XML 40 R27.htm IDEA: XBRL DOCUMENT v3.22.4
Business Segments
 12 Months Ended
Dec. 31, 2022
Segment Reporting [Abstract]  
Business Segments 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. The Company has seven reportable segments: Kaplan International, Kaplan Higher Education, Kaplan Supplemental Education, Television Broadcasting, Manufacturing, Healthcare and Automotive.
The Company evaluates segment performance based on operating income before amortization of intangible assets and impairment of goodwill and other long-lived assets. 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. 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, Inc. Kaplan International 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, 2022, Kaplan had a total outstanding accounts receivable balance of $90.0 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 $19.4 million long-term receivable balance due from Purdue Global at December 31, 2022, 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.
Manufacturing. Manufacturing operations include Hoover, a Thomson, GA-based supplier of pressure impregnated kiln-dried lumber and plywood products for fire retardant and preservative application; Dekko, a Garrett, IN-based manufacturer of electrical workspace solutions, architectural lighting, and electrical components and assemblies; Joyce/Dayton Corp., 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.
Healthcare. Graham Healthcare Group provides home health, hospice and palliative services. GHG also provides other healthcare services, including nursing care and prescription services for patients receiving in-home infusion treatments, ABA therapy clinics, physician services for allergy, asthma and immunology patients, in-home aesthetics and healthcare software-as-a-service technology.
Automotive. Automotive includes six automotive dealerships in the Washington, D.C. metropolitan area, including Lexus of Rockville, Honda of Tysons Corner, Jeep of Bethesda, Ford of Manassas, which was acquired in December 2021, and Toyota of Woodbridge and Chrysler-Dodge-Jeep-Ram of Woodbridge, which were acquired in July 2022.
Other Businesses. Other businesses includes the following:
•Leaf Group, a consumer internet company, which was acquired in June 2021.
•Clyde’s Restaurant Group owns and operates 11 restaurants and entertainment venues in the Washington, D.C. metropolitan area.
•Framebridge, a custom framing service company, which was acquired in May 2020.
•Code3 is a marketing and insights company that manages digital advertising campaigns.
•The Slate Group and Foreign Policy Group, which publish online and print magazines and websites; and three investment stage businesses, Decile, Pinna and City Cast. Other businesses also includes Megaphone, which was sold in December 2020, and CyberVista, which merged with another entity in October 2022 resulting in the deconsolidation of the subsidiary.
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 2022, 2021 and 2020 totaled approximately $776 million, $709 million and $642 million, respectively, primarily from Kaplan’s operations outside the U.S. Additionally, revenues in 2022, 2021 and 2020 totaled approximately $448 million, $404 million, and $375 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 $477 million and $476 million at December 31, 2022 and 2021, respectively.
Restructuring. During 2020, Kaplan developed and implemented a number of initiatives across its businesses to help mitigate the negative revenue impact arising from COVID-19 and to re-align its program offerings to better pursue opportunities from the disruption. These initiatives include employee salary and work-hour reductions; temporary furlough and other employee reductions; reduced discretionary spending; facility restructuring to reduce its classroom and office facilities; reduced capital expenditures; and accelerated development and promotion of various online programs and solutions.
In 2020, Kaplan recorded restructuring costs related to severance, the exit of classroom and office facilities, and approved Separation Incentive Programs that reduced the number of employees at all of Kaplan’s divisions.
In 2020, Code3 and Decile recorded restructuring costs in connection with a restructuring plan that included the exit of an office facility, an approved Separation Incentive Program to reduce the number of employees, and other cost reduction initiatives to mitigate the adverse impact of COVID-19 on advertising demand.
Restructuring related costs across all businesses in 2020 were recorded as follows:
(in thousands)Kaplan InternationalHigher EducationSupplemental EducationKaplan CorporateTotal EducationOther BusinessesTotal
Severance$4,366 $— $1,797 $— $6,163 $— $6,163 
Facility related costs:
Operating lease cost2,905 3,451 3,586 — 9,942 — 9,942 
Accelerated depreciation of property, plant and equipment1,620 152 1,801 — 3,573 — 3,573 
Total Restructuring Costs Included in Segment Income (Loss) from Operations (1)
$8,891 $3,603 $7,184 $— $19,678 $— $19,678 
Impairment of other long-lived assets:
Lease right-of-use assets$3,976 $2,062 $4,005 $— $10,043 $1,405 $11,448 
Property, plant and equipment1,248 174 813 — 2,235 86 2,321 
Non-operating pension and postretirement benefit income, net1,100 2,233 8,566 883 12,782 999 13,781 
Total Restructuring Related Costs$15,215 $8,072 $20,568 $883 $44,738 $2,490 $47,228 
(1)    These amounts are included in the segments’ Income (Loss) from Operations before Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets.
Total accrued restructuring costs at Kaplan was $1.2 million as of December 31, 2021.
In June 2020, CRG made the decision to close its restaurant and entertainment venue in Columbia, MD effective July 19, 2020 and recorded accelerated depreciation of property, plant and equipment totaling $5.7 million for the year ended December 31, 2020.
Company information broken down by operating segment and education division:
Year Ended December 31
(in thousands)202220212020
Operating Revenues   
Education$1,427,915 $1,361,245 $1,305,713 
Television broadcasting535,651 494,177 525,212 
Manufacturing486,643 458,125 416,137 
Healthcare326,000 223,030 198,196 
Automotive734,185 327,069 258,144 
Other businesses416,084 324,353 187,347 
Corporate office— — — 
Intersegment elimination(1,985)(2,025)(1,628)
 $3,924,493 $3,185,974 $2,889,121 
Income (Loss) from Operations before Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets
Education$99,103 $69,892 $41,056 
Television broadcasting207,319 154,862 199,938 
Manufacturing54,079 36,926 40,427 
Healthcare19,041 29,912 30,327 
Automotive34,633 11,771 502 
Other businesses(86,270)(76,153)(72,915)
Corporate office(56,166)(59,025)(51,978)
$271,739 $168,185 $187,357 
Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets
Education$16,170 $19,319 $29,452 
Television broadcasting5,440 5,440 5,440 
Manufacturing20,372 52,974 28,099 
Healthcare3,776 3,106 4,220 
Automotive— — 6,698 
Other businesses142,083 9,971 13,041 
Corporate office— — — 
 $187,841 $90,810 $86,950 
Income (Loss) from Operations
Education$82,933 $50,573 $11,604 
Television broadcasting201,879 149,422 194,498 
Manufacturing33,707 (16,048)12,328 
Healthcare15,265 26,806 26,107 
Automotive34,633 11,771 (6,196)
Other businesses(228,353)(86,124)(85,956)
Corporate office(56,166)(59,025)(51,978)
 $83,898 $77,375 $100,407 
Equity in (Losses) Earnings of Affiliates, Net(2,837)17,914 6,664 
Interest Expense, Net(51,177)(30,534)(34,439)
Non-Operating Pension and Postretirement Benefit Income, Net197,939 109,230 59,315 
(Loss) Gain on Marketable Equity Securities, net(139,589)243,088 60,787 
Other Income, Net33,500 32,554 214,534 
Income Before Income Taxes$121,734 $449,627 $407,268 
Year Ended December 31
(in thousands)202220212020
Depreciation of Property, Plant and Equipment   
Education$34,114 $32,113 $31,759 
Television broadcasting12,294 14,018 13,830 
Manufacturing9,399 9,808 10,333 
Healthcare3,781 1,313 1,665 
Automotive3,709 2,156 2,017 
Other businesses9,392 11,376 13,947 
Corporate office608 631 706 
 $73,297 $71,415 $74,257 
Pension Service Cost   
Education$8,934 $9,357 $10,024 
Television broadcasting3,554 3,575 3,263 
Manufacturing1,104 1,282 1,424 
Healthcare11,008 561 543 
Automotive22 — — 
Other businesses2,073 1,755 1,698 
Corporate office5,872 6,461 5,704 
 $32,567 $22,991 $22,656 
Capital Expenditures   
Education$46,878 $100,780 $33,553 
Television broadcasting5,832 6,803 13,470 
Manufacturing7,968 7,190 8,034 
Healthcare2,745 3,671 2,481 
Automotive3,606 31,124 3,181 
Other businesses15,352 13,176 5,075 
Corporate office21 25 80 
 $82,402 $162,769 $65,874 
Asset information for the Company’s business segments is as follows:
 As of December 31
(in thousands)20222021
Identifiable Assets  
Education$1,987,042 $2,026,782 
Television broadcasting431,084 448,627 
Manufacturing486,487 486,304 
Healthcare249,845 194,823 
Automotive427,221 238,200 
Other businesses475,583 689,872 
Corporate office70,567 68,962 
 $4,127,829 $4,153,570 
Investments in Marketable Equity Securities609,921 809,997 
Investments in Affiliates186,419 155,444 
Prepaid Pension Cost1,658,046 2,306,514 
Total Assets$6,582,215 $7,425,525 
The Company’s education division comprises the following operating segments:
Year Ended December 31
(in thousands)202220212020
Operating Revenues   
Kaplan international$816,239 $726,875 $653,892 
Higher education304,136 317,854 316,095 
Supplemental education301,625 309,069 327,087 
Kaplan corporate and other18,752 14,759 12,643 
Intersegment elimination(12,837)(7,312)(4,004)
 $1,427,915 $1,361,245 $1,305,713 
Income (Loss) from Operations before Amortization of Intangible Assets and Impairment of Long-Lived Assets
Kaplan international$72,066 $33,457 $15,248 
Higher education24,031 24,134 24,364 
Supplemental education21,069 36,919 19,705 
Kaplan corporate and other(18,018)(24,715)(18,266)
Intersegment elimination(45)97 5 
$99,103 $69,892 $41,056 
Amortization of Intangible Assets$16,170 $16,001 $17,174 
Impairment of Long-Lived Assets$— $3,318 $12,278 
Income (Loss) from Operations   
Kaplan international$72,066 $33,457 $15,248 
Higher education24,031 24,134 24,364 
Supplemental education21,069 36,919 19,705 
Kaplan corporate and other(34,188)(44,034)(47,718)
Intersegment elimination(45)97 5 
 $82,933 $50,573 $11,604 
Depreciation of Property, Plant and Equipment   
Kaplan international$23,270 $21,472 $19,562 
Higher education4,107 3,658 3,082 
Supplemental education6,344 6,544 8,724 
Kaplan corporate and other393 439 391 
 $34,114 $32,113 $31,759 
Pension Service Cost   
Kaplan international$270 $291 $433 
Higher education3,842 4,440 4,150 
Supplemental education4,114 3,814 4,207 
Kaplan corporate and other708 812 1,234 
 $8,934 $9,357 $10,024 
Capital Expenditures   
Kaplan international$39,206 $92,532 $24,085 
Higher education1,398 3,629 3,234 
Supplemental education4,749 4,297 6,030 
Kaplan corporate and other1,525 322 204 
 $46,878 $100,780 $33,553 
Asset information for the Company’s education division is as follows:
 As of December 31
(in thousands)20222021
Identifiable Assets
Kaplan international$1,479,833 $1,493,868 
Higher education174,033 187,789 
Supplemental education268,499 286,877 
Kaplan corporate and other64,677 58,248 
 $1,987,042 $2,026,782