Company: GHC
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0000104889-25-000022
Chunk: 227

Company: Graham Holdings Co
Filing Date: 2025-02-26
Form: 10-K
Item: Item 7A
Chunk 227
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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 $852.4 million at December 31, 2024.

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, 2024, the Company had $400 million principal amount of 5.75% unsecured fixed-rate notes due June 1, 2026 (the Notes). At December 31, 2024, the aggregate fair value of the Notes, based upon quoted market prices, was $398.9 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 $5.4 million at December 31, 2024 using a yield to maturity. A 100 basis point increase in market interest rates would decrease the fair value of the Notes by $5.3 million at December 31, 2024, using a yield to maturity. The Company also had approximately $16 million of other fixed-rate debt, primarily relating to the healthcare business.

At December 31, 2024, the Company had approximately $483 million of variable-rate debt, including floor plan facility obligations. Approximately $70.9 million of this debt is hedged by an interest rate swap. The Company is 

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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 $4.1 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