DISCONTINUED OPERATIONS

On April 11, 2014, the Company and Berkshire Hathaway Inc. announced that they have signed an agreement for Berkshire to acquire a wholly-owned subsidiary of the Company that includes WPLG, the Company's Miami-based television station, a number of Berkshire shares currently held by the Company and an amount of cash in exchange for approximately 1.6 million shares of Graham Holdings Class B common stock currently owned by Berkshire. The transaction is expected to close in the second or third quarter of 2014.

On October 1, 2013, the Company completed the sale of most of its newspaper publishing businesses. The publishing businesses sold include The Washington Post, Express, The Gazette Newspapers, Southern Maryland Newspapers, Greater Washington Publishing, Fairfax County Times and El Tiempo Latino and related websites (Publishing Subsidiaries).

In March 2013, the Company completed the sale of The Herald which resulted in a pre-tax loss of $0.1 million that was recorded in the first quarter of 2013.

The results of operations of WPLG, the Publishing Subsidiaries and The Herald are included in the Company’s Consolidated Statements of Operations as Income (Loss) from Discontinued Operations, Net of Tax, for all periods presented. The assets of WPLG have been classified on the Company’s condensed consolidated balance sheet as assets held for sale as of March 31, 2014. The Company did not reclassify its Statements of Cash Flows or prior Condensed Consolidated Balance Sheets to reflect the various discontinued operations.

The carrying amounts of the major classes of assets included in assets held for sale at March 31, 2014 are as follows:



	As of
(in thousands)	March 31, 2014
Other current assets	$	397
Current Assets Held for Sale	$	397
Property, plant and equipment, net	$	30,954
Goodwill, net	60,206
Indefinite-lived intangible assets, net	22,150
Deferred charges and other assets	2
Noncurrent Assets Held for Sale	$	113,312

In the first quarter of 2014, an after-tax adjustment of $3.0 million was made to reduce the $100.0 million after-tax gain on the sale of the Publishing Subsidiaries previously reported in the fourth quarter of 2013, as a result of changes in estimates related to liabilities retained as part of the sale.

The summarized income (loss) from discontinued operations, net of tax, is presented below:



	Three Months Ended March 31
	Three Months Ended March 31
(in thousands)	2014			2013
Operating revenues	$	16,274		$	141,974
Operating costs and expenses	(10,134		)	(168,077		)
Income (loss) from discontinued operations	6,140			(26,103		)
Expense (benefit) from income taxes	2,026			(9,176		)
Net Income (Loss) from Discontinued Operations	4,114			(16,927		)
Loss on sales of discontinued operations	(4,737		)	(70		)
Benefit from income taxes on sales of discontinued operations	(1,695		)	(24		)
Income (Loss) from Discontinued Operations, Net of Tax	$	1,072		$	(16,973	)

The following table summarizes the 2013 quarterly operating results of the Company following the reclassification of the operations discussed above as discontinued operations:



	March 31,			June 30,			September 30,			December 31,
(in thousands, except per share amounts)	2013			2013			2013			2013
Operating Revenues
Education	$	527,815		$	548,230		$	546,452		$	555,011
Subscriber	186,790			192,273			190,302			186,297
Advertising	69,122			79,898			73,549			87,692
Other	36,865			50,103			48,651			42,635
	820,592			870,504			858,954			871,635
Operating Costs and Expenses
Operating	376,545			394,841			395,436			375,876
Selling, general and administrative	334,224			319,170			327,560			332,207
Depreciation of property, plant and equipment	58,959			56,879			54,705			58,954
Amortization of intangible assets	3,717			3,313			2,837			3,731
Impairment of goodwill and other long-lived assets	—			—			—			3,250
	773,445			774,203			780,538			774,018
Income from Operations	47,147			96,301			78,416			97,617
Equity in earnings of affiliates, net	3,418			3,868			5,892			37
Interest income	510			522			642			590
Interest expense	(8,960		)	(9,048		)	(9,221		)	(8,838		)
Other (expense) income, net	(4,083		)	(12,858		)	8,110			(14,920		)
Income from Continuing Operations before Income Taxes	38,032			78,785			83,839			74,486
Provision for Income Taxes	15,800			31,700			29,900			24,100
Income from Continuing Operations	22,232			47,085			53,939			50,386
(Loss) Income from Discontinued Operations, Net of Tax	(16,973		)	(1,951		)	(23,515		)	106,142
Net Income	5,259			45,134			30,424			156,528
Net Income Attributable to Noncontrolling Interests	(97		)	(253		)	(75		)	(55		)
Net Income Attributable to Graham Holdings Company	5,162			44,881			30,349			156,473
Redeemable Preferred Stock Dividends	(444		)	(206		)	(205		)	—
Net Income Attributable to Graham Holdings Company Common Stockholders	$	4,718		$	44,675		$	30,144		$	156,473
Amounts Attributable to Graham Holdings Company Common Stockholders
Income from continuing operations	$	21,691		$	46,626		$	53,659		$	50,331
(Loss) Income from discontinued operations, net of tax	(16,973		)	(1,951		)	(23,515		)	106,142
Net income attributable to Graham Holdings Company common stockholders	$	4,718		$	44,675		$	30,144		$	156,473
Per Share Information Attributable to Graham Holdings Company Common Stockholders
Basic income per common share from continuing operations	$	2.92		$	6.28		$	7.23		$	6.82
Basic (loss) income per common share from discontinued operations	(2.28		)	(0.26		)	(3.16		)	14.38
Basic net income per common share	$	0.64		$	6.02		$	4.07		$	21.20
Diluted income per common share from continuing operations	$	2.92		$	6.28		$	7.22		$	6.80
Diluted (loss) income per common share from discontinued operations	(2.28		)	(0.26		)	(3.17		)	14.34
Diluted net income per common share	$	0.64		$	6.02		$	4.05		$	21.14

The following table summarizes the annual operating results of the Company following the reclassification of operations discussed above as discontinued operations:



(in thousands, except per share amounts)	2013			2012
Operating Revenues
Education	$	2,177,508		$	2,196,496
Subscriber	755,662			732,370
Advertising	310,261			337,621
Other	178,254			118,063
	3,421,685			3,384,550
Operating Costs and Expenses
Operating	1,542,698			1,543,083
Selling, general and administrative	1,313,161			1,318,946
Depreciation of property, plant and equipment	229,497			240,313
Amortization of intangible assets	13,598			20,946
Impairment of goodwill and other long-lived assets	3,250			111,593
	3,102,204			3,234,881
Income from Operations	319,481			149,669
Equity in earnings of affiliates, net	13,215			14,086
Interest income	2,264			3,393
Interest expense	(36,067		)	(35,944		)
Other expense, net	(23,751		)	(5,456		)
Income from Continuing Operations before Income Taxes	275,142			125,748
Provision for Income Taxes	101,500			73,400
Income from Continuing Operations	173,642			52,348
Income from Discontinued Operations, Net of Tax	63,703			79,839
Net Income	237,345			132,187
Net Income Attributable to Noncontrolling Interests	(480		)	(74		)
Net Income Attributable to Graham Holdings Company	236,865			132,113
Redeemable Preferred Stock Dividends	(855		)	(895		)
Net Income Attributable to Graham Holdings Company Common Stockholders	$	236,010		$	131,218
Amounts Attributable to Graham Holdings Company Common Stockholders
Income from continuing operations	$	172,307		$	51,379
Income from discontinued operations, net of tax	63,703			79,839
Net income attributable to Graham Holdings Company common stockholders	$	236,010		$	131,218
Per Share Information Attributable to Graham Holdings Company Common Stockholders
Basic income per common share from continuing operations	$	23.44		$	6.54
Basic income per common share from discontinued operations	8.66			10.85
Basic net income per common share	$	32.10		$	17.39
Diluted income per common share from continuing operations	$	23.40		$	6.54
Diluted income per common share from discontinued operations	8.65			10.85
Diluted net income per common share	$	32.05		$	17.39