Graham Holdings Company
02/25/2026 | Press release | Distributed by Public on 02/25/2026 07:20
Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
Management's Discussion and Analysis of Financial Condition and Results of Operations.
See the information contained under the heading "Management's Discussion and Analysis of Results of Operations and Financial Condition," which is included in this Annual Report on Form 10-K and listed in the index to financial information on page 50 hereof.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
The Company is exposed to market risk in the normal course of its business due primarily to its ownership of marketable equity securities, which are subject to equity price risk; to its borrowing and cash-management activities, which are subject to interest rate risk; and to its non-U.S. business operations, which are subject to foreign exchange rate risk.
Equity Price Risk. The Company has common stock investments in several publicly traded companies (as discussed in Note 4 to the Company's Consolidated Financial Statements) that are subject to market price volatility. The fair value of these common stock investments totaled $1,081.9 million at December 31, 2025.
Interest Rate Risk. The Company manages the risk associated with interest rate movements through the use of a combination of variable and fixed-rate debt.
At December 31, 2025, the Company had $500 million principal amount of 5.625% unsecured fixed-rate notes due December 1, 2033 (the Notes). At December 31, 2025, the aggregate fair value of the Notes, based upon quoted market prices, was $504.0 million. There were no earnings or liquidity risks associated with the Company's Notes. The fair value of the Notes varies with fluctuations in market interest rates. A 100 basis point decrease in market interest rates would increase the fair value of the Notes by $33.1 million at December 31, 2025 using a yield to maturity. A 100 basis point increase in market interest rates would decrease the fair value of the Notes by $30.7 million at December 31, 2025, using a yield to maturity. The Company also had approximately $9 million of other fixed-rate debt relating to the healthcare business.
At December 31, 2025, the Company had approximately $498 million of variable-rate debt, including floor plan facility obligations. Approximately $67.1 million of this debt is hedged by an interest rate swap. The Company is subject to earnings and liquidity risks for changes in the interest rate on the unhedged portion of this debt. A 100 basis point increase in the applicable floating rates for the unhedged portions of our variable-rate debt would increase annual interest expense by approximately $4.3 million.
Foreign Exchange Rate Risk. The Company is exposed to foreign exchange rate risk primarily at its Kaplan international operations, and the primary exposure relates to the exchange rate between the U.S. dollar and the British pound, the Australian dollar, and the Singapore dollar. In 2025, 2024 and 2023, the Company reported a net foreign currency loss of $10.1 million, a net foreign currency gain of $5.4 million and a net foreign currency loss of $1.1 million, respectively.
If the values of the British pound, the Australian dollar, and the Singapore dollar relative to the U.S. dollar had been 10% lower than the values that prevailed during 2025, the Company's pre-tax income for 2025 would have been approximately $37 million lower. Conversely, if such values had been 10% higher, the Company's reported pre-tax income for 2025 would have been approximately $37 million higher.
Graham Holdings Company published this content on February 25, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on February 25, 2026 at 13:20 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]