McGraw-Hill Global Education Intermediate Holdings, LLC

CIK:0001585002|SEC Filings

Combined Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended									9 Months Ended	12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Mar. 22, 2013	Dec. 31, 2013	Dec. 31, 2015	Dec. 31, 2014
Successor
Revenue	$ 349,251	$ 437,279	$ 250,926	$ 199,814	$ 372,034	$ 462,128	$ 251,745	$ 204,571		$ 1,055,805	$ 1,237,270	$ 1,290,478
Cost of sales										460,850	345,166	358,731
Gross profit	248,645	322,606	176,498	144,355	264,926	335,509	180,561	150,751		594,955	892,104	931,747
Operating expenses
Operating & administration expenses										494,565	592,789	683,239
Depreciation										16,192	28,648	15,456
Amortization of intangibles										69,231	93,240	103,347
Transaction costs										27,612	0	3,931
Total operating expenses										607,600	714,677	805,973
Operating (loss) income	59,163	142,620	8,599	(32,955)	40,907	144,570	(9,039)	(50,664)		(12,645)	177,427	125,774
Interest expense (income), net										135,022	130,507	146,124
Other (income) expense										(2,125)	(9,878)	(12,429)
(Loss) income from operations before taxes on income										(145,542)	56,798	(7,921)
Income tax (benefit) provision										(61,831)	20,080	(11,447)
Net (loss) income										(83,711)	36,718	3,526
Less: Net (income) loss attributable to noncontrolling interests										(2,251)	0	299
Net (loss) income attributable to McGraw-Hill Global Education Intermediate Holdings, LLC	$ 20,823	$ 73,349	$ (13,166)	$ (44,288)	$ 17,364	$ 97,193	$ (53,563)	$ (57,169)		$ (85,962)	$ 36,718	$ 3,825
Predecessor
Revenue									$ 186,242
Cost of sales									56,249
Gross profit									129,993
Operating expenses
Operating & administration expenses									129,336
Depreciation									3,874
Amortization of intangibles									1,699
Transaction costs									0
Total operating expenses									134,909
Operating (loss) income									(4,916)
Interest expense (income), net									481
Other (income) expense									0
(Loss) income from operations before taxes on income									(5,397)
Income tax (benefit) provision									(1,213)
Net (loss) income									(4,184)
Less: Net (income) loss attributable to noncontrolling interests									631
Net (loss) income attributable to McGraw-Hill Global Education Intermediate Holdings, LLC									$ (3,553)

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended	9 Months Ended	12 Months Ended
	Mar. 22, 2013	Dec. 31, 2013	Dec. 31, 2015	Dec. 31, 2014
Financing activities
Cash and cash equivalents at the beginning of the period			$ 232,098
Cash and cash equivalents, ending balance			311,187	$ 232,098
Successor
Operating activities
Net (loss) income including noncontrolling interests		$ (83,711)	36,718	3,526
Adjustments to reconcile net loss including noncontrolling interests to net cash provided by operating activities
Depreciation (including amortization of technology projects)		16,192	28,648	15,456
Amortization of intangibles		69,231	93,240	103,347
Amortization of pre-publication costs		65,858	58,144	64,231
Provision for losses on accounts receivable		3,936	4,389	2,587
Inventory obsolescence		6,941	13,606	15,007
Deferred income taxes		(88,219)	8,058	(20,996)
Stock-based compensation		4,886	8,768	7,288
Amortization of debt discount		4,196	4,872	4,315
Amortization of deferred financing costs		11,248	10,532	11,228
Restructuring charges		7,348	7,230	24,028
Other		90	(1,292)	(7,329)
Changes in operating assets and liabilities, net of the effect of acquisitions
Accounts receivable		(123,257)	(16,849)	14,779
Due to/from related party		(25,071)	(15,290)	28,630
Inventories		150,309	(767)	(16,805)
Prepaid and other current assets		3,728	(510)	7,784
Accounts payable and accrued expenses		204,750	(36,929)	(52,250)
Deferred revenue		80,709	33,027	813
Other current liabilities		12,823	(5,766)	(7,437)
Net change in prepaid and accrued income taxes		3,770	158	(3,313)
Net change in operating assets and liabilities		39,330	(16,717)	16,228
Cash provided by (used for) operating activities		365,087	213,270	211,117
Investing activities
Investment in pre-publication costs		(52,455)	(46,111)	(50,263)
Capital expenditures		(6,749)	(39,544)	(39,580)
Acquisitions		(1,764,646)	(6,827)	(56,453)
Proceeds from sale of investments		0	12,500	3,304
Proceeds from dispositions		46	70	8,885
Cash provided by (used for) investing activities		(1,823,804)	(79,912)	(134,107)
Financing activities
Net transfers (to) from Parent		0	0	0
Borrowings on long-term debt		1,609,796	0	0
Payment of term loan		(87,075)	(7,137)	(41,880)
Payment of Revolving Facility		(35,000)	0	0
Equity contribution		950,000	0	0
Payment of acquisition costs on behalf of Parent		(28,672)	0	0
Distribution to Parent		(628,854)	0	0
Dividends paid to noncontrolling interests		(526)	0	(169)
Payment of deferred purchase price		0	0	(53,500)
Dividend on restricted stock units		(1,411)	(46)	(101)
Repurchase of vested stock options and restricted stock units		0	(2,297)	0
Dividend payment to MHGE Parent		0	(39,822)	0
Payment of deferred loan acquisition costs		(84,375)	0	0
Cash provided by (used for) financing activities		1,693,883	(49,302)	(95,650)
Effect of exchange rate changes on cash		(1,409)	(4,967)	(2,652)
Net change in cash and cash equivalents		233,757	79,089	(21,292)
Cash and cash equivalents at the beginning of the period		19,633	232,098	253,390
Cash and cash equivalents, ending balance	$ 19,633	253,390	311,187	232,098
Supplemental disclosures
Cash paid for interest expense		100,640	114,225	126,107
Cash paid for income taxes		11,762	$ 7,291	$ 15,244
Predecessor
Operating activities
Net (loss) income including noncontrolling interests	(4,184)
Adjustments to reconcile net loss including noncontrolling interests to net cash provided by operating activities
Depreciation (including amortization of technology projects)	3,874
Amortization of intangibles	1,699
Amortization of pre-publication costs	10,165
Provision for losses on accounts receivable	(34)
Inventory obsolescence	0
Deferred income taxes	(178)
Stock-based compensation	3,294
Amortization of debt discount	0
Amortization of deferred financing costs	0
Restructuring charges	0
Other	5
Changes in operating assets and liabilities, net of the effect of acquisitions
Accounts receivable	117,941
Inventories	(10,829)
Prepaid and other current assets	(19,204)
Accounts payable and accrued expenses	(50,120)
Deferred revenue	(26,435)
Other current liabilities	8,221
Net change in prepaid and accrued income taxes	(8,075)
Net change in operating assets and liabilities	3,607
Cash provided by (used for) operating activities	29,747
Investing activities
Investment in pre-publication costs	(14,128)
Capital expenditures	(1,911)
Acquisitions	(33,089)
Proceeds from sale of investments	0
Proceeds from dispositions	0
Cash provided by (used for) investing activities	(49,128)
Financing activities
Net transfers (to) from Parent	(55,910)
Borrowings on long-term debt	0
Payment of term loan	0
Payment of Revolving Facility	0
Equity contribution	0
Payment of acquisition costs on behalf of Parent	0
Distribution to Parent	0
Dividends paid to noncontrolling interests	(1,814)
Payment of deferred purchase price	0
Dividend on restricted stock units	0
Repurchase of vested stock options and restricted stock units	0
Dividend payment to MHGE Parent	0
Payment of deferred loan acquisition costs	0
Cash provided by (used for) financing activities	(57,724)
Effect of exchange rate changes on cash	(1,450)
Net change in cash and cash equivalents	(78,555)
Cash and cash equivalents at the beginning of the period	98,188	$ 19,633
Cash and cash equivalents, ending balance	19,633
Supplemental disclosures
Cash paid for interest expense	0
Cash paid for income taxes	$ 3,855

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Current assets
Cash and cash equivalents	$ 311,187	$ 232,098
Accounts receivable, net of allowance for doubtful accounts of $13,419 and $13,957 and sales returns of $145,569 and $181,927 as of December 31, 2015 and 2014, respectively	209,344	204,072
Due from related party	17,280	0
Inventories, net	61,475	76,992
Deferred income taxes	0	31,538
Prepaid and other current assets	27,344	30,710
Total current assets	626,630	575,410
Pre-publication costs, net	66,865	80,980
Property, plant and equipment, net	84,217	91,926
Goodwill	463,533	477,325	$ 314,275
Other intangible assets, net	813,822	906,665
Investments	6,368	9,219
Deferred income taxes non-current	60,570	43,440
Other non-current assets	110,457	101,509
Total assets	2,232,462	2,286,474
Current liabilities
Accounts payable	129,868	130,465
Accrued royalties	81,719	101,827
Accrued compensation and contributions to retirement plans	45,719	66,243
Deferred revenue	156,609	124,551
Current portion of long-term debt	79,120	6,880
Due to related parties	0	889
Other current liabilities	87,514	89,160
Total current liabilities	580,549	520,015
Long-term debt	1,372,967	1,447,473
Deferred income taxes	6,022	8,288
Other non-current liabilities	30,831	48,839
Total liabilities	$ 1,990,369	$ 2,024,615
Commitments and contingencies
Equity
Member's equity	$ 334,955	$ 370,881
Accumulated deficit	(45,419)	(82,137)
Accumulated other comprehensive loss	(47,443)	(26,885)
Total equity (deficit)	242,093	261,859
Total liabilities and equity	$ 2,232,462	$ 2,286,474