BUSINESS SEGMENTS

As a result of the Kaplan University transaction, the Company reorganized its operations in the first quarter of 2018 into the following six reportable segments for the purpose of making operating decisions and assessing performance: Kaplan International, Kaplan Higher Education, Kaplan Test Preparation, Kaplan Professional (U.S.), Television Broadcasting and Healthcare.

Kaplan reorganized its higher education operations into the following two operating segments: Higher Education and Professional (U.S.). The higher education segment comprises the historical KU for-profit postsecondary education business and the current non-academic operations support services provided to the new university, Purdue University Global. The Professional (U.S.) segment comprises the KU School of Professional and Continuing Education, which provides professional training and exam preparation for professional certifications and licensures.

The business segments disclosed in the condensed consolidated financial statements are based on this new organizational structure and information reviewed by the Company’s management to evaluate the business segment results. Segment operating results have been restated to reflect this organizational change.

The following table summarizes the financial information related to each of the Company’s business segments:



	Three Months Ended						Six months ended
	June 30						June 30
(in thousands)	2018			2017			2018			2017
Operating Revenues
Education	$	370,005		$	386,499		$	745,504		$	759,396
Television broadcasting	114,086			106,102			222,888			197,598
Healthcare	38,208			38,220			75,829			75,119
Other businesses	150,399			145,266			287,937			226,691
Corporate office	—			—			—			—
Intersegment elimination	(21		)	—			(45		)	—
	$	672,677		$	676,087		$	1,332,113		$	1,258,804
Income (Loss) from Operations
Education	$	37,554		$	33,331		$	60,254		$	42,768
Television broadcasting	41,118			39,777			81,660			66,260
Healthcare	764			384			(627		)	(542		)
Other businesses	(1,054		)	(9,302		)	(4,749		)	(18,940		)
Corporate office	(12,756		)	(14,449		)	(26,698		)	(29,552		)
	$	65,626		$	49,741		$	109,840		$	59,994
Equity in Earnings (Losses) of Affiliates, Net	931			1,331			3,510			1,980
Interest Expense, Net	(15,264		)	(7,862		)	(21,963		)	(14,628		)
Debt Extinguishment Costs	(11,378		)	—			(11,378		)	—
Non-Operating Pension and Postretirement Benefit Income, Net	23,041			18,620			44,427			37,421
Loss on Marketable Equity Securities, Net	(2,554		)	—			(16,656		)	—
Other Income, Net	2,333			4,069			11,520			4,918
Income Before Income Taxes	$	62,735		$	65,899		$	119,300		$	89,685
Depreciation of Property, Plant and Equipment
Education	$	6,839		$	8,325		$	14,445		$	16,909
Television broadcasting	2,974			2,991			6,045			5,585
Healthcare	647			1,194			1,300			2,263
Other businesses	2,906			3,070			5,965			5,185
Corporate office	253			291			506			581
	$	13,619		$	15,871		$	28,261		$	30,523
Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets
Education	$	1,663		$	1,323		$	2,812		$	2,443
Television broadcasting	1,408			970			2,816			1,872
Healthcare	1,809			1,644			3,617			3,298
Other businesses	6,519			15,818			12,538			18,978
Corporate office	—			—			—			—
	$	11,399		$	19,755		$	21,783		$	26,591
Pension Expense
Education	$	1,878		$	2,153		$	4,542		$	4,859
Television broadcasting	601			479			1,094			972
Healthcare	165			166			287			332
Other businesses	378			249			667			566
Corporate office	1,295			1,544			2,667			2,776
	$	4,317		$	4,591		$	9,257		$	9,505

Asset information for the Company’s business segments are as follows:



	As of
(in thousands)	June 30, 2018		December 31, 2017
Identifiable Assets
Education	$	1,543,166	$	1,592,097
Television broadcasting	454,180		455,884
Healthcare	119,231		129,856
Other businesses	790,735		855,399
Corporate office	146,645		182,905
	$	3,053,957	$	3,216,141
Marketable Equity Securities	452,917		536,315
Investments in Affiliates	133,550		128,590
Prepaid Pension Cost	1,090,509		1,056,777
Total Assets	$	4,730,933	$	4,937,823

The Company’s education division comprises the following operating segments:



	Three Months Ended						Six months ended
	June 30						June 30
(in thousands)	2018			2017			2018			2017
Operating Revenues
Kaplan international	$	184,303		$	171,747		$	367,885		$	336,309
Higher education	85,981			111,840			185,811			222,951
Test preparation	68,604			75,730			127,755			140,298
Professional (U.S.)	31,057			27,364			64,413			60,563
Kaplan corporate and other	442			57			727			71
Intersegment elimination	(382		)	(239		)	(1,087		)	(796		)
	$	370,005		$	386,499		$	745,504		$	759,396
Income (Loss) from Operations
Kaplan international	$	24,187		$	15,954		$	44,591		$	23,661
Higher education	11,219			13,140			12,574			15,586
Test preparation	6,120			5,741			6,641			2,877
Professional (U.S.)	4,780			4,571			14,095			14,729
Kaplan corporate and other	(8,763		)	(6,045		)	(17,658		)	(14,108		)
Intersegment elimination	11			(30		)	11			23
	$	37,554		$	33,331		$	60,254		$	42,768
Depreciation of Property, Plant and Equipment
Kaplan international	$	3,764		$	3,609		$	7,738		$	7,291
Higher education	1,274			2,484			3,132			5,132
Test preparation	973			1,332			1,951			2,673
Professional (U.S.)	670			765			1,312			1,548
Kaplan corporate and other	158			135			312			265
	$	6,839		$	8,325		$	14,445		$	16,909
Amortization of Intangible Assets	$	1,663		$	1,323		$	2,812		$	2,443
Pension Expense
Kaplan international	$	84		$	87		$	167		$	174
Higher education	804			1,742			2,210			3,484
Test preparation	729			911			1,458			1,822
Professional (U.S.)	290			302			580			604
Kaplan corporate and other	(29		)	(889		)	127			(1,225		)
	$	1,878		$	2,153		$	4,542		$	4,859

Asset information for the Company’s education division is as follows:



	As of
(in thousands)	June 30, 2018		December 31, 2017
Identifiable assets
Kaplan international	$	1,049,790	$	1,115,919
Higher education	224,272		231,986
Test preparation	132,067		130,938
Professional (U.S.)	121,711		91,630
Kaplan corporate and other	15,326		21,624
	$	1,543,166	$	1,592,097