Title IV programs may not provide any commission, bonus or other incentive payment to any person or entity engaged in any student recruiting or admission activities or in making decisions regarding the awarding of Title IV funds if such payment is based directly or indirectly on success in securing enrollments or financial aid. KNA provides various services to Title IV participating institutions, including recruiting and, in the case of Purdue Global, financial aid services. As such, KNA is subject to the incentive compensation rule and cannot provide any commission, bonus or other incentive payment to any covered employees, subcontractors or other parties engaged in certain student recruiting, admission or financial aid activities based on success in securing enrollments or financial aid. In addition, KNA’s client Title IV institutions’ payments to KNA must comply with revenue sharing guidance provided by the ED related to bundled services agreements. In 2011 guidance, the ED provided that in certain arrangements with Title IV participating institutions where student recruiting services are “bundled” with other non-recruiting services, revenue sharing may be allowable despite the incentive compensation rule’s general prohibition on such revenue sharing with entities or individuals that provide recruiting services. Because this guidance is not codified in any rule or law but is instead ED guidance on the applicability of the incentive compensation rule, such guidance can be at any time and without notice. The ED has indicated it is considering a change to this guidance as some lawmakers and states, such as California, have publicly called for the of this guidance or sought to introduce federal and state legislation seeking to prevent any such revenue sharing with entities that engage in recruiting students. KNA cannot predict how the ED or a federal court will interpret, revise or enforce all aspects of the incentive compensation rule or the bundled service revenue sharing guidance in the future. Any revisions or changes in interpretation or enforcement could require KNA and its client institutions to change their practices or the tuition revenue sharing payment terms of KNA’s agreements with such client institutions and could have a material effect on Kaplan’s business and results of operations. Additionally, to comply with the incentive compensation rule could result in or enforcement actions KNA or its clients and could result in liabilities, or other sanctions KNA or its clients, which could have a material effect on Kaplan’s business and results of operations.
• Failure to Comply with the ED’s Title IV Misrepresentation Regulations Could Subject Kaplan to Liabilities, Sanctions and Fines.
A Title IV participating institution is required to comply with the ED regulations related to misrepresentations and with related federal and state laws. These laws and regulations are broad in scope and may extend to statements by servicers, such as KNA, that provide marketing or certain other services to such institutions. These laws and regulations may also apply to KNA’s employees and agents, with respect to statements addressing the nature of an institution’s programs, financial charges or the employability of its graduates. KNA provides marketing and other services to Title IV participating institutions. The failure to comply with these or other federal and state laws and regulations regarding misrepresentation and marketing practices could result in the imposition on KNA or its client institutions of fines, other sanctions or liabilities, including federal student aid repayment obligations to the ED, the
termination or limitation of Kaplan’s eligibility to provide services as a third-party servicer to Title IV participating institutions, the termination or limitation of a client institution’s eligibility to participate in the Title IV programs, or legal action by students or other third parties. A violation of misrepresentation regulations or other federal or state laws and regulations applicable to the services KNA provides to its client institutions arising out of statements by KNA, its employees or agents could require KNA to pay the costs associated with indemnifying its client institutions from applicable losses resulting from the violation or could result in termination by such client institutions of their services agreements with KNA.
• Compliance Reviews, Program Reviews, Audits and Investigations, Including in Connection with Borrower Defense to Repayment Claims, Could Result in Findings of Noncompliance with Statutory and Regulatory Requirements and Result in Liabilities, Sanctions and Fines.
KNA and its client institutions are subject to reviews, audits, investigations and other compliance reviews conducted by various regulatory agencies and auditors, including, among others, the ED and the ED’s Office of the Inspector General (in connection with KNA’s Third Party Servicer status with respect to Purdue Global), accrediting bodies and state and various other federal agencies. These compliance reviews can result in findings of noncompliance with statutory and regulatory requirements that can, in turn, result in the imposition of fines, liabilities, civil or criminalpenalties or other sanctions against KNA and its client institutions, which could have an adverse effect on Kaplan’s financial results and operations. Separately, if KNA provides financial aid services to more than one Title IV participating institution, it will be required to arrange for an independent auditor to conduct an annual Title IV compliance audit of KNA’s compliance with applicable ED requirements. KNA’s client institutions are also required to arrange for an independent auditor to conduct an annual Title IV audit of their compliance with applicable ED requirements, including requirements related to services provided by KNA.
Although Kaplan no longer owns Kaplan University or the former KHE Campuses, Kaplan may be liable to the current owners of Kaplan University and the former KHE Campuses, for the pre-sale conduct of the schools, and the pre-sale conduct of the schools has been and could be the subject of future compliance reviews, regulatory proceedings or lawsuits that could result in monetary liabilities or fines or other sanctions.
In 2021, Kaplan received claims and related information requests seeking discharge of approximately $35 million in loans, excluding interest, from students at Title IV participating schools formerly owned by Kaplan. Kaplan believes it has defenses that would bar any student discharge or school liability including that the claims are barred by the applicable statute of limitations, unproven, incomplete and fail to meet regulatory filing requirements.
As part of the Sweet v. Cardona settlement in November 2022 in the Northern District of California, the ED agreed to review any borrower defense applications submitted between June 23, 2022, and November 15, 2022 on an expedited basis. In January 2024, Kaplan was informed that the ED received applications during this time period regarding former Kaplan University and Purdue Global students. Unknown at this time is the total discharge amount sought or how much of that amount would apply to Kaplan University students. The Sweet v. Cardona settlement requires the ED to adjudicate applications received during the designated time period pursuant to the requirements of the 2016 Borrower Defense Regulation. To the extent these applications apply to Kaplan University, Kaplan anticipates that it will have defenses similar to those described above.
Kaplan expects to vigorously defend any attempt by the ED to hold Kaplan liable for any ultimate student discharges and responded to the prior claims with documentary and narrative evidence to refute the allegations, demonstrate their lack of merit and support the denial of all such claims by the ED. Kaplan will similarly respond to all future claims it receives. As noted, if the claims are successful, the ED may seek reimbursement for the amount discharged from Kaplan. If the ED initiates a reimbursement action against Kaplan following approval of additional former students’ borrower defense to repayment applications, Kaplan may be subject to significant liability.
• Noncompliance with Regulations by KNA’s Client Institutions May Adversely Impact Kaplan’s Results of Operations.
KNA currently provides services to higher education institutions that are heavily regulated by federal and state laws and regulations and by accrediting bodies. A substantial portion of KNA’s revenue is attributable to service fees and deferred purchase price payments it receives under its agreement with Purdue Global, which are dependent upon revenue generated by Purdue Global and upon Purdue Global’s eligibility to participate in the Title IV federal student aid program. To maintain Title IV eligibility, Purdue Global and KNA’s other client institutions must be certified by the ED as eligible institutions, maintain authorizations by applicable state education agencies and be accredited by an accrediting commission recognized by the ED. Purdue Global and KNA’s other client institutions must also comply with the extensive statutory and regulatory requirements of the Higher Education Act and other state and federal laws, and accrediting standards relating to their financial aid management, educational programs, financial strength, disbursement and return of Title IV funds, facilities, recruiting practices, representations made by the school and other parties, and various other matters. Additionally, Purdue Global and other client institutions are subject to laws and regulations that, among other things, limit student default rates on the repayment of Title IV loans; permit BDTR
of Title IV loans based on certain conduct of the institution; establish specific measures of financial responsibility and administrative capability; regulate the addition of new campuses and programs and other institutional changes; require compliance with state professional licensure board requirements to the extent applicable to institutional programs; require compliance with the Title IV definition of nonprofit institution; and require state authorization and institutional and programmatic accreditation.
If the ED finds that Purdue Global or any other KNA client institution has failed to comply with Title IV requirements or improperly disbursed or retained Title IV program funds, it may take one or more of a number of actions, including fining the school, requiring the school to repay Title IV program funds, limiting or terminating the school’s eligibility to participate in Title IV programs, initiating an emergency action to suspend the school’s participation in the Title IV programs without prior notice or opportunity for a hearing, transferring the school to a method of Title IV payment that would adversely affect the timing of the institution’s receipt of Title IV funds, requiring the school to submit a letter of credit, denying or refusing to consider the school’s application for renewal of its certification to participate in the Title IV programs or for approval to add a new campus or educational program, requiring the institution to comply with additional regulatory requirements reserved for schools not meeting the definition of a nonprofit institution including 90/10 and Gainful Employment requirements, and/or referring the matter for possible civil or . There can be no assurance that the ED will not take any of these or other actions in the future, whether as a result of lawsuits, program reviews or otherwise. On November 25, 2024, the ED approved Purdue Global’s Application for Participation in the Title IV program and granted a full Program Participation Agreement. This Program Participation Agreement expires on December 31, 2028 and will need to be renewed prior to that date pursuant to federal regulations. Pursuant to the terms of the Program Participation Agreement, Purdue Global must report to the ED any accreditation or governmental agency action or class action lawsuit. If Purdue Global or another KNA client institution or has limits placed on its Title IV eligibility, accreditation or state licensure, or if Purdue Global or another KNA client institution is subject to , repayment obligations or other actions, accreditor or state agency requirements, or other state or federal laws, Kaplan’s financial results of operations could be affected.
In turn, any of the aforementioned consequences could have a material adverse effect on Kaplan’s operating results even though such institution’s compliance is affected by circumstances beyond Kaplan’s control, including, for example:
• a reduction or loss in KNA’s revenues under the TOSA or other client agreements if Purdue Global or any other KNA client institution loses or has limits placed on its Title IV eligibility, accreditation or state licensure;
• a reduction or loss in KNA’s revenues under the TOSA or other client agreements if Purdue Global or any other client institution is subject to fines, repayment obligations or other adverse actions owing to noncompliance by the institution (or Kaplan) with Title IV, accreditor or state agency requirements;
• the imposition on KNA of fines or repayment obligations to the ED or the termination or limitation on Kaplan’s eligibility to provide services to Purdue Global or other Title IV participating institutions if findings of noncompliance by Purdue Global or such other institution result in a determination that Kaplan failed to comply with statutory or regulatory requirements applicable to service providers; and
• liability under the TOSA or other client agreements for noncompliance with federal, state or accreditation requirements arising from KNA’s conduct.
• Kaplan May Fail to Realize the Anticipated Benefits of the Purdue Global Transaction.
Kaplan’s ability to realize the anticipated benefits of the Purdue Global transaction will depend, in part, on its ability to successfully and efficiently provide services to Purdue Global. Achieving the anticipated benefits is subject to a number of uncertainties, including whether the services can be provided in the manner and at the cost Kaplan anticipated and whether Purdue Global is able to realize anticipated student enrollment levels. The TOSA (Kaplan’s service agreement with Purdue Global) acknowledges that the Purdue Global Board of Trustees controls the university. While the TOSA provides financial protections to Kaplan to ensure payment of certain of its fees, actions by Purdue Global that change university policies, direct the provision of certain non-academic service functions, or increase costs associated with the non-academic service functions could impact Kaplan’s ability to achieve the benefits of the transaction.
• Regulatory Changes and Developments Could Negatively Impact Kaplan’s Results of Operations.
Any legislative, regulatory or other development that has the effect of materially reducing the amount of Title IV financial assistance or other federal, state or private financial assistance available to the students of Purdue Global or any other client institution could have a material adverse effect on Kaplan’s business and results of operations. In addition, any development that has the effect of making the terms on which Title IV financial assistance or other financial assistance funds are available to Purdue Global’s or other client institutions’ students materially less attractive could have a material adverse effect on Kaplan’s business and results of operations.
The laws, regulations and other requirements applicable to KNA or any KNA client institutions are subject to change and to interpretation. The July 2023 regulations included new rules and changes to existing rules related to the ability of student borrowers to obtain discharges of their obligations to repay certain Title IV loans that were first disbursed on or after July 1, 2023; closed school loan discharges; disability loan discharges; public loan forgiveness; income-driven repayment plans; colleges and universities undergoing changes in ownership; and arbitration agreements. The ED also changed the Title IV definition of “nonprofit” institution to generally exclude from that definition any institution that is an obligor on a debt owed to a former owner of the institution or maintains a revenue-based service agreement with a former owner of the institution. Such regulatory changes as well as those described above could subject Purdue Global and other KNA client institutions to additional regulatory requirements. These and other regulatory, policy or legal changes could include the imposition of outcome metrics on universities, a form of free community college, and changes to the financial aid system, including broad loan forgiveness. Other regulatory requirements or developments could have a material adverse effect on Purdue Global’s and other client institutions’ revenues and, in turn, on Kaplan’s operating results, including, for example:
Reductions in Title IV or other federal, state or private financial assistance: KNA receives revenue based on its agreements with client institutions and particularly revenue from Purdue Global under the TOSA. Purdue Global is expected to derive a significant percentage of its tuition revenues from its participation in Title IV programs. Any legislative, regulatory or other development that materially reduces the amount of Title IV, federal, state or private financial assistance available to the students of Purdue Global and other client institutions could have a material adverse effect on Kaplan’s business and results of operations. In addition, any development that makes the terms of such financial assistance less attractive could have a material adverse effect on Kaplan’s business and results of operations.
Compliance reviews and litigation: Institutions participating in the Title IV programs, including Purdue Global and other client institutions, are subject to program reviews, audits, investigations and other compliance reviews conducted by various regulatory agencies and auditors, including, among others, the ED, the ED’s Office of the Inspector General, accrediting bodies and state and various other federal agencies, as well as annual audits by an independent certified public accountant of compliance with Title IV statutory and regulatory requirements. Purdue Global and other client institutions may also be subject to various lawsuits and claims related to a variety of matters, including but not limited to allegedviolations of federal and state laws and accrediting agency requirements. These compliance reviews and litigation matters could extend to activities conducted by KNA on behalf of Purdue Global or other client institutions and to KNA itself as a Third Party Servicer subject to Title IV regulations.
Changes in legislation, regulations or interpretations: Congress periodically revises the Higher Education Act and other laws and enacts new laws governing the Title IV programs and annually determines the funding level for each Title IV program and may make changes in the laws at any time. The ED and other federal and state agencies may also issue new regulations and guidance or change their interpretation of regulations at any time. In addition, any action by Congress or the ED that impacts the ability of Purdue Global to contract with KNA to receive a share of revenue as deferred payment for the sale of Kaplan University or the ability of KNA to contract with any client institution to provide bundled services in exchange for a share of tuition revenue could require KNA to modify the TOSA, other agreements or its practices and could impact the revenues KNA may receive under such agreements. Congress, the ED and other federal and state regulators may create new laws or take actions that may require Purdue Global, other client institutions or KNA to modify practices in ways that could have a material adverse effect on Kaplan’s business and results of operations.
Increases in regulatory scrutiny of postsecondary education and service providers: The increased scrutiny of online schools that offer programs similar to those offered by Purdue Global or other client institutions and of service providers that provide services similar to Kaplan’s has resulted, and may continue to result, in additional enforcement actions, investigations and lawsuits by the ED, other federal agencies, Congress, state Attorneys General and state licensing agencies, or private plaintiffs. Recent enforcement actions have resulted in substantial liabilities, restrictions and sanctions and in some cases have led to the loss of Title IV eligibility and closure of institutions. New legislation or regulation could affect Kaplan’s participation in Title IV programs as a Third Party Servicer to Purdue Global or such other client institutions. In addition, legislative proposals that restrict the ability of entities like KNA to provide certain admissions-related services to Title IV participating institutions under revenue sharing arrangements could impact KNA agreements.
• Reductions in the Use of Standardized Tests in the Admissions Process by Colleges or Graduate Schools and Increased Competition Could Reduce Demand for KNA Supplemental Education Test Preparation Offerings.
KNA Supplemental Education Exam Preparation provides courses that prepare students for a broad range of admissions examinations that are considered by colleges and graduate schools. Historically, colleges and graduate
schools have required standardized tests as part of the admissions process. Certain colleges have moved away from the historical reliance on standardized admissions tests. Reductions in the use of standardized tests in college or graduate school admissions processes have had and could continue to have an adverse effect on KNA’s operating results.
Additionally, KNA faces increased competition offering lower-cost or free test prep products that may be used by students to piece together alternatives to traditional comprehensive test prep programs. Kaplan’s operating results may be adversely affected if student demand for KNA’s traditional comprehensive programs shifts to KNA’s lower-cost, stand-alone offerings, or if competitors offer lower-cost, stand-alone offerings or free test prep products that are more attractive to students than KNA’s products.
• Changes in the Extent to Which Licensing and Proficiency Examinations Are Used to Qualify Individuals to Pursue Certain Careers Could Reduce Demand for Kaplan’s Offerings.
A material portion of KNA’s and KI’s revenue comes from preparing individuals for licensing or technical proficiency examinations in various fields. Any significant relaxation or elimination of licensing or technical proficiency requirements in those fields served by KNA’s and KI’s businesses could negatively affect Kaplan’s operating results.
Risks Related to the Company’s Television Broadcasting and Media Businesses
• Changing Perceptions About the Effectiveness of Television Broadcasting in Delivering Advertising and Competition from Digital Platforms Could Adversely Affect the Profitability of Television Broadcasting.
Historically, television broadcasting has been viewed as a cost-effective method of delivering various forms of advertising, particularly local advertising. There can be no guarantee that this historical perception will guide future decisions by advertisers. To the extent that advertisers shift advertising expenditures, including local advertising, away from broadcast television to other media outlets, including digital distribution platforms, the profitability of the Company’s television broadcasting business could be adversely affected.
• Increased Competition Resulting from Technological Innovations in Video Programming Distribution Systems and Changing Consumer Behavior Could Adversely Affect the Company’s Operating Results.
The continuing growth and technological expansion of internet-based services has increased competitive pressure on the Company’s media businesses. Examples of such developments include delivery of programming via online platforms, including both ad-supported and subscription video programming services, including vMVPDs, and the national broadcast networks’ direct-to-consumer services, technologies that enable users to fast-forward or skip advertisements, and devices that allow users to consume content on demand and in remote locations while avoiding traditional commercial advertisements or cable and satellite subscriptions. A number of these platforms make local programming, including local news, available to viewers and subscribers. Subscription service Amazon Prime Video has publicly discussed the availability of local news on its platform.
In many cases, internet-based platforms and services compete with GMG’s broadcast stations for both viewers and advertising revenues. Changing consumer behavior may also put pressure on the Company’s media businesses to alter traditional distribution methods. The Company obtains significant revenue from its retransmission consent agreements with traditional cable and satellite distributors. These payments are calculated on a per-subscriber basis, so that payments to the Company may decrease as customers “cut the cord” and cancel their cable and satellite subscriptions. The Company also receives payments for the distribution of its stations’ signals on certain internet-based services (through “opt-in” agreements negotiated by the national networks and agreements with the networks for distribution of local programming on network-owned direct-to-consumer platforms); however, these revenues may be less than those received from traditional cable and satellite distribution. Anticipating and adapting to changes in technology and consumer behavior on a timely basis will affect the ability of the Company’s media businesses to continue to increase their revenue. The development and deployment of new technologies and changing consumer behavior have the potential to negatively and significantly affect the Company’s media businesses in ways that cannot now be reliably predicted and that may have a material adverse effect on the Company’s operating results.
• Changes in the Nature and Extent of Government Regulations Could Adversely Affect the Company’s Television Broadcasting Business and Other Businesses.
The Company’s television broadcasting business operates in a highly regulated environment. The costs and burdens of complying with applicable regulations have significantly increased, and may continue to increase, GMG’s operating costs, and have reduced, and may continue to reduce, the revenues of GMG’s business. Changes in regulations have the potential to negatively impact the television broadcasting business, not only by increasing compliance costs and reducing revenues through restrictions on certain types of advertising, limitations on pricing flexibility, or other means, but also by possibly creating more favorable regulatory environments for the providers of competing services, including unregulated digital programming distribution platforms. In addition, changes to the
FCC’s rules governing broadcast ownership may affect the Company’s ability to expand its television broadcasting business and/or may enable the Company’s competitors to improve their market positions through consolidation. More generally, significant changes in applicable regulations could adversely affect the profitability and/or competitive positions of the Company’s businesses.
• Transition to New Technical Standards for Broadcast Television Stations May Alter the Competitive Environment in the Company’s Stations’ Markets or Cause the Company to Incur Increased Costs.
The Company cannot predict how the market will evolve as the new broadcast television station technical standard, ATSC 3.0, is made available in a growing number of television markets across the country; today, ATSC 3.0 streams are available in more than 80 markets. Competing stations that transition to ATSC 3.0 may increase competition for the Company’s stations. As noted above, all of GMG’s stations have begun broadcasting ATSC 3.0 streams. The pace of transition to and consumer adoption of the ATSC 3.0 broadcasting standard may also be affected by the availability of ATSC 3.0-capable consumer devices. Equipment manufacturers began releasing certain TV models with built-in ATSC 3.0-capable receivers in 2020, and an increasing number of external tuners or converter boxes are available, but ATSC 3.0-capable consumer devices are not yet widely available or in use in the U.S . The ongoing transition to ATSC 3.0 may have material effects on the Company’s media businesses that cannot now be reliably predicted and that may have an adverse effect on the Company’s operating results.
• Changes in MVPD Subscriber Numbers, Retransmission Consent Fees, “Reverse Retransmission Consent” Payments to the Networks, and Broadcast Exclusivity Could Adversely Affect the Company’s Revenues.
As the number of subscribers to traditional cable, satellite and telecommunications services continues to decline, GMG faces the possibility of declining revenues under its existing retransmission agreements, which typically provide for payment to GMG on a per-subscriber basis. Those subscribers who “cut the cord” and move to internet-based subscription streaming services may not generate the same revenues as GMG receives under its existing retransmission consent agreements, because, as discussed above, the per-subscriber fees paid to network-affiliated stations under the network-negotiated distribution agreements that apply to vMVPDs may be less than the fees paid by traditional MVPDs under GMG’s retransmission consent agreements.
At the same time, GMG’s network affiliation agreements typically require payments to the networks with which GMG stations are affiliated in the form of what is frequently referred to as “reverse retransmission consent fees,” which require GMG to share a specified portion of its retransmission consent revenues with the respective networks. As reverse retransmission consent fee payments required to be paid to the networks escalate, GMG potentially could retain smaller shares of revenues generated by its retransmission consent agreements. Network affiliation fee obligations are sometimes structured as annual flat fees. In those cases, as the number of subscribers to traditional MVPD platforms decreases, GMG alone bears the costs and risks of declining retransmission consent revenues.
As the national networks have launched and continue to market and invest in their direct-to-consumer platforms, an increasing amount of network programming, including valuable sports programming, that was once available exclusively on an in-market network-affiliated station is now being made available on ad-supported or subscription services such as Paramount+ (CBS), ESPN Unlimited (ABC), Fox One (Fox), and Peacock (NBC), either exclusively or simultaneously with its over-the-air broadcast. The diminishing program exclusivity provided by network affiliation could decrease local broadcasters’ leverage in retransmission consent negotiations with MVPDs. This paradigm could create a growing imbalance for GMG, as “reverse retrans” payments to the networks increase at the same time network-affiliated stations’ exclusivity–and with it, the revenues generated by retransmission consent agreements–continue to decline.
Taken together, these factors could adversely affect GMG’s revenues and operating results.
Risks Related to the Company’s Healthcare Business
• Extensive Regulation of the Healthcare Industry Could Adversely Affect the Company’s Healthcare Businesses and Results of Operations.
Home health and hospice and home infusion therapies are subject to extensive federal, state and local laws, with regulations affecting a wide range of matters, including licensure and certification, quality of services, qualifications of personnel, confidentiality and security of medical records, relationships with physicians and other referral sources, operating policies and procedures, and billing and coding practices. Failure to obtain, maintain or timely renew required licenses, or to comply with evolving regulatory standards, could limit the healthcare group’s ability to operate in certain jurisdictions, delay growth initiatives or result in enforcement actions, fines, or other adverse consequences. In addition, these laws and regulations change frequently, and the manner in which they will be interpreted is subject to change in ways that cannot be predicted.
• Ongoing Market Consolidation Could Result in Reduced Access to Patients
Managed-care organizations, hospitals, physician practices and other third-party payors continue to consolidate in response to the evolving regulatory environment, thereby enhancing their ability to influence the delivery of healthcare services and decreasing the number of organizations serving patients. Continued consolidation among payors, PBMs and vertically integrated healthcare organizations could result in narrower or preferred specialty pharmacy networks, more restrictive participation criteria, or increased reliance on network adequacy standards. This consolidation could adversely impact the healthcare group’s businesses if they are unable to maintain their ability to participate in established networks.
• Reviews and Audits by Government Agencies and Private Payors Could Negatively Impact the Company’s Healthcare Businesses
The healthcare group is subject to periodic and routine reviews, audits and investigations by federal and state government agencies and private payors, which could result in negative findings that adversely impact the business. The federal Centers for Medicare and Medicaid Services (CMS) increasingly uses third-party, for-profit contractors to conduct these reviews, many of which share in the amounts that CMS denies. These reviews, audits and investigations consume significant staff and financial resources and may take years to resolve. The costs associated with these actions as well as potential negative outcomes could materially adversely affect the healthcare group’s results of operations.
• Federal and State Changes to Reimbursement and Other Aspects of Medicare and Medicaid Could Have a Material Adverse Effect on the Company’s Healthcare Business.
The healthcare group derives revenue primarily from Medicare. Payments received from Medicare are subject to changes made through federal legislation. When changes are implemented, internal billing processes and procedures must be modified, which can require significant time and expense. These changes can include changes to base payments, adjustments for home health services, changes to cap limits and per diem rates for hospice services, changes to Medicare eligibility and documentation requirements and changes designed to restrict utilization. Health care reform and legislation and continuing efforts of governmental payors to contain health care costs could decrease payments made for services. Within the Medicare program, the hospice benefit is often specifically targeted for cuts. Reimbursement payments under governmental payor programs, including Medicare supplemental insurance policies, may not remain at levels comparable to present levels or be sufficient to cover the costs allocable to patients eligible for reimbursement pursuant to these programs. Any such changes, including retroactive adjustments, could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows.
• Continued Nursing Staffing Shortages Could Adversely Affect the Growth of the Company’s Healthcare Businesses.
The country’s severeshortage of nurses, including shortages of specialized nursing personnel, could adversely affect the healthcare group’s ability to meet customer demand, impact its ability to take on new business and increase labor costs.
• Value-based Purchasing and Decreased Medicare Payments Could Negatively Impact Medicare Reimbursement.
Both private and government payors are increasingly looking to value-based purchasing to lower costs. Value-based purchasing focuses on quality of outcomes and care efficiency, rather than quantity of care. Effective January 1, 2023, under the 2022 Home Health final rule for Medicare home health providers, value-based purchasing was expanded to all 50 states. Under the expanded model, home health agencies receive adjustments to their Medicare fee-for-service payments based on their performance against a set of quality measures, relative to their peers’ performance. Performance on these quality measures in a specified year (performance year) impacts payment adjustments in a later year (payment year). The Home Health Final Rule for 2024, published on November 1, 2023, introduced significant updates that took effect in 2025. Those updates altered the risk profile for home health providers by implementing changes which included a redefined set of quality measures, updated performance benchmarks, and adjustments to payment methodologies, intensifying the financial and operational pressures on providers. CMS could also create a similar plan for hospice providers in the future. Additionally, the Home Health Rule for 2026, published on November 28, 2025, and effective January 1, 2026, will add further financial and operational pressures by decreasing aggregate Medicare payments to home health agencies by 1.3% compared to calendar year 2025. Private and government payors’ implementation of value-based purchasing requirements could impact Medicare reimbursement and have an effect on the healthcare group’s financial condition, results of operations and overall cash flows.
• The Company’s Healthcare Business Is Limited in its Ability to Control Rates Received for its Services, Which Could Materially Adversely Affect its Business if it Is Unable to Maintain or Reduce Costs to Provide Such Services.
Medicare is the primary payor for the healthcare group and rates are established through federal legislation. Additionally, non-Medicare rates are difficult to negotiate because such payors are under pressure to reduce their own costs. As a result, the Healthcare business must manage costs in order to achieve a desired level of profitability including, but not limited to, centralization of various processes, utilization of technology/automation and management of the number of employees utilized. If the Healthcare business is unable to streamline its processes and reduce costs, its business and consolidated financial condition, results of operations and cash flows could be materially adversely affected.
• Reliance on Plasma Supply and Third-Party Manufacturing Could Limit CSI’s Ability to Meet Demand and Increase Costs.
A significant portion of CSI’s revenue is derived from plasma-based therapies. The supply of plasma-derived products depends on donor availability, regulatory requirements, manufacturing capacity, quality standards, and the operations of third-party collection and fractionalization facilities. Disruptions in plasma supply, manufacturing delays or increases in acquisition costs could limit CSI’s ability to meet patient demand, increase costs and adversely affect financial results.
Risks Related to the Company’s Manufacturing Businesses
• Failure to Recruit and Retain Production Staff Needed to Meet Customer Demand Could Have a Material Adverse Effect on the Company’s Manufacturing Businesses.
The Company’s manufacturing operations have experienced in recent years a highly competitive market for production labor. While the market has improved, competitiveness in the industrial sector for experienced skilled workers will continue, which may limit its ability to meet customer demand. If staffing cannot be hired at a cost-efficient wage rate relative to product pricing, volume will be impacted.
• The Company May Be Subject to Liability Claims That Could Have a Material Adverse Effect on Its Business.
The Company’s manufacturing operations are subject to hazards inherent in manufacturing and production-related facilities. An accident involving these operations or equipment may result in losses due to personal injury; loss of life; damage or destruction of property, equipment or the environment; or a suspension of operations. Insurance may not protect the Company against liability for certain kinds of events, including those involving pollution or losses resulting from business interruption. In addition, claims related to product design, manufacturing or service (by the Company or its suppliers) may harm the Company’s reputation and brands and reduce demand. Any damages caused by the Company’s operations that are not covered by insurance, or are in excess of policy limits, could materially affect the Company’s results of operations, financial position or cash flows.
Risks Related to the Company’s Automotive Businesses
• Termination or Non-renewal of a Dealership Agreement by an Automobile Manufacturer and Limitations on the Company’s Ability to Acquire Additional Dealerships Could Adversely Affect the Company’s Automotive Business and Results of Operations.
The Company’s automobile dealerships are dependent on maintaining strong relationships with manufacturers, and the Company’s ownership and operation of automobile dealerships is subject to its ability to comply with various requirements established by automobile manufacturers. The Company’s dealerships operate under separate agreements with each applicable automobile manufacturer. Manufacturers may terminate their agreements for a variety of reasons subject to state laws, including a dealership’s failure to meet a manufacturer’s standards for financial and sales performance, customer satisfaction, facilities and the quality of dealership management; and any unapproved change in ownership or management. These agreements also limit the Company’s ability to acquire multiple dealerships of the same brand within a particular market and preclude the Company from establishing new dealerships within an area already served by another dealer of the same vehicle brand. In addition, dealerships controlled by related parties of the management team operating the Company’s dealerships may restrict the Company’s ability to acquire new dealerships within an area in which such dealerships operate. Manufacturers also have the right of first refusal if the Company seeks to sell dealerships and may limit the Company’s ability to transfer ownership of a dealership without the prior approval of the manufacturer. to maintain ownership of the dealerships in compliance with manufacturer agreements could constitute a of the agreements and could result in or non-renewal of existing dealer agreements. If one of the Company’s manufacturers does not renew its dealer agreement or the agreement, the Company’s dealership would be to sell or
distribute new vehicles or perform manufacturer-authorized warranty service, which would adversely affect the Company’s automotive business.
• Changes Affecting Automobile Manufacturers Could Adversely Affect the Company’s Automotive Business.
The Company’s dealerships are dependent on the products and services offered by the brand of automobiles that its dealerships sell. The ability of the Company’s dealerships to sell and service these brands may be adversely affected by negative conditions faced by manufacturers such as negative changes to a manufacturer’s financial condition; negative publicity concerning a manufacturer or vehicle model; declines in consumer demand or brand preferences; changes in consumer preferences driven by fuel price volatility, disruptions in production and delivery, including those caused by natural disasters or labor strikes, new laws or regulations, including more stringent fuel economy and greenhouse gas emission standards; and technological innovations in ridesharing, electric vehicles and autonomous driving. The ability of the Company’s dealerships to align with manufacturers and adapt to evolving consumer demand for electric vehicles could adversely affect new and used vehicle sales volumes, parts and service revenue and results of operations.
• Changes to State Dealer Franchise Laws to Permit Manufacturers to Enter the Retail Market Directly and Technological Innovations Could Adversely Impact the Company’s Traditional Dealership Model.
Changes to state dealer franchise laws to permit the sale of new vehicles without the involvement of franchised dealers could adversely affect the Company’s dealerships. Certain manufacturers have been challenging state dealer franchise laws in many states and some have expressed interest in selling directly to customers. The Company’s dealership model could be adversely affected if new vehicle sales are allowed to be conducted on the internet without the involvement of franchised dealers.
• Changes in Economic Conditions and Vehicle Inventories Are Difficult to Predict and May Adversely Impact the Results of Operations of the Company’s Dealerships.
Sales of new and used vehicles are cyclical. Historically there have been periods of downturns characterized by weak demand due to general economic conditions, excess supplies, consumer confidence, discretionary income and credit availability. Recently, supply shortages have led to a period of higher average new and used selling prices as a result of strong consumer demand and inventory shortages related to supply chain disruptions and production delays at vehicle manufacturers. These conditions may deteriorate in the future. Changes in these conditions could materially adversely impact the results of the Company’s dealerships.
Risks Related to the Company’s Other Businesses
• If Saatchi Art is Unable to Attract and Retain Artists, Convert Visitors, Retain Customers and Successfully Drive Traffic to its Marketplaces and Events, its Business and Results of Operations Would Be Adversely Affected.
Saatchi Art’s business and results of operations depend upon attracting and retaining artists whose artwork adds value to its marketplaces and that consumers want to purchase, and upon attracting customers who convert into new and repeat purchasers. Saatchi Art must continue to ensure there is a strong value proposition for artists to join and remain in the marketplace due to the quality of the service offered and the sales commissions it can generate. If Saatchi Art is unable to do any of these functions effectively, then its business and results of operations would be adversely affected.
• Claims related to Authenticity, Ownership or Intellectual Property Rights of Artwork Sold by Saatchi Art Could Adversely Impact its Business.
Saatchi Art may face claims related to the authenticity, ownership, or intellectual property rights of artwork sold on its platform. Any such claims could result in litigation, financial liability, reputational harm, and increased operational costs.
• If Society6 is Unable to Attract and Retain Customers and Successfully Drive Traffic to its Marketplace, its Business and Results of Operations Would Be Adversely Affected.
Society6’s business and results of operation depend upon attracting and retaining customers who convert into new and repeat purchasers. Its ability to attract new customers, some of whom may already purchase similar products from competitors, depends in part on its ability to successfully drive traffic to its marketplace using social media platforms, email marketing campaigns and promotions, paid referrals, and search engines. If Society6 is unable to effectively attract and retain customers, then its business and results of operations would be adversely affected.
• Failure to Recruit and Retain Employees in the Company’s Restaurants Could Adversely Impact the Company’s Restaurant Business.
Historically, competition among restaurants for qualified management and staff has been very high. The Company’s ability to recruit and retain managers and staff to operate its restaurants is critical to a customer’s dining experience. Failure to recruit and retain employees, low levels of unemployment or high turnover levels could negatively affect the Company’s restaurant business. Tipped wage legislation is presenting new challenges to balance menu pricing, service standards, staffing levels, operating costs and public awareness as new wage laws are implemented.
• Food-borne Illness Concerns and Damage to the Company’s Reputation Could Harm the Company’s Restaurant Business.
Historically, reports of food-borne illness or food safety issues at restaurants, even if caused by food suppliers or distributors, have had negative effects, and may continue to have negative effects on restaurant sales. Because food safety issues could be experienced at the source by food suppliers or distributors, food safety could, in part, be out of the Company’s control. Even instances of food-borne illness at a location served by one of the Company’s competitors could result in negative publicity regarding the food service industry generally and could negatively impact restaurant revenue. Regardless of the source or cause, negative publicity about food-borne illness or other food safety issues could adversely impact the Company’s reputation. Similarly, publicity about litigation, violence, complaints, or government investigations could have a negative effect on the Company’s restaurant business.
• Concentration of the Company’s Restaurants in the Washington, D.C. Region Subjects the Company’s Restaurant Business to Regional Economic Conditions.
The concentration of the Company’s restaurants in the Washington, D.C. region subjects it to adverse economic conditions and trends in the region that are out of the Company’s control. For example, increases in the level of unemployment, a temporary government shutdown, reductions to the federal workforce or a decrease in tourism would decrease customers’ disposable income available for discretionary spending. These and other national, regional and local economic pressures could result in decreases in customer traffic and lower sales and profits.
Risks Related to the Company’s Stock Ownership and Operations
• As a Controlled Company, the Rights of Class B Common Stockholders Are Limited.
The Company has two classes of shares, Class A Common Stock and Class B Common Stock. Class B Common Stock has limited voting rights, including the right to elect 30% of the Company’s Board of Directors, to vote on the reservation of shares for option grants and on the acquisition of the stock or assets of other companies under certain circumstances. The descendants of Katharine Graham and trusts for the benefit of those descendants own the majority of the shares of Class A Common Stock and have the right to vote for 70% of the Board of Directors and to vote on all other matters. As a result, control of the Company has been and is expected to remain with members of the Graham family. In addition, the Company is a “controlled company” under the corporate governance rules of the New York Stock Exchange (NYSE) and as such, the Company is exempt from certain corporate governance requirements of the NYSE.
• Failure to Comply with Environmental and Health and Safety Laws Applicable to the Company’s Operations Could Negatively Impact the Company’s Businesses.
The Company’s operations are subject to extensive federal, state and local laws and regulations relating to the environment, as well as health and workplace safety, including those set forth by the Occupational Safety and Health Administration (OSHA), the Environmental Protection Agency (EPA) and state and local regulatory authorities in the U.S. as well as similar laws and regulations internationally where the Company operates. Such laws and regulations affect operations and require compliance with various environmental registrations, licenses, permits, inspections and other approvals. In the U.K., the Company is subject to new registration requirements under the U.K. Building Safety Act in 2022 with respect to its dormitories as well as compliance with existing U.K. and local legislation regarding licensing occupancy of such dormitories. The Company incurs substantial costs to comply with these regulations, and any failure to comply may expose the Company to civil, criminal and administrative fees, fines, penalties and interruptions in operations that could have a material adverse impact on the Company’s results of operations, financial position or cash flows.
Environmental laws and regulations to which the Company is subject include those governing discharges into the air and water; the operation and removal of above-ground and underground storage tanks; the use, handling, storage and disposal of hazardous substances and other materials; and the investigation and remediation of environmental contamination at facilities that are owned or operated by the Company. The Company may be subject to liability, for example, in the automotive business, because the business involves the generation, use, handling and contracting for recycling or disposal of hazardous or toxic substances or wastes, including environmentally sensitive materials such as motor oil, filters, transmission fluid, antifreeze, refrigerant, batteries, solvents, lubricants, tires and fuel. In
addition, climate change could cause increases in hurricanes, floods, wildfires, and other risks that could produce losses affecting the Company’s businesses. Although in connection with certain acquisitions the Company has obtained indemnification for certain environmental liabilities and insurance policies, such rights and policies may not be sufficient to reimburse the Company for all losses that it might incur. The Company has incurred, and will continue to incur, capital and operating expenditures and other costs to comply with such laws and regulations and changes to such regulations, including any new regulations related to climate change, could give rise to additional compliance or remedial costs.
• Failure to Successfully Integrate Acquired Businesses Could Negatively Affect the Company’s Operating Results.
Acquisitions involve various inherent risks and uncertainties, including difficulties in efficiently integrating the service offerings, accounting and other administrative systems of an acquired business; the challenges of assimilating and retaining key personnel; the consequences of diverting the attention of senior management from existing operations; the possibility that an acquired business does not meet or exceed the financial projections that supported the purchase price; and the possible failure of the due diligence process to identify significant business risks or liabilities associated with the acquired business. A failure to effectively manage growth and integrate acquired businesses could have a material adverse effect on the Company ’ s operating results.
• Changes in Business Conditions Have Caused and May in the Future Cause Goodwill and Other Intangible Assets to Become Impaired.
Goodwill generally represents the purchase price paid in excess of the fair value of net tangible and intangible assets acquired in a business combination. Goodwill is not amortized and remains on the Company’s balance sheet indefinitely unless there is an impairment or a sale of a portion of the business. Goodwill is subject to an impairment test on an annual basis and when circumstances indicate that an impairment is more likely than not. Such circumstances include an adverse change in the business climate for one of the Company’s businesses or a decision to dispose of a business or a significant portion of a business. Each of the Company’s businesses faces uncertainty in its business environment due to a variety of factors, including challenges in operating environments created by macro-economic factors, pandemics and changes in demand for products and services. In the fourth quarter of 2025, the Company recorded an intangible asset impairment charge of $10.1 million related to the CDJR franchise right indefinite-lived intangible asset as a result of underperformance at the CDJR automotive dealership from a continued in revenues. Additional in revenue could result in changes in projections for future operating results or other key assumptions, such as projected revenue, profit margin, capital expenditures or cash flows associated with fair value estimates, and could lead to additional future , which could be material. The Company may experience other circumstances that affect the value of the Company’s goodwill or intangible assets and trigger an evaluation of the amount of the recorded goodwill and intangible assets. There also exists a reasonable possibility that changes to the discounted cash-flow model used to perform the quantitative goodwill review, including a decrease in the assumed projected cash flows or long-term growth rate, or an increase in the discount rate assumption, could result in an charge. Future write-offs of goodwill or other intangible assets as a result of an in the business could materially affect the Company’s results of operations and financial condition.
• Current Tariffs and the Introduction of Additional Tariffs Could Increase Material Costs and Reduce Demand
The Company’s businesses purchase materials from suppliers in both the U.S. and other countries, including Mexico, Canada and China. Some of its businesses source products and parts from regions that have already been subject to tariffs that have impacted the cost of their products. Should new tariffs be levied on goods or materials imported from other countries, it could result in cost increases to both the Company and its customers and could impact customer demand. Widespread imposition of tariffs could materially adversely affect the Company’s results of operations.
Risks Related to Cybersecurity, Privacy, Artificial Intelligence and Intellectual Property
• System Disruptions and Security Threats to the Company’s Information Technology Infrastructure, or Those of Third Parties, Could Have a Material Adverse Effect on Its Businesses and Results of Operations.
The Company relies extensively on information technology systems, networks and services, including internet sites, data hosting and processing facilities and tools and other hardware, software and technical platforms, some of which are managed, hosted, provided and used by third parties or their vendors, to assist in conducting the Company’s business.
The Company’s systems and the third-party systems on which it relies have been subjected to, and will continue to be subject to, damage or interruption from a number of causes, including but not limited to power outages; computer
and telecommunications failures; computer viruses; industry-wide software supply chain vulnerabilities and security breaches; cyberattacks, including phishing and other forms of social engineering such as deepfakes, hacking, denial-of-service attacks, cyber extortion, including the use of ransomware and other actions or attempts to exploitvulnerabilities; and design or usage errors by our employees, contractors or third-party service providers. For example, in the fourth quarter of 2025, the Company experienced a data security incident in which an unauthorized third party accessed and acquired certain data stored on several of Kaplan’s file servers, including current and former student and other customer data at Kaplan’s U.S. Higher Education and U.K. Professional businesses. Upon discovery, the Company activated its incident response plan and took steps to respond to and investigate the , including working with external cybersecurity specialists and restricting access to involved systems. The Company also notified law enforcement. In accordance with applicable law, the Company has notified and will be notifying relevant authorities together with those individuals whose information was contained in the involved files. The did not have a material impact on Kaplan’s operations or the Company’s financial results. The techniques used by computer hackers and cyber to obtain access to data or to computer systems change frequently, continue to grow in sophistication and volume, and have not in the past and may not in the future be detected until after an has occurred. These techniques include using artificial intelligence, including generative AI to their attacks, which may increase our cybersecurity risk. Although the Company and the third-party service providers seek to maintain their respective systems effectively and to address the risk of compromise of the , security and consistent operations of these systems, such efforts have not in the past and may not in the future be . As a result, the Company and its service providers have in the past and could in the future experience , , or cessations of service in key portions of the Company’s information technology infrastructure, which could significantly its operations, including manufacturing production , and be , time-consuming and resource-intensive to remedy. Any security or access also has in the past and could in the future result in the compromise or of the Company’s proprietary information or the proprietary information of the Company’s users, customers or partners, which could result in significant legal and financial exposure and to the Company’s reputation. If an actual or perceived of the Company’s security occurs, or if the Company’s consumer-facing sites become the subject of external attacks that affect or service or availability, the market perception of the effectiveness of the Company’s security measures could be and the Company could users, customers, advertisers or partners, all of which could have a material effect on the Company’s business, financial condition and results of operations. Any security at a company providing services to the Company or the Company’s users, including third-party payment processors, could have similar effects and the Company may not be fully indemnified for the costs it may incur as a result of any such . To the extent that such require remediation, such remedial measures could require significant resources and may not be implemented before such are . As the cybersecurity landscape evolves, the Company may also find it necessary to make significant further investments to protect data and infrastructure, including continuing to evaluate control changes and investments needed to support an increased remote workforce. Any of these events could have a material effect on the Company’s businesses and results of operations. Sustained or repeated system or security that the Company’s ability to process information in a timely manner or that result in a of proprietary or personal information could have a material effect on the Company’s operations and reputation. In addition, cybersecurity , even if not material and even if dealt with promptly, could lead to legal, financial and reputational issues, such as by authorities, enforcement, lawsuits and publicity, and a collection of , though not considered material individually at the time they occur, may be deemed material later in the aggregate.
• Failure to Comply with Privacy Laws or Regulations Could Have a Material Adverse Effect on the Company’s Businesses.
Various U.S. federal, state and international laws and regulations govern the collection, use, retention, sharing and security of personal data. This area of the law is evolving, and interpretations of applicable laws and regulations differ. Legislative activity in the privacy area may result in new laws that are relevant to the Company’s operations, including restrictions on the collection, use and sharing of personal data that could limit our ability to use the data for marketing or advertising, and could result in exposure to material liability. For example, data privacy regulations adopted by the EU known as the General Data Protection Regulation (GDPR), became effective in May 2018. These regulations require certain of the Company’s operations to meet extensive requirements regarding the handling of personal data, including its use, protection and transfer. In addition, the GDPR provides the legal right for persons whose data is stored to request access to or correction or deletion of their personal data, among other rights. Failure to meet the applicable requirements in the GDPR could result in fines of up to 4% of the Company’s annual global revenues. In addition to the GDPR in Europe, new privacy laws and regulations are rapidly developing and being implemented elsewhere around the globe, including amendments to the scope, penalties and other provisions of existing data protection laws. to comply with these international data protection laws and regulations could have a impact on the Company’s reputation and subject the Company to significant , or other liabilities or restrict the Company’s ability to continue operating its existing business processes, all of which may increase the cost of operations, reduce customer growth, or otherwise the Company’s business.
The California Consumer Privacy Act of 2018 (CCPA), which became effective on January 1, 2020, provided a new private right of action for data breaches and requires companies that process personal information pertaining to California residents to make disclosures to consumers about their data collection, use and sharing practices and allows consumers to opt out of certain data sharing with third parties. The enforcement of the CCPA by the California Attorney General commenced on July 1, 2020. In November 2020, the California Privacy Rights Act (CPRA) was approved by California voters, and went into effect on January 1, 2023. The CPRA included new requirements that were not in the CCPA. In July 2025, the California Privacy Protection Agency (CPPA) approved updated CCPA regulations and that introduced new requirements, including requirements related to automated decision-making technology, risk assessments, and cybersecurity audits, with effectiveness of certain requirements beginning in 2026. In addition to California, numerous other states have enacted similar laws that are currently in effect, including laws in Rhode Island, Indiana and Kentucky that went into effect on January 1, 2026. Various U.S. states have enacted laws governing the personal data of minors and health-related personal data that are in addition to Federal laws. There are also comprehensive privacy bills that have been introduced at the U.S. federal level. In addition to the comprehensive privacy laws and bills, there are now laws and regulations focused on the development, use, and provision of AI technologies and other digital products and services, which could result in monetary or other regulatory actions, and others continue to be proposed. States and local jurisdictions have passed new targeted AI legislation, such as the Colorado AI Act and NYC Local Law 144, Rules for AI in hiring. Internationally, the EU AI Act came into on August 1, 2024, and will generally become fully applicable after a two-year transitional period (although certain obligations have already taken effect). There have also been actions taken at the U.S. federal level with respect to regulation of AI technologies, such as the executive order issued by the U.S. President on December 11, 2025, to establish a national policy framework for AI intended to preempt state AI laws and regulations. The passage of any additional laws, or modification of existing laws could result in further uncertainty and cause the Company to incur additional costs and expenses in order to comply. Compliance with the GDPR, the CCPA, the CPRA and other applicable international and U.S. privacy laws can be and time-consuming. If the Company to properly respond to security of its or its third-party’s information technology systems or to properly respond to an individual’s requests under these laws, the Company could experience to its reputation, publicity, of consumer confidence, reduced sales and profits, in executing the Company’s growth initiatives and regulatory and legal risk, including or civil liabilities.
Claims of failure to comply with the Company’s privacy policies or applicable laws or regulations could form the basis of governmental or private party actions against the Company and could result in significant penalties. Additionally, evolving concerns regarding data privacy may cause the Company’s customers and potential customers to resist providing the data necessary to allow the Company to deliver its solutions effectively. Even the perception that personal information is not satisfactorily protected or does not meet regulatory requirements could inhibit sales and any failure to comply with such laws and regulations could lead to significant fines, penalties or other liabilities. Such claims and actions could cause damage to the Company’s reputation and could have an adverse effect on the Company’s businesses.
• Uncertainty in the Development, Deployment, and Use of AI in the Company’s Products and Services, as Well as its Businesses More Broadly, Could Adversely Affect the Company’s Business and Reputation.
The Company is building and expects to use, and expects its third parties to use, systems and tools that incorporate AI-based technologies, including generative AI, for its customers and workforce. The development, adoption and use of generative AI technology is still maturing, and ineffective or inadequate AI or generative AI development or deployment practices by the Company or third parties could result in unintended consequences. For example, AI algorithms that the Company uses may be flawed or may be (or perceived to be) based on datasets that are biased or insufficient. In addition there is uncertainty around the validity and enforceability of intellectual property rights related to the Company’s development, deployment and use of AI. Compliance with new or changing laws, regulations or industry standards relating to AI may impose significant operational costs and may limit the Company’s ability to develop, deploy or use AI technologies. Failure to appropriately respond to this evolving landscape may result in legal liability, regulatory action or brand and reputational harm.
• Potential Liability for Intellectual Property Infringement Could Adversely Affect the Company’s Businesses.
The Company periodically receives claims from third parties alleging that the Company’s businesses infringe on the intellectual property rights of others. It is likely that the Company will continue to be subject to similar claims, particularly as they relate to its media businesses. Other parts of the Company’s business could also be subject to such claims. Addressing intellectual property claims is a time-consuming and expensive endeavor, regardless of the merits of the claims. In order to resolve such claims, the Company may have to change its method of doing business, enter into licensing agreements with copyright holders, or incur substantial monetary liability. It is also possible that one of the Company’s businesses could be enjoined from using the intellectual property at issue, causing it to significantly alter its operations. Although the Company cannot predict the impact at this time, if any
such claim is successful, the outcome would likely affect the business utilizing the intellectual property at issue and could have a material adverse effect on that business’s operating results or prospects.
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
delayed+10
restated+5
underperformance+3
shut+3
decline+2
Positive rising
improved+4
effective+1
greater+1
positive+1
satisfaction+1
MD&A (Item 7)
46,523 words
Management’s Discussion and Analysis of Results of Operations and Financial Condition (Unaudited)
Financial Statements:
Report of Independent Registered Public Accounting Firm (PCAOB ID 238 )
Consolidated Statements of Operations for the Three Years Ended December 31, 2025
Consolidated Statements of Comprehensive Income (Loss) for the Three Years Ended December 31, 2025
Consolidated Balance Sheets at December 31, 2025 and 2024
Consolidated Statements of Cash Flows for the Three Years Ended December 31, 2025
Consolidated Statements of Changes in Common Stockholders’ Equity for the Three Years Ended December 31, 2025
Notes to Consolidated Financial Statements
Organization and Nature of Operations
Summary of Significant Accounting Policies
Acquisitions and Dispositions of Businesses
Investments
Accounts Receivable, Accounts Payable, Vehicle Floor Plan Payable and Accrued Liabilities
All schedules have been omitted either because they are not applicable or because the required information is included in the Consolidated Financial Statements or the notes thereto referred to above.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
This analysis should be read in conjunction with the Consolidated Financial Statements and the notes thereto. Refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Graham Holdings Company’s 2024 Annual Report on Form 10-K for management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023.
OVERVIEW
Graham Holdings Company (the Company) is a diversified holding company whose operations include educational services, television broadcasting, healthcare, manufacturing and automotive dealerships. The Company has five business divisions, seven reportable segments and a group of companies that make up Other Businesses. The Company’s business units are diverse and subject to different trends and risks.
Education is the largest operating division of the Company, making up 35% of the Company’s consolidated revenues in 2025 and having the largest operating income in 2025. Through its subsidiary Kaplan, Inc., the Company provides extensive worldwide education services for individuals, schools and businesses. The Company has devoted significant resources and attention to this division for many years, given its geographic and product diversity, the investment opportunities and growth prospects during this time, and challenges related to government regulation. Kaplan is organized into the following three operating segments: Kaplan International (KI), Kaplan Higher Education (KHE) and Supplemental Education.
KI reported revenue and operating income growth for 2025 due largely to increases at UK Professional and Singapore, partially offset by declines at Pathways and Languages. KHE revenue and operating income improved due to an increase in the fees from Purdue University Global (Purdue Global). Supplemental Education revenues and operating results improved in 2025 due to growth in most of the program offerings.
Television broadcasting was the Company’s second largest business in 2025 from an operating income standpoint. The Company’s television broadcasting division reported lower revenues and operating income in 2025, due largely to a significant decrease in political advertising revenue from the 2024 election cycle and declines in local and digital advertising revenue. Retransmission revenues, net of network fee expense, declined in 2025 with this trend expected to continue in the future due largely to adverse subscriber trends from cord cutting.
The healthcare division has grown substantially over the last few years and provided meaningful operating cash flow from internal growth and acquisitions. Since 2019, the healthcare division has expanded from its home health and hospice operations into new lines of business. The largest of these is CSI Pharmacy Holding Company, LLC (CSI), which provides nursing care and prescription services for patients receiving in-home infusion treatments. CSI reported significant revenue growth and substantially higher operating results in 2025 from an expansion of infusion treatment offerings and patient service areas in 2025. Healthcare’s home health and hospice revenue and operating results have also grown substantially in recent years, with investments to streamline operations and enhance patient care, along with a reduction in pension expense in 2025.
The Company’s manufacturing division has provided meaningful operating cash flow over the last few years, with Dekko experiencing improved revenues and operating results in 2025, and declines at Hoover in recent years. In July 2025, Hoover acquired Arconic Architectural Products, LLC, which manufactures aluminum cladding products and operates within the broader non-residential materials space. Automotive revenues and operating results declined in 2025 due largely to lower new and used vehicle sales and a decline in sales of finance and insurance products offerings, partially offset by the Honda of Woodbridge acquisition in October 2025 as well as sales growth for services and parts.
The Company’s other businesses include several investment stage businesses as well as investments into new lines of business over the last few years. In total, there are ten operating business units that make up this group in three categories: specialty, retail and media. The largest of these businesses from a revenue standpoint is Clyde’s Restaurant Group (CRG) and Framebridge, a custom framing service company. In 2025, CRG and Foreign Policy each reported positive operating income, Code3 reported break-even results, and the other businesses each reported operating losses, which were significant at Framebridge.
The Company generates a significant amount of cash from its businesses that is used to support its operations, pay down debt and fund capital expenditures, share repurchases, dividends, acquisitions and other investments.
RESULTS OF OPERATIONS
Net income attributable to common shares was $292.3 million ($66.47 per share) for the year ended December 31, 2025, compared to $724.6 million ($163.40 per share) for the year ended December 31, 2024.
Items included in the Company’s net income for 2025 are listed below:
• $12.3 million in intangible and other long-lived asset impairment cha rges (aft er-tax impact of $9.5 million, or $2.16 per share);
• $9.2 million in non-operating expenses related to Separation Incentive Programs (SIPs) at other businesses, the education, television broadcasting and manufacturing divisions and the corporate office (after-tax impact of $6.8 million , or $1.55 per share);
• $54.5 million in interest expense to adjust the fair value of the mandatorily redeemable noncontrolling interest (after-tax impact of $51.2 million , or $11.63 per share);
• $200.2 million in net gains on marketable equity securities (after-tax impact of $149.0 million , or $33.90 per share);
• $16.7 million in net losses of affiliates whose operations are not managed by the Company (after-tax impact of $12.4 million , or $2.83 per share);
• net non-operating gains of $8.9 million fro m earnings, sales and impairments of equity and cost method investments (after-tax impact of $6.6 million, or $1.50 per share); and
• a $9.9 million deferred tax expense arising from a change in the estimated deferred state income tax rate related to the Company’s pension and other postretirement plans ($2.26 per share).
Items included in the Company’s net income for 2024 are listed below:
• $49.8 million in goodwill and other long-lived asset impairment charges (after-tax impact of $39.4 million , or $8.89 per share);
• a $653.4 million fourth quarter settlement gain related to a retiree annuity pension purchase (after-tax impact of $486.1 million, or $109.62 per share);
• $21.0 million in non-operating expenses related to a Voluntary Retirement Incentive Program (VRIP) at the television broadcasting division and the corporate office, and SIPs at Kaplan, manufacturing and other businesses (after-tax impact of $15.6 million , or $3.52 per share);
• $119.3 million in interest expense to adjust the fair value of the mandatorily redeemable noncontrolling interest (after-tax impact of $113.7 million , or $25.65 per share);
• $181.3 million in net gains on marketable equity securities (after-tax impact of $134.9 million , or $30.41 per share);
• $3.5 million in net losses of affiliates whose operations are not managed by the Company (after-tax impact of $2.6 million , or $0.59 per share);
• a non-operating gain of $7.2 million on the sale of certain businesses and websites (after-tax impact of $5.3 million , or $1.19 per share); and
• a net non-operating loss of $16.7 million from the impairments and valuation adjustments of equity and cost method investments (after-tax impact of $12.4 million , or $2.80 per share).
Revenue for 2025 was $4,911.6 million, up 3% from $4,790.9 million in 2024. Revenues increased at education, healthcare, manufacturing and other businesses, partially offset by declines at television broadcasting and automotive. Operating costs and expenses for the year increased to $4,676.6 million in 2025, from $4,575.4 million in 2024. Expenses in 2025 increased at healthcare and manufacturing, partially offset by a decrease at television broadcasting, automotive, other businesses and education. The Company reported operating income for 2025 of $234.9 million, compared to $215.5 million in 2024. Excluding goodwill and other long-lived asset impairment charges, operating results were down in 2025, due to declines at television broadcasting and automotive, partially offset by increases at education, healthcare, manufacturing and other businesses.
Division Results
Education
Education division revenue in 2025 totaled $1,744.3 million, up 3% from $1,691.8 million in 2024. Kaplan reported operating income of $159.9 million for 2025, an increase from $100.8 million in 2024. Excluding long-lived asset impairment charges, operating results improved significantly in 2025.
A summary of Kaplan’s operating results is as follows:
Year Ended December 31
(in thousands)
% Change
Revenue
Kaplan international
Higher education
Supplemental education
Kaplan corporate and other
Intersegment elimination
Operating Income (Loss)
Kaplan international
Higher education
Supplemental education
Kaplan corporate and other
Amortization of intangible assets
Impairment of long-lived assets
Intersegment elimination
KI includes postsecondary education, professional training and language training businesses largely outside the United States. KI revenue increased slightly in 2025 (2% decrease on a constant currency basis) . The increase in 2025 is due largely to growth at UK Professional and Singapore, offset by lower student enrollments in US Pathways, Languages and UK Pathways . KI reported operating income of $113.4 million in 2025, compared to $101.7 million in 2024. The increase is due largely to improved results at Australia, Singapore and UK Professional, partially offset by declines at Languages, US Pathways and Mander Portman Woodward (MPW). US Pathways revenues and operating results were down significantly in 2025, due to changes in U.S. visa policies and practices for international students recruited by Kaplan to study in the U.S.
KHE includes the results of Kaplan as a service provider to higher education institutions. KHE revenue increased 8% in 2025 due to an increase in fees from Purdue Global and growth in other higher education programs. Average e nrollments at Pur due Global, the largest institutional client, were up 4% for 2025 compared to 2024. In 2025, Kaplan recorded the full fee with Purdue Global, whereas in 2024, Kaplan recorded a portion of the fee. Th e Company will continue to assess the fee it records from Purdue Global on a quarterly basis to make a determination as to whether to record all or part of the fee in the future and whether to make adjustments to fee amounts recognized in earlier periods. During 2025 and 2024 , Kaplan recorded $70.0 million and $54.5 million, respectively, in fees from Purdue Global in its KHE operating results. KHE results improved in 2025 due to an increase in the Purdue Global fee recorded.
Supplemental Education includes Kaplan’s standardized test preparation programs and domestic professional and other continuing education businesses. Most of the program offerings in Supplemental Education experienced growth in 2025 leading to a 9% revenue increase. Operating results improved in 2025 due largely to revenue growth.
In the second and third quarters of 2025, the Company offered SIPs to certain employees at KHE and Supplemental Education, $2.0 million in related non-operating pension expense was recorded. In 2024, Kaplan offered SIPs to certain employees, primarily at Supplemental Education; $2.8 million in related non-operating pension expense was recorded.
Kaplan corporate and other represents unallocated expenses of Kaplan, Inc.’s corporate office, other minor businesses and certain shared activities.
In the fourth quarter of 2024, Kaplan recorded an intangible asset impairment charge of $22.9 million related to MPW, which is part of KI.
Television Broadcasting
A summary of television broadcasting’s operating results is as follows:
Year Ended December 31
(in thousands)
% Change
Revenue
Operating Income
Graham Media Group, Inc. (GMG) owns seven television stations located in Houston, TX; Detroit, MI; Orlando, FL; San Antonio, TX; Jacksonville, FL; and Roanoke, VA, as well as SocialNewsDesk, a provider of social media management tools designed to connect newsrooms with their users. Revenue at the television broadcasting division was down 21% to $425.1 million in 2025, from $535.7 million in 2024. The revenue decline is due to a $87.9 million decrease in political advertising revenue, a $10.3 million decrease in retransmission revenues and declines in local and digital advertising revenue. Operating income for 2025 was down 44% to $112.3 million, from $201.2 million in 2024, due to lower revenues, partially offset by lower overall costs . Whi le per subscriber rates from cable, satellite and OTT providers have grown, overall cable and satellite subscribers are down due to cord cutting, resulting in retransmission revenue net of network fees in 2025 to decline compared with 2024, and this trend is expected t o continue in the future. Operating margin at the television broadcasting division was 26% in 2025 and 38% in 2024.
In the second and third quarters of 2025, the Company offered SIPs to certain employees at the television broadcasting division, $0.1 million in related non-operating pension expense was recorded. In the second quarter of 2024, GMG offered a VRIP to certain employees; $14.3 million in related non-operating pension expense was recorded.
Healthcare
Healthcare division revenue in 2025 totaled $815.0 million, up 33% from $611.1 million in 2024. Healthcare reported operating income of $96.0 million for 2025, an increase from $50.9 million in 2024 .
A summary of the healthcare division’s operating results is as follows:
Year Ended December 31
(in thousands)
% Change
Revenue
CSI
Other Healthcare
Operating Income
CSI
Other Healthcare
The healthcare group provides nursing care and prescription services for patients receiving in-home infusion treatments through its 87.5% interest in CSI. In August 2025, CSI purchased Pine Drug Holdings, LLC and was issued a California pharmacy license, with dispensing operations commencing late in the fourth quarter of 2025. CSI revenue increased 55% in 2025 and operating results were up substantially from an expansion of infusion treatment offerings and patient service areas.
The healthcare group also provides home health and hospice services in seven states, and other healthcare services through Clarus (provides call management SaaS-based solution for physician groups and hospitals), Impact Medical (an allergy, asthma and immunology physician practice), Skin Clique (a concierge provider of aesthetics products and services) and Surpass Behavioral Health (provides therapy for autism patients). Revenue increased in other healthcare businesses by 12% in 2025 from growth in home health and hospice services and the other healthcare businesses. Operating results improved substantially at home health and hospice, and improved at all the other healthcare businesses; operating results also benefited from a reduction in pension expense.
In January 2022, Healthcare implemented a pension credit retention program offering a pension credit up to $50,000 per employee, cliff vested after three years of continuous employment for certain existing employees and new employees. Effective April 1, 2024, this program is no longer being offered to new employees.
In the third quarter of 2025, home health and hospice recorded $1.0 million of lease impairment charges.
The Company also holds interests in four home health and hospice joint ventures managed by Healthcare, whose results are included in equity in earnings of affiliates in the Company’s Consolidated Statements of Operations. In 2025 and 2024, the Company recorded equity in earnings of $13.6 million and $ 13.7 million, respectively, from these joint ventures.
Manufacturing
A summary of manufacturing’s operating results is as follows:
Year Ended December 31
(in thousands)
% Change
Revenue
Operating Income
Manufacturing includes four businesses: Hoover, a supplier of pressure impregnated kiln-dried lumber and plywood products for fire retardant and preservative applications; Dekko, a manufacturer of electrical workspace solutions, architectural lighting and electrical components and assemblies; Joyce, a manufacturer of screw jacks and other linear motion systems; and Forney, a global supplier of products and systems that control and monitor combustion processes in electric utility and industrial applications. On July 15, 2025, Hoover acquired Arconic Architectural Products, LLC, a wholly-owned subsidiary of Arconic Corporation (operating as Hoover Architectural Solutions), which manufactures aluminum cladding products and operates within the broader non-residential materials space from its facility in Eastman, GA. A significant portion of the purchase price was funded by the Company’s assumption of $107.5 million in net pension obligations.
Manufacturing revenues increased 10% in 2025 due to increased revenues at Hoover, Dekko and Joyce, partially offset by lower revenues at Forney. The revenue increase at Hoover is due to the Arconic acquisition, partially offset by a decline in overall product demand. Revenues improved at Dekko due largely to sales growth for commercial office power and data products, and medical equipment assembly products. Overall, Hoover results included modest wood gains on inventory sales in 2025 and 2024. Manufacturing operating results improved slightly in 2025 due to substantially improved results at Dekko, along with a modest improvement at Joyce and Forney, partially offset by significant declines at Hoover. Hoover results in 2025 included significant transaction, transition and intangible asset amortization costs related to the Arconic transaction, along with a substantial decline in Hoover’s core fire-retardant wood product business from the continued sluggish multi-family housing market. Excluding costs related to the Arconic transaction, Hoover Architectural Solutions had positive operating results in the second half of 2025.
In the third quarter of 2025, the Company offered a SIP to certain employees at Joyce; $0.1 million in related non-operating pension expense was recorded. In the third and fourth quarters of 2024, Dekko offered SIPs to certain employees; $0.2 million in related non-operating pension expense was recorded.
Automotive
A summary of automotive’s operating results is as follows:
Year Ended December 31
(in thousands)
% Change
Revenue
Operating Income
Automotive includes eight automotive dealerships in the Washington, D.C. metropolitan area and Richmond, VA: Ourisman Lexus of Rockville, Ourisman Honda of Tysons Corner, Ourisman Ford of Manassas, Toyota of Woodbridge, Ourisman Chrysler-Dodge-Jeep-Ram (CDJR) of Woodbridge, Ourisman Toyota of Richmond, and Ourisman Kia of Bethesda. In addition, on October 21, 2025, the Company acquired a Honda automotive dealership in Woodbridge, VA, including the real property for the dealership operations. Christopher J. Ourisman, a member of the Ourisman Automotive Group family of dealerships, and his team of industry professionals operates and manages the dealerships; the Company holds a 90% stake.
The Company recently decided to cease operations of the Ourisman Jeep of Bethesda dealership, which was closed in early September 2025. As a result, the Company recorded a $0.6 million intangible asset impairment charge on the related franchise agreement in the third quarter of 2025. In addition, as a result of underperformance at the CDJR automotive dealership from a continued decline in revenues, the Company recorded a $10.1 million intangible asset impairment charge in the fourth quarter of 2025.
Revenues for 2025 decreased 6% due to the closure of the Ourisman Jeep of Bethesda dealership in September 2025, and declines in new and used vehicle sales and sales of finance and insurance products offerings. The decline was partially offset by the Honda of Woodbridge acquisition as well as sales growth for services and parts. Operating results for 2025 declined due to lower overall sales and gross margins on new and used vehicles and a decline in finance and insurance product sales, partially offset by higher overall gross profit on services and parts.
Other Businesses
In the first half of 2025, the Company completed the sale of various websites and related businesses of World of Good Brands (WGB). All remaining WGB operations were substantially shut down by the end of the third quarter of 2025. WGB recorded various asset write-offs and incurred other costs in the second and third quarters of 2025 related to these actions.
A summary of revenue by category for other businesses:
Year Ended December 31
(in thousands)
% Change
Operating Revenues
Specialty (1)
Retail (2)
Media (3)
Includes Clyde’s Restaurant Group, Decile and Supporting Cast
Includes Framebridge, Saatchi Art and Society6
Includes Slate, Foreign Policy, Code3, WGB and City Cast
Overall, revenue from other busine sses increased slightly in 2025. Specialty revenue increased due to revenue growth at CRG and Supporting Cast. Retail revenue increased due to revenue growth at Framebridge and Saatchi Art, partially offset by lower revenue at Society6. Media revenue declined due to lower revenue at WGB, Slate, and Code3, partially offset by revenue growth at Foreign Policy and City Cast.
Overall, operating results at other businesses improved in 2025 due largely to $26.3 million in goodwill and intangible asset impairment charges at WGB in 2024. Excluding these impairment charges, operating losses in 2025 were modestly lower than the prior year.
Clyde’s Restaurant Group
CRG owns and operates 14 restaurants and entertainment venues in the Washington, D.C. metropolitan area, including Old Ebbitt Grill and The Hamilton. In July 2024, CRG opened Rye Street Tavern, a new restaurant in Baltimore, MD. In November 2024, CRG opened Cordelia Fishbar, a new restaurant in Washington, D.C. Revenue increased in 2025 due to the new restaurant openings and modest price increases, partially offset by softer demand and lower guest traffic at the D.C. restaurants in the second half of 2025. CRG reported an operating profit in 2025 and 2024, with operating results improved in 2025; pre-opening expenses incurred for new restaurants were lower in 2025.
CRG plans to open a new restaurant in Reston, VA in the second quarter of 2026, as well as a Clyde’s at Dulles International Airport under a licensing agreement later in 2026.
Framebridge
Framebridge is a custom framing service company, headquartered in the Washington, D.C. area, with 44 retail locations an d four manufacturing facilities in Kentucky, Virginia and Nevada (opened in the third quarter of 2025). Framebridge opened 13 new stores in 2025, including six new stores in California, and continues to actively explore opportunities for further store expansion. Revenues grew in 2025 due to an increase in retail revenue from same-store sales growth and operating additional retail stores compared to 2024, as well as higher online revenues, particularly during the holiday season . F ramebridge is an investment stage business and reported significant operating losses in 2025 and 2024, and operating losses at Framebridge in 2025 were higher than in 2024. Framebridge operating results include ongoing expansion investments from new retail store openings and the new manufacturing facility in Nevada.
In the first and second quarters of 2024, Framebridge offered a SIP; $1.4 million in related non-operating pension expense was recorded.
Other
Other businesses also include Code3, a performance marketing agency focused on driving performance for brands through three core elements of digital success: media, creative and commerce ; Slate and Foreign Policy, which publish online and print magazines and websites; Saatchi Art and Society6, which offer art and designs of various consumer products; and three investment stage businesses, Decile, City Cast and Supporting Cast . Foreign Policy, Supporting Cast, City Cast, and Saatchi Art reported revenue growth in 2025 , while WGB, Society6, Slate and Code3 reported revenue declines. Losses from Society6, WGB, City Cast, Saatchi Art, Decile, Slate and Supporting Cast in 2025 adversely affected operating results, while Foreign Policy reported an operating profit and Code3
reported break-even results. In the second quarter of 2024, the Company recorded $26.3 million in goodwill and intangible asset impairment charges at WGB. Excluding the impairment charge, operating results in 2025 improved at Society6, Decile, Code3, Foreign Policy, Supporting Cast and Saatchi Art, with declines at Slate and increased losses at City Cast.
In 2025, the Company offered SIPs to certain employees at Code 3, Saatchi Art, Society6, WGB and Decile; $7.0 million in related non-operating pension expense was recorded. In 2024, the Company offered SIPs to certain employees at Code3, Decile, Slate, Society6, Saatchi Art and WGB to redu ce the number of employees; $1.8 million in related non-operating pension expense was recorded.
Corporate Office
Corporate office includes the expenses of the Company’s corporate office and certain continuing obligations related to prior business disposition s. Corporate office expenses were up in 2025 due to increased incentive compensation and employee healthcare costs, higher professional fees incurred related to transactions, and increased information technology costs.
Equity in Earnings (Losses) of Affiliates
At December 31, 2025, the Company held an approximate 25% interest in Intersection Holdings, LLC (Intersection), a company that provides digital marketing and advertising services and products for cities, transit systems, airports, and other public and private spaces; and a 41.4% interest in Realm on a fully diluted basis. The Company also holds interests in several other affiliates, including a number of home health and hospice joint ventures managed by GHG and a joint venture managed by Kaplan. Overall, the Company recorded equity in earnings of affiliates of $16.4 million for 2025, compared to losses of $3.3 million for 2024. These amounts include $16.7 million and $3.5 million in net losses for 2025 and 2024, respectively, from affiliates whose operations are not managed by the Company. The 2025 amount also includes a gain of $18.6 million in equity earnings related to the Company’s investment in Intersection. The 2024 amount also includes a $14.4 million impairmentloss on the Company’s investment in N2K Networks.
Net Interest Expense and Related Balances
On November 24, 2025, the Company issued $500 million of 5.625% unsecured eight-year fixed-rate notes due December 1, 2033. Interest is paid semi-annually on June 1 and December 1. Also on November 24, 2025, the Company used the net proceeds from the sale of the notes, together with the borrowings under the revolving credit agreement, to (i) redeem the $400 million of 5.75% notes due June 1, 2026, (ii) refinance outstanding revolving loans under the existing revolving credit facility, and (iii) repay all amounts outstanding under the Company's existing $150 million term loan. On October 21, 2025, the automotive subsidiary borrowed $38.7 million under the delayed draw term loan to finance the acquisition of a Honda automotive dealership, including the real property for the dealership operations.
The Company incurred net interest expense of $110.5 million in 2025, compared to $176.3 million in 2024. The Company recorded net interest expense of $54.5 million and $119.3 million in 2025 and 2024, respectively, to adjust the fair value of the mandatorily redeemable noncontrolling interest at GHG. The significant adjustments recorded in 2025 and 2024 are largely related to a substantial increase in the estimated fair value of CSI. On February 25, 2025, the Company and a group of minority shareholders entered into an agreement to settle a significant portion of the mandatorily redeemable noncontrolling interest for a total of $205 million, which consisted of approximately $186.25 million in cash and $18.75 million in Graham Holdings Company Class B common stock.
Excluding these adjustments, the net interest expense was down slightly in 2025 compared to 2024.
At December 31, 2025, the Company had $880.8 million in borrowings outstanding at an average interest rate of 5.7%, and cash, marketable equity securities and other investments of $1,400.4 million. At December 31, 2025, the Company had $222.5 million outstanding on its $400 million revolving credit facility. At December 31, 2024, the Company had $748.2 million in borrowings outstanding at an average interest rate of 6.0%, and cash, marketable equity securities and other investments of $1,156.6 million.
Non-Operating Pension and Postretirement Benefit Income, Net
The Company recorded net non-operating pension and postretirement benefit income of $127.5 million in 2025, compared to $794.9 million in 2024.
In the third quarter of 2025, the Company recorded $2.5 million in expenses related to non-operating SIPs at Kaplan, the television broadcasting division, manufacturing, the corporate office and other businesses. In the second quarter of 2025, the Company recorded $6.0 million in expenses related to non-operating SIPs at the education and television broadcasting divisions and other businesses . In t he first quarter of 2025, the Company
recorded $0.6 million in expenses related to non-operating SIPs at other businesses. The SIPs were funded by the assets of the Company’s pension plan.
In the fourth quarter of 2024, the Company recorded a pre-tax, noncash settlement gain of $653.4 million in connection with the purchase of an irrevocable group annuity contract from an insurance company.
Also in the fourth quarter of 2024, the Company recorded $0.5 million in expenses related to non-operating SIPs at Kaplan, manufacturing and other businesses. In the third quarter of 2024, the Company recorded $3.7 million in expenses related to non-operating SIPs at Kaplan, manufacturing and other businesses. In the second quarter of 2024, the Company recorded $14.8 million in expenses related to a VRIP at the television broadcasting division and the corporate office and $1.6 million in expenses related to non-operating SIPs at other businesses. In t he first quarter of 2024, the Company recorded $0.4 million in expenses related to a non-operating SIP at other businesses. The SIPs and VRIP were funded by the assets of the Company’s pension plan.
Gain on Marketable Equity Securities, Net
The Company recognized $200.2 million in net gains on marketable equity securities in 2025 compared to $181.3 million in 2024.
Other Non-Operating (Expense) Income
The Company recorded total other non-operating expense, net, of $18.9 million in 2025, compared to income of $12.5 million in 2024. The 2025 amounts included $14.7 million in impairments on cost method investments and $10.1 million in foreign currency losses, partially offset by $4.7 million in gains on sales of cost method investments and other items. The 2024 amounts included gains of $7.2 million on the sales of certain businesses and websites; $5.4 million in foreign currency gains; $0.9 million in gains related to sale of businesses and contingent consideration, and other items; partially offset by $1.5 million in net fair value decreases on cost method investments and $0.7 million in impairments on cost method investments.
Provision for Income Taxes
The Company’s effective tax rates for 2025 and 2024 were 32.6% and 28.5%, respectively. The Company’s effective tax rate in 2025 and 2024 was unfavorably impacted by permanent differences related to the interest expense recorded to adjust the fair value of the mandatorily redeemable noncontrolling interest at the healthcare division and the goodwill and intangible asset impairment charges. In addition, the 2025 effective tax rate was unfavorably impacted by a $9.9 million deferred tax adjustment arising from a change in the estimated deferred state income tax rate attributable to the apportionment formula used in the calculation of deferred taxes related to the Company’s pension and other postretirement plans. Excluding the impact of these items, the overall income tax rates for 2025 and 2024 were 27.6% and 25.8%, respectively.
Earnings Per Share
The calculation of diluted earnings per share for the 2025 was based on 4,372,606 weighted average shares outstanding, compared to 4,404,807 for 2024. At December 31, 2025, there were 4,360,943 sh ares outstanding.
FINANCIAL CONDITION: LIQUIDITY AND CAPITAL RESOURCES
The Company considers the following when assessing its liquidity and capital resources:
As of December 31
(In thousands)
Cash and cash equivalents
Restricted cash
Investments in marketable equity securities and other investments
Total debt
Cash generated by operations is the Company’s primary source of liquidity. The Company maintains investments in a portfolio of marketable equity securities, which is considered when assessing the Company’s sources of liquidity. An additional source of liquidity includes the undrawn portion of the Company’s $400 million revolving credit facility, amounting to $177.5 million at December 31, 2025.
During 2025, the Company’s cash and cash equivalents increased by $6.1 million, due to cash generated from operations and net borrowings from new debt, which was partially offset by the settlement of a significant portion of the mandatorily redeemable noncontrolling interest, capital expenditures, business acquisitions, purchases of marketable equity securities, investments in equity affiliates, dividend payments, and net repayments of the vehicle floor plan payable. In 2025, the Company’s borrowings increased by $132.6 million, primarily due to the issuance of
$500 million senior unsecured eight-year fixed-rate notes, additional borrowings under the revolving credit facility, and new term loans at the automotive subsidiary, offset by repayment of the outstanding $400 million unsecured senior fixed-rate notes and the term loan.
As of December 31, 2025 and 2024, the Company had money market investments of $5.3 million and $3.9 million, respectively, that were included in cash and cash equivalents. At December 31, 2025, the Company held approximately $191 million in cash and cash equivalents in businesses domiciled outside the U.S., of which approximately $6 million is not available for immediate use in operations or for distribution. Additionally, Kaplan’s business operations outside the U.S. retain cash balances to support ongoing working capital requirements, capital expenditures, and regulatory requirements. As a result, the Company considers a significant portion of the cash and cash equivalents balance held outside the U.S. as not readily available for use in U.S. operations.
At December 31, 2025, the fair value of the Company’s investments in marketable equity securities was $1,081.9 million, which includes investments in the common stock of five publicly traded companies. The Company purchased $29.8 million of marketable equity securities during 2025. There were no sales of marketable equity securities during 2025. At December 31, 2025, the net unrealized gain related to the Company’s investments totaled $825.0 million.
The Company had working capital of $1,042.5 million and $898.8 million at December 31, 2025 and 2024, 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.
At December 31, 2025 and 2024, the Company had borrowings outstanding of $880.8 million and $748.2 million, respectively. The Company’s borrowings at December 31, 2025 were mostly from $500.0 million of 5.625% unsecured notes due December 1, 2033, $222.5 million in outstanding borrowings under the Company’s revolving credit facility, and real estate and capital term loans of $155.9 million at the automotive subsidiary. The Company’s borrowings at December 31, 2024 were mostly from $400.0 million of 5.75% unsecured notes due June 1, 2026, $62.8 million in outstanding borrowings under the Company’s revolving credit facility, a term loan of $140.1 million, and real estate and capital term loans of $127.6 million at the automotive subsidiary.
On November 24, 2025, the Company issued $500 million of senior unsecured fixed-rate notes due December 1, 2033 (the Notes). The Notes are guaranteed, jointly and severally, on a senior unsecured basis, by certain of the Company's existing and future domestic subsidiaries, as described in the terms of the indenture, dated as of November 24, 2025 (the Indenture). The Notes have a coupon rate of 5.625% per annum, payable semi-annually on June 1 and December 1 of each year, beginning on June 1, 2026. The Company may redeem the Notes in whole or in part at any time at the respective redemption prices described in the Indenture.
In combination with the issuance of the Notes, the Company amended and restated the Second Amended and Restated Five Year Credit Agreement, dated as of May 3, 2022, to, among other things, (i) increase the Company’s borrowing capacity by replacing the existing revolving commitments with a new revolving credit facility in the aggregate principal amount of $400 million , (ii) extend the maturity of the facility to November 24, 2030, and (iii) increase the letter of credit sublimit to $40 million.
The Company used the net proceeds from the sale of the Notes, together with borrowings under the new revolving credit facility, to (i) redeem the $400 million of 5.75% unsecured notes due June 1, 2026, (ii) refinance outstanding revolving loans under the existing revolving credit facility, and (iii) repay all amounts outstanding under the Company's existing $150 million term loan.
On September 26, 2023, the Company’s automotive subsidiary entered into a credit agreement with Truist Bank that includes a delayed draw term loan under which the proceeds may be used to (i) finance the acquisition of automobile dealerships (delayed draw capital loan), and (ii) finance the acquisition of real estate (delayed draw real estate loan). The delayed draw term loan bears interest at variable rates based on Secured Overnight Financing Rate (SOFR) plus an applicable margin based on the type of delayed draw term loan requested. On September 24, 2025, the Company executed an amendment to extend the delayed draw term loan availability to November 10, 2025. On October 21, 2025, the automotive subsidiary borrowed $38.7 million under the delayed draw term loan to finance the acquisition of a Honda automotive dealership, including the real property for the dealership operations. The real estate term loan is payable in monthly installments of $0.4 million and bears interest at variable rates based on SOFR plus 1.75% per annum, and the capital term loan is payable in monthly installments of $0.7 million and bears interest at variable rates based on SOFR plus an applicable margin.
During 2025 and 2024, the Company had average borrowings outstanding of approximately $834.2 million and $804.7 million, respectively, at average annual interest rates of approximately 6.0% and 6.3%, respectively. The Company incurred net interest expense of $110.5 million and $176.3 million, respectively, during 2025 and 2024. Included in the 2025 and 2024 interest expense is $54.5 million and $119.3 million, respectively, to adjust the fair value of the mandatorily redeemable noncontrolling interest (see Note 11).
On February 25, 2025, the Company and a group of minority shareholders entered into an agreement to settle a significant portion of the mandatorily redeemable noncontrolling interest related to GHC One, including CSI, for a total of $205 million, which consisted of approximately $186.25 million in cash and $18.75 million in Graham Holdings Company Class B common stock.
The settlement agreement resulted in a $66.2 million increase to the mandatorily redeemable noncontrolling interest obligation, which the Company recorded as interest expense in the first quarter of 2025. The remaining mandatorily redeemable noncontrolling interest obligation related to GHC One and GHC Two was $8.4 million at December 31, 2025.
On November 12, 2025, Moody’s affirmed the Company’s credit rating and maintained the outlook as Stable. Also on November 12, 2025, Standard & Poor’s affirmed the Company’s credit rating and maintained the outlook as Stable.
The Company’s current credit ratings are as follows:
Moody’s
Standard & Poor’s
Long-term
Outlook
Stable
Stable
The Company expects to fund its estimated capital needs primarily through existing cash balances and internally generated funds, and, as needed, from borrowings under its revolving credit facility. As of December 31, 2025, the Company had $222.5 million outstanding under the $400 million revolving credit facility. In management’s opinion, the Company will have sufficient financial resources to meet its business requirements in the next 12 months, including working capital requirements, capital expenditures, interest payments, potential acquisitions and strategic investments, dividends and stock repurchases.
In summary, the Company’s cash flows for each period were as follows:
Year Ended December 31
(In thousands)
Net cash provided by operating activities
Net cash used in investing activities
Net cash used in financing activities
Effect of currency exchange rate change
Net increase in cash and cash equivalents and restricted cash
Operating Activities. Cash provided by operating activities is net income adjusted for certain non-cash items and changes in assets and liabilities. The Company’s net cash flow provided by operating activities were as follows:
Year Ended December 31
(In thousands)
Net Income
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and goodwill and other long-lived asset impairments
Amortization of lease right-of-use asset
Net pension benefit, settlement gain and early retirement and special separation benefit expense
Other non-cash activities
Change in operating assets and liabilities
Net Cash Provided by Operating Activities
Net cash provided by operating activities consists primarily of cash receipts from customers, less disbursements for costs, benefits, income taxes, interest and other expenses.
For 2025 compared to 2024, the decrease in net cash provided by operating activities is primarily due to changes in operating assets and liabilities, partially offset by higher net income, net of non-cash adjustments. Changes in operating assets and liabilities were driven by an increase in the value of the mandatorily redeemable noncontrolling interest and lower purchases of inventory, partially offset by lower collections from customers. The increase in the value of the mandatorily redeemable noncontrolling interest in 2025 was $64.8 million lower than the corresponding increase in 2024. The change in non-cash activities is largely the result of a significant decrease in the provision for deferred income taxes.
For 2024 compared to 2023, the increase in net cash provided by operating activities is primarily due to changes in operating assets and liabilities, partially offset by lower net income, net of non-cash adjustments. Changes in operating assets and liabilities were driven by a significant increase in the value of the mandatorily redeemable noncontrolling interest and lower purchases of inventory. The change in non-cash activities is largely the result of a significant increase in the provision for deferred income taxes, partially offset by fluctuations in the share prices of the Company’s investments in marketable equity securities with larger gains in 2024 compared to 2023.
Investing Activities. The Company’s net cash flow used in investing activities were as follows:
Year Ended December 31
(In thousands)
Purchases of property, plant and equipment
Investments in certain businesses, net of cash acquired
Investments in equity affiliates and cost method investments
Net (purchases of) proceeds from sales of marketable equity securities
Net proceeds from sales of businesses, property, plant and equipment, investments and other assets
Loan to related party
Other
Net Cash Used in Investing Activities
Capital Expenditures. The amounts reflected in the Company’s Statements of Cash Flows are based on cash payments made during the relevant periods, whereas the Company’s capital expenditures for 2025, 2024 and 2023 disclosed in Note 19 to the Consolidated Financial Statements include assets acquired during the year. The Company estimates that its capital expenditures will be in the range of $90 million to $100 million in 2026.
Acquisitions. During 2025, the Company acquired five businesses: one small business in supplemental education, two small businesses in other healthcare businesses, one in manufacturing and one in automotive for $71.2 million in cash and the assumption of floor plan payables and $107.5 million in net pension obligations. In July 2025, Hoover acquired 100% of Arconic Architectural Products, LLC, a wholly-owned subsidiary of Arconic Corporation, which manufactures aluminum cladding products and operates within the broader non-residential materials space from its facility in Eastman, GA. A significant portion of the purchase price was funded by the Company’s assumption of certain pension obligations. In October 2025, the Company’s automotive subsidiary acquired a Honda automotive dealership, including the real property for the dealership operations. In addition to a cash payment and the assumption of $4.9 million in floor plan payables, the automotive subsidiary borrowed $38.7 million under the delayed draw term loan to finance the acquisition.
During 2024, the Company acquired two small businesses. During 2023, the Company acquired five businesses: one in automotive, three small businesses in other healthcare businesses and one in other businesses for $83.3 million in cash and contingent consideration and the assumption of floor plan payables. In September 2023, the Company’s automotive subsidiary acquired a Toyota automotive dealership, including the real property for the dealership operations. In addition to a cash payment and the assumption of $2.2 million in floor plan payables, the automotive subsidiary borrowed $37.0 million to finance the acquisition.
Transactions with Related Parties. In September 2025, the Company invested an additional $29.3 million in its equity affiliate Intersection. Intersection used a portion of the additional investment to settle, in a non-cash exchange, $19.3 million of the outstanding amount owed to the Company on the $30 million term loan extended in April 2023. In November 2025, the Company invested an additional $28.7 million in Intersection. In December 2025, Intersection repaid the $5.0 million remaining outstanding balance on the term loan. In May 2024, the Company entered into a convertible promissory note agreement to loan N2K Networks $2.0 million. The convertible promissory note bears interest at a rate of 12% per annum and, subject to conversion provisions, all unpaid interest and principal are due by May 2027. During 2023, the Company made additional investments in Intersection and Realm.
Net (Purchases of) Proceeds from Sales of Marketable Equity Securities. The Company purchased $29.8 million , $5.0 million, and $4.6 million of marketable equity securities during 2025, 2024 and 2023, respectively. There were no sales of marketable equity securities during 2025. During 2024 and 2023, the Company sold marketable securities that generated proceeds of $23.5 million and $62.0 million, respectively.
Disposition of Businesses and Investments. In 2025, the Company received proceeds from the sale of a cost method investment. In April 2025, Kaplan completed the sale of a small business, BridgeU Limited, which was included in KI. In 2024 and the first half of 2025, WGB completed the sale of various websites and related businesses that made up the WGB operations. All remaining WGB operations were substantially shut down by the end of the third quarter of 2025. In July 2024, Kaplan completed the sale of a small business, Red Marker, which was included in KI.
Financing Activities. The Company’s net cash flow used in financing activities were as follows:
Year Ended December 31
(In thousands)
Distributions paid to noncontrolling interests
Net borrowing (payments) under revolving credit facilities
Net (repayments of) proceeds from vehicle floor plan payable
(Repayments) issuance of borrowings, net
Dividends paid
Common shares repurchased
Other
Net Cash Used in Financing Activities
Distributions paid to noncontrolling interests. On February 25, 2025, the Company and a group of minority shareholders entered into an agreement to settle a significant portion of the mandatorily redeemable noncontrolling interest related to GHC One, including CSI, for a total of $205 million , which consisted of approximately $186.25 million in cash and $18.75 million in Graham Holdings Company Class B common stock.
Borrowings and Vehicle Floor Plan Payable. In 2025, the Company issued $500 million senior unsecured fixed rate notes due December 1, 2033 at a coupon rate of 5.625%. In combination with the issuance of the notes, the Company amended and restated its revolving credit facility to increase the borrowing capacity to $400 million and extend the maturity to November 24, 2030. T he Company used the net proceeds from the sale of the notes, together with the borrowings under the revolving credit agreement, to (i) redeem the $400 million of 5.75% notes due June 1, 2026, (ii) refinance outstanding revolving loans under the existing revolving credit facility, and (iii) repay all amounts outstanding under the Company's existing $150 million term loan. Also in 2025, the automotive subsidiary borrowed $38.7 million under the delayed draw term loan to finance the acquisition of a Honda automotive dealership, including the real property for the dealership operations.
In 2024, the Company repaid amounts borrowed under the $300 million revolving credit facility, term loan and commercial notes at the automotive subsidiary.
In September 2023, the Company’s automotive subsidiary entered into a credit agreement with Truist Bank which includes (i) a $75.2 million real estate term loan, (ii) a $65.0 million capital term loan, (iii) a $50.0 million delayed draw term loan, and (iv) establishment of a revolving floor plan credit facility . The automotive subsidiary used the net proceeds from the real estate and capital term loans to acquire an automotive dealership, including the real property for the dealership operations, and to repay the outstanding balances of the commercial notes maturing in 2031 and 2032. On July 28, 2023, the Company entered into a $150 million term loan and used the proceeds to repay the U.S. dollar borrowings of the $300 million revolving credit facility.
In 2025, 2024, and 2023, the Company used vehicle floor plan financing to fund the purchase of new, used and service loaner vehicles at its automotive subsidiary. The (repayments of) proceeds from the vehicle floor plan payable fluctuates with changes in the amount of vehicle inventory held by the automotive dealerships.
Dividends. The annual dividend rate per share was $7.20, $6.88 and $6.60 in 2025, 2024 and 2023, respectively. The Company expects to pay a dividend of $7.52 per share in 2026.
Common Stock Repurchases. During 2025, the Company purchased a total of 3,978 shares of its Class B common stock at a cost of approximately $3.5 million resulting from the net settlement of stock awards upon vesting. During 2024 and 2023, the Company purchased a total of 152,948 and 325,134 shares, respectively, of its Class B common stock at a cost of approximately $115.2 million and $195.0 million, respectively, including commissions and accrued excise tax of $1.1 million and $1.8 million, respectively. 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 did not announce a ceiling price or time limit for the purchases. At December 31, 2025, the Company had remaining authorization from the Board of Directors to purchase up to 462,482 shares of Class B common stock.
Other. In 2025, 2024 and 2023, the Company paid $7.0 million, $5.4 million and $5.3 million, respectively, related to contingent consideration and deferred payments from prior acquisitions. In December 2023, the Company acquired some of the minority-owned shares of CSI for a total amount of $20.0 million. The Company paid cash of $5.0 million and entered into a promissory note with the minority owners for the remaining $15.0 million.
Contractual Obligations. The following reflects a summary of the Company’s contractual obligations as of December 31, 2025:
(in thousands)
Thereafter
Total
Debt and interest
Finance leases
Operating leases
Television broadcasting commitments (1)
IT software and services
Other purchase obligations (2)
Long-term liabilities (3)
Total
Includes network fees, employment agreements and programming purchase commitments for the Company’s television broadcasting business.
Includes purchase obligations related to capital projects and other legally binding commitments. Other purchase orders made in the ordinary course of business are excluded from the table above. Any amounts for which the Company is liable under purchase orders are reflected in the Company’s Consolidated Balance Sheets as accounts payable and accrued liabilities.
Primarily made up of multiemployer pension plan withdrawal obligations and postretirement benefit obligations other than pensions. The Company has other long-term liabilities excluded from the table above, including obligations for deferred compensation, long-term incentive plans, long-term deferred revenue and mandatorily redeemable noncontrolling interest.
Other. The Company does not have any off-balance-sheet arrangements or financing activities with special-purpose entities.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and judgments that affect the amounts reported in the financial statements. On an ongoing basis, the Company evaluates its estimates and assumptions. The Company bases its estimates on historical experience and other assumptions believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates.
An accounting policy is considered critical if it is important to the Company’s financial condition and results and if it requires management’s most difficult, subjective and complex judgments in its application. For a summary of all of the Company’s significant accounting policies, see Note 2 to the Company’s Consolidated Financial Statements.
Revenue Recognition, Trade Accounts Receivable and Allowance for Credit Losses. Education revenue is primarily derived from postsecondary education services, professional education and test preparation services. Revenue, net of any refunds, corporate discounts, scholarships and employee tuition discounts, is recognized ratably over the instruction period or access period for higher education and supplemental education services.
At KI and Kaplan Supplemental Education, estimates of average student course length are developed for each course, along with estimates for the anticipated level of student drops and refunds from test performance guarantees, and these estimates are evaluated on an ongoing basis and adjusted as necessary. As Kaplan’s businesses and related course offerings have changed, including more online programs, the complexity and significance of management’s estimates have increased.
KHE provides non-academic operations support services to Purdue Global pursuant to a TOSA, which includes technology support, helpdesk functions, human resources support for faculty and employees, admissions support, financial aid administration, advertising, back-office business functions, and certain student recruitment services. KHE is not entitled to receive any reimbursement of costs incurred in providing support services, or any fee, unless and until Purdue Global has first covered all of its academic costs (subject to a cap) and, if applicable, received payment for cost efficiencies. KHE will receive reimbursement for its operating costs of providing the support services after payment of Purdue Global’s operating costs and cost efficiency payments. If there are sufficient revenues, KHE may be entitled to a cost efficiency payment, if any, and an additional fee equal to 12.5% of Purdue Global’s revenue. Subject to certain limitations, a portion of the fee that is earned by KHE in one year may be carried over to subsequent years for payment to Kaplan.
The support fee and reimbursement for KHE support costs are entirely dependent on the availability of cash at the end of Purdue Global’s fiscal year (June 30), and therefore, all consideration in the contract is variable. The Company uses significant judgment to forecast the operating results of Purdue Global, the availability of cash at the end of each fiscal year, and the consideration it expects to receive from Purdue Global annually. Key assumptions used in the forecast model include student census and degree enrollment data, Purdue Global and KHE expenses,
changes to working capital, contractually stipulated minimum payments, and lead conversion rates. The forecast is updated as uncertainties are resolved. The Company reviews and updates the assumptions regularly, as a significant change in one or more of these estimates could affect the revenue recognized. Changes to the estimated variable consideration were not material for the year ended December 31, 2025.
A KI business has a contract with an examination body through August 2029 comprised of two performance obligations, one to build and create a professional exam and another to manage the delivery of that exam to qualified candidates. The first obligation was completed in 2021. The second obligation began after the first obligation was completed and is expected to continue through the end of the contract term. Revenues are recognized for both of these obligations by allocating the transaction price based on forecasted financial results and the use of a market-based profit margin applied to costs incurred during the financial reporting period. This profit margin, determined at contract inception, is different for each obligation as a result of the different value created by each distinct obligation. The forecast, including key assumptions such as expected candidate volumes and related exam-management expenses, is updated as future uncertainties are resolved, which may result in changes to the transaction price. The Company reviews and updates the assumptions regularly, as a significant change in one or more of these estimates could affect revenue recognized. Changes to the estimated variable consideration were not material for the year ended December 31, 2025.
The determination of whether revenue should be reported on a gross or net basis is based on an assessment of whether the Company acts as a principal or an agent in the transaction. In certain cases, the Company is considered the agent, and the Company records revenue equal to the net amount retained when the fee is earned. In these cases, costs incurred with third-party suppliers are excluded from the Company’s revenue. The Company assesses whether it obtained control of the specified goods or services before they are transferred to the customer as part of this assessment. In addition, the Company considers other indicators such as the party primarily responsible for fulfillment, inventory risk and discretion in establishing price.
Accounts receivable have been reduced by an allowance that reflects the current expected credit losses associated with the receivables. This estimated allowance is based on historical write-offs, current macroeconomic conditions, reasonable and supportable forecasts of future economic conditions and management’s evaluation of the financial condition of the customer. The Company generally considers an account past due or delinquent when a student or customer misses a scheduled payment. The Company writes off accounts receivable balances deemed uncollectibleagainst the allowance for credit losses following the passage of a certain period of time, or generally when the account is turned over for collection to an outside collection agency.
Goodwill and Other Intangible Assets. The Company has a significant amount of goodwill and indefinite-lived intangible assets that are reviewed at least annually for possible impairment.
As of December 31
(in millions)
Goodwill and indefinite-lived intangible assets
Total assets
Percentage of goodwill and indefinite-lived intangible assets to total assets
The Company performs its annual goodwill and intangible assets impairment test as of November 30. Goodwill and other intangible assets are reviewed for possible impairment between annual tests if an event occurred or circumstances changed that would more likely than not reduce the fair value of the reporting unit or other intangible assets below its carrying value.
Goodwill
The Company tests its goodwill at the reporting unit level, which is an operating segment or one level below an operating segment. The Company initially performs an assessment of qualitative factors to determine if it is necessary to perform a quantitative goodwill impairment test. The Company quantitatively tests goodwill for impairment if, based on its assessment of the qualitative factors, it determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, or if it decides to bypass the qualitative assessment. The quantitative goodwill impairment test compares the estimated fair value of a reporting unit with its carrying amount, including goodwill. An impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value.
The Company had 25 reporting units as of December 31, 2025. The reporting units with significant goodwill balances as of December 31, 2025, were as follows, representing 92% of the total goodwill of the Company:
(in millions)
Goodwill
Education
Kaplan international
Higher education
Supplemental education
Television broadcasting
CSI
Automotive
Hoover
Framebridge
Total
As of November 30, 2025, in connection with the Company’s annual impairment testing, the Company decided to perform the quantitative goodwill impairment process at all of the reporting units. The Company’s policy requires the performance of a quantitative impairment review of the goodwill at least once every three years. The Company used a discounted cash flow model, and, where appropriate, a market value approach was also utilized to supplement the discounted cash flow model to determine the estimated fair value of its reporting units. The Company made estimates and assumptions regarding future cash flows, discount rates, long-term growth rates and market values to determine each reporting unit’s estimated fair value. The methodology used to estimate the fair value of the Company’s reporting units on November 30, 2025, was consistent with the one used during the 2024 annual goodwill impairment test.
The Company made changes to certain of its assumptions utilized in the discounted cash flow models for 2025 compared with the prior year to take into account changes in the economic environment, regulations and their impact on the Company’s businesses. The key assumptions used by the Company were as follows:
• Expected cash flows underlying the Company’s business plans for the periods 2026 through 2030 were used. The Company used expected cash flows for the periods 2026 through 2031 and 2026 through 2035 for the Framebridge and Hoover reporting units, respectively. The expected cash flows took into account historical growth rates, the effect of the changed economic outlook at the Company’s businesses, industry challenges and an estimate for the possible impact of any applicable regulations.
• Cash flows beyond the forecasted years were projected to grow at a long-term growth rate, which the Company estimated between 1.5% and 3% for each reporting unit.
• The Company used a discount rate of 9% to 25% to risk adjust the cash flow projections in determining the estimated fair value.
The fair value of each of the reporting units exceeded its respective carrying value as of November 30, 2025.
The estimated fair value of the Framebridge reporting unit exceeded its carrying values by a margin of less than 20%. The total goodwill at the Framebridge reporting unit was $60.9 million as of December 31, 2025, or 4% of the total goodwill of the Company. There exists a reasonable possibility that a decrease in the assumed projected cash flows or long-term growth rate, or an increase in the discount rate assumption used in the discounted cash flow model of this reporting unit, could result in a possible impairment charge.
The estimated fair value of the Company’s other reporting units with significant goodwill balances exceeded their respective carrying values by a margin in excess of 40%. It is possible that impairment charges could occur in the future, as changes in market conditions and the inherent variability in projecting future operating performance could result in adverse changes in projections for future operating results or other key assumptions, such as projected revenue, profit margin, capital expenditures or cash flows associated with fair value estimates and could lead to additional future impairments, which could be material.
Indefinite-Lived Intangible Assets
The Company’s intangible assets with an indefinite life are principally from franchise rights, trade names and FCC licenses. The Company initially assesses qualitative factors to determine if it is more likely than not that the fair value of its indefinite-lived intangible assets is less than its carrying value. The Company compares the fair value of the indefinite-lived intangible asset with its carrying value if the qualitative factors indicate it is more likely than not that the fair value of the asset is less than its carrying value or if it decides to bypass the qualitative assessment. The Company records an impairmentloss if the carrying value of the indefinite-lived intangible assets exceeds the fair value of the assets for the difference in the values. The Company uses a discounted cash flow model, and, in
certain cases, a market value approach is also utilized to supplement the discounted cash flow model to determine the estimated fair value of the indefinite-lived intangible assets. The Company makes estimates and assumptions regarding future cash flows, discount rates, long-term growth rates and other market values to determine the estimated fair value of the indefinite-lived intangible assets. The Company’s policy requires the performance of a quantitative impairment review of the indefinite-lived intangible assets at least once every three years.
In conjunction with the Company’s annual impairment review, a s a result of underperformance at the CDJR automotive dealership from a continued decline in revenues, the Company recorded an indefinite-lived intangible asset impairment charge of $10.1 million. The Company estimated the fair value of the franchise right by utilizing the excess earnings method under a discounted cash flow model. The carrying value of the CDJR franchise right indefinite-lived intangible asset exceeded its estimated fair value, resulting in an indefinite-lived intangible asset impairment charge. CDJR automotive dealership is included in Automotive.
With the exception of the CDJR franchise right indefinite-lived intangible asset, the fair value of all the indefinite-lived intangible assets exceeded their respective carrying values as of November 30, 2025. The estimated fair values of indefinite-lived intangible assets with a total carrying value of $37.3 million exceeded their carrying value by a margin of less than 10 %. There exists a reasonable possibility that impairment charges could occur in the future, as changes in market conditions and the inherent variability in projecting future operating performance could result in adverse changes in projections for future operating results or other key assumptions, such as projected revenue, profit margin, capital expenditures or cash flows associated with fair value estimates and could lead to future impairments, which could be material.
Pension Costs. The Company sponsors a defined benefit pension plan for eligible employees in the U.S. Excluding curtailmentgains, settlement gains and special termination benefits, the Company’s net pension credit was $93.0 million, $107.7 million and $111.3 million for 2025, 2024 and 2023, respectively. The Company’s pension benefit obligation and related credits are actuarially determined and are significantly impacted by the Company’s assumptions related to future events, including the discount rate, expected return on plan assets and rate of compensation increases. The Company evaluates these critical assumptions at least annually and, periodically, evaluates other assumptions involving demographic factors, such as retirement age, mortality and turnover, and updates them to reflect its experience and expectations for the future. Actual results in any given year will often differ from actuarial assumptions because of economic and other factors.
The Company assumed a 6.25% expected return on plan assets for 2025, 2024 and 2023. The Company’s actual return on plan assets was 16.9% in 2025, 19.1% in 2024 and 23.2% in 2023. The 10-year and 20-year actual returns on plan assets on an annual basis were 11.2% and 10.0%, respectively.
Accumulated and projected benefit obligations are measured as the present value of future cash payments. The Company discounts those cash payments using the weighted average of market-observed yields for high-quality fixed-income securities with maturities that correspond to the payment of benefits. Lower discount rates increase present values and generally increase subsequent-year pension costs; higher discount rates decrease present values and decrease subsequent-year pension costs. The Company’s discount rate at December 31, 2025, 2024 and 2023, was 5.6%, 5.8% and 5.2%, respectively, reflecting market interest rates.
Changes in key assumptions for the Company’s pension plan would have had the following effects on the 2025 pension credit, excluding curtailmentgains, settlement gains and special termination benefits:
• Expected return on assets – A 1% increase or decrease to the Company’s assumed expected return on plan assets would have increased or decreased the pension credit by approximately $26.8 million.
• Discount rate – A 1% decrease to the Company’s assumed discount rate would have increased the pension credit by approximately $2.5 million. A 1% increase to the Company’s assumed discount rate would have decreased the pension credit by approximately $2.7 million.
The Company’s net pension credit includes an expected return on plan assets component, calculated using the expected return on plan assets assumption applied to a market-related value of plan assets. The market-related value of plan assets is determined using a five-year average market value method, which recognizes realized and unrealized appreciation and depreciation in market values over a five-year period. The value resulting from applying this method is adjusted, if necessary, such that it cannot be less than 80% or more than 120% of the market value of plan assets as of the relevant measurement date. As a result, year-to-year increases or decreases in the market-related value of plan assets impact the return on plan assets component of pension credit for the year.
At the end of each year, differences between the actual return on plan assets and the expected return on plan assets are combined with other differences in actual versus expected experience to form a net unamortized actuarial gain or loss in accumulated other comprehensive income. Only those net actuarial gains or losses in excess of the deferred realized and unrealized appreciation and depreciation are potentially subject to amortization.
The types of items that generate actuarial gains and losses that may be subject to amortization in net periodic pension (credit) cost include the following:
• Asset returns that are more or less than the expected return on plan assets for the year;
• Actual participant demographic experience different from assumed (retirements, terminations and deaths during the year);
• Actual salary increases different from assumed; and
• Any changes in assumptions that are made to better reflect the anticipated experience of the plan or to reflect current market conditions on the measurement date (discount rate, longevity increases, changes in expected participant behavior and expected return on plan assets).
Amortization of the unrecognized actuarial gain or loss is included as a component of pension credit for a year if the magnitude of the net unamortized gain or loss in accumulated other comprehensive income exceeds 10% of the greater of the benefit obligation or the market-related value of assets (10% corridor). The amortization component is equal to that excess divided by the average remaining service period of active employees expected to receive benefits under the plan. At the end of 2022, the Company had net unamortized actuarial gains in accumulated other comprehensive income subject to amortization outside the 10% corridor, and therefore, an amortized gain of $39.8 million was included in the pension credit for 2023.
During 2023, there were significant pension asset gains partially offset by a decrease in the discount rate that resulted in net unamortized actuarial gains in accumulated other comprehensive income subject to amortization outside the 10% corridor, and therefore, an amortized gain of $37.9 million was included in the pension credit for the first nine and a half months of 2024.
As a result of the irrevocable group annuity purchase, the Company remeasured the accumulated and projected benefit obligations as of October 17, 2024, and recorded a settlement gain. During the first nine and a half months, there were significant pension asset gains offset by the $653.4 million settlement gain following the purchase of the irrevocable group annuity contract that resulted in no net unamortized actuarial gains in accumulated other comprehensive income subject to amortization outside the 10% corridor, and therefore, no amortized gain amount was included in the pension credit for the last two and a half months of 2024. During the last two and a half months of 2024, there was an increase in the discount rate; however, the Company had no net unamortized actuarial gains in accumulated other comprehensive income subject to amortization outside the 10% corridor, and therefore, no amortized gain amount was included in the pension credit for 2025.
During 2025, there were significant pension asset gains partially offset by a decrease in the discount rate; however, the Company currently estimates that there will be no net unamortized actuarial gains in accumulated other comprehensive income subject to amortization outside the 10% corridor, and therefore, no amortized gain amount is included in the estimated pension credit for 2026.
Overall, the Company estimates that it will record a net pension credit of approximately $97.1 million in 2026.
Note 15 to the Company’s Consolidated Financial Statements provides additional details surrounding pension costs and related assumptions.
Accounting for Income Taxes.
Valuation Allowances
Deferred income taxes arise from temporary differences between the tax and financial statement recognition of assets and liabilities. In evaluating its ability to recover deferred tax assets within the jurisdiction from which they arise, the Company considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations. These assumptions require significant judgment about forecasts of future taxable income.
As of December 31, 2025, the Company had state income tax net operating loss carryforwards of $1,318.6 million, which will expire at various future dates. Also at December 31, 2025, the Company had $78.5 million of non-U.S. income tax loss carryforwards, of which $24.5 million may be carried forward indefinitely; $44.3 million of losses that, if unutilized, will expire in varying amounts through 2030; and $9.7 million of losses that, if unutilized, will start to expire after 2030. At December 31, 2025, the Company has established approximately $83.0 million in total valuation allowances, primarily against deferred state tax assets, net of U.S. Federal income taxes, and non-U.S. deferred tax assets, as the Company believes that it is more likely than not that the benefit from certain state and non-U.S. net operating loss carryforwards and other deferred tax assets will not be realized. In most instances, the Company has established valuation allowances against state income tax benefits recognized, without considering
potentially offsetting deferred tax liabilities established with respect to prepaid pension cost and goodwill. Prepaid pension cost and goodwill have not been considered a source of future taxable income for realizing deferred tax benefits recognized since these temporary differences are not likely to reverse in the foreseeable future. However, certain deferred state tax assets have an indefinite life. As a result, the Company has considered deferred tax liabilities for prepaid pension cost and goodwill as a source of future taxable income for realizing those deferred state tax assets with indefinite lives. The valuation allowances established against state and non-U.S. income tax benefits recorded may increase or decrease within the next 12 months, based on operating results or the market value of investment holdings; as a result, the Company is unable to estimate the potential tax impact, given the uncertain operating and market environment. The Company will be monitoring future operating results and projected future operating results on a quarterly basis to determine whether the valuation allowances provided against state and non-U.S. deferred tax assets should be increased or decreased, as future circumstances warrant.
Recent Accounting Pronouncements. See Note 2 to the Company’s Consolidated Financial Statements for a discussion of recent accounting pronouncements.
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of Graham Holdings Company
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Graham Holdings Company and its subsidiaries (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations, of comprehensive income (loss), of changes in common stockholders' equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
As described in Management’s Report on Internal Control Over Financial Reporting, management has excluded Arconic Architectural Products, LLC and Hendrick Honda of Woodbridge from its assessment of internal control over financial reporting as of December 31, 2025 because they were acquired by the Company in purchase business combinations during 2025. We have also excluded Arconic Architectural Products, LLC and Hendrick Honda of Woodbridge from our audit of internal control over financial reporting. Arconic Architectural Products, LLC and Hendrick Honda of Woodbridge are wholly-owned and majority-owned subsidiaries, respectively, whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting collectively each represent approximately 1% of the related consolidated financial statement amounts as of and for the year ended December 31, 2025.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Annual Goodwill Impairment Assessment - Framebridge Reporting Unit
As described in Notes 2 and 9 to the consolidated financial statements, the Company’s consolidated goodwill balance was $1,585.7 million as of December 31, 2025, and as disclosed by management, the goodwill associated with the Framebridge reporting unit was $60.9 million as of December 31, 2025. Management reviews goodwill for possible impairment at least annually, as of November 30, or between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying value. An impairment charge is recognized for the amount by which the carrying value exceeds the reporting unit’s fair value. The quantitative goodwill impairment analysis at Framebridge indicated the estimated fair value of the reporting unit exceeded its carrying value as of November 30, 2025, the annual goodwill impairment assessment date. Management uses a discounted cash flow model, and, where appropriate, a market value approach is also utilized to supplement the discounted cash flow model, to determine the estimated fair value of the reporting units. Management makes assumptions regarding estimated future cash flows, discount rates, long-term growth rates and market values to determine the estimated fair value of each reporting unit.
The principal considerations for our determination that performing procedures relating to the annual goodwill impairment assessment of the Framebridge reporting unit is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the Framebridge reporting unit; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to the estimated future cash flows and the discount rate used in the discounted cash flow model; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessment, including controls over the valuation of the Framebridge reporting unit. These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the Framebridge reporting unit; (ii) evaluating the appropriateness of the discounted cash flow model used by management; (iii) testing the completeness and accuracy of underlying data used in the discounted cash flow model; and (iv) evaluating the reasonableness of the significant assumptions related to the estimated future cash flows and the discount rate used in the discounted cash flow model. Evaluating management’s assumption related to the estimated future cash flows involved evaluating whether the assumption used by management was reasonable considering (i) the past and present performance of the Framebridge reporting unit; (ii) the consistency with external market and industry data; and (iii) whether the assumption was consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the discounted cash flow model and (ii) the reasonableness of the discount rate assumption.
/s/ PricewaterhouseCoopers LLP
Washington, District of Columbia
February 25, 2026
We have served as the Company’s auditor since 1946.
GRAHAM HOLDINGS COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended December 31
(in thousands, except per share amounts)
Operating Revenues
Sales of services
Sales of goods
Operating Costs and Expenses
Cost of services sold (exclusive of items shown below)
Cost of goods sold (exclusive of items shown below)
Selling, general and administrative
Depreciation of property, plant and equipment
Amortization of intangible assets
Impairment of goodwill and other long-lived assets
Income from Operations
Equity in earnings (losses) of affiliates, net
Interest income
Interest expense
Non-operating pension and postretirement benefit income, net
Gain on marketable equity securities, net
Other (expense) income, net
Income Before Income Taxes
Provision for Income Taxes
Net Income
Net Income Attributable to Noncontrolling Interests
Net Income Attributable to Graham Holdings Company Common Stockholders
Per Share Information Attributable to Graham Holdings Company Common Stockholders
Basic net income per common share
Basic average number of common shares outstanding
Diluted net income per common share
Diluted average number of common shares outstanding
See accompanying Notes to Consolidated Financial Statements.
GRAHAM HOLDINGS COMPANY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Year Ended December 31
(in thousands)
Net Income
Other Comprehensive Income (Loss), Before Tax
Foreign currency translation adjustments:
Translation adjustments arising during the year
Adjustment for sale of a business with foreign operations
Pension and other postretirement plans:
Actuarial gain
Prior service (cost) credit
Amortization of net actuarial gain included in net income
Amortization of net prior service (credit) cost included in net income
Settlement included in net income
Cash flow hedges (loss) gain
Other Comprehensive Income (Loss), Before Tax
Income tax (expense) benefit related to items of other comprehensive income (loss)
Other Comprehensive Income (Loss), Net of Tax
Comprehensive Income
Comprehensive income attributable to noncontrolling interests
Total Comprehensive Income Attributable to Graham Holdings Company
See accompanying Notes to Consolidated Financial Statements.
GRAHAM HOLDINGS COMPANY
CONSOLIDATED BALANCE SHEETS
As of December 31
(In thousands, except share amounts)
Assets
Current Assets
Cash and cash equivalents
Restricted cash
Investments in marketable equity securities and other investments
Accounts receivable, net
Inventories and contracts in progress
Prepaid expenses
Income taxes receivable
Other current assets
Total Current Assets
Property, Plant and Equipment, Net
Lease Right-of-Use Assets
Investments in Affiliates
Goodwill, Net
Indefinite-Lived Intangible Assets
Amortized Intangible Assets, Net
Prepaid Pension Cost
Deferred Income Taxes
Deferred Charges and Other Assets
Total Assets
Liabilities and Equity
Current Liabilities
Accounts payable, vehicle floor plan payable and accrued liabilities
Unrealized gain on pensions and other postretirement plans
Cash flow hedges
Cost of 15,639,057 and 15,667,693 shares of Class B common stock held in treasury
Total Common Stockholders’ Equity
Noncontrolling Interests
Total Equity
Total Liabilities and Equity
See accompanying Notes to Consolidated Financial Statements.
GRAHAM HOLDINGS COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31
(In thousands)
Cash Flows from Operating Activities
Net Income
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and goodwill and other long-lived asset impairments
Amortization of lease right-of-use asset
Net pension benefit, settlement gain and early retirement and separation program costs
Gain on marketable equity securities and cost method investments, net
Credit loss expense
Stock-based compensation expense, net of forfeitures
Accretion expense and change in fair value of contingent consideration liabilities
Foreign exchange loss (gain)
Gain on disposition of businesses, property, plant and equipment, investments and other assets, net
Equity in (earnings) losses of affiliates, net of distributions
Provision for deferred income taxes
Change in operating assets and liabilities:
Accounts receivable
Inventories
Accounts payable and accrued liabilities
Deferred revenue
Income taxes receivable/payable
Lease liabilities
Other assets and other liabilities, net
Other
Net Cash Provided by Operating Activities
Cash Flows from Investing Activities
Purchases of property, plant and equipment
Investments in certain businesses, net of cash acquired
Investments in equity affiliates and cost method investments
Purchases of marketable equity securities
Net proceeds from sales of businesses, property, plant and equipment, investments and other assets
Proceeds from sales of marketable equity securities
Loan to related party
Other
Net Cash Used in Investing Activities
Cash Flows from Financing Activities
Repayments of borrowings
Issuance of borrowings
Distributions paid to noncontrolling interests
Net borrowings (payments) under revolving credit facilities
Net (repayments of) proceeds from vehicle floor plan payable
Dividends paid
Principal payments of finance leases
Payments of financing costs
Deferred payments of acquisitions
Common shares repurchased
Purchase of noncontrolling interest
Issuance of noncontrolling interest
Other
Net Cash Used in Financing Activities
Effect of Currency Exchange Rate Change
Net Increase in Cash and Cash Equivalents and Restricted Cash
Cash and Cash Equivalents and Restricted Cash at Beginning of Year
Cash and Cash Equivalents and Restricted Cash at End of Year
Supplemental Cash Flow Information
Cash paid during the year for:
Income taxes
Interest
See accompanying Notes to Consolidated Financial Statements.
GRAHAM HOLDINGS COMPANY
CONSOLIDATED STATEMENTS OF CHANGES IN COMMON STOCKHOLDERS’ EQUITY
(in thousands)
Class A
Common
Stock
Class B
Common
Stock
Capital in
Excess of
Par Value
Retained
Earnings
Accumulated Other Comprehensive Income
Treasury
Stock
Noncontrolling
Interest
Total Equity
Redeemable Noncontrolling Interest
As of December 31, 2022
Net income for the year
Noncontrolling interest capital contributions
Purchase of equity from noncontrolling interest
Net income attributable to noncontrolling interests
Net income attributable to redeemable noncontrolling interests
Change in redemption value of redeemable noncontrolling interests
Distribution to noncontrolling interests
Dividends paid on common stock
Repurchase of Class B common stock
Issuance of Class B common stock, net of restricted stock award forfeitures
Amortization of unearned stock compensation and stock option expense
Other comprehensive income, net of income taxes
Purchase of redeemable noncontrolling interest
As of December 31, 2023
Net income for the year
Noncontrolling interest capital contributions
Net income attributable to noncontrolling interests
Net income attributable to redeemable noncontrolling interests
Change in redemption value of redeemable noncontrolling interests
Distribution to noncontrolling interests
Dividends paid on common stock
Repurchase of Class B common stock
Issuance of Class B common stock, net of restricted stock award forfeitures
Shares withheld related to net share settlement
Amortization of unearned stock compensation and stock option expense
Other comprehensive loss, net of income taxes
Purchase of redeemable noncontrolling interest
As of December 31, 2024
Net income for the year
Noncontrolling interest capital contributions
Net income attributable to noncontrolling interests
Net income attributable to redeemable noncontrolling interests
Change in redemption value of redeemable noncontrolling interests
Distribution to noncontrolling interests
Dividends paid on common stock
Repurchase of Class B common stock
Issuance of Class B common stock, net of restricted stock award forfeitures
Shares withheld related to net share settlement
Amortization of unearned stock compensation and stock option expense
Other comprehensive income, net of income taxes
Purchase of noncontrolling interest
Purchase of redeemable noncontrolling interests
As of December 31, 2025
See accompanying Notes to Consolidated Financial Statements.
GRAHAM HOLDINGS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND NATURE OF OPERATIONS
Graham Holdings Company (the Company), is a diversified holding company whose operations include educational services, television broadcasting, healthcare, manufacturing, automotive dealerships and other businesses.
Through Kaplan, Inc. (Kaplan), the Company provides a wide variety of educational services to students, schools, colleges, universities and businesses, both domestically and outside the United States (U.S.). Kaplan’s educational services include academic preparation programs for international students; English-language programs; operations support services for pre-college, certificate, undergraduate and graduate programs; exam preparation for high school and graduate students and for professional certifications and licensures; career and academic advisement services to businesses; and a United Kingdom (U.K.) sixth-form college that prepares students for A-level examinations.
The Company’s television broadcasting segment owns and operates seven television broadcasting stations and provides social media management tools designed to connect newsrooms with their users.
The Company’s healthcare division provides in-home specialty pharmacy infusion therapies; home health, hospice and palliative services; physician services for allergy, asthma and immunology patients; in-home aesthetics; applied behavior analysis (ABA) therapy; and healthcare software-as-a-service technology.
The Company’s manufacturing companies include a supplier of pressure-treated wood and aluminum cladding products, a manufacturer of electrical solutions, a manufacturer of lifting solutions, and a supplier of parts used in electric utilities and industrial systems.
The Company’s automotive business comprises eight dealerships and valet repair services.
The Company’s other businesses include restaurants; a custom framing company; a marketing solutions provider; a customer data and analytics software company; Slate and Foreign Policy magazines; a daily local news podcast and newsletter company; a company that provides a software-as-a-service platform that enables podcasters and media companies to monetize audio content through paid subscriptions, memberships, and audiobooks; an online art gallery and in-person art fair business; and an online commerce platform featuring original art and designs on an array of consumer products.
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 U.S. 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.
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.
Business Combinations. The purchase price of an acquisition is allocated to the assets acquired, including intangible assets, and liabilities assumed, based on their respective fair values at the acquisition date. Acquisition-related costs are expensed as incurred. The excess of the cost of an acquired entity over the net of the amounts assigned to the assets acquired and liabilities assumed is recognized as goodwill. The net assets and results of operations of an acquired entity are included in the Company’s Consolidated Financial Statements from the acquisition date.
Cash and Cash Equivalents. Cash and cash equivalents consist of cash on hand, short-term investments with original maturities of three months or less and investments in money market funds with weighted average maturities of three months or less.
Restricted Cash. Restricted cash represents amounts required to be held by non-U.S. higher education institutions for prepaid tuition pursuant to foreign government regulations. These regulations stipulate that the Company has a fiduciary responsibility to segregate certain funds to ensure these funds are only used for the benefit of eligible students.
Concentration of Credit Risk. Cash and cash equivalents are maintained with several financial institutions domestically and internationally. Deposits held with banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and are maintained with financial institutions with investment-grade credit ratings. The Company routinely assesses the financial strength of significant customers, and this assessment, combined with the large number and geographical diversity of its customers, limits the Company’s concentration of risk with respect to receivables from contracts with customers.
Allowance for Credit Losses. Accounts receivable have been reduced by an allowance that reflects the current expected credit losses associated with the receivables. The current expected credit losses are estimated based on historical write-offs, current macroeconomic conditions and reasonable and supportable forecasts of future economic conditions. Reserves are also established against specific receivables based on aging category, historical collection experience and management’s evaluation of the financial condition of the customer. The Company generally considers an account past due or delinquent when a student or customer misses a scheduled payment. The Company writes off accounts receivable balances deemed uncollectibleagainst the allowance for credit losses following the passage of a certain period of time, or generally when the account is turned over for collection to an outside collection agency.
Investments in Equity Securities. The Company measures its investments in equity securities at fair value with changes in fair value recognized in earnings. The Company elected the measurement alternative to measure cost method investments that do not have readily determinable fair value at cost less impairment, adjusted by observable price changes with any fair value changes recognized in earnings. If the fair value of a cost method investment declines below its cost basis and the decline is considered other than temporary, the Company will record a write-down, which is included in earnings. The Company uses the average cost method to determine the basis of the securities sold.
Fair Value Measurements. Fair value measurements are determined based on the assumptions that a market participant would use in pricing an asset or liability based on a three-tiered hierarchy that draws a distinction between market participant assumptions based on (i) observable inputs, such as quoted prices in active markets (Level 1); (ii) inputs other than quoted prices in active markets that are observable either directly or indirectly (Level 2); and (iii) unobservable inputs that require the Company to use present value and other valuation techniques in the determination of fair value (Level 3). Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measure. The Company’s assessment of the significance of a particular input to the fair value measurements requires judgment and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy.
For assets that are measured using quoted prices in active markets, the total fair value is the published market price per unit multiplied by the number of units held, without consideration of transaction costs. Assets and liabilities that are measured using significant other observable inputs are primarily valued by reference to quoted prices of similar assets or liabilities in active markets, adjusted for any terms specific to that asset or liability.
The Company measures certain assets—including goodwill; intangible assets; property, plant and equipment; lease right-of-use (ROU) assets; cost and equity-method investments—at fair value on a nonrecurring basis when they are deemed to be impaired. The fair value of these assets is determined with valuation techniques using the best information available and may include quoted market prices, market comparables and discounted cash flow models.
Fair Value of Financial Instruments. The carrying amounts reported in the Company’s Consolidated Financial Statements for cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities, the current portion of deferred revenue and the current portion of debt approximate fair value because of the short-term nature of these financial instruments. The fair value of long-term debt is determined based on a number of observable inputs, including the current market activity of the Company’s publicly traded notes, trends in investor demands and market values of comparable publicly traded debt. The fair value of interest rate hedges is determined based on a number of observable inputs, including time to maturity and market interest rates.
Inventories and Contracts in Progress. Inventories and contracts in progress are stated at the lower of cost or net realizable values and are based on the first-in, first-out (FIFO) method or the average cost method. Inventory costs include direct material, direct and indirect labor, and applicable manufacturing overhead. The Company allocates manufacturing overhead based on normal production capacity and recognizes unabsorbed manufacturing costs in earnings. The provision for excess and obsolete inventory is based on management’s evaluation of inventories on hand relative to historical usage, estimated future usage and technological developments.
Vehicle inventory is based on the specific identification method. The cost of new and used vehicle inventories includes the cost of any equipment added, reconditioning and transportation. In certain instances, vehicle manufacturers provide incentives, which are reflected as a reduction in the carrying value of each vehicle purchased.
Property, Plant and Equipment. Property, plant and equipment is recorded at cost and includes interest capitalized in connection with major long-term construction projects. Replacements and major improvements are capitalized; maintenance and repairs are expensed as incurred. Depreciation is calculated using the straight-line method over the estimated useful lives of the property, plant and equipment: 3 to 20 years for machinery and equipment; 20 to 50 years for buildings. The costs of leasehold improvements are amortized over the lesser of their useful lives or the terms of the respective leases.
Evaluation of Long-Lived Assets. The recoverability of long-lived assets and finite-lived intangible assets is assessed whenever adverse events or changes in circumstances indicate that recorded values may not be recoverable. A long-lived asset is considered not to be recoverable when the undiscounted estimated future cash flows are less than the asset’s recorded value. An impairment charge is measured based on estimated fair market value, determined primarily using estimated future cash flows on a discounted basis. Losses on long-lived assets to be disposed of are determined in a similar manner, but the fair market value would be reduced for estimated costs to dispose.
Goodwill and Other Intangible Assets. Goodwill is the excess of purchase price over the fair value of identified net assets of businesses acquired. The Company’s intangible assets with an indefinite life are principally from franchise agreements, trade names and trademarks and Federal Communications Commission (FCC) licenses. Amortized intangible assets are primarily student and customer relationships and trade names and trademarks, with amortization periods up to 10 years. Costs associated with renewing or extending intangible assets are insignificant and expensed as incurred.
The Company reviews goodwill and indefinite-lived intangible assets at least annually, as of November 30, for possible impairment. Goodwill and indefinite-lived intangible assets are reviewed for possible impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit or indefinite-lived intangible asset below its carrying value. The Company tests its goodwill at the reporting unit level, which is an operating segment or one level below an operating segment. The Company initially assesses qualitative factors to determine if it is necessary to perform the goodwill or indefinite-lived intangible asset quantitative impairment review. The Company reviews the goodwill and indefinite-lived assets for impairment using the quantitative process if, based on its assessment of the qualitative factors, it determines that it is more likely than not that the fair value of a reporting unit or indefinite-lived intangible asset is less than its carrying value, or if it decides to bypass the qualitative assessment. The Company uses a discounted cash flow model, and, where appropriate, a market value approach is also utilized to supplement the discounted cash flow model, to determine the estimated fair value of its reporting units and indefinite-lived intangible assets. The Company makes assumptions regarding estimated future cash flows, discount rates, long-term growth rates and market values to determine the estimated fair value of each reporting unit and indefinite-lived intangible asset. If these estimates or related assumptions change in the future, the Company may be required to record impairment charges.
Investments in Affiliates. The Company uses the equity method of accounting for its investments in and earnings or losses of affiliates that it does not control, but over which it exerts significant influence. Significant influence is generally deemed to exist if the Company has an ownership interest in the voting stock of an investee between 20% and 50%. The Company also uses the equity method of accounting for its investments in a partnership or limited liability company with specific ownership accounts, if the Company has an ownership interest of 3% or more. The Company considers whether the fair values of any of its equity method investments have declined below their carrying values whenever adverse events or changes in circumstances indicate that recorded values may not be recoverable. If the Company considered any such decline to be other than temporary (based on various factors, including historical financial results, product development activities and the overall health of the affiliate’s industry), a write-down would be recorded to estimated fair value. The Company records its share of the earnings or losses of its affiliates from their most recent available financial statements. In some instances, the reporting period of the affiliates’ financial statements lag the Company’s reporting period, but such lag is never more than three months.
Revenue Recognition. The Company identifies a contract for revenue recognition when there is approval and commitment from both parties, the rights of the parties and payment terms are identified, the contract has commercial substance and the collectability of consideration is probable. The Company evaluates each contract to determine the number of distinct performance obligations in the contract, which requires the use of judgment.
Education Revenue . Education revenue is primarily derived from postsecondary education and supplementary education services provided both domestically and abroad. Generally, tuition and other fees are paid upfront and recorded in deferred revenue in advance of the date when education services are provided to the student. In some instances, installment billing is available to students, which reduces the amount of cash consideration received in advance of performing the service. The contractual terms and conditions associated with installment billing indicate that the student is liable for the total contract price, therefore mitigating the Company’s exposure to losses associated with nonpayment. The Company determined the installment billing does not represent a significant financing component.
Kaplan International (KI) . KI provides higher education, professional education, and test preparation services and materials to students primarily in the U.K., Singapore, and Australia. Some KI contracts consist of one performance obligation that is a combination of indistinct promises to the student, while other KI contracts include multiple performance obligations, as the promises in the contract are capable of being both distinct and distinct within the context of the contract. One KI business offers an option whereby students receive future services at a discount that is accounted for as a material right.
The transaction price is stated in the contract and known at the time of contract inception, therefore no variable consideration exists. Revenue is allocated to each performance obligation based on its standalone selling price. Any discounts within the contract are allocated across all performance obligations unless observable evidence exists that the discount relates to a specific performance obligation or obligations in the contract. KI generally determines standalone selling prices based on prices charged to students.
Revenue is recognized ratably over the instruction period or access period for higher education, professional education and test preparation services. KI generally uses the time elapsed method, an input measure, as it best depicts the simultaneous consumption and delivery of these services. Course materials determined to be a separate performance obligation are recognized at the point in time when control transfers to the student, generally when the products are delivered to the student.
One KI business has a contract with a customer consisting of two performance obligations which consisted entirely of variable consideration at contract inception. The Company allocates revenue to each performance obligation based on the expected cost plus a margin. The margin was determined by a market assessment performed at contract inception. Revenue is recognized over time, using an input method, as the customer simultaneously benefits from the services as delivery occurs. The Company records a contract asset associated with this KI contract, as the right to revenue is dependent on something other than the passage of time.
Kaplan Higher Education (KHE) . KHE primarily provides non-academic operations support services to Purdue University Global (Purdue Global) pursuant to a Transition and Operations Support Agreement (TOSA). This contract has a 30 -year term and consists of one performance obligation, which represents a series of daily promises to provide support services to Purdue Global. The transaction price is entirely made up of variable consideration related to the reimbursement of KHE support costs and the KHE fee. The TOSA outlines a payment structure, which dictates how cash will be distributed at the end of Purdue Global’s fiscal year, which is the 30th of June. The collectability of the KHE support costs and KHE fee is entirely dependent on the availability of cash at the end of the fiscal year. This variable consideration is constrained based on fiscal year forecasts prepared for Purdue Global. The forecasts are updated throughout the fiscal year until the uncertainty is ultimately resolved, which is at the end of each Purdue Global fiscal year. As KHE’s performance obligation is made up of a series, the variable consideration is allocated to the distinct service period to which it relates, which is the Purdue Global fiscal year.
Support services revenue is recognized over time based on the expenses incurred to date and the percentage of expected reimbursement. KHE fee revenue is also recognized over time based on the amount of Purdue Global revenue recognized to date and the percentage of fee expected to be collected for the fiscal year. The Company used these input measures as Purdue Global simultaneously receives and consumes the benefits of the services provided by KHE.
Kaplan Supplemental Education . Supplemental Education offers test preparation services and materials to students, as well as professional training and exam preparation for professional certifications and licensures to students. Generally, Supplemental Education contracts consist of multiple performance obligations, as promises for these services are distinct within the context of the contract. The transaction price is stated in the contract and known at the time of contract inception, therefore no variable consideration exists. Revenue is allocated to each performance obligation based on its standalone selling price. Supplemental Education generally determines standalone selling prices based on the prices charged to students and professionals. Any discounts within the contract are allocated across all performance obligations unless observable evidence exists that the discount relates to a specific performance obligation in the contract.
Supplemental Education services revenue is recognized ratably over the period of access to the education materials. An estimate of the average access period is developed for each course, and this estimate is evaluated on an ongoing basis and adjusted as necessary. The time elapsed method, an input measure, is used as it best depicts the simultaneous consumption and availability of access to the services. Revenue associated with distinct course materials is recognized at the point in time when control transfers to the student, generally when products are delivered to the student.
Supplemental Education offers a guarantee on certain courses that gives students the ability to repeat a course if they are not satisfied with their exam score. The Company accounts for this guarantee as a separate performance obligation.
Television Broadcasting Revenue . Television broadcasting revenue at Graham Media Group (GMG) is primarily comprised of television and internet advertising revenue and retransmission revenue.
Television Advertising Revenue . GMG accounts for the series of advertisements included in television advertising contracts as one performance obligation and recognizes advertising revenue over time. The Company elected the right to invoice practical expedient, an output method, as GMG has the right to consideration that equals the value provided to the customer for advertisements delivered to date. As a result of the election to use the right to invoice practical expedient, GMG does not determine the transaction price or allocate any variable consideration at contract inception. Rather, GMG recognizes revenue commensurate with the amount to which it has the right to invoice the customer. Payment is typically received in arrears within 60 days of revenue recognition.
Retransmission Revenue . Retransmission revenue represents compensation paid by cable, satellite and other multichannel video programming distributors (MVPDs) to retransmit GMG’s stations’ broadcasts in their designated market areas. The retransmission rights granted to MVPDs are accounted for as a license of functional intellectual property, as the retransmitted broadcast provides significant standalone functionality. As such, each retransmission contract with an MVPD includes one performance obligation for each station’s retransmission license. GMG recognizes revenue using the usage-based royalty method, in which revenue is recognized in the month the broadcast is retransmitted based on the number of MVPD subscribers and the applicable per-user rate identified in the retransmission contract. Payment is typically received in arrears within 60 days of revenue recognition.
Healthcare Revenue . Healthcare revenue consists primarily of in-home specialty pharmacy infusion therapies at CSI Pharmacy Holding Company, LLC (CSI); home health and hospice services; healthcare software-as-a-service technology; physician services for allergy, asthma and immunology patients; in-home aesthetics; applied behavior analysis therapy; and management services related to equity affiliates.
Specialty Pharmacy Revenue. CSI contracts with patients to provide specialty pharmacy infusion and other therapies. Payment is typically received from third-party payors such as private insurers and Medicare. The payor is a third party to the contract that stipulates the transaction price of the contract. The Company identifies the customer as the party who benefits from its therapies and as such, the patient is the customer.
Specialty pharmacy contracts generally have one performance obligation to deliver the prescribed infusion therapy to the patient’s location and, in some cases, another performance obligation for nursing services to administer the infusion. The transaction price is the total amount CSI expects to receive from a payor as result of fulfilling its performance obligation. Revenue is recognized at the point in time the infusion therapy is delivered to the patient; revenue related to the nursing services is recognized as the services are provided.
Home Health and Hospice Revenue. The Company contracts with patients to provide home health or hospice services. Payment is typically received from third-party payors such as Medicare, Medicaid, and private insurers. The payor is a third party to the contract that stipulates the transaction price of the contract. The Company identifies the patient as the party who benefits from its healthcare services and as such, the patient is its customer.
Home health services contracts generally have one performance obligation to provide home health services to patients. The Company recognizes revenue using the right to invoice practical expedient, an output method, as the contractual right to revenue corresponds directly with the transfer of services to the patient. Given the election of the practical expedient, the Company does not determine the transaction price or allocate any variable consideration at contract inception. Rather, the Company recognizes revenue commensurate with the amount to which it has the right to invoice the customer, which is a function of the average length of stay within each of the two 30-day payment periods. Payment is typically received from Medicare within 30 days after a claim is filed. Medicare is the most common third-party payor for home health services.
Home health revenue contracts may be modified to account for changes in the patient’s plan of care. The Company identifies contract modifications when the modification changes the existing enforceable rights and obligations. As modifications to the plan of care modify the original performance obligation, the Company accounts for the contract modification as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis.
Hospice services contracts generally have one performance obligation to provide healthcare services to patients. The transaction price reflects the amount of revenue the Company expects to receive in exchange for providing these services. As the transaction price for healthcare services is known at the time of contract inception, no variable consideration exists. Hospice service revenue is recognized ratably over the period of care. The Company generally uses the time-elapsed method, an input measure, as it best depicts the simultaneous delivery and consumption of healthcare services. Payment is received from third-party payors for hospice services within 60 days after a claim is filed, or in some cases in two installments, one during the contract and one after the services have been provided. Medicare is the most common third-party payor.
Healthcare Software-as-a-service Revenue . Software-as-a-service revenue at Clarus is recognized ratably over the subscription period.
Physician Services Revenue. Physician services revenue at Impact Medical consists of revenue from physician and nurse visits as well as revenue related to allergy and immunology treatments. Each treatment is a separate performance obligation and revenue is recognized as the performance obligation is satisfied.
In-home Aesthetics Revenue. In-home aesthetics revenue at Skin Clique primarily represents treatments provided to a customer by a Skin Clique representative. Revenue is recognized as the service is being provided.
Applied Behavior Analysis Revenue. Applied behavior analysis revenue at Surpass is recognized as services are provided to the customer. Payments are generally received in arrears, from customers as well as third-party payors.
Management Services Revenue . The Company accounts for the management services provided to each of its affiliates as one performance obligation and recognizes revenue over time as the services are delivered. The Company uses the right to invoice practical expedient, an output method, as the Company’s right to revenue corresponds directly with the value delivered to the affiliate. As a result of the election to use the right to invoice practical expedient, the Company does not determine the transaction price or allocate any variable consideration at contract inception. Rather, the Company recognizes revenue commensurate with the amount to which it has the right to invoice the affiliate, which is based on contractually identified percentages. Payment is received monthly in arrears.
Manufacturing Revenue . Manufacturing revenue consists primarily of product sales generated by four businesses: Hoover, Dekko, Joyce, and Forney. The Company has determined that each item ordered by the customer is a distinct performance obligation, as it has standalone value and is distinct within the context of the contract. For arrangements with multiple performance obligations, the Company initially allocates the transaction price to each obligation based on its standalone selling price, which is the retail price charged to customers. Any discounts within the contract are allocated across all performance obligations unless observable evidence exists that the discount relates to a specific performance obligation or obligations in the contract.
The Company sells some products and services with a right of return. This right of return constitutes variable consideration and is constrained from revenue recognition on a portfolio basis, using the expected value method until the refund period expires.
The Company recognizes revenue when or as control transfers to the customer. Some manufacturing revenue is recognized ratably over the manufacturing period, if the product created for the customer does not have an alternative use for the Company and the Company has an enforceable right to payment for performance completed to date. The determination of the method by which the Company measures its progress toward the satisfaction of its performance obligations requires judgment. The Company measures its progress for these products using the units delivered method, an output measure. These arrangements represented 22 %, 21 %, and 19 % of the manufacturing revenue recognized for the years ended December 31, 2025, 2024 and 2023, respectively.
Other manufacturing revenue is recognized at the point in time when control transfers to the customer, generally when the products are shipped. Some customers have a bill-and-hold arrangement with the Company. Revenue for bill-and-hold arrangements is recognized when control transfers to the customer, even though the customer does not have physical possession of the goods. Control transfers when the bill-and-hold arrangement has been requested from the customer, the product is identified as belonging to the customer and is ready for physical transfer, and the product cannot be directed for use by anyone but the customer.
Payment terms and conditions vary by contract, although terms generally include a requirement of payment within 90 days of delivery.
The Company evaluated the terms of the warranties and guarantees offered by its manufacturing businesses and determined that these should not be accounted for as a separate performance obligation as a distinct service is not identified.
Automotive Revenue. The automotive subsidiary generates revenue primarily through the sale of new and used vehicles; the arrangement of vehicle financing, insurance and other service contracts (F&I revenue); and the performance of vehicle repair and maintenance services.
New and used vehicle revenue contracts generally contain one performance obligation to deliver the vehicle to the customer in exchange for the stated contract consideration. Revenue is recognized at the point in time when control of the vehicle passes to the customer. F&I revenue is recognized at the point in time when the agreement between the customer and financing, insurance or service provider is executed. As the automotive subsidiary acts as an agent in these F&I revenue transactions, revenue is recognized net of any financing, insurance and service provider costs. Repair and maintenance services revenue is recognized over time, as the service is performed.
Other Revenue . Restaurant Revenue. Restaurant revenues consist of sales generated by Clyde’s Restaurant Group (CRG). Food and beverage revenue, net of discounts and taxes, is recognized at the point in time when it is delivered to the customer. Proceeds from the sale of gift cards are recorded as deferred revenue and recognized as revenue upon redemption by the customer.
Custom Framing Services Revenue. Framebridge sells custom framing solutions to customers. Custom framing services revenue, net of discounts and taxes, is recognized when the products are delivered to the customer. Proceeds from the sale of gift cards are recorded as deferred revenue and recognized as revenue upon redemption by the customer.
Code3 Revenue . Code3 generates media management revenue in exchange for providing social media marketing solutions to its clients. The Company determined that Code3 contracts generally have one performance obligation made up of a series of promises to manage the client’s media spend on advertising platforms for the duration of the contract period.
Code3 recognizes revenue, net of media acquisition costs, over time as media management services are delivered to the customer. Generally, Code3 recognizes revenue using the right to invoice practical expedient, an output method, as Code3’s right to revenue corresponds directly with the value delivered to its customer. As a result of the election to use the right to invoice practical expedient, Code3 does not determine the transaction price or allocate any variable consideration at contract inception. Rather, Code3 recognizes revenue commensurate with the amount to which it has the right to invoice the customer, which is a function of the cost of social media placement plus a management fee, less any applicable discounts. Payment is typically received within 100 days of revenue recognition.
Code3 evaluates whether it is the principal (i.e., presents revenue on a gross basis) or agent (i.e., presents revenue on a net basis) in its contracts. Code3 presents revenue for media management services, net of media acquisition costs, as an agent, as Code3 does not control the media before placement on social media platforms.
Society6 Revenue. Revenue is primarily derived from the sale of products. Each product ordered is generally accounted for as an individual performance obligation. Product revenue, net of discounts and taxes, is recognized when control of the promised good is transferred to the customer.
Saatchi Art Revenue. Commissions revenue is primarily derived through the sale of artwork through Saatchi’s online art gallery or in-person art fairs. Each individual art piece ordered is generally accounted for as an individual performance obligation. Revenue is recognized net of artist fees when control of the promised good is transferred to the customer.
World of Good Brands (WGB) Revenue. Revenue is primarily derived from advertisements displayed on WGB’s online media properties. Revenue is recognized over time as the performance obligation is delivered. Revenue is generally recognized based on an output measure including impressions delivered, cost per click or time-based advertisements.
Other Revenue. Other revenue primarily includes advertising and subscription revenue from Slate, Decile, Pinna, Foreign Policy, Supporting Cast and City Cast. The Company accounts for other advertising revenues consistently with the advertising revenue streams addressed above. Subscription revenue consists of fees that provide customers access to online and print publications. The Company recognizes subscription revenue ratably over the subscription period beginning on the date that the publication or product is made available to the customer. Subscription revenue contracts are generally annual or monthly subscription contracts that are paid in advance of the delivery of performance obligations.
Revenue Policy Elections . The Company has elected to account for shipping and handling activities that occur after the customer has obtained control of the good as a fulfillment cost rather than as an additional promised service. Therefore, revenue for these performance obligations is recognized when control of the good transfers to the customer, which is when the good is ready for shipment. The Company accrues the related shipping and handling costs over the period when revenue is recognized.
The Company has elected to exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the entity from a customer.
Revenue Practical Expedients . The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) contracts for which the amount of revenue recognized is based on the amount to which the Company has the right to invoice the customer for services performed, (iii) contracts for which the consideration received is a usage-based royalty promised in exchange for a license of intellectual property and (iv) contracts for which variable consideration is allocated entirely to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation.
Costs to Obtain a Contract . The Company incurs costs to obtain a contract that are both incremental and expected to be recovered, as the costs would not have been incurred if the contract was not obtained and the revenue from the contract exceeds the associated cost. The revenue guidance provides a practical expedient to expense sales commissions as incurred in instances where the amortization period is one year or less. The amortization period is defined in the guidance as the contract term, inclusive of any expected contract renewal periods. The Company has elected to apply this practical expedient to all contracts except for third-party contracts in its international education division. In the international education division, costs to obtain a contract are amortized over the applicable amortization period except for cases in which commissions paid on initial contracts and renewals are commensurate. The Company amortizes these costs to obtain a contract on a straight-line basis over the amortization period. These expenses are included as cost of services or products in the Company’s Consolidated Statements of Operations.
Leases. The Company has operating leases for substantially all of its educational facilities, corporate offices and other facilities used in conducting its business, as well as certain equipment. The Company determines if an arrangement is a lease at inception. Operating leases are included in lease ROU assets, current portion of lease liabilities, and lease liabilities on the Company’s Consolidated Balance Sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. ROU assets also include any initial direct costs, prepaid lease payments and lease incentives received, when applicable. As most of the Company’s leases do not provide an implicit rate, the Company used its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. The Company used the incremental borrowing rate on December 31, 2018 for operating leases that commenced prior to that date.
The Company’s lease terms may include options to extend or terminate the lease by one to 10 years or more when it is reasonably certain that the option will be exercised. Leases with a term of 12 months or less are not recorded on the balance sheet; however, lease expense for these leases is recognized on a straight-line basis. The Company has elected the practical expedient to not separate lease components from nonlease components. As such, lease expense includes these nonlease components, when applicable. Fixed lease expense is recognized on a straight-line basis over the lease term. Variable lease expense is recognized when incurred. The Company’s lease agreements do not contain any significant residual value guarantees or restrictive covenants. In some instances, the Company subleases its leased real estate facilities to third parties. The Company has several restaurant leases with an entity affiliated with some of CRG’s senior managers and some automotive leases with an entity affiliated with automotive’s minority shareholder.
Finance leases are included in property, plant and equipment, net, accounts payable and accrued liabilities and other liabilities on the Company’s Consolidated Balance Sheets. The Company primarily has finance leases for its vehicle fleet at the healthcare subsidiary and service loaner vehicles at the automotive subsidiary. Service loaner vehicles are generally purchased from the lessor within six months of contract commencement and upon purchase, the vehicles are placed into used vehicle inventory at cost. As of December 31, 2025 and 2024, the Company had $ 9.3 million and $ 10.5 million, respectively, in net, property, plant and equipment and current finance lease liabilities related to service loaner vehicles at the automotive subsidiary.
Pensions and Other Postretirement Benefits. The Company maintains various pension and incentive savings plans. Most of the Company’s employees are covered by these plans. The Company also provides healthcare and life insurance benefits to certain retired employees. These employees become eligible for benefits after meeting age and service requirements.
The Company recognizes the overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability in its Consolidated Balance Sheets and recognizes changes in that funded status in the year in which the changes occur through comprehensive income. The Company measures changes in the funded status of its plans using the projected unit credit method and several actuarial assumptions, the most significant of which are the discount rate, the expected return on plan assets and the rate of compensation increase. The Company uses a measurement date of December 31 for its pension and other postretirement benefit plans.
Self-Insurance. The Company uses a combination of insurance and self-insurance for a number of risks, including claims related to employee healthcare and dental care, disability benefits, workers’ compensation, general liability, property damage and business interruption. Liabilities associated with these plans are estimated based on, among other things, the Company’s historical claims experience, severity factors and other actuarial assumptions. The expected loss accruals are based on estimates, and, while the Company believes that the amounts accrued are adequate, the ultimate loss may differ from the amounts provided.
Income Taxes. The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been
included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.
The Company records net deferred tax assets to the extent that it believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations; this evaluation is made on an ongoing basis. In the event the Company were to determine that it was able to realize net deferred income tax assets in the future in excess of their net recorded amount, the Company would record an adjustment to the valuation allowance, which would reduce the provision for income taxes.
The Company recognizes a tax benefit from an uncertain tax position when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. The Company records a liability for the difference between the benefit recognized and measured for financial statement purposes and the tax position taken or expected to be taken on the Company’s tax return. Changes in the estimate are recorded in the period in which such determination is made.
Foreign Currency Translation. Income and expense accounts of the Company’s non-U.S. operations where the local currency is the functional currency are translated into U.S. dollars using the current rate method, whereby operating results are converted at the average rate of exchange for the period, and assets and liabilities are converted at the closing rates on the period end date. Gains and losses on translation of these accounts are accumulated and reported as a separate component of equity and other comprehensive income. Gains and losses on foreign currency transactions, including foreign currency denominated intercompany loans on entities with a functional currency in U.S. dollars, are recognized in the Consolidated Statements of Operations.
Equity-Based Compensation. The Company measures compensation expense for awards settled in shares based on the grant date fair value of the award. The Company measures compensation expense for awards settled in cash, or that may be settled in cash, based on the fair value at each reporting date. The Company recognizes the expense over the requisite service period, which is generally the vesting period of the award. Stock award forfeitures are accounted for as they occur.
Earnings Per Share. Basic earnings per share is calculated under the two-class method. The Company treats restricted stock as a participating security due to its nonforfeitable right to dividends. Under the two-class method, the Company allocates to the participating securities their portion of dividends declared and undistributed earnings to the extent the participating securities may share in the earnings as if all earnings for the period had been distributed. Basic earnings per share is calculated by dividing the income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated similarly except that the weighted average number of common shares outstanding during the period includes the dilutive effect of the assumed exercise of options and restricted stock issuable under the Company’s stock plans. The dilutive effect of potentially dilutive securities is reflected in diluted earnings per share by application of the treasury stock method.
Mandatorily Redeemable Noncontrolling Interest. The mandatorily redeemable noncontrolling interest represents the ownership portion of a group of minority shareholders, consisting of a group of current and former senior managers of the healthcare business, in subsidiaries of Graham Healthcare Group (GHG). The Company established GHC One LLC (GHC One) and GHC Two LLC (GHC Two) as vehicles to invest in a portfolio of healthcare businesses together with the group of senior managers of GHG. As the holder of preferred units, the Company is obligated to contribute 95 % of the capital required for the acquisition of portfolio investments with the remaining 5 % of the capital coming from the group of senior managers. The operating agreements of GHC One and GHC Two require the dissolution of the entities on March 31, 2026, and March 31, 2029, respectively, at which time the net assets will be distributed to its members. As a preferred unit holder, the Company will receive an amount up to its contributed capital plus a preferred annual return of 8 % (guaranteed return) after the group of senior managers has received the redemption of their 5 % interest in net assets (manager return). All distributions in excess of the manager and guaranteed return will be paid to common unit holders, which currently comprise the group of senior managers of GHG. The Company may convert its preferred units to common units at any time after which it will receive 80 % of all distributions in excess of the manager return, with the remaining 20 % of excess distributions going to the group of senior managers as holders of the other common units. The mandatorily redeemable noncontrolling interest related to GHC One is reported as a current liability at December 31, 2025 and a noncurrent liability at December 31, 2024 in the Consolidated Balance Sheets. The mandatorily redeemable noncontrolling interested related to GHC Two is reported as a noncurrent liability at December 31, 2025 and 2024. The Company presents this liability at fair value, which is computed quarterly at the current redemption value. Changes in the redemption value are recorded as interest expense or income in the Company’s Consolidated Statement of Operations.
Redeemable Noncontrolling Interest. The Company’s redeemable noncontrolling interest represents the noncontrolling interest in CSI, which is 87.5 % owned; Framebridge, which is 93.4 % owned; Impact Medical, which is 50.1 % owned; Skin Clique, which is 51 % owned; and Clarus, which is 95.75 % owned.
CSI’s minority shareholders may put up to 50 % of their shares to the Company. The first put period began in 2022. A second put period for another tranche of shares began in 2024. In December 2024, the Company acquired some of the minority-owned shares of CSI for a tot al am ount of $ 2.1 million. Prior to the redemption, the Company owned 86.7 % of CSI. In December 2023, the Company acquired some of the minority-owned shares of CSI for a total amount of $ 20.0 million. Prior to the redemption, the Company owned 76.5 % of CSI. The minority shareholder of Framebridge has an option to put 20 % of the shares to the Company annually starting in 2024. The minority shareholder of Impact Medical has an option to put 10 % of the shares to the Company annually starting in 2026 and may put all of the shares starting in 2033. The minority shareholders of Skin Clique have the option to put all or a portion of their shares to the Company starting in 2029 and ending in 2032. The minority shareholder at Clarus may put all or a portion of their shares to the Company. The first put period occurred in 2025; a second put period will occur in 2026; and a final put period will occur in 2030. In October 2025, the Company purchased some of the minority-owned interest of Clarus for $ 0.4 million. Prior to the redemption, the Company owned 95 % of Clarus.
The Company presents the redeemable noncontrolling interests at the greater of its carrying amount or redemption value at the end of each reporting period in the Consolidated Balance Sheets. Changes in the redemption value are recorded as capital in excess of par value in the Company’s Consolidated Balance Sheets.
Comprehensive Income. Comprehensive income consists of net income, foreign currency translation adjustments, net changes in cash flow hedges, and pension and other postretirement plan adjustments.
Recently Adopted and Issued Accounting Pronouncements. In December 2023, the Financial Accounting Standards Board (FASB) issued new guidance that requires enhanced income tax disclosures related to the rate reconciliation, information on income taxes paid and other items. The guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The standard permits both prospective and retrospective application. The standard was adopted by the Company in the fourth quarter of 2025 and applied retrospectively to all prior periods presented in the Consolidated Financial Statements.
In November 2024, the FASB issued new guidance that requires disclosures about certain significant expense categories including inventory purchases, employee compensation, depreciation, amortization, and selling expenses. The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is in the process of evaluating the impact of this new guidance on the disclosures within its Consolidated Financial Statements.
In September 2025, the FASB issued new guidance which updates the accounting for internal-use software by removing references to software development project stages and adding new criteria to determine when an entity is required to start capitalizing internal-use software costs. The guidance is effective for fiscal years and interim periods beginning after December 15, 2027. Early adoption is permitted. The Company is in the process of evaluating the impact of this new guidance on its Consolidated Financial Statements.
Other new accounting pronouncements issued but not effective until after December 31, 2025, are not expected to have a material impact on the Company’s Consolidated Financial Statements.
3. ACQUISITIONS AND DISPOSITIONS OF BUSINESSES
Acquisitions. During 2025, the Company acquired five businesses: one in education, two in other healthcare businesses, one in manufacturing and one in automotive for $ 71.2 million in cash and the assumption of floor plan payables and $ 107.5 million in net pension obligations. The assets and liabilities of the companies acquired were recorded at their estimated fair values at the date of acquisition.
In June 2025, Kaplan acquired one small business which is included in its supplemental education division.
In July 2025, Hoover acquired 100 % of Arconic Architectural Products, LLC, a wholly-owned subsidiary of Arconic Corporation, which manufactures aluminum cladding products and operates within the broader non-residential materials space from its facility in Eastman, GA. A significant portion of the purchase price was funded by the Company’s assumption of certain pension obligations. The acquisition expands Hoover’s product offerings and is included in manufacturing.
In October 2025, GHG acquired two small businesses which are included in other healthcare businesses.
In October 2025, the Company’s automotive subsidiary acquired a Honda automotive dealership, including the real property for the dealership operations. In addition to a cash payment and the assumption of $ 4.9 million in floor plan payables, the automotive subsidiary borrowed $ 38.7 million under the delayed draw term loan to finance the
acquisition (see Note 11). The dealership is operated and managed by an entity affiliated with Christopher J. Ourisman, a member of the Ourisman Automotive Group family of dealerships. This acquisition expands the Company’s automotive business operations and is included in automotive.
During 2024, the Company acquired two small businesses. In January 2024, the Company acquired one small business which is included in other businesses. In May 2024, Kaplan acquired one small business which is included in its international division. The assets and liabilities of the companies acquired were recorded at their estimated fair values at the date of acquisition.
During 2023, the Company acquired five businesses: three in other healthcare businesses, one in automotive and one in other businesses for $ 83.3 million in cash and contingent consideration and the assumption of floor plan payables. The assets and liabilities of the companies acquired were recorded at their estimated fair values at the date of acquisition.
In January 2023, GHG acquired two small businesses which are included in other healthcare businesses.
In July 2023, the Company acquired one small business which is included in other businesses.
In September 2023, the Company’s automotive subsidiary acquired a Toyota automotive dealership, including the real property for the dealership operations. In addition to a cash payment and the assumption of $ 2.2 million in floor plan payables, the automotive subsidiary borrowed $ 37.0 million to finance the acquisition. The dealership is operated and managed by an entity affiliated with Christopher J. Ourisman, a member of the Ourisman Automotive Group family of dealerships. This acquisition expanded the Company’s automotive business operations and is included in automotive.
In December 2023, GHG acquired one small business which is included in other healthcare businesses.
Acquisition-related costs for acquisitions that closed during 2025 and 2023 were $ 4.3 million and $ 1.2 million, respectively, and were expensed as incurred. The aggregate purchase price of these acquisitions was allocated as follows, based on acquisition date fair values to the following assets and liabilities:
Purchase Price Allocation
Year Ended December 31
(in thousands)
Accounts receivable
Inventory
Property, plant and equipment
Lease right-of-use assets
Goodwill
Indefinite-lived intangible assets
Amortized intangible assets
Deferred income taxes
Other assets
Pension liabilities
Floor plan payables
Other liabilities
Current and noncurrent lease liabilities
Aggregate purchase price, net of cash acquired
Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The goodwill recorded due to these acquisitions is attributable to the assembled workforces of the acquired companies and expected synergies. The Company expects to deduct $ 12.4 million and $ 45.0 million of goodwill for income tax purposes for the acquisitions completed in 2025 and 2023, respectively.
The acquired companies were consolidated into the Company’s financial statements starting on their respective acquisition dates. The Company’s Consolidated Statements of Operations for the year ended December 31, 2025 includes aggregate revenue and operating losses for the companies acquired in 2025 of $ 68.5 million and $ 2.3 million, respectively. The following unaudited pro forma financial information includes the 2025 acquisitions as if they occurred at the beginning of 2024 and the 2023 acquisitions as if they had occurred at the beginning of 2022:
Year Ended December 31
(in thousands)
Operating revenues
Net income
These pro forma results were based on estimates and assumptions, which the Company believes are reasonable, and include the historical results of operations of the acquired companies and adjustments for depreciation and amortization of identified assets and the effect of pre-acquisition transaction-related expenses incurred by the Company and the acquired entities. The pro forma information does not include efficiencies, cost reductions and synergies expected to result from the acquisitions. They are not the results that would have been realized had these entities been part of the Company during the periods presented and are not necessarily indicative of the Company’s consolidated results of operations in future periods.
Disposition of Businesses. In early September 2025, the Company ceased operations of the Ourisman Jeep of Bethesda dealership.
In April 2025, Kaplan completed the sale of a small business, BridgeU Limited, which was included in KI.
In the first half of 2025, WGB completed the sale of various websites and related businesses that made up the WGB operations, which were included in other businesses. All remaining WGB operations were substantially shut down by the end of the third quarter of 2025.
In June and September 2024, WGB completed the sales of small businesses, which were included in other businesses. In July 2024, Kaplan completed the sale of a small business, Red Marker, which was included in KI (see Note 16).
In June 2023, the Company entered into an agreement to merge the Pinna business with Realm of Possibility, Inc. (Realm) in return for an additional noncontrolling financial interest in Realm (the Pinna transaction). The Company deconsolidated the Pinna subsidiary, which was included in other businesses, and continues to account for its interest in Realm under the equity method of accounting (see Notes 4 and 16).
Other Transactions. In October 2025, pursuant to the exercise of a put right, the Company purchased some of the minority-owned interest of Clarus for $ 0.4 million. Following the redemption, the Company owns 95.75 % of Clarus.
In July 2025, CSI exercised its call option to purchase some of the minority-owned interest of CSI for $ 1.8 million.
On February 25, 2025, the Company and a group of minority shareholders entered into an agreement to settle a significant portion of the mandatorily redeemable noncontrolling interest related to GHC One, including CSI, for a total of $ 205 million, which consisted of approximately $ 186.25 million in cash and $ 18.75 million in Graham Holdings Company Class B common stock.
The settlement agreement resulted in a $ 66.2 million increase to the mandatorily redeemable noncontrolling interest obligation, which the Company recorded as interest expense in the first quarter of 2025. The remaining mandatorily redeemable noncontrolling interest obligation related to GHC One and GHC Two was $ 8.4 million at December 31, 2025, with $ 6.9 million included in current liabilities due to the expected dissolution of GHC One by March 31, 2026.
In December 2024, the Company acquired some of the minority-owned shares of CSI for a total estimated amount of $ 2.0 million. The Company paid cash of $ 0.6 million and entered into a promissory note with the minority owner for the remaining $ 1.4 million at an interest rate of 5.5 % per annum. The note is included in other indebtedness (see Note 11) and is due and payable on January 31, 2026. Following the redemption, the Company owns 87.5 % of CSI. Pursuant to the terms of the purchase agreement, the purchase price was finalized in December 2025, resulting in an additional amount payable of $ 0.1 million, plus interest at 5.5 % per annum, to the minority owner.
In December 2023, the Company acquired some of the minority-owned shares of CSI for a total amount of $ 20.0 million. The Company paid cash of $ 5.0 million and entered into a promissory note with the minority owners for the remaining $ 15.0 million at an interest rate of 8 % per annum. The note is included in other indebtedness (see Note 11) and payable in quarterly installments with the final payment due by January 1, 2027. Following the redemption, the Company owned 86.7 % of CSI.
As of December 31, 2025, the Company holds a controlling financial interest in GHC One and GHC Two and therefore includes the assets, liabilities, results of operations and cash flows in its consolidated financial statements. GHC One acquired Clarus during 2019. GHC Two acquired Impact Medical during 2021 and Skin Clique and Surpass in 2022. The Company accounts for the minority ownership of the group of current and former senior managers in GHC One and GHC Two as a mandatorily redeemable noncontrolling interest (see Notes 2 and 12).
4. INVESTMENTS
Money Market Investments. As of December 31, 2025 and 2024, the Company had money market investments of $ 5.3 million and $ 3.9 million, respectively, that are classified as cash and cash equivalents in the Company’s Consolidated Balance Sheets.
Investments in Marketable Equity Securities. Investments in marketable equity securities consist of the following:
As of December 31
(in thousands)
Total cost
Gross unrealized gains
Gross unrealized losses
Total Fair Value
At December 31, 2025 and 2024, the Company owned 55,430 shares in Markel Group Inc. (Markel) valued at $ 119.2 million and $ 95.7 million, respectively. The Chief Executive Officer of Markel, Mr. Thomas S. Gayner, is a member of the Company’s Board of Director s. As of December 31, 2025, the Company owned 422 Class A and 481,920 Class B shares in Berkshire Hathaway valued at $ 560.8 million, which exceeded 5 % of the Company’s total assets.
The Company purchased $ 29.8 million, $ 5.0 million, and $ 4.6 million of marketable equity securities during 2025, 2024 and 2023, respectively.
There were no sales of marketable equity securities during 2025. During 2024 and 2023, the gross cumulative realized net gains from the sales of marketable equity securities were $ 19.8 million and $ 12.7 million, respectively. The total proceeds from such sales were $ 23.5 million and $ 62.0 million, respectively. The Company donated marketable equity securities in 2025, 2024 and 2023 and recorded $ 0.4 million in gross cumulative realized gains from the donations in each year.
The net gain on marketable equity securities comprised the following:
Year Ended December 31
(in thousands)
Gain on marketable equity securities, net
Less: Net gains in earnings from marketable equity securities sold and donated
Net unrealized gains in earnings from marketable equity securities still held at the end of the year
Investments in Affiliates. As of December 31, 2025, the Company’s healthcare subsidiary held investments in several affiliates that GHG actively manages; GHG held a 40 % interest in each of the following affiliates: Residential Home Health Illinois, Residential Hospice Illinois, Mary Free Bed at Home, and Allegheny Health Network Healthcare at Home. For the years ended December 31, 2025, 2024 and 2023, GHG recorded $ 16.5 million, $ 17.5 million and $ 15.6 million, respectively, in revenue for services provided to its affiliates.
In September 2025, the Company invested an additional $ 29.3 million in Intersection Holdings, LLC (Intersection). Intersection used a portion of the additional investment to settle, in a non-cash exchange, $ 19.3 million of the outstanding amount owed to the Company on the $ 30.0 million term loan extended in April 2023. Following the additional investment, the Company recognized a gain of $ 18.6 million in equity earnings. In November 2025, the Company invested an additional $ 28.7 million in Intersection. In December 2025, Intersection repaid the remaining $ 5.0 million outstanding balance on the term loan. As of December 31, 2025, the Company held an approximate 25.2 % interest in Intersection.
As of December 31, 2025, the Company held a 50.4 % and 41.4 % interest in N2K Networks and Realm, respectively, on a fully diluted basis, and accounts for these investments under the equity method. The Company holds two of the five seats of N2K Networks’ governing board with the other shareholders retaining substantive participation rights to control the financial and operating decisions of N2K Networks through representation on the board. In May 2024, the Company entered into a convertible promissory note agreement to loan N2K Networks $ 2.0 million. The convertible promissory note bears interest at a rate of 12 % per annum and, subject to conversion provisions, all unpaid interest and principal are due by May 2027. In the third quarter of 2024, the Company recorded an impairment charge of $ 14.4 million on its investment in N2K Networks as a result of the investee exiting a significant product offering following losses incurred.
The Company had $ 30.0 million and $ 38.0 million in its investment account that represents cumulative undistributed income in its investments in affiliates as of December 31, 2025 and 2024, respectively.
Additionally, Kaplan International Holdings Limited (KIHL) held a 45 % interest in a joint venture formed with University of York. KIHL loaned the joint venture £ 22 million, which is repayable over 25 years at an interest rate of 7 % and guaranteed by the University of York. The outstanding balance on this loan was £ 18.8 million as of December 31, 2025. The loan is repayable by December 2041.
Cost Method Investments. The Company held investments without readily determinable fair values in a number of equity securities that are accounted for as cost method investments, which are recorded at cost, less impairment, and adjusted for observable price changes for identical or similar investments of the same issuer. The carrying value of these investments was $ 49.4 million and $ 74.8 million as of December 31, 2025 and 2024, respectively. For the years ended December 31, 2025, 2024 and 2023, the Company recorded impairmentlosses of $ 14.7 million, $ 0.7 million and $ 0.5 million, respectively, to those securities. During the years ended December 31, 2024 and 2023, the Company recorded gains of $ 0.2 million and $ 3.1 million, respectively, to those equity securities based on observable transactions. During the year ended December 31, 2024, the Company recorded losses of $ 1.7 million to those equity securities based on observable transactions.
5. ACCOUNTS RECEIVABLE, ACCOUNTS PAYABLE, VEHICLE FLOOR PLAN PAYABLE AND ACCRUED LIABILITIES
Accounts receivable consist of the following:
As of December 31
(in thousands)
Receivables from contracts with customers, less estimated credit losses of $ 23,164 and $ 23,719
Other receivables
The changes in estimated credit losses were as follows:
(in thousands)
Balance at
Beginning of Period
Additions –
Charged to
Costs and
Expenses
Deductions
Balance at
End of
Period
Accounts payable, vehicle floor plan payable and accrued liabilities consist of the following:
As of December 31
(in thousands)
Accounts payable
Vehicle floor plan payable
Accrued compensation and related benefits
Other accrued liabilities
Cash overdrafts of $ 0.6 million are included in accounts payable at December 31, 2025 .
The Company finances new, used and service loaner vehicle inventory through standardized floor plan facilities with Truist Bank and Toyota Motor Credit Corporation (Truist and Toyota floor plan facility) and Ford Motor Credit Company. At December 31, 2025 , the floor plan facilities bore interest at variable rates that are based on Secured Overnight Financing Rate (SOFR) and prime-based interest rates. The weighted average interest rate for the floor plan facilities was 6.2 %, 6.7 % and 6.2 % for the years ended December 31, 2025, 2024 and 2023, respectively. The Company incurred floor plan interest expense of $ 7.9 million, $ 11.5 million and $ 6.6 million during 2025, 2024 and 2023, respectively, which is included in interest expense in the Consolidated Statements of Operations. Changes in the vehicle floor plan payable are reported as cash flows from financing activities in the Consolidated Statements of Cash Flows.
The floor plan facilities are collateralized by vehicle inventory and other assets of the relevant dealership subsidiary, and contain a number of covenants, including, among others, covenants restricting the dealership subsidiary with respect to the creation of liens and changes in ownership, officers and key management personnel. The Company was in compliance with all of these restrictive covenants as of December 31, 2025.
The floor plan interest expense related to the vehicle floor plan arrangements is offset by amounts received from manufacturers in the form of floor plan assistance capitalized in inventory and recorded against cost of goods sold in the Consolidated Statements of Operations when the associated inventory is sold. For the years ended December 31, 2025, 2024 and 2023, the Company recognized a reduction in cost of goods sold of $ 8.3 million, $ 9.3 million and $ 6.7 million, respectively, related to manufacturer floor plan assistance.
Activity related to floor plan facilities associated with new vehicles is as follows:
(in thousands)
Obligations outstanding at the beginning of the year
Additions
Settlements
Obligations outstanding at the end of the year
6. INVENTORIES AND CONTRACTS IN PROGRESS
Inventories and contracts in progress consist of the following:
As of December 31
(in thousands)
Raw materials
Work-in-process
Finished goods
Contracts in progress
7. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consist of the following:
As of December 31
(in thousands)
Land
Buildings
Machinery, equipment and fixtures
Leasehold improvements
Construction in progress
Less: accumulated depreciation
Depreciation expense was $ 80.4 million, $ 87.0 million, and $ 86.1 million in 2025, 2024 and 2023, respectively.
The Company recorded property, plant and equipment impairment charges of $ 0.1 million and $ 0.3 million in 2025 and 2023, respectively. The Company estimated the fair value of the property, plant and equipment using income and market approaches.
8. LEASES
The components of lease expense were as follows:
Year Ended December 31
(in thousands)
Operating lease cost
Finance lease cost:
Amortization of right-of-use assets
Interest on lease liabilities
Short-term and month-to-month lease cost
Variable lease cost
Sublease income
Total net lease cost
The Company recorded operating lease impairment charges of $ 1.6 million, $ 0.6 million, and $ 0.8 million in 2025, 2024 and 2023, respectively. The Company estimated the fair value of the ROU assets using an income approach.
Supplemental balance sheet information related to leases were as follows:
As of December 31
(in thousands)
Assets:
Lease right-of-use assets
Finance lease assets
Total lease assets
Current liabilities:
Operating lease liabilities
Finance lease liabilities
Noncurrent liabilities:
Operating lease liabilities
Finance lease liabilities
Total lease liabilities
Weighted average remaining lease term (years):
Operating leases
Finance leases
Weighted average discount rate:
Operating leases
Finance leases
At December 31, 2025, maturities of lease liabilities were as follows:
(in thousands)
Operating Leases
Finance Leases
Thereafter
Total payments
Less: Imputed interest
Present value of lease liabilities
As of December 31, 2025, the Company has entered into operating leases, including healthcare and retail facilities, that have not yet commenced and have minimum lease payments of $ 8.8 million. These operating leases will commence in fiscal year 2026 with contractual lease terms of 5 to 11 years.
Supplemental cash flow information related to leases were as follows:
Year Ended December 31
(in thousands)
Cash paid for amounts included in the measurements of lease liabilities:
Operating cash flows from operating leases (payments)
Operating cash flows from finance leases
Financing cash flows from finance leases (payments)
Right-of-use assets obtained in exchange for new lease liabilities (noncash):
Operating leases
Finance leases
9. GOODWILL AND OTHER INTANGIBLE ASSETS
The Company changed the presentation of its segments in the fourth quarter of 2025 into the following seven reportable segments: Kaplan International, Kaplan Higher Education, Kaplan Supplemental Education, Television Broadcasting, CSI, Manufacturing and Automotive (see Note 19). The composition of the reporting units within the healthcare division changed with the breakout of CSI and resulted in the reassignment of the assets and liabilities. The goodwill was allocated to the reporting units within the healthcare division using the relative fair value approach.
In the fourth quarter of 2025, as a result of underperformance at the Chrysler-Dodge-Jeep-Ram (CDJR) automotive dealership from a continued decline in revenues, the Company recorded an indefinite-lived intangible asset impairment charge of $ 10.1 million. The Company estimated the fair value of the indefinite-lived intangible asset by utilizing a discounted cash flow model. The carrying value of the indefinite-lived intangible asset exceeded its estimated fair value, resulting in an intangible asset impairment charge for the amount by which the carrying value exceeded its estimated fair value. The CDJR automotive dealership is included in the automotive segment.
In the fourth quarter of 2024, as a result of reduced enrollments at Mander Portman Woodward (MPW), due partly to the recent U.K. government elimination of the Value Added Tax (VAT) exemption on private school tuition, the Company recorded an intangible asset impairment charge of $ 22.9 million. The Company estimated the fair value of this indefinite-lived intangible asset by utilizing a discounted cash flow model. The carrying value of the indefinite-lived intangible asset exceeded its estimated fair value, resulting in an intangible asset impairment charge for the amount by which the carrying value exceeded its estimated fair value. MPW is included in KI.
In the second quarter of 2024, as a result of substantial digital advertising revenue declines and continued operating losses at WGB, the Company performed an interim review of the goodwill and intangible assets at the WGB reporting unit. As a result of the impairment review, the Company recorded goodwill and amortized intangible asset impairment charges totaling $ 26.3 million . The Company estimated the fair value of the reporting unit and amortized intangible asset by utilizing a discounted cash flow model. The carrying value of the reporting unit and amortized intangible asset exceeded their estimated fair values, resulting in goodwill and intangible asset impairment charges for the amount by which the carrying values exceeded their estimated fair value s. WGB was included in other businesses.
In the third quarter of 2023, due to continued sustained weakness in demand for certain Dekko power and data products primarily in the commercial office space market, th e Company performed an interim review of the goodwill of the Dekko reporting unit. As a result of the impairment review, the Company recorded a $ 47.8 million goodwill impairment charge. Also in the third quarter of 2023, as a result of the substantial digital advertising revenue declines and continued significant operating losses at WGB , th e Company performed an interim review of the goodwill of the WGB reporting unit. As a result of the impairment review, the Company recorded a $ 50.2 million goodwill impairment charge . The Company estimated the fair value of the reporting units by utilizing a discounted cash flow model. The carrying value of the reporting units exceeded their estimated fair values, resulting in goodwill impairment charges for the amount by which the carrying values exceeded their estimated fair values after taking into account the effect of deferred income taxes. Dekko is included in manufacturing and WGB was included in other businesses.
Amortization of intangible assets for the years ended December 31, 2025, 2024 and 2023, was $ 32.0 million, $ 37.1 million and $ 50.0 million, respectively. Amortization of intangible assets is estimated to be approximately $ 24 million in 2026, $ 9 million in 2027, $ 6 million in 2028, $ 5 million in 2029, $ 5 million in 2030 and $ 13 million thereafter.
The changes in the carrying amount of goodwill, by segment, were as follows:
(in thousands)
Education
Television
Broadcasting
Healthcare
Manufacturing
Automotive
Other
Businesses
Total
As of December 31, 2023
Goodwill
Accumulated impairmentlosses
Acquisitions
Impairment
Dispositions
Foreign currency exchange rate changes
As of December 31, 2024
Goodwill
Accumulated impairmentlosses
Acquisitions
Dispositions
Foreign currency exchange rate changes
As of December 31, 2025
Goodwill
Accumulated impairmentlosses
The changes in carrying amount of goodwill at the Company’s education and healthcare divisions were as follows:
(in thousands)
Kaplan
International
Higher
Education
Supplemental Education
Total Education
CSI
Other Healthcare
Total Healthcare
As of December 31, 2023
Goodwill
Accumulated impairmentlosses
Acquisitions
Dispositions
Foreign currency exchange rate changes
As of December 31, 2024
Goodwill
Accumulated impairmentlosses
Reallocation
Acquisitions
Dispositions
Foreign currency exchange rate changes
As of December 31, 2025
Goodwill
Accumulated impairmentlosses
Other intangible assets consist of the following:
As of December 31, 2025
As of December 31, 2024
(in thousands)
Useful
Life
Range
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Amortized Intangible Assets
Student and customer relationships
2 – 10 years
Trade names and trademarks
2 – 10 years
Network affiliation agreements
10 years
Databases and technology
3 – 6 years
Other
1 – 8 years
Indefinite-Lived Intangible Assets
Franchise agreements
Trade names and trademarks
FCC licenses
Other
10. INCOME TAXES
Income before income taxes consists of the following:
Year Ended December 31
(in thousands)
Non-U.S.
The provision for income taxes consists of the following:
(in thousands)
Current
Deferred
Total
Year Ended December 31, 2025
U.S. Federal
State and Local
Non-U.S.
Year Ended December 31, 2024
U.S. Federal
State and Local
Non-U.S.
Year Ended December 31, 2023
U.S. Federal
State and Local
Non-U.S.
The provision for income taxes differs from the amount of income tax determined by applying the U.S. Federal statutory rate of 21% to the income before taxes as a result of the following:
Year Ended December 31
(in thousands)
Amount
Percent
Amount
Percent
Amount
Percent
U.S. Federal taxes at statutory rate (see above)
State and local taxes, net of U.S. Federal tax (1)
Foreign tax effects
Australia
Change in valuation allowance
Other
United Kingdom
Other non-U.S. jurisdictions
Nontaxable or nondeductible Items
Goodwill impairments
Mandatorily redeemable noncontrolling interest
Other
Other, net
Provision for Income Taxes
The states that contribute to the majority (greater than 50%) of the tax effect in this category include Virginia for 2025, Virginia for 2024, and Maryland and Virginia for 2023.
The Company’s effective tax rate for 2025 was impacted by a $ 9.9 million deferred tax adjustment arising from a change in the estimated deferred state income tax rate attributable to the apportionment formula used in the calculation of deferred taxes related to the Company’s pension and other postretirement plans. This expense is included in the overall state tax provision for 2025 of $ 27.2 million reflected above.
Deferred income taxes consist of the following:
As of December 31
(in thousands)
Employee benefit obligations
State income tax loss carryforwards
State income tax credit carryforwards
U.S. Federal income tax loss carryforwards
U.S. Federal foreign income tax credit carryforwards
Non-U.S. income tax loss carryforwards
Non-U.S. capital loss carryforwards
Leases
Other
Deferred Tax Assets
Valuation allowances
Deferred Tax Assets, Net
Prepaid pension cost
Unrealized gain on marketable equity securities
Goodwill and other intangible assets
Leases
Non-U.S. withholding tax
Other
Deferred Tax Liabilities
Deferred Income Tax Liabilities, Net
Cash income taxes paid, net of refunds, by jurisdiction consist of the following:
Year Ended December 31
(in thousands)
U.S. Federal
State
Non-U.S.
Australia
Singapore
United Kingdom
Other non-U.S.
Total non-U.S.
Total
The Company has $ 1,318.6 million of state income tax net operating loss carryforwards available to offset future state taxable income as of December 31, 2025. State income tax loss carryforwards, if unutilized, will start to expire approximately as follows:
(in millions)
2031 and after
Total
The Company has recorded $ 75.9 million in deferred state income tax assets, net of U.S. Federal income tax, with respect to these state income tax loss carryforwards as of December 31, 2025. The Company has established $ 56.2 million in valuation allowances against these deferred state income tax assets, since the Company has determined that it is more likely than not that some of these state income tax losses may not be fully utilized in the future to reduce state taxable income.
The Company has $ 224.9 million of U.S. Federal income tax loss carryforwards obtained as a result of prior stock acquisitions as of December 31, 2025. U.S. Federal income tax loss carryforwards are expected to be fully utilized as follows:
(in millions)
2031 and after
Total
The Company has established $ 47.2 million in U.S. Federal deferred tax assets with respect to these U.S. Federal income tax loss carryforwards as of December 31, 2025.
For U.S. Federal income tax purposes, the Company has established U.S. Federal deferred tax assets with respect to $ 0.4 million of foreign tax credits available to be credited against future U.S. Federal income tax liabilities that will start to expire in 2031 if unutilized. The Company has recorded $ 0.1 million in valuation allowances against these deferred tax assets since the Company determined that it is more likely than not that these foreign tax credit carryforwards may not be utilized in the future to reduce U.S. Federal income taxes.
The Company has $ 78.5 million of non-U.S. income tax loss carryforwards as a result of operating losses and carryforwards that were obtained in part through prior stock acquisitions that are available to offset future non-U.S. taxable income and has recorded, with respect to these losses, $ 14.4 million in non-U.S. deferred income tax assets. The Company has established $ 11.1 million in valuation allowances against the deferred tax assets for the portion of non-U.S. tax losses that may not be utilized to reduce future non-U.S. taxable income. The $ 78.5 million of non-U.S. income tax loss carryforwards consist of $ 24.5 million in losses that may be carried forward indefinitely; $ 44.3 million of losses that, if unutilized, will expire in varying amounts through 2030; and $ 9.7 million of losses that, if unutilized, will start to expire after 2030.
The Company has $ 32.0 million of non-U.S. capital loss carryforwards that may be carried forward indefinitely and are available to offset future non-U.S. capital gains. The Company recorded a $ 9.0 million non-U.S. deferred income tax asset for these non-U.S. capital loss carryforwards and has established a full valuation allowance against this non-U.S. deferred tax asset since the Company has determined that it is more likely than not that the capital loss carryforwards may not be utilized to reduce taxable income in the future.
Deferred tax valuation allowances and changes in deferred tax valuation allowances were as follows:
(in thousands)
Balance at Beginning of Period
Tax Expense and Revaluation
Deductions
Balance at End of
Period
Year Ended
December 31, 2025
December 31, 2024
December 31, 2023
The Company has established $ 62.0 million in valuation allowances against deferred state tax assets recognized, net of U.S. Federal tax. As stated above, approximately $ 56.2 million of the valuation allowances, net of U.S. Federal income tax, relate to state income tax loss carryforwards. In most instances, the Company has established valuation allowances against deferred state income tax assets without considering potentially offsetting deferred tax liabilities established with respect to prepaid pension cost and goodwill. Prepaid pension cost and goodwill have not been considered a source of future taxable income for realizing those deferred state tax assets recognized because these temporary differences are not likely to reverse in the foreseeable future. However, certain deferred state tax assets have an indefinite life. As a result, the Company has considered deferred tax liabilities for prepaid pension cost and goodwill as a source of future taxable income for realizing those deferred state tax assets with indefinite lives. The valuation allowances established against deferred state income tax assets may increase or decrease within the next 12 months, based on operating results or the market value of investment holdings. The Company will monitor future results on a quarterly basis to determine whether the valuation allowances provided against deferred state tax assets should be increased or decreased as future circumstances warrant.
The Company has established $ 20.5 million in valuation allowances against non-U.S. deferred tax assets, and as stated above, $ 11.1 million of the non-U.S. valuation allowances relate to non-U.S. income tax loss carryforwards and $ 9.0 million relate to non-U.S. capital loss carryforwards. Valuation allowances established against non-U.S. deferred tax assets are recorded at the education division and other businesses. These non-U.S. valuation allowances may increase or decrease within the next 12 months, based on operating results. As a result, the Company is unable to estimate the potential tax impact, given the uncertain operating environment. The Company will monitor future education division and other businesses’ operating results and projected future operating results on a quarterly basis to determine whether the valuation allowances provided against non-U.S. deferred tax assets should be increased or decreased as future circumstances warrant.
The Company estimates that unremitted non-U.S. subsidiary earnings, when distributed, will not be subject to tax except to the extent non-U.S. withholding taxes are imposed. Approximately $ 3.2 million of deferred tax liabilities remain recorded on the books at December 31, 2025, with respect to future non-U.S. withholding taxes the Company estimated may be imposed on future cash distributions.
U.S. Federal and state tax liabilities may be recorded if the investment in non-U.S. subsidiaries becomes held for sale instead of being held indefinitely, but the calculation of the tax due is not practicable.
The Company files income tax returns with the U.S. Federal government and in various state, local and non-U.S. governmental jurisdictions, with the U.S. and the U.K. representing its major tax jurisdictions. The 2022 U.S. Federal tax return and subsequent years remain open to Internal Revenue Service examination. The 2022 U.K. corporation tax return and subsequent years remain open to examination by His Majesty’s Revenue and Customs (HMRC). There are currently no ongoing tax examinations in either jurisdiction.
The Company endeavors to comply with tax laws and regulations where it does business, but cannot guarantee that, if challenged, the Company’s interpretation of all relevant tax laws and regulations will prevail and that all tax benefits recorded in the financial statements will ultimately be recognized in full.
The following summarizes the Company’s unrecognized tax benefits, excluding interest and penalties, for the respective periods:
Year Ended December 31
(in thousands)
Beginning unrecognized tax benefits
Increases related to current year tax positions
Increases related to prior year tax positions
Decreases related to prior year tax positions
Decreases related to settlement with tax authorities
Decreases due to lapse of applicable statutes of limitations
Ending unrecognized tax benefits
The unrecognized tax benefits relate to federal and state research and development tax credits applicable to the 2022 to 2025 tax periods, as well as state income tax filing positions applicable to the 2012 to 2020 tax periods. In making these determinations, the Company presumes that taxing authorities pursuing examinations of the Company’s compliance with tax law filing requirements will have full knowledge of all relevant information, and, if necessary, the Company will pursue resolution of disputed tax positions by appeals or litigation. Although the Company cannot predict the timing of resolution with tax authorities, the Company estimates that some of the unrecognized tax benefits may change in the next 12 months due to settlement with the tax authorities. The Company expects that a $ 0.8 million federal tax benefit and a $ 2.2 million state tax benefit, net of $ 0.5 million federal tax expense, will reduce the effective tax rate in the future if the unrecognized tax benefits are recognized.
The Company classifies interest and penalties related to uncertain tax positions as a component of interest and other expenses, respectively. As of December 31, 2025, the Company has accrued $ 0.5 million of interest related to the unrecognized tax benefits. The Company has no t accrued any penalties related to the unrecognized tax benefits.
In December 2021, the Organization for Economic Co-operation and Development (OECD) issued a set of rules known as “Pillar Two” with the intent to ensure that global companies pay a minimum corporate income tax of 15% in jurisdictions in which the global companies operate. Many non-U.S. countries (including the U.K. and European Union member countries) enacted legislation to adopt certain aspects of Pillar Two effective January 1, 2024. While the U.S. has not adopted Pillar Two, rules implemented by participating countries apply to the Company’s worldwide operations. The Company does not have material operations in jurisdictions with tax rates lower than 15%. The amount of Pillar Two tax recorded as of December 31, 2025 is not material. The Company will continue to monitor legislative changes as it relates to Pillar Two.
On July 4, 2025, legislation known as "An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14" (the Act) was enacted in the U.S., which includes, among other things, many corporate income tax provisions that will impact the Company. The Company has considered the Act in its full year 2025 effective tax rate, and continues to analyze its various provisions. The Act resulted in a significant decline in federal taxable income for 2025 as a result of changes to the income tax treatment of certain research and development costs and accelerated income tax deductions for certain capital expenditures.
11. DEBT
The Company’s borrowings consist of the following:
As of December 31
(in thousands)
Maturities
Stated Interest Rate
Effective Interest Rate
5.625% Unsecured notes (1)
5.75% Unsecured notes (2)
Revolving credit facility
Term loan (3)
Real estate term loan (4)
Capital term loan (5)
Other indebtedness
Total Debt
Less: current portion
Total Long-Term Debt
(1) The carrying value is net of $ 6.4 million of unamortized debt issuance costs as of December 31, 2025.
(2) The carrying value is net of $ 1.0 million of unamortized debt issuance costs as of December 31, 2024. Unsecured notes were redeemed in November 2025 .
(3) The carrying value is net of $ 0.5 million of unamortized debt issuance costs as of December 31, 2024. Term loan was repaid in November 2025.
(4) The carrying value is net of $ 0.1 million of unamortized debt issuance costs as of December 31, 2025 and 2024.
(5) The carrying value is net of $ 0.5 million and $ 0.6 million of unamortized debt issuance costs as of December 31, 2025 and 2024, respectively.
On November 24, 2025, the Company issued $ 500 million of senior unsecured fixed-rate notes due December 1, 2033 (the Notes). The Notes are guaranteed, jointly and severally, on a senior unsecured basis, by certain of the Company's existing and future domestic subsidiaries, as described in the terms of the indenture, dated as of November 24, 2025 (the Indenture). The Notes have a coupon rate of 5.625 % per annum, payable semi-annually on June 1 and December 1 of each year, beginning on June 1, 2026. The Company may redeem the Notes in whole or in part at any time at the respective redemption prices described in the Indenture.
In combination with the issuance of the Notes, the Company amended and restated the Second Amended and Restated Five Year Credit Agreement, dated as of May 3, 2022, to, among other things, (i) increase the Company’s borrowing capacity by replacing the existing revolving commitments with a new revolving credit facility in the aggregate principal amount of $ 400 million , (ii) extend the maturity of the facility to November 24, 2030, and (iii) increase the letter of credit sublimit to $ 40 million.
The Company used the net proceeds from the sale of the Notes, together with borrowings under the new revolving credit facility, to (i) redeem the $ 400 million of 5.75 % unsecured notes due June 1, 2026, (ii) refinance outstanding revolving loans under the existing revolving credit facility, and (iii) repay all amounts outstanding under the Company's existing $ 150 million term loan.
At December 31, 2025, the fair value of the Company’s $ 500 million of 5.625 % unsecured notes, based on quoted market prices (Level 2 fair value assessment), totaled $ 504.0 million. At December 31, 2024, the fair value of the Company’s $ 400 million of 5.75 % unsecured notes, based on quoted market prices (Level 2 fair value assessment) totaled $ 398.9 million.
The outstanding balance on the Company’s $ 400 million unsecured revolving credit facility was $ 222.5 million as of December 31, 2025, consisting of U.S. dollar borrowing of $ 155.0 million with interest payable at SOFR plus 1.375 % and British Pound (GBP) borrowings of £ 50.0 million with interest payable at Daily Sterling Overnight Index Average (SONIA) plus 1.375 %.
On September 26, 2023, the Company’s automotive subsidiary entered into a credit agreement with Truist Bank that includes a delayed draw term loan under which the proceeds may be used to (i) finance the acquisition of automobile dealerships (delayed draw capital loan), and (ii) finance the acquisition of real estate (delayed draw real estate loan). The delayed draw term loan bears interest at variable rates based on SOFR plus an applicable margin based on the type of delayed draw term loan requested. On September 24, 2025, the Company executed an amendment to extend the delayed draw term loan availability to November 10, 2025. On October 21, 2025, the automotive subsidiary borrowed $ 38.7 million under the delayed draw term loan to finance the acquisition of a Honda automotive dealership, including the real property for the dealership operations. The real estate term loan is payable in monthly installments of $ 0.4 million and bears interest at variable rates based on SOFR plus 1.75 % per
annum, and the capital term loan is payable in monthly installments of $ 0.7 million and bears interest at variable rates based on SOFR plus an applicable margin.
The automotive subsidiary used the net proceeds from the new credit agreement in 2023 to repay the outstanding balances of the previously issued commercial notes. The previous interest rate swap agreements were also terminated resulting in realized gains of $ 4.6 million that reduced interest expense during the third quarter of 2023.
The fair value of the Company’s other debt, which is based on Level 2 inputs, approximates its carrying value as of December 31, 2025 and 2024. The Company is in compliance with all financial covenants of the revolving credit facility and term loans as of December 31, 2025.
During 2025 and 2024, the Company had average borrowings outstanding of approximately $ 834.2 million and $ 804.7 million, respectively, at average annual interest rates of approximately 6.0 % and 6.3 %, respectively. The Company incurred net interest expense of $ 110.5 million , $ 176.3 million and $ 56.2 million during 2025, 2024 and 2023, respectively.
For the years ended December 31, 2025, 2024 and 2023, the Company recorded interest expense of $ 54.5 million , $ 119.3 million and $ 10.1 million, respectively, to adjust the fair value of the mandatorily redeemable noncontrolling interest. The fair value of the mandatorily redeemable noncontrolling interest was based on the fair value of the underlying subsidiaries owned by GHC One and GHC Two, after taking into account any debt and other noncontrolling interests of its subsidiary investments. The fair value of the owned subsidiaries is determined by reference to either a discounted cash flow or EBITDA multiple, which approximates fair value (Level 3 fair value assessment) (see Notes 3 and 12).
12. FAIR VALUE MEASUREMENTS
The Company’s financial assets and liabilities measured at fair value on a recurring basis were as follows:
The Company’s money market investments are included in cash and cash equivalents and the value considers the liquidity of the counterparty.
The Company’s investments in marketable equity securities are held in common shares of U.S. corporations that are actively traded on U.S. exchanges. Price quotes for these shares are readily available.
Includes mutual funds, which are valued using a market approach based on the quoted market prices of the security or inputs that include quoted market prices for similar instruments.
Included in Accounts payable, vehicle floor plan payable and accrued liabilities and Other Liabilities. The Company determined the fair value of the contingent consideration liabilities using either a Monte Carlo simulation, Black-Scholes model, or probability-weighted analysis depending on the type of target included in the contingent consideration requirements (revenue, EBITDA, client retention). All analyses included estimated financial projections for the acquired businesses and acquisition-specific discount rates.
Included in Other Liabilities. The Company utilized a market approach model using the notional amount of the interest rate swap multiplied by the observable inputs of time to maturity and market interest rates.
The fair value of the mandatorily redeemable noncontrolling interest is based on the fair value of the underlying subsidiaries owned by GHC One and GHC Two, after taking into account any debt and other noncontrolling interests of its subsidiary investments. The fair value of the owned subsidiaries is determined using enterprise value analyses which include an equal weighing between guideline public company and discounted cash flow analyses.
Included in Other current assets and valued based on a valuation model that calculates the differential between the contract price and the market-based forward rate.
The following table provides a reconciliation of changes in the Company’s financial liabilities measured at fair value on a recurring basis, using Level 3 inputs:
(in thousands)
Contingent consideration liabilities
Mandatorily redeemable noncontrolling interest
As of December 31, 2023
Acquisition of business
Changes in fair value (1)
Capital contributions
Accretion of value included in net income (1)
Settlements or distributions
Foreign currency exchange rate changes
As of December 31, 2024
Changes in fair value (1)
Capital contributions
Accretion of value included in net income (1)
Settlements or distributions
Foreign currency exchange rate changes
As of December 31, 2025
Changes in fair value and accretion of value of contingent consideration liabilities are included in Selling, general and administrative expenses and the changes in fair value of mandatorily redeemable noncontrolling interest is included in Interest expense in the Company’s Consolidated Statements of Operations.
For the years ended December 31, 2025, 2024 and 2023, the Company recorded goodwill and other long-lived asset impairment charges of $ 12.3 million, $ 49.8 million and $ 99.1 million , respectively (see Note 9). The remeasurement of goodwill and other long-lived assets is classified as a Level 3 fair value assessment due to the significance of unobservable inputs developed in the determination of the fair value. The Company used a discounted cash flow model to determine the estimated fair value of the reporting units, indefinite-lived intangible assets, and other long-lived assets. Where appropriate, a market value approach was also utilized to supplement the discounted cash flow model. The Company made estimates and assumptions regarding future cash flows, royalty rates, discount rates, market values, and long-term growth rates.
For the years ended December 31, 2025, 2024 and 2023, the Company recorded impairmentlosses of $ 14.7 million , $ 0.7 million and $ 0.5 million, respectively, to equity securities that are accounted for as cost method investments. During the year ended December 31, 2024, the Company recorded losses of $ 1.7 million to equity securities that are accounted for as cost method investments based on observable transactions for identical or similar investments of the same issuer. For the years ended December 31, 2024 and 2023, the Company recorded gains of $ 0.2 million and $ 3.1 million, respectively, to those equity securities based on observable transactions (see Note 4).
For the year ended December 31, 2024 , the Company recorded impairment charges of $ 14.4 million on one of its investments in affiliates (see Note 4). The Company used a market approach to determine the estimated fair value of its investment in the affiliate.
13. REVENUE FROM CONTRACTS WITH CUSTOMERS
The Company generated 79 % of its revenue from U.S. domestic sales in each of 2025, 2024 and 2023. The remaining 21 % of revenue was generated from non-U.S. sales.
In 2025, 2024 and 2023, the Company recognized 53 %, 54 % and 54 %, respectively, of its revenue over time as control of the services and goods transferred to the customer. The remaining 47 %, 46 % and 46 %, respectively, of revenue was recognized at a point in time, when the customer obtained control of the promised goods.
The determination of the method by which the Company measures its progress towards the satisfaction of its performance obligations requires judgment and is described in the Summary of Significant Accounting Policies (see Note 2).
Contract Assets. As of December 31, 2025, the Company recognized a total contract asset of $ 36.5 million related to a contract at a Kaplan International business, of which $ 4.4 million is included in Other current assets and $ 32.1 million is included in Deferred Charges and Other Assets. The Company expects to recognize an additional $ 235.8 million related to the remaining performance obligation in the contract over the next four years . As of December 31, 2024, the contract asset was $ 36.6 million, of which $ 1.9 million was included in Other current assets and $ 34.7 million was included in Deferred Charges and Other Assets. Additional contract assets of $ 3.0 million and
$ 3.1 million are included in Other current assets on the Company’s Consolidated Balance Sheet as of December 31, 2025 and 2024, respectively.
Deferred Revenue. The Company records deferred revenue when cash payments are received or due in advance of the Company’s performance which includes some payments that are refundable due to the contractual right of the customer to cancel the agreement. As of December 31, 2025 and 2024, 22 % and 19 %, respectively, of the Company’s deferred revenue consisted of prepaid amounts which are refundable. The following table presents the change in the Company’s deferred revenue balance during the year ended December 31, 2025:
As of December 31
(in thousands)
% Change
Deferred revenue
The majority of the change in the deferred revenue balance is related to increases within the KI and Supplemental Education divisions due to the cyclical nature of services. During the year ended December 31, 2025, the Company recognized $ 351.1 million from the Company’s deferred revenue balance as of December 31, 2024, including $ 60.9 million of prepaid amounts which were refundable at the prior year-end.
Revenue allocated to remaining performance obligations represents deferred revenue amounts that will be recognized as revenue in future periods. As of December 31, 2025, the deferred revenue balance related to certain medical and nursing qualifications with an original contract length greater than 12 months at Kaplan Supplemental Education was $ 5.0 million. Kaplan Supplemental Education expects to recognize 68 % of this revenue over the next 12 months and the remainder thereafter.
Costs to Obtain a Contract. The following table presents changes in the Company’s costs to obtain a contract asset:
(in thousands)
Balance at
Beginning
of Year
Costs Associated with New Contracts
Less: Costs Amortized During the Year
Other
Balance
End of
Year
The majority of other activity was related to currency translation adjustments and other adjustments in 2025, 2024 and 2023.
14. CAPITAL STOCK, STOCK AWARDS AND STOCK OPTIONS
Capital Stock. Each share of Class A common stock and Class B common stock participates equally in dividends. The Class B stock has limited voting rights and, as a class, has the right to elect 30 % of the Board of Directors; the Class A stock has unlimited voting rights, including the right to elect a majority of the Board of Directors.
During 2025, 2024 and 2023, the Company purchased a total of 3,978 , 152,948 and 325,134 shares, respectively, of its Class B common stock at a cost of approximately $ 3.5 million , $ 115.2 million and $ 195.0 million, respectively, including commissions and excise taxes. On September 12, 2024 , the Board of Directors authorized the Company to purchase up to 500,000 shares of its Class B common stock. This authorization includes shares that remained under the previous authorization. The Company did not announce a ceiling price or time limit for the purchases. At December 31, 2025, the Company had remaining authorization from the Board of Directors to purchase up to 462,482 shares of Class B common stock.
Stock Awards. In 2012, the Company adopted an incentive compensation plan (the 2012 Plan), which, among other provisions, authorizes the awarding of Class B common stock to key employees in the form of stock awards, stock options and other awards involving the issuance of shares. Stock awards made under the 2012 Plan are primarily subject to the general restriction that stock awarded to a participant will be forfeited and revert to Company ownership if the participant’s employment terminates before the end of a specified period of service to the Company. At December 31, 2025, there were 75,045 shares reserved for issuance under the 2012 Plan, which were all subject to stock awards and stock options outstanding.
In 2022, the Company adopted a new incentive compensation plan (the 2022 Plan), which, among other provisions, authorizes the awarding of Class B common stock to key employees and non-employee Directors in the form of stock awards, stock options and other awards involving the issuance of shares. All stock awards, stock options and other awards involving the issuance of shares issued subsequent to the adoption of this plan are covered under this new incentive compensation plan. Stock awards made under the 2022 Plan are primarily subject to the general restriction that stock awarded to a participant will be forfeited and revert to Company ownership if the participant’s
employment terminates before the end of a specified period of service to the Company. The number of Class B common shares authorized for issuance under the 2022 Plan is 500,000 shares. At December 31, 2025, there were 496,824 shares reserved for issuance under the 2022 Plan. Of this number, 23,396 shares were subject to stock awards and 473,428 shares were available for future awards.
Activity related to stock awards under these incentive compensation plans for the year ended December 31, 2025 was as follows:
Number of Shares
Average Grant-Date Fair Value
Beginning of year, unvested
Awarded
Vested
Forfeited
End of Year, unvested
For the share awards outstanding at December 31, 2025, the aforementioned restriction is expected to lapse in 2027 for 14,617 shares and 2029 for 9,779 shares. Also, early in 2026, the Company issued stock awards of 172 shares. Stock-based compensation costs resulting from Company stock awards were $ 3.7 million, $ 4.0 million and $ 3.9 million in 2025, 2024 and 2023, respectively.
As of December 31, 2025, there was $ 8.5 million of total unrecognized compensation expense related to these awards. That cost is expected to be recognized on a straight-line basis over a weighted average period of 1.8 years.
Stock Options. Stock options granted under the incentive compensation plans cannot be less than the fair value on the grant date, generally vest over six years and have a maximum term of 10 years.
Activity related to options outstanding for the year ended December 31, 2025 was as follows:
Number of Shares
Average Option Price
Beginning of year
Granted
Exercised
Expired or forfeited
End of Year
Of the shares covered by options outstanding at the end of 2025, 60,168 are now exercisable and 12,877 are expected to become exercisable in 2026. For each of 2025, 2024 and 2023, the Company recorded expense of $ 1.2 million related to stock options. Information related to stock options outstanding and exercisable at December 31, 2025, is as follows:
Options Outstanding
Options Exercisable
Exercise Prices
Shares Outstanding at 12/31/2025
Weighted
Average
Remaining
Contractual
Life (years)
Weighted
Average
Exercise
Price
Shares Exercisable at 12/31/2025
Weighted
Average
Remaining
Contractual
Life (years)
Weighted
Average
Exercise
Price
At December 31, 2025, the intrinsic value for all options outstanding, exercisable and unvested was $ 48.2 million, $ 39.6 million and $ 8.6 million, respectively. The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the option. The market value of the Company’s stock was $ 1,098.60 at December 31, 2025. At December 31, 2025, there were 12,877 unvested options related to this plan with an average exercise price of $ 426.86 and a weighted average remaining contractual term of 4.7 years. At December 31, 2024, there were 25,754 unvested options with an average exercise price of $ 426.86 and a weighted average remaining contractual term of 5.7 years.
As of December 31, 2025, total unrecognized stock-based compensation expense related to stock options was $ 0.8 million, which is expected to be recognized on a straight-line basis over a weighted average period of approximately 0.7 years. There were 24,742 options exercised during 2025. The total intrinsic value of options exercised during 2025 was $ 6.1 million; a tax benefit from these option exercises of $ 1.6 million was realized. There were 77,258
options exercised during 2024. The total intrinsic value of options exercised during 2024 was $ 8.0 million; a tax benefit from these option exercises of $ 2.1 million was realized. There were 3,060 options exercised during 2023. The total intrinsic value of options exercised during 2023 was $ 0.5 million; a tax benefit from these option exercises of $ 0.1 million was realized.
No options were granted during 2025, 2024 or 2023.
Other Awards. At December 31, 2025, an executive officer has a stock award that is subject to price-based vesting conditions. The stock award provides the executive officer the right to receive 1,000 shares of the Company’s Class B common stock each time the Company’s closing share price exceeds a certain share price target for a 90 consecutive day period; the award period expires on December 31, 2027. The grant date fair value of the stock award totaled $ 3.5 million , which was estimated using a Monte Carlo simulation. The grant date fair value is recognized over the derived service period of each tranche. In 2025, the second and third tranches of 1,000 shares each related to this award vested following satisfaction of the price-based vesting condition. In 2024, the first tranche of 1,000 shares related to this award vested following satisfaction of the price-based vesting condition. No shares related to this award vested in 2023. Th e Company recognized $ 0.4 million, $ 0.7 million and $ 1.1 million in stock-based compensation expense related to this award in 2025, 2024 and 2023, respectively.
For each of the years ended December 31, 2025, 2024 and 2023, the Company recognized expense of $ 0.4 million related to the issuance and vesting of 425 , 532 and 731 shares, respectively, to non-employee Directors under the 2022 Plan.
The Company also maintains a stock option plan at Kaplan. Under the provisions of this plan, options are issued with an exercise price equal to the estimated fair value of Kaplan’s common stock, and options vest ratably over the number of years specified (generally four to five years ) at the time of the grant. Upon exercise, an option holder may receive Kaplan shares or cash equal to the difference between the exercise price and the then fair value.
At December 31, 2025, a Kaplan senior manager held 7,206 Kaplan restricted shares. The fair value of Kaplan’s common stock is determined by the Company’s compensation committee of the Board of Directors, and in January 2026, the committee set the fair value price at $ 2,034 per share. No options were awarded during 2025, 2024, or 2023; no options were exercised during 2025, 2024 or 2023; and no options were outstanding at December 31, 2025.
Kaplan recorded stock compensation expense of $ 1.9 million, $ 0.5 million and $ 1.0 million in 2025, 2024 and 2023, respectively. At December 31, 2025, the Company’s accrual balance related to the Kaplan restricted shares totaled $ 14.7 million. There were no payouts in 2025, 2024 or 2023.
Earnings Per Share. The Company’s unvested restricted stock awards contain nonforfeitable rights to dividends and, therefore, are considered participating securities for purposes of computing earnings per share pursuant to the two-class method. The diluted earnings per share computed under the two-class method is lower than the diluted earnings per share computed under the treasury stock method, resulting in the presentation of the lower amount in diluted earnings per share. The computation of earnings per share under the two-class method excludes the income attributable to the unvested restricted stock awards from the numerator and excludes the dilutive impact of those underlying shares from the denominator.
The following reflects the Company’s net income and share data used in the basic and diluted earnings per share computations using the two-class method:
Year Ended December 31
(in thousands, except per share amounts)
Numerator:
Numerator for basic earnings per share:
Net income attributable to Graham Holdings Company common stockholders
Less: Dividends paid–common stock outstanding and unvested restricted shares
Undistributed earnings
Percent allocated to common stockholders
Add: Dividends paid–common stock outstanding
Numerator for basic earnings per share
Add: Additional undistributed earnings due to dilutive stock options
Numerator for diluted earnings per share
Denominator:
Denominator for basic earnings per share:
Weighted average shares outstanding
Add: Effect of dilutive stock options
Denominator for diluted earnings per share
Graham Holdings Company Common Stockholders:
Basic earnings per share
Diluted earnings per share
Earnings per share amounts may not recalculate due to rounding.
Diluted earnings per share excludes the following weighted average potential common shares, as the effect would be antidilutive, as computed under the treasury stock method:
Year Ended December 31
(in thousands)
Weighted average restricted stock
The 2025, 2024 and 2023 diluted earnings per share amounts exclude the effects of 1,000 , 27,742 and 105,000 stock options and contingently issuable shares outstanding, respectively, as their inclusion would have been antidilutive due to a market condition.
In 2025, 2024 and 2023, the Company declared regular dividends totaling $ 7.20 , $ 6.88 and $ 6.60 per share, respectively.
15. PENSIONS AND OTHER POSTRETIREMENT PLANS
The Company maintains various pension and incentive savings plans and contributed to multiemployer plans on behalf of certain union-represented employee groups. Most of the Company’s employees are covered by these plans. The Company also provides healthcare and life insurance benefits to certain retired employees. These employees become eligible for benefits after meeting age and service requirements.
The Company uses a measurement date of December 31 for its pension and other postretirement benefit plans.
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 remeasured the accumulated and projected benefit obligation as of October 17, 2024 and recorded a one-time pre-tax settlement gain of $ 653.4 million. The new measurement basis was used for the recognition of the Company’s pension benefit following the remeasurement. The settlement gain is included in non-operating pension and postretirement benefit income on the Consolidated Statements of Operations.
Defined Benefit Plans. The Company’s defined benefit pension plans consist of various pension plans and a Supplemental Executive Retirement Plan (SERP) offered to certain executives of the Company.
In the first quarter of 2025, the Company recorded $ 0.6 million in expenses related to a Separation Incentive Program (SIP) for certain WGB employees. In the second quarter of 2025, the Company recorded $ 6.0 million in expenses related to SIPs for certain Kaplan, GMG, WGB, Saatchi Art, Society6, Code3 and Decile employees. In the third quarter of 2025, the Company recorded $ 2.5 million in expenses related to SIPs for certain Kaplan, GMG, Joyce, Society6, Saatchi Art, Code3 and Corporate employees. These SIPs were funded from the assets of the Company’s pension plans.
In the first quarter of 2024, the Company recorded $ 0.4 million in expenses related to a SIP for certain Framebridge employees. In the second quarter of 2024, the Company recorded $ 14.8 million in expenses related to a Voluntary Retirement Incentive Program (VRIP) for certain GMG and Corporate employees. Also in the second quarter of 2024, the Company recorded $ 1.6 million in expenses related to SIPs for certain Framebridge and Code3 employees. In the third quarter of 2024, the Company recorded $ 3.7 million in expenses related to SIPs for certain Kaplan, Dekko, WGB, Saatchi Art, Society6, Slate and Decile employees. In the fourth quarter of 2024, the Company recorded $ 0.5 million in expenses related to SIPs for certain Kaplan, Dekko, WGB and Decile employees. These SIPs and VRIP were funded from the assets of the Company’s pension plan.
In the first quarter of 2023, the Company recorded $ 4.1 million in expenses related to SIPs for certain Leaf and Code3 employees. In the second quarter of 2023, the Company recorded $ 5.5 million in expenses related to SIPs for certain Kaplan, GMG, Leaf, Code3 and Pinna employees. In the fourth quarter of 2023, the Company recorded $ 0.2 million in expenses related to a SIP for certain GMG employees. These SIPs were funded from the assets of the Company’s pension plan.
In January 2022, a pension credit retention program was implemented by the Company for certain GHG employees; the program offers a pension credit up to $ 50,000 per employee, cliff vested after three years of continuous employment for certain existing employees and new employees. Effective April 1, 2024, this program is no longer being offered to new employees. The Company recorded $ 5.3 million, $ 18.6 million and $ 13.5 million in pension service cost expense in 2025, 2024 and 2023, respectively, related to this program.
The following table sets forth obligation, asset and funding information for the Company’s defined benefit pension plans:
Pension Plans
As of December 31
(in thousands)
Change in Benefit Obligation
Benefit obligation at beginning of year
Service cost
Interest cost
Amendments
Actuarial loss
Acquisitions
Benefits paid
Special termination benefits
Settlement
Benefit Obligation at End of Year
Change in Plan Assets
Fair value of assets at beginning of year
Actual return on plan assets
Benefits paid
Settlement
Fair Value of Assets at End of Year
Funded Status
SERP
As of December 31
(in thousands)
Change in Benefit Obligation
Benefit obligation at beginning of year
Service cost
Interest cost
Actuarial loss (gain)
Benefits paid
Benefit Obligation at End of Year
Funded Status
The change in the Company’s benefit obligations for the pension plans in 2025 was primarily due to the assumption of obligations related to an acquisition and the recognition of an actuarial loss resulting from various experience variances and assumption changes used to measure the benefit obligation, offset by the benefits paid during the year. The change in the Company’s benefit obligations for the SERP in 2025 was primarily due to the benefits paid during the year, offset by the recognition of an actuarial loss resulting from a decrease to the discount rate used to measure the benefit obligation.
The accumulated benefit obligation for the Company’s pension plans at December 31, 2025 and 2024, was $ 632.0 million and $ 448.7 million, respectively. The accumulated benefit obligation for the Company’s SERP at December 31, 2025 and 2024, was $ 90.4 million and $ 84.9 million, respectively. The amounts recognized in the Company’s Consolidated Balance Sheets for its defined benefit pension plans are as follows:
Pension Plans
SERP
As of December 31
As of December 31
(in thousands)
Noncurrent asset
Current liability
Noncurrent liability
Recognized Asset (Liability)
Key assumptions utilized for determining the benefit obligation are as follows:
Pension Plans
SERP
As of December 31
As of December 31
Discount rate
Rate of compensation increase – age graded
Cash balance interest crediting rate
4.89 % with phase in to 6.00 % in 2027
5.43 % with phase in to 6.00 % in 2026
The Company made no contributions to its pension plans in 2025 and 2024, and the Company does no t expect to make any contributions in 2026. The SERP is unfunded; therefore, the Company made actual benefit payments of $ 6.3 million and $ 6.1 million to beneficiaries for the years ended December 31, 2025 and 2024, respectively.
At December 31, 2025, future estimated benefit payments, excluding charges for early retirement programs, are as follows:
(in thousands)
Pension Plans
SERP
The total (benefit) cost arising from the Company’s defined benefit pension plans consists of the following components:
Pension Plans
Year Ended December 31
(in thousands)
Service cost
Interest cost
Expected return on assets
Amortization of prior service (credit) cost
Recognized actuarial gain
Net Periodic Benefit for the Year
Settlement
Early retirement and separation program costs
Total Benefit for the Year
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income
Current year actuarial gain
Current year prior service cost (credit)
Amortization of prior service credit (cost)
Recognized net actuarial gain
Settlement
Total Recognized in Other Comprehensive Income (Before Tax Effects)
Total Recognized in Total Benefit and Other Comprehensive Income (Before Tax Effects)
SERP
Year Ended December 31
(in thousands)
Service cost
Interest cost
Total Cost for the Year
Other Changes in Benefit Obligations Recognized in Other Comprehensive Income
Current year actuarial loss (gain)
Total Recognized in Other Comprehensive Income (Before Tax Effects)
Total Recognized in Total Cost and Other Comprehensive Income (Before Tax Effects)
The costs for the Company’s defined benefit pension plans are actuarially determined. Below are the key assumptions utilized to determine periodic cost:
Pension Plans
SERP
Year Ended December 31
Year Ended December 31
Discount rate
Expected return on plan assets
Rate of compensation increase – age graded
Cash balance interest crediting rate
5.43 % with phase in to 6.00 % in 2026
6.37 % with phase in to 5.20 % in 2025 / 6.37 % with phase in to 5.50 % in 2026 (2)
4.28 % with phase in to 5.50 % in 2025
As a result of the irrevocable group annuity contract purchase, the Company remeasured the accumulated and projected benefit obligation of the pension plan as of October 17, 2024. The remeasurement changed the discount rate from 5.2 % for the period January 1 to October 17, 2024 to 5.3 % for the period after October 17, 2024.
As a result of the irrevocable group annuity contract purchase, the Company remeasured the accumulated and projected benefit obligation of the pension plan as of October 17, 2024. The remeasurement changed the cash balance interest crediting rate from 6.37 % with phase in to 5.20 % in 2025 for the period January 1 to October 17, 2024 to 6.37 % with phase in to 5.50 % in 2026 for the period after October 17, 2024.
Accumulated other comprehensive income (AOCI) includes the following components of unrecognized net periodic cost for the defined benefit plans:
Pension Plans
SERP
As of December 31
As of December 31
(in thousands)
Unrecognized actuarial (gain) loss
Unrecognized prior service credit
Gross Amount
Deferred tax liability (asset)
Net Amount
Defined Benefit Plan Assets. The Company’s defined benefit pension obligations are funded by a portfolio made up of private investment funds and a relatively small number of stocks and high-quality fixed-income securities that are held by a third-party trustee. The assets of the Company’s pension plans were allocated as follows:
As of December 31
U.S. equities
Private investment funds
International equities
U.S. fixed income
The Company manages approximately 42 % of the pension assets internally, of which the majority is invested in Berkshire Hathaway stock, with the remaining investments in private investment funds, Markel stock, and short-term fixed-income securities. The remaining 58 % of plan assets are managed by two investment companies. The goal of the investment managers is to produce moderate long-term growth in the value of these assets, while protecting them against large decreases in value. Both investment managers may invest in a combination of equity and fixed-income securities and cash. The managers are not permitted to invest in securities of the Company or in alternative investments. One investment manager cannot invest more than 15 % of the assets at the time of purchase in each of the stocks of Alphabet and Berkshire Hathaway, and no more than 50 % of the assets it manages in specified international exchanges at the time the investment is made. The other investment manager cannot invest more than 20 % of the assets at the time of purchase in the stock of Berkshire Hathaway, and no more than 15 % of the assets it manages in specified international exchanges at the time the investment is made. Excluding the exceptions noted above, the investment managers cannot invest more than 10 % of the assets in the securities of any other single issuer, except for obligations of the U.S. Government, without receiving prior approval from the plan administrator.
In determining the expected rate of return on plan assets, the Company considers the relative weighting of plan assets, the historical performance of total plan assets and individual asset classes and economic and other indicators of future performance. In addition, the Company may consult with and consider the input of financial and other professionals in developing appropriate return benchmarks.
The Company evaluated its defined benefit pension plan asset portfolio for the existence of significant concentrations (defined as greater than 10 % of plan assets) of credit risk as of December 31, 2025. Types of concentrations that were evaluated include, but are not limited to, investment concentrations in a single entity, type of industry, foreign country and individual fund. At December 31, 2025, the pension plan held investments in one common stock and one private investment fund that exceeded 10 % of total plan assets, valued at $ 1,267.4 million, or approximately 37 % of total plan assets. At December 31, 2024, the pension plan held investments in one common stock and one private investment fund that exceeded 10 % of total plan assets, valued at $ 1,178.5 million, or approximately 40 % of total plan assets. Assets also included $ 124.7 million and $ 100.1 million of Markel shares at December 31, 2025 and 2024, respectively.
The Company’s pension plan assets measured at fair value on a recurring basis were as follows:
As of December 31, 2025
(in thousands)
Level 1
Level 2
Level 3
Total
Cash equivalents
Equity securities
U.S. equities (1)
International equities (2)
Total Investments
Short-term investment funds measured at NAV (3)
Private investment funds measured at NAV (4)
Receivables, net
Total
As of December 31, 2024
(in thousands)
Level 1
Level 2
Level 3
Total
Cash equivalents
Equity securities
U.S. equities (1)
International equities (2)
Total Investments
Short-term investment funds measured at NAV (3)
Private investment funds measured at NAV (4)
Payables, net
Total
U.S. equities. These investments are held in common and preferred stock of U.S. corporations and American Depositary Receipts (ADRs) traded on U.S. exchanges. Common and preferred shares and ADRs are traded actively on exchanges, and price quotes for these shares are readily available. These investments are classified as Level 1 in the valuation hierarchy.
International equities. These investments are held in common and preferred stock issued by non-U.S. corporations. Common and preferred shares are traded actively on exchanges, and price quotes for these shares are readily available. These investments are classified as Level 1 in the valuation hierarchy.
Short-term investment funds. These investments include commingled funds that are primarily held in U.S. Treasury securities. The funds are valued using the net asset value (NAV) provided by the administrator of the funds and reviewed by the Company.
Private investment funds. This category includes a commingled fund and a private investment fund. The commingled fund invests in a diversified mix of publicly traded securities (U.S. and international stocks) and private companies. The private investment fund invests in non-public companies. The funds are valued using the NAV provided by the administrator of the funds and reviewed by the Company. The NAV is based on the value of the underlying assets owned by the fund, minus liabilities and divided by the number of units outstanding.
The following table sets forth a summary of the Plan’s investments with a reported NAV:
(in thousands)
Fair Value
Unfunded Commitment
Redemption Frequency
Other Redemption Restriction
Redemption
Notice
Period
Short-term investment funds
Immediate
None
None
Immediate
None
None
Private investment funds
90 days
90 days
Five percent of the NAV of the investment in the commingled fund may be redeemed annually starting at the 12-month anniversary of the investment, subject to certain limitations. Additionally, the investment in the commingled fund may be redeemed in part, or in full, at the 60-month anniversary of the investment, or at any subsequent 36-month anniversary date following the initial 60-month anniversary. The investment in the private investment fund is generally not redeemable until the dissolution of the fund.
Other Postretirement Plans. In 2023, the Company purchased a contract from an insurance company to settle its outstanding retiree life insurance obligation for $ 1.7 million. As a result, the Company recorded a settlement gain of $ 1.1 million.
The following table sets forth obligation, asset and funding information for the Company’s other postretirement plans:
Postretirement Plans
As of December 31
(in thousands)
Change in Benefit Obligation
Benefit obligation at beginning of year
Interest cost
Actuarial loss (gain)
Benefits paid, net of Medicare subsidy
Benefit Obligation at End of Year
Funded Status
The change in the benefit obligation for the Company’s other postretirement plans in 2025 was primarily due to benefits paid during the year, offset by an actuarial loss resulting from various experience variances and assumption changes used to measure the benefit obligation.
The amounts recognized in the Company’s Consolidated Balance Sheets for its other postretirement plans are as follows:
Postretirement Plans
As of December 31
(in thousands)
Current liability
Noncurrent liability
Recognized Liability
The discount rates utilized for determining the benefit obligation at December 31, 2025 and 2024, for the postretirement plans were 4.84 % and 5.12 %, respectively. The assumed healthcare cost trend rate used in measuring the postretirement benefit obligation at December 31, 2025, was 8.15 % for pre-age 65, decreasing to 4.5 % in the year 2034 and thereafter. The assumed healthcare cost trend rate used in measuring the postretirement benefit obligation at December 31, 2025, was 9.35 % for post-age 65, decreasing to 4.5 % in the year 2034 and thereafter. The assumed healthcare cost trend rate used in measuring the postretirement benefit obligation at December 31, 2025, was 11.00 % for Medicare Advantage, decreasing to 4.5 % in the year 2034 and thereafter.
The Company’s postretirement benefit plans are unfunded, therefore, the Company made actual benefit payments of $ 0.6 million and $ 0.1 million to beneficiaries for the years ended December 31, 2025 and 2024, respectively.
At December 31, 2025, future estimated benefit payments are as follows:
(in thousands)
Postretirement
Plans
The total benefit arising from the Company’s other postretirement plans consists of the following components:
Postretirement Plans
Year Ended December 31
(in thousands)
Interest cost
Amortization of prior service credit
Recognized actuarial gain
Net Periodic Benefit for the Year
Settlement
Total Benefit for the Year
Other Changes in Benefit Obligations Recognized in Other Comprehensive Income
Current year actuarial loss (gain)
Amortization of prior service credit
Recognized actuarial gain
Settlement
Total Recognized in Other Comprehensive Income (Before Tax Effects)
Total Recognized in Benefit and Other Comprehensive Income (Before Tax Effects)
The costs for the Company’s postretirement plans are actuarially determined. The discount rate utilized to determine the periodic cost for the years ended December 31, 2025, 2024 and 2023 was 5.12 %, 4.53 % and 4.76 %. AOCI included the following components of unrecognized net periodic benefit for the postretirement plans:
As of December 31
(in thousands)
Unrecognized actuarial gain
Gross Amount
Deferred tax liability
Net Amount
Multiemployer Pension Plans . In 2025, 2024 and 2023, the Company contributed to one multiemployer defined benefit pension plan under the terms of a collective-bargaining agreement that covered certain union-represented employees. The Company’s total contributions to the multiemployer pension plan amounted to $ 0.1 million in each year for 2025, 2024 and 2023.
Savings Plans. The Company recorded expense associated with retirement benefits provided under incentive savings plans (primarily 401(k) plans) of approximately $ 3.8 million in 2025, $ 3.5 million in 2024 and $ 13.0 million in 2023.
16. OTHER NON-OPERATING (EXPENSE) INCOME
A summary of non-operating (expense) income is as follows:
Year Ended December 31
(in thousands)
Impairment of cost method investments
Foreign currency (loss) gain, net
Gain on sale of cost method investments
Gain on sale of businesses
Gain on sale of investment in affiliates
Net (loss) gain on cost method investments
Other, net
Total Other Non-Operating (Expense) Income
The net (loss) gain on cost method investments result from observable price changes in the fair value of the underlying equity securities accounted for under the cost method (see Notes 4 and 12).
For the years ended December 31, 2024 and 2023, the Company recorded contingent consideration gains of $ 0.9 million and $ 5.6 million, respectively, related to the disposition of Kaplan University (KU) in 2018.
In the third quarter of 2024, the Company recorded a $ 3.7 million gain related to Kaplan’s sale of a small business (see Note 3).
In the second quarter of 2024, the Company recorded a $ 3.5 million gain related to the sale of a small business by WGB, which included five websites (see Note 3).
In the second quarter of 2023, the Company recorded a $ 10.0 million gain related to the Pinna transaction (see Note 3). The Company used a market approach to determine the fair value of the noncontrolling financial interest received in Realm in exchange for the Pinna business.
17. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The other comprehensive income (loss) consists of the following components:
Year Ended December 31, 2025
Before-Tax
Income
After-Tax
(in thousands)
Amount
Tax
Amount
Foreign currency translation adjustments:
Translation adjustments arising during the year
Adjustment for sale of a business with foreign operations
Pension and other postretirement plans:
Actuarial gain
Prior service cost
Amortization of net actuarial gain included in net income
Amortization of net prior service credit included in net income
Cash flow hedges:
Loss for the year
Other Comprehensive Income
Year Ended December 31, 2024
Before-Tax
Income
After-Tax
(in thousands)
Amount
Tax
Amount
Foreign currency translation adjustments:
Translation adjustments arising during the year
Adjustment for sale of a business with foreign operations
Pension and other postretirement plans:
Actuarial gain
Prior service credit
Amortization of net actuarial gain included in net income
Amortization of net prior service credit included in net income
Settlement included in net income
Cash flow hedges:
Gain for the year
Other Comprehensive Loss
Year Ended December 31, 2023
Before-Tax
Income
After-Tax
(in thousands)
Amount
Tax
Amount
Foreign currency translation adjustments:
Translation adjustments arising during the year
Pension and other postretirement plans:
Actuarial gain
Prior service credit
Amortization of net actuarial gain included in net income
Amortization of net prior service cost included in net income
Settlement included in net income
Cash flow hedges:
Loss for the year
Other Comprehensive Income
The accumulated balances related to each component of other comprehensive income (loss) are as follows:
(in thousands, net of taxes)
Cumulative
Foreign
Currency
Translation
Adjustment
Unrealized Gain
on Pensions
and Other
Postretirement
Plans
Cash Flow
Hedges
Accumulated
Other
Comprehensive
Income
As of December 31, 2023
Other comprehensive (loss) income before reclassifications
Net amount reclassified from accumulated other comprehensive income
Net other comprehensive (loss) income
As of December 31, 2024
Other comprehensive income (loss) before reclassifications
Net amount reclassified from accumulated other comprehensive income
Net other comprehensive income (loss)
As of December 31, 2025
The amounts and line items of reclassifications out of accumulated other comprehensive income (loss) are as follows:
Year Ended December 31
Affected Line Item in the Consolidated Statements of Operations
(in thousands)
Foreign Currency Translation Adjustments:
Adjustment for sale of businesses with foreign operations
Other (expense) income, net
Pension and Other Postretirement Plans:
Amortization of net actuarial gain
Amortization of net prior service (credit) cost
Settlement gains
Before tax
Provision for income taxes
Net of tax
Cash Flow Hedges
Interest expense
Total reclassification for the year
Net of tax
These accumulated other comprehensive income components are included in the computation of net periodic pension and postretirement plan cost (see Note 15) and are included in non-operating pension and postretirement benefit income in the Company’s Consolidated Statements of Operations.
18. CONTINGENCIES AND OTHER COMMITMENTS
Litigation, Legal and Other Matters . The Company and its subsidiaries are subject to complaints and administrative proceedings and are defendants in various civil lawsuits that have arisen in the ordinary course of their businesses, including contract disputes; actions allegingnegligence, libel, defamation and invasion of privacy; trademark, copyright and patent infringement; real estate lease and sublease disputes; violations of employment laws and applicable wage and hour laws; and statutory or common law claims involving current and former students and employees. Although the outcomes of the legal claims and proceedings against the Company cannot be predicted with certainty, based on currently available information, management believes that there are no existing claims or proceedings that are likely to have a material effect on the Company’s business, financial condition, results of operations or cash flows. However, based on currently available information, management believes it is reasonably possible that future losses from existing and threatened legal, regulatory and other proceedings in excess of the amounts recorded could reach approximately $ 10 million.
In 2021, Kaplan received the borrower defense to repayment (BDTR) applications from the Department of Education (ED) seeking discharge of approximately $ 35 million in loans, excluding interest, from students at Kaplan’s previously owned schools, including Kaplan University. It is not clear to what extent the ED will exclude claims based on the underlying statutes of limitations, evidence provided by Kaplan, prior settlements with these students relieving their debt outside of the BDTR process, or any prior investigation related to schools attended by the student applicants.
Kaplan believes it has substantive as well as procedural defenses to the borrower defense claims that would bar any student discharge or school liability, including that the claims are barred by the applicable statute of limitations, are unproven, incomplete and fail to meet regulatory filing requirements. Kaplan expects to vigorously defend any attempt by the ED to hold Kaplan liable for any ultimate student discharges. If the claims are successful, the ED may seek reimbursement for the amount discharged from Kaplan. If the ED initiates a reimbursement action against Kaplan following approval of former students’ BDTR applications, Kaplan may be subject to significant liability.
In the Sweet v. Cardona lawsuit in the Northern District of California which was settled in November 2022, Plaintiffs claimed that the ED failed to properly consider and decide pending BDTR claims. As part of the Sweet v. Cardona settlement, the ED agreed to review any BDTR applications submitted between June 23, 2022 and November 15, 2022 on an expedited basis. In January 2024, Kaplan was informed that the ED received applications during this time period regarding former Kaplan University and Purdue Global students. Kaplan received those applications and believes none of the applications has merit and that the applications are far outside any statute of limitations period and accordingly Kaplan responded similarly to responses for prior claims. The total discharge amount sought or how much of that amount would apply to Kaplan University students is not fully known. The Sweet v. Cardona settlement requires the ED to adjudicate applications received during the designated time period pursuant to the requirements of the 2016 Borrower Defense Regulation. Kaplan believes it has significant defenses against any attempt by the ED at recoupment including the claims’ collective lack of merit, the applicable statute of limitations periods, and the ED’s standing for recoupment given the Sweet v. Cordona settlement. If the ED initiates a reimbursement action against Kaplan following approval of former students’ BDTR applications, Kaplan may be subject to significant liability.
Other Commitments. The Company’s broadcast subsidiaries are parties to certain agreements that commit them to purchase programming to be produced in future years. As of December 31, 2025, such commitments amounted to approximately $ 18.2 million. If such programs are not produced, the Company’s commitment would expire without obligation.
19. BUSINESS SEGMENTS
Basis of Presentation. The Company’s organizational structure is based on a number of factors that management uses to evaluate, view and run its business operations, which include, but are not limited to, customers, the nature of products and services and use of resources. The business segments disclosed in the Consolidated Financial Statements are based on this organizational structure and information reviewed by the Company’s management to evaluate the business segment results.
To meet the quantitative threshold related to operating income for separate disclosure, the Company changed the presentation of its segments in the fourth quarter of 2025 into the following seven reportable segments: Kaplan International, Kaplan Higher Education, Kaplan Supplemental Education, Television Broadcasting, CSI, Manufacturing and Automotive. Segment operating results have been updated to reflect this change. The Company defines its operating segments as those operations whose results the chief operating decision maker (CODM), who is our Chief Executive Officer, regularly reviews to analyze performance and allocate resources.
The Company and CODM use both operating income before amortization of intangible assets and impairment of goodwill and other long-lived assets and earnings before interest, income taxes, depreciation, amortization and pension service cost (EBITDAP) to evaluate segment performance and allocate resources to the Company’s segments. The CODM uses reports provided during annual budget presentations, the three-year forecasting process, quarterly business reviews and monthly management reports and related communication when making decisions about allocating capital resources across segments. The accounting policies at the segments are the same as described in Note 2. In computing operating income before amortization by segment, the effects of amortization of intangible assets, impairment of goodwill and other long-lived assets, equity in earnings (losses) of affiliates, interest income, interest expense, non-operating pension and postretirement benefit income, other non-operating income and expense items and income taxes are excluded. In computing EBITDAP, the effects of pension service cost, depreciation, amortization of intangible assets, impairment of goodwill and other long-lived assets, equity in earnings (losses) of affiliates, interest income, interest expense, non-operating pension and postretirement benefit income, other non-operating income and expense items and income taxes are excluded. Intersegment sales are not material.
Identifiable assets by segment are those assets used in the Company’s operations in each business segment. The investments in marketable equity securities and affiliates, and prepaid pension cost are not included in identifiable assets by segment. Investments in marketable equity securities are discussed in Note 4.
Education. Education products and services are provided by Kaplan. KI includes professional training and postsecondary education businesses largely outside the U.S., as well as English-language programs. KHE includes the results as a service provider to higher education institutions. Supplemental Education includes Kaplan’s standardized test preparation, domestic professional and other continuing education businesses.
As of December 31, 2025, Kaplan had a total outstanding accounts receivable balance of $ 87.4 million from Purdue Global related to amounts due for reimbursements for services, fees earned and a deferred fee. Included in this total, Kaplan has a $ 1.1 million long-term receivable balance and an $ 18.8 million short-term receivable balance due from Purdue Global at December 31, 2025, related to the advance of $ 20.0 million during the initial KU Transaction.
Television Broadcasting. Television broadcasting operations are conducted through seven television stations serving the Detroit, Houston, San Antonio, Orlando, Jacksonville and Roanoke television markets. All stations are network-affiliated (except for WJXT in Jacksonville), with revenues derived primarily from sales of advertising time. In addition, the stations generate revenue from retransmission consent agreements for the right to carry their signals.
Healthcare. Healthcare provides nursing care and prescription services for patients receiving in-home infusion treatments through its 87.5 % interest in CSI. The healthcare division also provides home health, hospice and palliative services; ABA therapy; physician services for allergy, asthma and immunology patients; in-home aesthetics; and healthcare software-as-a-service technology.
Manufacturing. Manufacturing operations include Hoover, an Augusta, GA-based supplier of pressure impregnated kiln-dried lumber and plywood products for fire retardant and preservative applications; Dekko, a Garrett, IN-based manufacturer of electrical workspace solutions, architectural lighting, and electrical components and assemblies; Joyce/Dayton, a Dayton, OH-based manufacturer of screw jacks and other linear motion systems; and Forney, a global supplier of products and systems that control and monitor combustion processes in electric utility and industrial applications. On July 15, 2025, Hoover acquired Arconic Architectural Products, LLC, a wholly-owned subsidiary of Arconic Corporate (operating as Hoover Architectural Solutions), an Eastman, GA-based manufacturer of aluminum cladding products.
Automotive. Automotive includes eight automotive dealerships and valet repair services in the Washington, D.C. metropolitan area and Richmond, VA, including Lexus of Rockville; Honda of Tysons Corner; Ford of Manassas; Toyota of Woodbridge; CDJR of W oodbridge; Toyota of Richmond, which was acquired in September 2023; and Honda of Woodbridge, which was acquired in October 2025. The automotive group was awarded a Kia Open Point dealership in Bethesda, MD, which commenced operations at the end of December 2023. The Company decided to cease operations at Jeep of Bethesda in September 2025.
Other Businesses. Other businesses includes the following:
• Clyde’s Restaurant Group owns and operates 14 restaurants and entertainment venues in the Washington, D.C. metropolitan area.
• Framebridge, a custom framing compa ny.
• Code3, a marketing solutions provider; the Slate Group and Foreign Policy, which publish online and print magazines and websites; Saatchi Art and Society6, which offer art and designs of various consumer products; and three investment stage businesses, Decile, City Cast and Supporting Cast. Other businesses also includes Pinna, which merged with another entity in June 2023 resulting in the deconsolidation of the subsidiary and WGB, which was disposed of by the end of the third quarter of 2025.
Corporate Office. Corporate office includes the expenses of the Company’s corporate office, defined benefit pension expense, and certain continuing obligations related to prior business dispositions.
Geographical Information. The Company’s non-U.S. revenues in 2025, 2024 and 2023 totaled approximately $ 1,074 million , $ 1,042 million and $ 930 million, respectively, primarily from Kaplan’s operations outside the U.S. Additionally, revenues in 2025, 2024 and 2023 totaled approximately $ 609 million , $ 618 million, and $ 543 million, respectively, from Kaplan’s operations in the U.K. The Company’s long-lived assets in non-U.S. countries (excluding goodwill and other intangible assets), totaled approximately $ 440 million and $ 455 million at December 31, 2025 and 2024, respectively.
The Company’s segment information is as follows:
Year Ended December 31, 2025
(in thousands)
Education
Television Broadcasting
Healthcare
Manufacturing
Automotive
Total Segments
Operating Revenues
Reconciliation of Revenue
Other Businesses and Corporate Office Revenues (1)
Intersegment Elimination
Total Consolidated Revenues
Less: Significant Expenses (2)
Cost of Revenue (3)
Payroll and Fringe Benefits Expense (4)
Occupancy Expense
Advertising and Marketing Expense
Networking and Programming Expense
Management Services (5)
Other Segment Items (6)
EBITDAP
Pension Service Cost
Depreciation Expense
Income from Operations before Amortization of Intangible Assets and Impairment of Intangible and Other Long-Lived Assets
Other Businesses (7)
Corporate Costs
Amortization of Intangible Assets
Impairment of Intangible and Other Long-Lived Assets
Income from Operations
Equity in Earnings of Affiliates, Net
Interest Expense, Net
Non-Operating Pension and Postretirement Benefit Income, Net
Gain on Marketable Equity Securities, Net
Other Expense, Net
Income Before Income Taxes
Capital Expenditures
Reconciliation of Capital Expenditures
Other Businesses and Corporate Office Capital Expenditures (8)
Total Capital Expenditures
Revenue from segments below the quantitative thresholds is attributable to Other Businesses and the Corporate Office, as described above. None of these operating segments meet the quantitative thresholds for determining reportable segments.
The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.
Cost of revenue reflects the amounts reported and provided to the CODM and does not necessarily reconcile to the Company's Consolidated Statement of Operations or align across reportable segments. Cost of revenue excludes charges related to depreciation, which is shown separately.
Excludes pension service cost, which is shown separately above. Excludes any payroll and related benefits costs captured in cost of revenue.
Management and operating services provided by Christopher J. Ourisman and his team of industry professionals.
Other segment items for each reportable segment include:
Education (includes Kaplan International, Kaplan Higher Education and Kaplan Supplemental Education) - training and employment expense, travel meals and entertainment expense, operating fees and other general and administrative (G&A) expenses.
Television Broadcasting - other broadcast expenses, facilities expenses, third-party commission costs and other selling, general and administrative expenses (SG&A).
Manufacturing - payroll and fringe benefits expense (SG&A) and other SG&A expenses.
Healthcare (includes CSI) - indirect costs (e.g. payroll and benefits expenses, general and administrative expenses) and other SG&A expenses.
Automotive - advertising and marketing expense and other G&A expenses.
Profit or loss from operating segments below the quantitative thresholds attributable to Other Businesses as described above. These operating segments did not meet any of the quantitative thresholds for determining reportable segments.
Capital Expenditures from operating segments below the quantitative thresholds are attributable to Other Businesses and the Corporate Office, as described above. None of these operating segments meet the quantitative thresholds for determining reportable segments.
The Company’s education division segment information is as follows:
Year Ended December 31, 2025
(in thousands)
Kaplan International
Higher Education
Supplemental Education
Kaplan Corporate and Other
Intersegment Elimination
Total Education
Operating Revenues
Less: Significant Expenses (1)
Cost of Revenue (2)
Payroll and Fringe Benefits Expense (3)
Occupancy Expense
Advertising and Marketing Expense
Other Segment Items (4)
EBITDAP
Pension Service Cost
Depreciation Expense
Income (Loss) from Operations before Amortization of Intangible Assets
Capital Expenditures
The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.
Cost of revenue reflects the amounts reported and provided to the CODM and does not necessarily reconcile to the Company's Consolidated Statement of Operations or align across reportable segments. Cost of revenue excludes charges related to depreciation, which is shown separately.
Excludes pension service cost, which is shown separately above. Excludes any payroll and related benefits costs captured in cost of revenue.
Other segment items for each reportable segment include:
Kaplan international - travel meals and entertainment expense, training and employment expense, operating fees and other G&A expenses.
Higher education - training and employment expense, operating fees and other G&A expenses.
Supplemental education - training and employment expense, operating fees and other G&A expenses.
The Company’s healthcare division segment information is as follows:
Year Ended December 31, 2025
(in thousands)
CSI
Other Healthcare
Total Healthcare
Operating Revenues
Less: Significant Expenses (1)
Cost of Revenue (2)
Other Segment Items (3)
EBITDAP
Pension Service Cost
Depreciation Expense
Income from Operations before Amortization of Intangible Assets and Impairment of Long-Lived Assets
Capital Expenditures
The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.
Cost of revenue reflects the amounts reported and provided to the CODM and does not necessarily reconcile to the Company's Consolidated Statement of Operations. Cost of revenue excludes charges related to depreciation, which is shown separately.
Other segment items for CSI include indirect costs (e.g. payroll and benefits expenses, general and administrative expenses) and other SG&A expenses.
The Company’s segment information is as follows:
Year Ended December 31, 2024
(in thousands)
Education
Television Broadcasting
Healthcare
Manufacturing
Automotive
Total Segments
Operating Revenues
Reconciliation of Revenue
Other Businesses and Corporate Office Revenues (1)
Intersegment Elimination
Total Consolidated Revenues
Less: Significant Expenses (2)
Cost of Revenue (3)
Payroll and Fringe Benefits Expense (4)
Occupancy Expense
Advertising and Marketing Expense
Networking and Programming Expense
Management Services (5)
Other Segment Items (6)
EBITDAP
Pension Service Cost
Depreciation Expense
Income from Operations before Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets
Other Businesses (7)
Corporate Costs
Amortization of Intangible Assets
Impairment of Goodwill and Other Long-Lived Assets
Income from Operations
Equity in Losses of Affiliates, Net
Interest Expense, Net
Non-Operating Pension and Postretirement Benefit Income, Net
Gain on Marketable Equity Securities, Net
Other Income, Net
Income Before Income Taxes
Capital Expenditures
Reconciliation of Capital Expenditures
Other Businesses and Corporate Office Capital Expenditures (8)
Total Capital Expenditures
Revenue from segments below the quantitative thresholds is attributable to Other Businesses and the Corporate Office, as described above. None of these operating segments meet the quantitative thresholds for determining reportable segments.
The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.
Cost of revenue reflects the amounts reported and provided to the CODM and does not necessarily reconcile to the Company's Consolidated Statement of Operations or align across reportable segments. Cost of revenue excludes charges related to depreciation, which is shown separately.
Excludes pension service cost, which is shown separately above. Excludes any payroll and related benefits costs captured in cost of revenue.
Management and operating services provided by Christopher J. Ourisman and his team of industry professionals.
Other segment items for each reportable segment include:
Education (includes Kaplan International, Kaplan Higher Education and Kaplan Supplemental Education) - training and employment expense, travel meals and entertainment expense, operating fees and other general and administrative (G&A) expenses.
Television Broadcasting - other broadcast expenses, facilities expenses, third-party commission costs and other selling, general and administrative expenses (SG&A).
Manufacturing - payroll and fringe benefits expense (SG&A) and other SG&A expenses.
Healthcare (includes CSI) - indirect costs (e.g. payroll and benefits expenses, general and administrative expenses) and other SG&A expenses.
Automotive - advertising and marketing expense and other G&A expenses.
Profit or loss from operating segments below the quantitative thresholds attributable to Other Businesses as described above. These operating segments did not meet any of the quantitative thresholds for determining reportable segments.
Capital Expenditures from operating segments below the quantitative thresholds are attributable to Other Businesses and the Corporate Office, as described above. None of these operating segments meet the quantitative thresholds for determining reportable segments.
The Company’s education division segment information is as follows:
Year Ended December 31, 2024
(in thousands)
Kaplan International
Higher Education
Supplemental Education
Kaplan Corporate and Other
Intersegment Elimination
Total Education
Operating Revenues
Less: Significant Expenses (1)
Cost of Revenue (2)
Payroll and Fringe Benefits Expense (3)
Occupancy Expense
Advertising and Marketing Expense
Other Segment Items (4)
EBITDAP
Pension Service Cost
Depreciation Expense
Income (Loss) from Operations before Amortization of Intangible Assets and Impairment of Intangible Assets
Capital Expenditures
The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.
Cost of revenue reflects the amounts reported and provided to the CODM and does not necessarily reconcile to the Company's Consolidated Statement of Operations or align across reportable segments. Cost of revenue excludes charges related to depreciation, which is shown separately.
Excludes pension service cost, which is shown separately above. Excludes any payroll and related benefits costs captured in cost of revenue.
Other segment items for each reportable segment include:
Kaplan international - travel meals and entertainment expense, training and employment expense, operating fees and other G&A expenses.
Higher education - training and employment expense, operating fees and other G&A expenses.
Supplemental education - training and employment expense, operating fees and other G&A expenses.
The Company’s healthcare division segment information is as follows:
Year Ended December 31, 2024
(in thousands)
CSI
Other Healthcare
Total Healthcare
Operating Revenues
Less: Significant Expenses (1)
Cost of Revenue (2)
Other Segment Items (3)
EBITDAP
Pension Service Cost
Depreciation Expense
Income from Operations before Amortization of Intangible Assets
Capital Expenditures
The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.
Cost of revenue reflects the amounts reported and provided to the CODM and does not necessarily reconcile to the Company's Consolidated Statement of Operations. Cost of revenue excludes charges related to depreciation, which is shown separately.
Other segment items for CSI include indirect costs (e.g. payroll and benefits expenses, general and administrative expenses) and other SG&A expenses.
The Company’s segment information is as follows:
Year Ended December 31, 2023
(in thousands)
Education
Television Broadcasting
Healthcare
Manufacturing
Automotive
Total Segments
Operating Revenues
Reconciliation of Revenue
Other Businesses and Corporate Office Revenues (1)
Intersegment Elimination
Total Consolidated Revenues
Less: Significant Expenses (2)
Cost of Revenue (3)
Payroll and Fringe Benefits Expense (4)
Occupancy Expense
Advertising and Marketing Expense
Networking and Programming Expense
Management Services (5)
Other Segment Items (6)
EBITDAP
Pension Service Cost
Depreciation Expense
Income from Operations before Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets
Other Businesses (7)
Corporate Costs
Amortization of Intangible Assets
Impairment of Goodwill and Other Long-Lived Assets
Income from Operations
Equity in Losses of Affiliates, Net
Interest Expense, Net
Non-Operating Pension and Postretirement Benefit Income, Net
Gain on Marketable Equity Securities, Net
Other Income, Net
Income Before Income Taxes
Capital Expenditures
Reconciliation of Capital Expenditures
Other Businesses and Corporate Office Capital Expenditures (8)
Total Capital Expenditures
Revenue from segments below the quantitative thresholds is attributable to Other Businesses, as described above. None of these operating segments meet the quantitative thresholds for determining reportable segments.
The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.
Cost of revenue reflects the amounts reported and provided to the CODM and does not necessarily reconcile to the Company's Consolidated Statement of Operations or align across reportable segments. Cost of revenue excludes charges related to depreciation, which is shown separately.
Excludes pension service cost, which is shown separately above. Excludes any payroll and related benefits costs captured in cost of revenue.
Management and operating services provided by Christopher J. Ourisman and his team of industry professionals.
Other segment items for each reportable segment include:
Education (includes Kaplan International, Kaplan Higher Education and Kaplan Supplemental Education) - training and employment expense, travel meals and entertainment expense, operating fees and other general and administrative (G&A) expenses.
Television Broadcasting - other broadcast expenses, facilities expenses, third-party commission costs and other selling, general and administrative expenses (SG&A).
Manufacturing - payroll and fringe benefits expense (SG&A) and other SG&A expenses.
Healthcare (includes CSI) - indirect costs (e.g. payroll and benefits expenses, general and administrative expenses) and other SG&A expenses.
Automotive - advertising and marketing expense and other G&A expenses.
Profit or loss from operating segments below the quantitative thresholds attributable to Other Businesses as described above. These operating segments did not meet any of the quantitative thresholds for determining reportable segments.
Capital Expenditures from operating segments below the quantitative thresholds are attributable to Other Businesses and the Corporate Office, as described above. None of these operating segments meet the quantitative thresholds for determining reportable segments.
The Company’s education division segment information is as follows:
Year Ended December 31, 2023
(in thousands)
Kaplan International
Higher Education
Supplemental Education
Kaplan Corporate and Other
Intersegment Elimination
Total Education
Operating Revenues
Less: Significant Expenses (1)
Cost of Revenue (2)
Payroll and Fringe Benefits Expense (3)
Occupancy Expense
Advertising and Marketing Expense
Other Segment Items (4)
EBITDAP
Pension Service Cost
Depreciation Expense
Income (Loss) from Operations before Amortization of Intangible Assets and Impairment of Long-Lived Assets
Capital Expenditures
The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.
Cost of revenue reflects the amounts reported and provided to the CODM and does not necessarily reconcile to the Company's Consolidated Statement of Operations or align across reportable segments. Cost of revenue excludes charges related to depreciation, which is shown separately.
Excludes pension service cost, which is shown separately above. Excludes any payroll and related benefits costs captured in cost of revenue.
Other segment items for each reportable segment include:
Kaplan international - travel meals and entertainment expense, training and employment expense, operating fees and other G&A expenses.
Higher education - training and employment expense, operating fees and other G&A expenses.
Supplemental education - training and employment expense, operating fees and other G&A expenses.
The Company’s healthcare division segment information is as follows:
Year Ended December 31, 2023
(in thousands)
CSI
Other Healthcare
Total Healthcare
Operating Revenues
Less: Significant Expenses (1)
Cost of Revenue (2)
Other Segment Items (3)
EBITDAP
Pension Service Cost
Depreciation Expense
Income from Operations before Amortization of Intangible Assets and Impairment of Long-Lived Assets
Capital Expenditures
The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.
Cost of revenue reflects the amounts reported and provided to the CODM and does not necessarily reconcile to the Company's Consolidated Statement of Operations. Cost of revenue excludes charges related to depreciation, which is shown separately.
Other segment items for CSI include indirect costs (e.g. payroll and benefits expenses, general and administrative expenses) and other SG&A expenses.
Asset information for the Company’s business segments is as follows:
