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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Quarterly Period Ended June 30, 2021
or
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Commission File Number 001-06714
GRAHAM HOLDINGS COMPANY
(Exact name of registrant as specified in its charter)
Delaware53-0182885
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
1300 North 17th Street, Arlington, Virginia

22209
(Address of principal executive offices)(Zip Code)
(703) 345-6300
(Registrant’s telephone number, including area code)
Securities Registered Pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class B Common Stock, par value $1.00 per share GHCNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes  .    No  .
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes  .    No  .  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer
Accelerated
filer
Non-accelerated
filer
Smaller reporting
company
Emerging growth
company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  .    No  .  
Shares outstanding at July 30, 2021:
Class A Common Stock – 964,001 Shares
Class B Common Stock – 4,037,461 Shares



GRAHAM HOLDINGS COMPANY
Index to Form 10-Q
 
PART I. FINANCIAL INFORMATION
 
Item 1.
Financial Statements
 
 
Condensed Consolidated Statements of Operations
 
 
 
 
Condensed Consolidated Statements of Comprehensive Income (Loss)
 
 
 
 
Condensed Consolidated Balance Sheets
 
 
 
 
Condensed Consolidated Statements of Cash Flows
Condensed Consolidated Statements of Changes in Common Stockholders' Equity
 
 
 
 
Notes to Condensed Consolidated Financial Statements

Organization, Basis of Presentation and Recent Accounting Pronouncements

Acquisitions and Dispositions of Businesses

Investments

Accounts Receivable, Accounts Payable and Accrued Liabilities

Inventories, Contracts in Progress and Vehicle Floor Plan Payable

Goodwill and Other Intangible Assets

Debt

Fair Value Measurements

Income Taxes

Revenue From Contracts With Customers

Earnings (Loss) Per Share

Pension and Postretirement Plans

Other Non-Operating Income

Accumulated Other Comprehensive Income (Loss)

Contingencies

Business Segments
Item 2.
Management’s Discussion and Analysis of Results of Operations and Financial Condition
 
 
 
Item 3.
Quantitative and Qualitative Disclosures about Market Risk
 
 
 
Item 4.
Controls and Procedures
 
 
PART II. OTHER INFORMATION
 
Item 6.
Exhibits
 
 
Signatures



PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
GRAHAM HOLDINGS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
  Three Months Ended 
 June 30
Six Months Ended 
 June 30
  
(in thousands, except per share amounts)2021202020212020
Operating Revenues
Sales of services$511,037 $483,595 $994,706 $1,000,232 
Sales of goods290,115 169,276 518,901 384,896 
801,152 652,871 1,513,607 1,385,128 
Operating Costs and Expenses    
Cost of services sold (exclusive of items shown below)306,983 298,578 599,417 631,627 
Cost of goods sold (exclusive of items shown below)226,892 136,825 405,679 303,526 
Selling, general and administrative195,429 162,840 371,290 339,992 
Depreciation of property, plant and equipment16,600 22,913 33,145 39,617 
Amortization of intangible assets13,889 14,327 27,826 28,492 
Impairment of goodwill and other long-lived assets3,768 11,511 4,815 27,912 
  763,561 646,994 1,442,172 1,371,166 
Income from Operations37,591 5,877 71,435 13,962 
Equity in earnings (losses) of affiliates, net1,776 1,182 15,204 (365)
Interest income1,876 954 2,766 2,105 
Interest expense(7,353)(7,377)(15,801)(15,055)
Non-operating pension and postretirement benefit income, net25,216 12,136 54,003 30,539 
Gain (loss) on marketable equity securities, net83,698 39,890 162,912 (60,503)
Other income, net16,122 8,100 22,442 10,788 
Income (Loss) Before Income Taxes158,926 60,762 312,961 (18,529)
Provision for (Benefit from) Income Taxes43,000 41,900 84,400 (3,500)
Net Income (Loss)115,926 18,862 228,561 (15,029)
Net (Income) Loss Attributable to Noncontrolling Interests(568)(8)(753)638 
Net Income (Loss) Attributable to Graham Holdings Company Common Stockholders$115,358 $18,854 $227,808 $(14,391)
Per Share Information Attributable to Graham Holdings Company Common Stockholders
      
Basic net income (loss) per common share$23.07 $3.61 $45.55 $(2.77)
Basic average number of common shares outstanding4,968 5,196 4,968 5,235 
Diluted net income (loss) per common share$22.99 $3.60 $45.43 $(2.77)
Diluted average number of common shares outstanding4,985 5,201 4,981 5,235 
See accompanying Notes to Condensed Consolidated Financial Statements.
1


GRAHAM HOLDINGS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
  Three Months Ended 
 June 30
Six Months Ended 
 June 30
(in thousands)2021202020212020
Net Income (Loss)$115,926 $18,862 $228,561 $(15,029)
Other Comprehensive Income (Loss), Before Tax      
Foreign currency translation adjustments:      
Translation adjustments arising during the period1,167 16,405 681 (20,971)
Pension and other postretirement plans:        
Amortization of net prior service cost included in net income
792 668 1,584 1,339 
Amortization of net actuarial (gain) loss included in net income
(924)390 (3,353)610 
  (132)1,058 (1,769)1,949 
Cash flow hedges gain (loss)13 (143)634 (1,721)
Other Comprehensive Income (Loss), Before Tax1,048 17,320 (454)(20,743)
Income tax expense (benefit) related to items of other comprehensive income (loss)
32 (252)331 (132)
Other Comprehensive Income (Loss), Net of Tax1,080 17,068 (123)(20,875)
Comprehensive Income (Loss)117,006 35,930 228,438 (35,904)
Comprehensive (income) loss attributable to noncontrolling interests
(568)(8)(753)638 
Total Comprehensive Income (Loss) Attributable to Graham Holdings Company$116,438 $35,922 $227,685 $(35,266)

See accompanying Notes to Condensed Consolidated Financial Statements.
2


GRAHAM HOLDINGS COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
As of
(in thousands)June 30,
2021
December 31,
2020
  (Unaudited)  
Assets    
Current Assets    
Cash and cash equivalents$114,802 $413,991 
Restricted cash9,982 9,063 
Investments in marketable equity securities and other investments765,740 587,582 
Accounts receivable, net516,483 537,156 
Inventories and contracts in progress126,395 120,622 
Prepaid expenses82,633 75,523 
Income taxes receivable16,947 29,313 
Other current assets7,631 942 
Total Current Assets1,640,613 1,774,192 
Property, Plant and Equipment, Net373,471 378,286 
Lease Right-of-Use Assets444,082 462,560 
Investments in Affiliates164,203 155,777 
Goodwill, Net1,653,607 1,484,750 
Indefinite-Lived Intangible Assets121,417 120,437 
Amortized Intangible Assets, Net264,408 204,646 
Prepaid Pension Cost1,750,588 1,708,305 
Deferred Income Taxes7,124 8,396 
Deferred Charges and Other Assets (includes $748 and $0 of restricted cash)
157,029 146,770 
Total Assets$6,576,542 $6,444,119 
Liabilities and Equity    
Current Liabilities    
Accounts payable and accrued liabilities$512,409 $520,236 
Deferred revenue284,013 331,021 
Income taxes payable8,236 5,140 
Current portion of lease liabilities86,143 86,797 
Current portion of long-term debt4,248 6,452 
Dividends declared7,553  
Total Current Liabilities902,602 949,646 
Accrued Compensation and Related Benefits203,296 201,918 
Other Liabilities32,511 48,768 
Deferred Income Taxes531,350 521,274 
Mandatorily Redeemable Noncontrolling Interest9,332 9,240 
Lease Liabilities407,740 428,849 
Long-Term Debt506,079 506,103 
Total Liabilities2,592,910 2,665,798 
Redeemable Noncontrolling Interests7,720 11,928 
Preferred Stock  
Common Stockholders’ Equity    
Common stock20,000 20,000 
Capital in excess of par value386,882 388,159 
Retained earnings7,009,971 6,804,822 
Accumulated other comprehensive income, net of taxes  
Cumulative foreign currency translation adjustment10,435 9,754 
Unrealized gain on pensions and other postretirement plans593,996 595,287 
Cash flow hedges(1,240)(1,727)
Cost of Class B common stock held in treasury(4,051,958)(4,056,993)
Total Common Stockholders’ Equity3,968,086 3,759,302 
Noncontrolling Interests7,826 7,091 
Total Equity3,975,912 3,766,393 
Total Liabilities and Equity$6,576,542 $6,444,119 

See accompanying Notes to Condensed Consolidated Financial Statements.
3


GRAHAM HOLDINGS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
  Six Months Ended 
 June 30
(in thousands)20212020
Cash Flows from Operating Activities    
Net Income (Loss)$228,561 $(15,029)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:    
Depreciation, amortization and goodwill and other long-lived asset impairments65,786 96,021 
Amortization of lease right-of-use asset36,774 50,954 
Net pension benefit(45,413)(21,409)
(Gain) loss on marketable equity securities and cost method investments, net(165,257)60,509 
Gain on disposition and write-down of businesses, property, plant and equipment and investments, net(15,080)(5,444)
Provision for doubtful trade receivables2,506 7,241 
Stock-based compensation expense, net3,060 3,135 
Foreign exchange gain(680)(3,220)
Equity in (earnings) losses of affiliates, net of distributions(5,053)4,263 
Provision for (benefit from) deferred income taxes52,856 (1,349)
Accretion expense and change in fair value of contingent consideration liabilities(2,679) 
Change in operating assets and liabilities:
Accounts receivable, net38,541 164,314 
Inventories(4,971)2,840 
Accounts payable and accrued liabilities(15,592)(99,496)
Deferred revenue(61,591)(69,105)
Income taxes receivable10,681 (6,434)
Lease liabilities(41,655)(43,697)
Other assets and other liabilities, net(9,343)(2,384)
Other1,394 (359)
Net Cash Provided by Operating Activities72,845 121,351 
Cash Flows from Investing Activities    
Investments in certain businesses, net of cash acquired(272,428)(20,080)
Purchases of marketable equity securities(48,036) 
Purchases of property, plant and equipment(27,502)(40,209)
Proceeds from sales of marketable equity securities37,629 93,775 
Investments in equity affiliates, cost method and other investments
(4,910)(8,011)
Net proceeds from disposition of businesses, property, plant and equipment, and investments
4,735 862 
Return of investment in equity affiliates4 314 
Net Cash (Used in) Provided by Investing Activities(310,508)26,651 
Cash Flows from Financing Activities    
Deferred payments of acquisitions(30,866)(5,010)
Dividends paid(15,106)(15,289)
Net payments on vehicle floor plan payable(9,591)(11,063)
Proceeds from bank overdrafts4,433 9,135 
Purchase of noncontrolling interest(3,508) 
Net payments under revolving credit facilities(2,304) 
Repayments of borrowings(2,071)(75,206)
Issuance of borrowings121 76,984 
Common shares repurchased (62,905)
Proceeds from exercise of stock options 5,335 
Other(283) 
Net Cash Used in Financing Activities(59,175)(78,019)
Effect of Currency Exchange Rate Change(684)(4,953)
Net (Decrease) Increase in Cash and Cash Equivalents and Restricted Cash(297,522)65,030 
Beginning Cash and Cash Equivalents and Restricted Cash423,054 214,044 
Ending Cash and Cash Equivalents and Restricted Cash$125,532 $279,074 


See accompanying Notes to Condensed Consolidated Financial Statements.
4


GRAHAM HOLDINGS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN COMMON STOCKHOLDERS’ EQUITY (UNAUDITED)
(in thousands)Common
Stock
Capital in
Excess of
Par Value
Retained
Earnings
Accumulated Other Comprehensive IncomeTreasury
Stock
Noncontrolling
Interest
Total EquityRedeemable Noncontrolling Interest
As of December 31, 2020$20,000 $388,159 $6,804,822 $603,314 $(4,056,993)$7,091 $3,766,393 $11,928 
Net income for the period112,635 112,635 
Net income attributable to noncontrolling interests(185)185  
Change in redemption value of redeemable noncontrolling interests697 64 761 (634)
Distribution to noncontrolling interest(126)(126)
Dividends on common stock(15,106)(15,106)
Issuance of Class B common stock, net of restricted stock forfeitures(5,188)5,084 (104)
Amortization of unearned stock compensation and stock option expense1,589 1,589 
Other comprehensive loss, net of income taxes(1,203)(1,203)
Purchase of redeemable noncontrolling interest (3,508)
As of March 31, 2021$20,000 $385,257 $6,902,166 $602,111 $(4,051,909)$7,214 $3,864,839 $7,786 
Net income for the period115,926 115,926 
Net income attributable to noncontrolling interests(699)699  
Net loss attributable to redeemable noncontrolling interests131 131 (131)
Change in redemption value of redeemable noncontrolling interests65 65 65 
Distribution to noncontrolling interest(152)(152)
Dividends on common stock(7,553)(7,553)
Forfeiture of restricted stock awards, net of Class B common stock issuances(47)(49)(96)
Amortization of unearned stock compensation and stock option expense1,672 1,672 
Other comprehensive income, net of income taxes1,080 1,080 
As of June 30, 2021$20,000 $386,882 $7,009,971 $603,191 $(4,051,958)$7,826 $3,975,912 $7,720 
5


(in thousands)Common
Stock
Capital in
Excess of
Par Value
Retained
Earnings
Accumulated Other Comprehensive IncomeTreasury
Stock
Noncontrolling
Interest
Total EquityRedeemable Noncontrolling Interest
As of December 31, 2019$20,000 $381,669 $6,534,427 $303,295 $(3,920,152)$7,557 $3,326,796 $5,655 
Net loss for the period(33,891)(33,891)
Net loss attributable to noncontrolling interests772 (772) 
Net income attributable to redeemable noncontrolling interests
(126)(126)126 
Dividends on common stock(15,289)(15,289)
Repurchase of Class B common stock(33,610)(33,610)
Issuance of Class B common stock
5,335 5,335 
Amortization of unearned stock compensation and stock option expense
1,568 1,568 
Other comprehensive loss, net of income taxes
(37,943)(37,943)
As of March 31, 2020$20,000 $383,237 $6,485,893 $265,352 $(3,948,427)$6,785 $3,212,840 $5,781 
Net income for the period18,862 18,862 
Net loss attributable to noncontrolling interests
37 (37) 
Acquisition of redeemable noncontrolling interest 6,005 
Net income attributable to redeemable noncontrolling interests
(45)(45)45 
Dividends on common stock(7,581)(7,581)
Repurchase of Class B common stock(29,295)(29,295)
Amortization of unearned stock compensation and stock option expense
1,567 1,567 
Other comprehensive income, net of income taxes17,068 17,068 
As of June 30, 2020$20,000 $384,804 $6,497,166 $282,420 $(3,977,722)$6,748 $3,213,416 $11,831 

See accompanying Notes to Condensed Consolidated Financial Statements.
6


GRAHAM HOLDINGS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. ORGANIZATION, BASIS OF PRESENTATION AND RECENT ACCOUNTING PRONOUNCEMENTS
Graham Holdings Company (the Company), is a diversified education and media company. The Company’s Kaplan subsidiary provides a wide variety of educational services, both domestically and outside the United States (U.S.). The Company’s media operations comprise the ownership and operation of seven television broadcasting stations, several websites and print publications, podcast content and a marketing solutions provider. The Company’s other business operations include manufacturing, automotive dealerships, consumer internet brands, restaurants and entertainment venues, custom framing services and home health and hospice services.
Basis of Presentation – The accompanying condensed consolidated financial statements have been prepared in accordance with: (i) generally accepted accounting principles in the United States of America (GAAP) for interim financial information; (ii) the instructions to Form 10-Q; and (iii) the guidance of Rule 10-01 of Regulation S-X under the Securities and Exchange Act of 1934, as amended, for financial statements required to be filed with the Securities and Exchange Commission (SEC). They include the assets, liabilities, results of operations and cash flows of the Company, including its domestic and foreign subsidiaries that are more than 50% owned or otherwise controlled by the Company. As permitted under such rules, certain notes and other financial information normally required by GAAP have been condensed or omitted. Management believes the accompanying condensed consolidated financial statements reflect all normal and recurring adjustments necessary for a fair statement of the Company’s financial position, results of operations, and cash flows as of and for the periods presented herein. The Company’s results of operations for the three and six months ended June 30, 2021 and 2020 may not be indicative of the Company’s future results. These condensed consolidated financial statements are unaudited and should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP.
Use of Estimates in the Preparation of the Condensed Consolidated Financial Statements – The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and judgments that affect the amounts reported herein. Management bases its estimates and assumptions on historical experience and on various other factors that are believed to be reasonable under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in those estimates.
The Company assessed certain accounting matters that generally require consideration of forecasted financial information, in context with the information reasonably available to the Company and the unknown future impacts of the novel coronavirus (COVID-19) pandemic as of June 30, 2021 and through the date of this filing. The accounting matters assessed included, but were not limited to, the Company’s carrying value of goodwill and other long-lived assets, allowance for doubtful accounts, inventory valuation and related reserves, fair value of financial assets, valuation allowances for tax assets and revenue recognition. Other than the other long-lived asset impairment charges (see Note 8), there were no other impacts to the Company’s condensed consolidated financial statements as of and for the six months ended June 30, 2021 resulting from our assessments. The Company’s assessments as of and for the six months ended June 30, 2020 resulted in goodwill, indefinite-lived asset and other long-lived asset impairment charges (see Note 6 and Note 8). The Company’s future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in material impacts to the Company’s condensed consolidated financial statements in future reporting periods.
2. ACQUISITIONS AND DISPOSITIONS OF BUSINESSES
Acquisitions. On June 14, 2021, the Company acquired all of the outstanding common shares of Leaf Group Ltd. (Leaf) for $308.6 million in cash and the assumption of $9.2 million in liabilities related to their previous stock compensation plan, which will be paid in the future. Leaf is a consumer internet company that builds creator-driven brands in lifestyle and home and art design categories. The acquisition is expected to provide benefits in the future by diversifying the Company’s business operations and providing operating synergies with other business units. The Company includes Leaf in other businesses.
During 2020, the Company acquired three businesses: two in education and one in other businesses for $96.8 million in cash and contingent consideration. The assets and liabilities of the companies acquired were recorded at their estimated fair values at the date of acquisition.
7


In the first three months of 2020, Kaplan acquired two small businesses; one in its supplemental education division and one in its international division.
In May 2020, the Company acquired an additional interest in Framebridge, Inc. for cash and contingent consideration that resulted in the Company obtaining control of the investee. Following the acquisition, the Company owns 93.4% of Framebridge. The Company previously accounted for Framebridge under the equity method, and included it in Investments in Affiliates on the Condensed Consolidated Balance Sheet (see Note 3). The contingent consideration is primarily based on Framebridge achieving revenue milestones within a specific time period. The fair value of the contingent consideration at the acquisition date was $50.6 million, determined using a Monte Carlo simulation. The fair value of the redeemable noncontrolling interest in Framebridge was $6.0 million as of the acquisition date, determined using a market approach. The minority shareholder has an option to put 20% of the minority shares annually starting in 2024. The acquisition is expected to provide benefits in the future by diversifying the Company’s business operations and is included in other businesses.
Acquisition-related costs for acquisitions that closed during the first six months of 2021 and 2020 were $1.4 million and $1.1 million, respectively, and were expensed as incurred. The aggregate purchase price of the 2021 and 2020 acquisitions was allocated as follows (2021 on a preliminary basis), based on acquisition date fair values to the following assets and liabilities:
Purchase Price Allocation
Six Months EndedYear Ended
(in thousands)June 30, 2021December 31, 2020
Accounts receivable$16,080 $745 
Inventory777 3,496 
Property, plant and equipment6,229 3,346 
Lease right-of-use assets7,744 6,580 
Goodwill167,098 73,951 
Amortized intangible assets88,000 14,589 
Other assets4,507 975 
Deferred income taxes40,850 15,958 
Other liabilities(49,797)(14,917)
Current and noncurrent lease liabilities(7,742)(6,593)
Redeemable noncontrolling interest (6,005)
Aggregate purchase price, net of cash acquired$273,746 $92,125 
The 2021 fair values recorded were based upon preliminary valuations and the estimates and assumptions used in such valuations are subject to change within the measurement period (up to one year from the acquisition date). The recording of deferred tax assets and liabilities, and the amounts of residual goodwill and other intangibles are not yet finalized. Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The goodwill recorded due to these acquisitions is attributable to the assembled workforces of the acquired companies and expected synergies. The Company expects to deduct $43.4 million and $3.2 million of goodwill for income tax purposes for the acquisitions completed in 2021 and 2020, respectively.
The acquired companies were consolidated into the Company’s financial statements starting on their respective acquisition dates. The following unaudited pro forma financial information presents the Company’s results as if the current year acquisitions had occurred at the beginning of 2020. The unaudited pro forma information also includes the 2020 acquisitions as if they occurred at the beginning of 2019:
Three Months Ended 
 June 30
Six Months Ended 
 June 30
(in thousands)2021202020212020
Operating revenues$841,966 $704,738 $1,606,299 $1,475,834 
Net income (loss)111,086 13,129 217,821 (36,427)
These pro forma results were based on estimates and assumptions, which the Company believes are reasonable, and include the historical results of operations of the acquired companies and adjustments for depreciation and amortization of identified assets and the effect of pre-acquisition transaction related expenses incurred by the Company and the acquired entities. The pro forma information does not include efficiencies, cost reductions and synergies expected to result from the acquisitions. They are not the results that would have been realized had these
8


entities been part of the Company during the periods presented and are not necessarily indicative of the Company’s consolidated results of operations in future periods.
Sale of Businesses. In December 2020, the Company completed the sale of Megaphone which was included in other businesses.
Other Transactions. In March 2021, Hoover’s minority shareholders put the remaining outstanding shares to the Company, which had a redemption value of $3.5 million. Following the redemption, the Company owns 100% of Hoover.
3. INVESTMENTS
Money Market Investments. As of June 30, 2021 the Company had no money market investments, compared to $268.8 million at December 31, 2020, that are classified as cash and cash equivalents in the Company’s Condensed Consolidated Balance Sheets.
Investments in Marketable Equity Securities. Investments in marketable equity securities consist of the following:
  As of
June 30,
2021
December 31,
2020
(in thousands)
Total cost
$276,532 $232,847 
Gross unrealized gains
474,908 340,255 
Total Fair Value
$751,440 $573,102 
At June 30, 2021 and December 31, 2020, the Company owned 44,430 shares and 28,000 shares, respectively, in Markel Corporation (Markel) valued at $52.7 million and $28.9 million, respectively. The Co-Chief Executive Officer of Markel, Mr. Thomas S. Gayner, is a member of the Company’s Board of Directors. As of June 30, 2021, there was no marketable equity security holding that exceeded 5% of the Company’s total assets.
The Company purchased $48.0 million of marketable equity securities during the first six months of 2021. There were no purchases of marketable equity securities during the first six months of 2020.
During the first six months of 2021, the gross cumulative realized gains from the sales of marketable equity securities were $27.7 million. The total proceeds from such sales were $37.6 million. During the first six months of 2020, the gross cumulative realized gains from the sales of marketable equity securities were $23.0 million. The total proceeds from such sales were $93.8 million.
The net gain (loss) on marketable equity securities comprised the following:

Three Months Ended 
 June 30

Six Months Ended 
 June 30
(in thousands)
2021202020212020
Gain (loss) on marketable equity securities, net
$83,698 $39,890 $162,912 $(60,503)
Less: Net (gains) losses in earnings from marketable equity securities sold and donated
(8,161)

4,608 

(8,161)13,382 
Net unrealized gains (losses) in earnings from marketable equity securities still held at the end of the period
$75,537 

$44,498 

$154,751 $(47,121)
Investments in Affiliates. As of June 30, 2021, the Company held an approximate 12% interest in Intersection Holdings, LLC, and in several other affiliates; Graham Healthcare Group (GHG) held a 40% interest in Residential Home Health Illinois, a 42.5% interest in Residential Hospice Illinois, a 40% interest in the joint venture formed between GHG and a Michigan hospital, and a 40% interest in the joint venture formed between GHG and Allegheny Health Network (AHN). For the three and six months ended June 30, 2021, the Company recorded $2.7 million and $5.2 million, respectively, in revenue for services provided to the affiliates of GHG. For the three and six months ended June 30, 2020, the Company recorded $2.2 million and $4.7 million, respectively, in revenue for services provided to the affiliates of GHG.
The Company had $41.6 million and $26.1 million in its investment account that represents cumulative undistributed income in its investments in affiliates as of June 30, 2021 and December 31, 2020, respectively.
In the first quarter of 2020, the Company recorded impairment charges of $3.6 million on two of its investments in affiliates as a result of the challenging economic environment for these businesses, of which $2.7 million related to the Company’s investment in Framebridge. It is reasonably possible that further COVID-19 disruptions could result in additional impairment charges related to the Company’s investments in affiliates should the impact of COVID-19
9


not dissipate or have a worsening adverse impact on our affiliates in future periods. The Company records its share of the earnings or losses of its affiliates from their most recent available financial statements. In some instances, the reporting period of the affiliates’ financial statements lags the Company’s financial reporting period, but such lag is never more than three months. It is possible that the Company’s results of operations for the six months ended June 30, 2021 does not capture the impact of the COVID-19 pandemic on the earnings or losses of the affiliates whose financial results are recorded on a lag basis.
In May 2020, the Company made an additional investment in Framebridge (see Note 2) that resulted in the Company obtaining control of the investee. The results of operations, cash flows, assets and liabilities of Framebridge are included in the condensed consolidated financial statements of the Company from the date of the acquisition. Timothy J. O’Shaughnessy, President and Chief Executive Officer of Graham Holdings Company, was a personal investor in Framebridge and served as Chairman of the Board prior to the acquisition of the additional interest. The Company acquired Mr. O’Shaughnessy’s interest under the same terms as the other Framebridge investors.
Additionally, Kaplan International Holdings Limited (KIHL) held a 45% interest in a joint venture formed with York University. KIHL loaned the joint venture £22 million, which loan is repayable over 25 years at an interest rate of 7% and guaranteed by the University of York. The loan is repayable by December 2041.
Cost Method Investments. The Company held investments without readily determinable fair values in a number of equity securities that are accounted for as cost method investments, which are recorded at cost, less impairment, and adjusted for observable price changes for identical or similar investments of the same issuer. The carrying value of these investments was $45.1 million and $35.7 million as of June 30, 2021 and December 31, 2020, respectively. During the three and six months ended June 30, 2021, the Company recorded gains of $7.8 million and $10.5 million, respectively, to those equity securities based on observable transactions. During the three and six months ended June 30, 2020, the Company recorded gains of $2.6 million to those equity securities based on observable transactions. During the first six months of 2020, the Company recorded impairment losses of $2.6 million to those equity securities.
4. ACCOUNTS RECEIVABLE, ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts receivable consist of the following:
As of
June 30,
2021
December 31,
2020
(in thousands)
Receivables from contracts with customers, less estimated credit losses of $20,445 and $21,494
$496,676 $519,577 
Other receivables19,807 17,579 
 $516,483 $537,156 
Credit loss expense was $1.4 million and $4.8 million for the three months ended June 30, 2021 and 2020, respectively. Credit loss expense was $2.5 million and $7.2 million for the six months ended June 30, 2021 and 2020, respectively.
Accounts payable and accrued liabilities consist of the following:
As of
June 30,
2021
December 31,
2020
(in thousands)
Accounts payable$116,607 $106,215 
Accrued compensation and related benefits139,125 135,493 
Other accrued liabilities256,677 278,528 
$512,409 $520,236 
Cash overdrafts of $6.6 million and $2.1 million are included in accounts payable as of June 30, 2021 and December 31, 2020, respectively.
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5.