Graham Holdings Co

Previous wording

The Company reported net income attributable to common shares of$124.4 million ($27.72 per share) for the first quarter of 2024, compared to $52.3 million ($10.88 per share) for the first quarter of 2023.

Current wording

The Company reported a net loss attributable to common shares of$21.0 million ($4.79 per share) for the second quarter of 2024, compared to income of $122.8 million ($25.89 per share) for the second quarter of 2023.

Previous wording

Items included in the Company’s net income for the first quarter of 2024:

Current wording

Items included in the Company’s net loss for the second quarter of 2024:

Previous wording

•non-operating loss of $0.4 million from the impairment of a cost method investment (after-tax impact of $0.3 million, or $0.07 per share); and

Current wording

•non-operating loss of $0.3 million from the impairment of a cost method investment (after-tax impact of $0.3 million, or $0.06 per share).

Previous wording

•non-operating gain of $2.6 million from the write-up and sale of a cost method investment (after-tax impactof$2.0 million, or$0.41 per share); and

Current wording

•non-operating gain of $1.3 million from the write-up and sale of cost method investments (after-tax impactof$1.0 million, or$0.21 per share).

Previous wording

Revenue for the first quarter of 2024 was $1,152.7 million, up 12% from $1,031.5 million in the first quarter of 2023. Revenues increased at education, healthcare and automotive, partially offset by declines at manufacturing and other businesses. The Company reported operating income of $35.4 million for the first quarter of 2024, compared to $27.7 million for the first quarter of 2023. The improvement in operating results is due to increases at education, television broadcasting and healthcare, and reduced losses at other businesses, partially offset by declines at manufacturing and automotive.

Current wording

Revenue for the second quarter of 2024 was$1,185.3 million, up 7% from $1,105.0 million in the second quarter of 2023. Revenues increased at education, healthcare and automotive, partially offset by declines at television broadcasting, manufacturing and other businesses. The Company reported operating income of$25.9 million for the second quarter of 2024, compared to $58.1 million for the second quarter of 2023. The decrease in operating results is due to goodwill and intangible asset impairment charges at WGB and declines at television broadcasting, manufacturing and other businesses, partially offset by increases at education, healthcare and automotive.

Previous wording

•$4.1 million in expenses related to non-operating SIPs at other businesses (after-tax impact of $3.1 million, or $0.64 per share);

Current wording

•$16.8 million in non-operating expenses related to a VRIP at the television broadcasting division and the corporate office, and SIPs at other businesses (after tax-impact of $12.5 million, or$2.80 per share);

Previous wording

Education division revenue totaled $422.6 million for the first quarter of 2024, up 12% from $378.0 million for the same period of 2023. Kaplan reported operating income of $30.6 million for the first quarter of 2024, compared to $23.0 million for the first quarter of 2023.

Current wording

Education division revenue totaled$422.9 million for the second quarter of 2024, up 5% from $402.2 million for the same period of 2023. Kaplan reported operating income of$35.3 million for the second quarter of 2024, compared to $30.1 million for the second quarter of 2023.

Previous wording

Kaplan International includes postsecondary education, professional training and language training businesses largely outside the United States (U.S.). Kaplan International revenue increased 19% for the first quarter of 2024 (16% on a constant currency basis). The increase is due largely to growth at Pathways, Australia, UK Professional and Singapore. Kaplan International reported operating income of $31.3 million in the first quarter of 2024, compared to $21.3 million in the first quarter of 2023. The improved results are due largely to improved results at Pathways, Australia, UK Professional and Singapore, partially offset by a decline at Languages.

Current wording

Kaplan International includes postsecondary education, professional training and language training businesses largely outside the United States (U.S.). Kaplan International revenue increased 12% and 16% for the second quarter and firstsix monthsof 2024, respectively (12% and 14%, respectively, on a constant currency basis). The increase is due largely to growth at Pathways, Australia, UK Professional and Singapore. Kaplan International reported operating income of$25.8 million in the second quarter of 2024, compared to $20.8 million in the second quarter of 2023. The increase is due largely to improved results at Australia, UK Professional and Pathways. Operating income increased to $57.1 million in the first six months of 2024, compared to $42.1 million in the first six months of 2023. The increase is due largely to improved results at Australia, UK Professional, Pathways and Singapore, partially offset by a decline at Languages.

Previous wording

Higher Education includes the results of Kaplan as a service provider to higher education institutions. Higher Education revenue increased 2% for the first quarter of 2024 due to revenue growth across most of the institutions served. Enrollments at Purdue Global, the largest institutional client, increased slightly compared to the first quarter of 2023. For the first quarter of 2024 and 2023, Kaplan recorded a portion of the fee from Purdue Global. The 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 adjust fee amounts recognized in earlier periods. Purdue Global’s available cash position under the TOSA at the end of its fiscal year (June 30) is an important determinant in the amount of fee recorded by Kaplan. Consequently, the timing of cash inflows and outflows close to Purdue Global’s fiscal year-end can significantly impact the amount of fee Kaplan records from Purdue Global. Higher Education operating results declined in the first quarter of 2024 due to a lower Purdue Global fee recorded compared to the first quarter of 2023 and an increase in higher education development costs.

Current wording

Higher Education includes the results of Kaplan as a service provider to higher education institutions. Higher Education revenue declined 10% and 4% for the second quarter and first six months of 2024, respectively, due primarily to a decrease in the Purdue Global fee recorded and reduced reimbursable expenses. The lower Purdue Global fee recorded was primarily due to timing of academic term starts. Enrollments at Purdue Global, the largest institutional client, increased 3% for the first half of 2024 compared to the first half of 2023. For the second quarter and first six months of 2024 and 2023, Kaplan recorded a portion of the fee from Purdue Global. The 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 adjust fee amounts recognized in earlier periods. Higher Education operating results declined in the second quarter and first six months of 2024 due to a lower Purdue Global fee recorded compared to the second quarter and first six months of 2023 and an increase in higher education development costs.

Previous wording

Supplemental Education includes Kaplan’s standardized test preparation programs and domestic professional and other continuing education businesses. Supplemental Education revenue declined 2% for the first quarter of 2024, driven mostly by softness in Medical Licensure test preparation and publishing activities and Real Estate, offset in part by growth in Insurance, CFA, Architecture and Engineering and MCAT test preparation. Overall, demand for graduate and pre-college test preparation programs has declined due to the strength of U.S. employment markets and the decline in test-takers, while demand for professional programs remained stable. Operating results improved in the first quarter of 2024 due to cost reductions from lower headcount, partially offset by lower revenues.

Current wording

Supplemental Education includes Kaplan’s standardized test preparation programs and domestic professional and other continuing education businesses. Supplemental Education revenue declined 2% for the second quarter and first six months of 2024, driven mostly by softness in Medical Licensure test preparation and publishing activities and Real Estate, offset in part by growth in Insurance, CFA, Architecture and Engineering and MCAT test preparation. Operating results improved in the second quarter and first six months of 2024 due to cost reductions from lower headcount, partially offset by lower revenues.

Previous wording

Kaplan corporate and other represents unallocated expenses of Kaplan, Inc.’s corporate office, other minor businesses and certain shared activities. Kaplan corporate and other expenses increased in the first quarter of 2024, largely due to increased employee benefit and incentive compensation costs.

Current wording

Kaplan corporate and other represents unallocated expenses of Kaplan, Inc.’s corporate office, other minor businesses and certain shared activities. Kaplan corporate and other expenses increased in the second quarter and first six months of 2024, largely due to increased employee benefit and incentive compensation costs.

Previous wording

Graham Media Group, Inc. 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 increased slightly to $113.1 million in the first quarter of 2024, from $112.9 million in the same period of 2023. The revenue increase is due to a $1.5 million increase in political advertising revenue and a modest increase in digital advertising revenues, partially offset by a decline in other advertising revenue. Retransmission revenues were flat in the first quarter of 2024. Operating income for the first quarter of 2024 increased 4% to $29.6 million, from $28.6 million in the same period of 2023, due to slightly higher revenues and lower overall costs, partially offset by increased pension expense.

Current wording

Graham Media Group, Inc. 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 decreased 3% to $115.5 million in the second quarter of 2024, from $118.8 million in the same period of 2023. The revenue decline is due to a $2.7 million decrease in retransmission revenue and declines in local and digital advertising revenues, partially offset by a $4.8 million increase in political advertising revenue. Operating income for the second quarter of 2024 was down 6% to $31.1 million, from $33.2 million in the same period of 2023, due to lower revenues and increased pension expense, partially offset by lower network fees.

Previous wording

While 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 2024 expected to decline compared with 2023, and this trend is expected to continue.

Current wording

Revenue at the television broadcasting division was down 1% to $228.5 million in the first six months of 2024, from $231.7 million in the same period of 2023. The revenue decline is due to a $2.7 million decrease in retransmission revenue and a decline in local advertising revenue, partially offset by a $6.2 million increase in political advertising revenue; digital advertising revenue was flat in the first six months of 2024. Operating income for the first six months of 2024 was down 2% to $60.8 million, from $61.8 million in the same period of 2023, due to modestly lower revenues and increased pension expense, partially offset by lower network fees and lower overall costs. While 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 2024 expected to decline compared with 2023, and this trend is expected to continue.

Previous wording

Manufacturing revenues decreased 11% in the first quarter of 2024 due to lower revenues at Hoover, Dekko and Joyce, partially offset by increased revenues at Forney. The revenue decline at Hoover is due largely to a decrease in volumes and overall product demand, particularly for multi-family housing. Revenues declined at Dekko due to lower product demand. Overall, Hoover results included wood gains on inventory sales in the first quarter of 2024 and 2023, with gains in the first quarter of 2024 lower than the prior year. Manufacturing operating results were down in the first quarter of 2024 due largely to a significant decline at Hoover, along with declines at Joyce and Forney.

Current wording

Manufacturing revenues decreased 14% and 12% in the second quarter and firstsix monthsof 2024, respectively. The revenue decline in the second quarter of 2024 is due to lower revenues at Hoover, Forney and Joyce, partially offset by a modest increase in revenues at Dekko. The revenue decline in the first six months of 2024 is due to lower revenues at all of the manufacturing businesses. The revenue decline at Hoover is due largely to a decrease in volumes and overall product demand, particularly for multi-family housing. Revenues declined at Dekko due to lower product demand. Overall, Hoover results included wood gains on inventory sales in the first half of 2024 and 2023, with gains in the first half of 2024 lower than the prior year. For the second quarter of 2024, Hoover results included modest wood losses on inventory sales compared with wood gains on inventory sales in the second quarter of 2023. Manufacturing operating results were down in the second quarter and firstsix months 2024 due largely to significant declines at Hoover and Dekko, along with declines at Joyce and Forney.

Previous wording

Graham Healthcare Group (GHG) provides home health and hospice services inseven states. GHG also provides other healthcare services, including nursing care and prescription services for patients receiving in-home infusion treatments through its 86.7% interest in CSI Pharmacy Holding Company, LLC (CSI). Healthcare revenues increased 26% for the first quarter of 2024 due largely to significant growth at CSI, along with growth in home health and hospice services and the other healthcare businesses. The increase in GHG operating results in the first quarter of 2024 is due largely to improved results at CSI and in home health.

Current wording

Graham Healthcare Group (GHG) provides home health and hospice services in seven states. GHG also provides nursing care and prescription services for patients receiving in-home infusion treatments through its 86.7% interest in CSI Pharmacy Holding Company, LLC (CSI), and other healthcare services. Healthcare revenues increased 30% and 28%for the second quarter and first six monthsof 2024, respectively, due largely to significant growth at CSI from an expansion of infusion treatment offerings and patient service areas; revenues also grew in home health and hospice services and at the other healthcare businesses. The increase in GHG operating results in the second quarter and first six months of 2024 is due to substantially higher operating results at CSI from significant revenue growth, along with improved results at home health, partially offset by a decline in hospice results and increased pension expense. In January 2022, GHC 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.

Previous wording

The Company also holds interests in four home health and hospice joint ventures managed by GHG, whose results are included in equity in earnings of affiliates in the Company’s Condensed Consolidated Statements of Operations. The Company recorded equity in earnings of $3.4 million and $2.7 million for the first quarter of 2024 and 2023, respectively, from these joint ventures.

Current wording

The Company also holds interests in four home health and hospice joint ventures managed by GHG, whose results are included in equity in earnings of affiliates in the Company’s Condensed Consolidated Statements of Operations. The Company recorded equity in earningsof $3.4 million and $2.3 million for the second quarter of 2024 and 2023, respectively, from these joint ventures. The Company recorded equity in earnings of $6.8 million and $5.0 million for the first six months of 2024 and 2023, respectively.

Previous wording

Automotive includes eight auto motive dealerships in the Washington, D.C. metropolitan area and Richmond, VA: Ourisman Lexus of Rockville, Ourisman Honda of Tysons Corner, Ourisman Jeep Bethesda, Ourisman Ford of Manassas, Toyota of Woodbridge, Ourisman Chrysler-Dodge-Jeep-Ram (CDJR) of Woodbridge and Ourisman Toyota of Richmond, which was acquired on September 27, 2023 from McGeorge Toyota. The automotive group was awarded a Kia Open Point dealership in Bethesda, MD, which commenced operations at the end of December 2023. Christopher J. Ourisman, a member of the Ourisman Automotive Group family of dealerships, and his team of industry professionals operate and manage the dealerships; the Company holds a 90% stake.

Current wording

Automotive includes eight auto motive dealerships in the Washington, DC metropolitan area and Richmond, VA: Ourisman Lexus of Rockville, Ourisman Honda of Tysons Corner, Ourisman Jeep Bethesda, Ourisman Ford of Manassas, Toyota of Woodbridge, Ourisman Chrysler-Dodge-Jeep-Ram (CDJR) of Woodbridge and Ourisman Toyota of Richmond, which was acquired on September 27, 2023 from McGeorge Toyota. The automotive group was awarded a Kia Open Point dealership in Bethesda, MD, which commenced operations at the end of December 2023. Christopher J. Ourisman, a member of the Ourisman Automotive Group family of dealerships, and his team of industry professionals operate and manage the dealerships; the Company holds a 90% stake.

Previous wording

Revenues for the first quarter of 2024 increased 31% due largely to the Toyota of Richmond acquisition and the addition of the Kia dealership, as well as sales growth for new and used vehicles and for services and parts. Operating results for the first quarter of 2024 declined due largely to lower overall gross margins on new and used vehicles, partially offset by earnings from the Toyota of Richmond acquisition and higher overall gross margins on services and parts.

Current wording

Revenues for the second quarter of 2024 increased 18% due largely to the Toyota of Richmond acquisition and the addition of the Kia dealership, as well as sales growth for new vehicles and for services and parts, partially offset by a decline in used vehicle sales. Revenues for the first six months of 2024 increased 24% due largely to the Toyota of Richmond acquisition and the addition of the Kia dealership, as well as sales growth for new and used vehicles and for services and parts. Operating results increased for the second quarter of 2024 due largely to earnings from the Toyota of Richmond acquisition and higher overall gross margins on services and parts, partially offset by lower overall gross margins on new and used vehicles. Operating results declined modestly for first six months of 2024 due largely to lower overall gross margins on new and used vehicles, partially offset by earnings from the Toyota of Richmond acquisition and higher overall gross margins on services and parts.

Previous wording

Overall, revenue from other businesses declined 9% in the first quarter of 2024. Retail revenue declined largely due to lower revenue at Society6, partially offset by revenue growth at Saatchi Art and Framebridge. Media revenue declined due to lower revenue at World of Good Brands (WGB) and Code3, partially offset by revenue growth at Slate, Foreign Policy and City Cast. Specialty revenue was flat due to lower revenue at Clyde’s Restaurant Group (CRG), partially offset by revenue growth at Decile and Supporting Cast. Excluding the former Leaf businesses, revenue from other businesses grew in the first quarter of 2024.

Current wording

Overall, revenue from other businesses declined 4% and 7% in the second quarter and first six months of 2024, respectively. Retail revenue declined in the first half of 2024 largely due to lower revenue at Society6, partially offset by revenue growth at Saatchi Art and Framebridge. Media revenue declined in the first half of 2024 due to lower revenue at WGB and Code3, partially offset by revenue growth at Slate and City Cast. Specialty revenue increased modestly in the first half of 2024 due to revenue growth at Clyde’s Restaurant Group (CRG), Decile and Supporting

Previous wording

Overall, operating results at other businesses improved in the first quarter of 2024 due primarily to improved results at Slate.

Current wording

Overall, operating results at other businesses declined significantly in the first six months of 2024 due to $26.3 million in goodwill and intangible asset impairment charges at WGB and increased pension expense. Excluding these impairment charges and increased pension expense, operating results at other businesses improved modestly in the first half of 2024.

Previous wording

On June 14, 2021, the Company acquired Leaf Group Ltd. (Leaf), a consumer internet company headquartered in Santa Monica, CA, that builds enduring, creator-driven brands that reach passionate audiences in large and growing lifestyle categories, including fitness and wellness (Well+Good and Livestrong.com), and home, art and design (Saatchi Art, Society6 and Hunker).

Current wording

On June 14, 2021, the Company acquired Leaf Group Ltd. (Leaf), a consumer internet company headquartered in Santa Monica, CA, that builds enduring, creator-driven brands that reach passionate audiences in large and growing lifestyle categories, including fitness and wellness (Well+Good and Livestrong.com), and home, art and design (Saatchi Art and Society6).

Previous wording

In the second quarter of 2023, the Company restructured Leaf into three stand-alone businesses: Society6 (formerly included in Leaf Marketplace), Saatchi Art (formerly included in Leaf Marketplace) and WGB (formerly Leaf Media). The transition process for this restructuring involves various cost reduction initiatives, including elimination of shared services costs and functions; transitioning financial and human resources systems; and rationalizing physical facilities and data centers. In the first and second quarters of 2023, Leaf implemented a SIP to reduce the number of employees, which was funded by the assets of the Company’s pension plan; $2.9 million and $3.9 million in related non-operating pension expense was recorded in the first and second quarters of 2023, respectively. Each of Society6, Saatchi Art and WGB is continuing with the transition and cost reduction process, which is expected to be largely completed by the end of the second quarter of 2024.

Current wording

In the second quarter of 2023, the Company restructured Leaf into three stand-alone businesses: Society6 (formerly included in Leaf Marketplace), Saatchi Art (formerly included in Leaf Marketplace) and WGB (formerly Leaf Media). The transition process for this restructuring involves various cost reduction initiatives, including elimination of shared services costs and functions; transitioning financial and human resources systems; and rationalizing physical facilities and data centers. In the first and second quarters of 2023, Leaf implemented a SIP to reduce the number of employees, which was funded by the assets of the Company’s pension plan; $2.9 million and $3.9 million inrelated non-operating pension expense was recorded in the first and second quarters of 2023, respectively. Each of Society6, Saatchi Art and WGB has continued with the transition and cost reduction process, which was largely complete at the end of the second quarter of 2024.

Previous wording

Revenues at Society6 and WGB declined substantially in the first quarter of 2024. Revenue declines at Society6 are due to declines in traffic, largely driven by a significant decrease in advertising spend, as well as softer demand in the home decor category. Revenue declines at WGB are due to reduced traffic and the soft digital advertising market for both direct and programmatic categories. Revenues at Saatchi Art grew in the first quarter of 2024. Overall, the Leaf businesses reported significant operating losses in each of the first quarters of 2024 and 2023, with a small decline in operating losses in the first quarter of 2024.

Current wording

Revenues at Society6 and WGB declined substantially in the second quarter and first six months of 2024. Revenue declines at Society6 are due to declines in traffic, largely driven by a significant decrease in advertising spend, as well as softer demand in the home decor category. Revenue declines at WGB are due to reduced traffic and the soft digital advertising market for programmatic. Revenues at Saatchi Art grew in the second quarter and first six months of 2024. Overall, the Leaf businesses reported significant operating losses in each of the second quarters and first six months of 2024 and 2023.

Previous wording

CRG owns and operates 12 restaurants and entertainment venues in the Washington, D.C. metropolitan area, including Old Ebbitt Grill and The Hamilton. Both revenues and operating results declined in the first quarter of 2024, due to overall lower guest traffic in the first two months of 2024. CRG reported an operating profit in each of the first quarters of 2024 and 2023.

Current wording

CRG owns and operates 13 restaurants and entertainment venues in the Washington, DC metropolitan area, including Old Ebbitt Grill and The Hamilton. Revenue increased in the second quarter and first six months of 2024 due to overall higher guest traffic and modest price increases. Operating results were flat in the second quarter of 2024 and declined in the first six months of 2024. Excluding pre-opening expenses incurred for new restaurants, operating results improved for the second quarter and first six months of 2024. CRG reported an operating profit in each of the second quarters and first six months of 2024 and 2023.

Previous wording

CRG plans to open new restaurants in Baltimore, MD; Washington, D.C.; and Reston, VA in mid 2024, late 2024 and late 2025, respectively.

Current wording

CRG opened a new restaurant in Baltimore, MD in July 2024 and plans to open new restaurants in Washington, DC and Reston, VA in late 2024 and late 2025, respectively.

Previous wording

Framebridge is a custom framing service company, headquartered in Washington, D.C., with 22 retail locations in the Washington, D.C., New York City, Atlanta, GA, Philadelphia, PA, Boston, MA and Chicago, IL areas and two manufacturing facilities in Kentucky and New Jersey. Framebridge plans to open additional stores in 2024, including an expansion into Texas, and continues to actively explore other opportunities for further store expansion.

Current wording

Framebridge is a custom framing service company, headquartered in Washington, DC, with 23 retail locations, and two manufacturing facilities in Kentucky and New Jersey. In the second quarter of 2024, Framebridge opened one new retail store in Austin, TX. Framebridge plans to open additional stores in the second half of 2024 and continues to actively explore other opportunities for further store expansion.

Previous wording

Revenues increased modestly in the first quarter of 2024 due to an increase in retail revenue from same-store sales growth and operating additional retail stores compared to the same period in 2023. Framebridge is an investment stage business and reported significant operating losses in the first quarters of 2024 and 2023.

Current wording

Revenues increased modestly in the second quarter and first six months of 2024 due to an increase in retail revenue from same-store sales growth and operating additional retail stores compared to the same periods in 2023. Framebridge is an investment stage business and reported significant operating losses in the first six months of 2024 and 2023, with increased losses in the first six months of 2024.

Previous wording

In the first quarter of 2024, Framebridge implemented a SIP, which will be funded by the assets of the Company’s pension plan; $0.4 million in related non-operating pension expense was recorded in the first quarter of 2024.

Current wording

In the first and second quarters of 2024, Framebridge implemented a SIP, which will be funded by the assets of the Company’s pension plan; $0.4 million and $1.0 million in related non-operating pension expense was recorded in the first and second quarters of 2024, respectively.

Previous wording

Other businesses also include Code3, a performance marketing agency focused on driving performance for brands though three core elements of digital success: media, creative and commerce; Slate and Foreign Policy, which publish online and print magazines and websites; and three investment stage businesses, Decile, City Cast and Supporting Cast. Slate, Foreign Policy, Decile, City Cast and Supporting Cast reported revenue growth in the first quarter of 2024, while Code3 reported a revenue decline. Losses from City Cast, Decile, Code3, Foreign Policy and Supporting Cast in the first quarter of 2024 adversely affected operating results, while Slate reported an operating profit during this period.

Current wording

Other businesses also include Code3, a performance marketing agency focused on driving performance for brands though three core elements of digital success: media, creative and commerce; Slate and Foreign Policy, which publish online and print magazines and websites; and three investment stage businesses, Decile, City Cast and Supporting Cast. Slate, Supporting Cast, City Cast and Decile reported revenue growth in the first six months of 2024, while Code3 reported a revenue decline. Losses from City Cast, Decile, Code3, Foreign Policy and Supporting Cast in the first six months of 2024 adversely affected operating results, while Slate reported an operating profit during this period.

Previous wording

Other businesses also included Pinna, which was sold in June 2023 when the Company entered into a merger agreement with Realm of Possibility, Inc. (Realm), a provider of audio entertainment services, to merge Pinna with Realm in return for a noncontrolling financial interest in the merged entity. The Company’s investment in Realm is reported as an equity method investment.

Current wording

Other businesses also included Pinna, which was sold in June 2023 when the Company entered into a merger agreement with Realm of Possibility, Inc. (Realm), a provider of audio entertainment services, to merge Pinna with Realm in return for a noncontrolling financial interest in the merged entity. In connection with the merger, the Company recorded a $10.0 million non-cash, non-operating gain related to the transaction. The Company’s investment in Realm is reported as an equity method investment.

Previous wording

In the first quarter of 2023, Code3 implemented a SIP to reduce the number of employees, which was funded by the assets of the Company’s pension plan; $1.2 million in related non-operating pension expense was recorded in the first quarter of 2023.

Current wording

In the second quarter of 2024, Code3 implemented a SIP to reduce the number of employees, which will be funded by the assets of the Company’s pension plan; $0.6 million in related non-operating pension expense was recorded in the second quarter of 2024. In the first and second quarters of 2023, Code3 implemented a SIP to reduce the number of employees, which was funded by the assets of the Company’s pension plan; $1.2 million and $0.6 million in related non-operating pension expense was recorded in the first and second quarters of 2023.

Previous wording

Corporate office includes the expenses of the Company’s corporate office and certain continuing obligations related to prior business dispositions.

Current wording

Corporate office includes the expenses of the Company’s corporate office and certain continuing obligations related to prior business dispositions. Corporate office expenses in the first half of 2023 benefited from a $4.2 million net credit related to a fair value change in contingent consideration from a prior acquisition.

Previous wording

At March 31, 2024, the Company held an approximate 18% 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; a 49.9% interest on a fully diluted basis in N2K Networks, a cybersecurity workforce intelligence company; and a 42.2% interest on a fully diluted basis in Realm. The Company also holds interests in several other affiliates, including a number of home health and hospice joint ventures managed by GHG and two joint ventures managed by Kaplan. Overall, the Company recorded equity in earnings of affiliates of $2.3 million for the first quarter of 2024, compared to $4.7 million for the first quarter of 2023. These amounts include $1.5 million in net lossesfor the first quarter of 2024 and$1.8 million in net earnings for thefirst quarter of 2023, from affiliates whose operations are not managed by the Company.

Current wording

At June 30, 2024, the Company held an approximate 18% 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; a 49.9% interest on a fully diluted basis in N2K Networks, a cybersecurity workforce intelligence company; and a 42.2% interest on a fully diluted basis in Realm. The Company also holds interests in several other affiliates, including a number of home health and hospice joint ventures managed by GHG and two joint ventures managed by Kaplan. Overall, the Company recorded equity in earnings of affiliates of$2.6 million for the second quarter of 2024, compared to losses of $6.1 million for the second quarter of 2023. These amounts include$1.1 million and $8.6 million in net lossesfor the second quarter of 2024 and 2023, respectively, from affiliates whose operations are not managed by the Company.

Previous wording

The Company incurred net interest expense of $17.2 million for the first quarter of 2024, compared to $13.1 million for the first quarter of 2023. The Company recorded interest expenseof$1.9 million and$1.5 million in the first quarter of 2024 and 2023, respectively, to adjust the fair value of the mandatorily redeemable noncontrolling interest at GHG. Excluding these adjustments, the increase in net interest expense relates primarily to higher debt balances at the automotive dealerships, higher interest rates on the Company’s variable debt, and increased floor plan interest expense.

Current wording

Excluding these adjustments, the increase in net interest expense relates primarily to higher debt balances, higher interest rates on the Company’s variable debt, and increased floor plan interest expense.

Previous wording

At March 31, 2024, the Company had $815.6 million in borrowings outstanding at an average interest rate of 6.4%, and cash, marketable equity securities and other investments of $981.9 million. At March 31, 2024, the Company had $108.1 million outstanding on its $300 million revolving credit facility.

Current wording

At June 30, 2024, the Company had $834.8 million in borrowings outstanding at an average interest rate of 6.4%, and cash, marketable equity securities and other investments of $1,009.6 million. At June 30, 2024, the Company had $132.2 million outstanding on its $300 million revolving credit facility.

Previous wording

The Company recorded net non-operating pension and postretirement benefit income of $42.4 million for the first quarter of 2024, compared to $31.8 million for the first quarter of 2023.

Current wording

The Company recorded net non-operating pension and postretirement benefit income of$24.7 million and$67.1 million for the second quarter and firstsix months of 2024, respectively, compared to $29.8 million and $61.7 million for the second quarter and firstsix months of 2023, respectively.

Previous wording

Overall, the Company recognized $104.2 million and $18.0 million in net gains on marketable equity securities in the first quarter of 2024 and 2023, respectively.

Current wording

Overall, the Company recognized$19.6 million and$123.8 million in net gains on marketable equity securities in the second quarter and firstsix monthsof 2024, respectively, compared to $78.6 million and $96.7 million in net gains on marketable equity securities in the second quarter and firstsix months of 2023, respectively.

Previous wording

The Company recorded total other non-operating income, net, of $1.6 million for the first quarter of 2024, compared to $3.1 million for the first quarter of 2023. The 2024 amounts included $0.9 million in gains related to the sale of businesses and contingent consideration; $0.6 million in foreign currency gains, and other items; partially offset by a $0.4 million impairment on a cost method investment. The 2023 amounts included a $1.8 million fair value increase on a cost method investment; $1.0 million in gains related to the sale of businesses and contingent consideration; a $0.8 million gain on sale of a cost method investment, and other items; partially offset by $1.5 million in foreign currency losses.

Current wording

The Company recorded total other non-opera ting income, net, of$1.8 million for the second quarter of 2024, compared to $15.8 million for the second quarter of 2023. The 2024 amounts included a gain of $3.5 million on the sale of certain WGB websites, and other items; partially offset by $1.7 million in foreign currency losses and a $0.3 million impairment on a cost method investment. The 2023 amounts included a non-cash gain of $10.0 million on the sale of Pinna; $2.2 million in gains related to the sale of businesses and contingent consideration; $1.6 million in foreign currency gains; a $1.3 million fair value increase on a cost method investment, and other items.

Previous wording

The Company’s effective tax rate for the first quarter of 2024 and 2023 was 25.8% and 26.6%, respectively.

Current wording

The Company’s effective tax rate for the firstsix months of 2024 and 2023 was 30.9% and 25.6%, respectively. The Company’s effective tax rate for the first six months of 2024 is based on the estimated full year 2024 effective tax rate, which includes the adverse impact of the permanent differences related to the interest expense recorded to adjust the fair value of the mandatorily redeemable noncontrolling interest at GHG and goodwill and intangible asset impairment charges.

Previous wording

The calculation of diluted earnings per share for the first quarter of 2024 was based on 4,456,825 weighted average shares outstanding, compared to 4,775,586 for the first quarterof 2023. At March 31, 2024, there were 4,450,593 shares outstanding. On May 4, 2023, the Board of Directors authorized the Company to acquire up to 500,000 shares of its Class B common stock; the Company has remaining authorization for 207,797 shares as of March 31, 2024.

Current wording

The calculation of diluted (loss) earnings per share for the second quarter and firstsix months of 2024 was based on 4,400,745 and 4,442,214 weighted average shares outstanding, respectively, compared to 4,712,626 and 4,744,076, respectively, for the second quarter and first six monthsof 2023. At June 30, 2024, there were 4,410,542 shares outstanding. On May 4, 2023, the Board of Directors authorized the Company to acquire up to 500,000 shares of its Class B common stock; the Company has remaining authorization for 167,617 shares as of June 30, 2024.