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) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 428.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 428.10 Td (the impact of being controlled by Principal Equityholders, whose interests may conflict with other stockholders;) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 410.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 410.10 Td (incurrence of impairment char) Tj ET Q q 0 0 0 rg BT 211.15 410.10 Td (ges for goodwill, long-lived assets and identifiable intangible assets;) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 392.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 392.10 Td (our ability to react to changes in the economy or our industry;) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 374.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 374.10 Td (changes in our credit ratings or macroeconomic conditions; and) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 356.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 356.10 Td (our ability to maintain ef) Tj ET Q q 0 0 0 rg BT 189.24 356.10 Td (fective internal controls over financial reporting.) 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Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 296.00 30.20 Td (- 1 -) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 239.80 742.25 Td (DESCRIPTION OF) Tj ET Q q 0 0 0 rg BT 325.27 742.25 Td ( BUSINESS ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.00 718.25 Td (Cengage Learning Holdings II, Inc. \(CL) Tj ET Q q 0 0 0 rg BT 237.85 718.25 Td ( Holdings II, Inc.\), together with its consolidated subsidiaries, is hereinafter ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 706.25 Td (collectively referred to as Cengage, the Company) Tj ET Q q 0 0 0 rg BT 264.64 706.25 Td (, us, we and our. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 685.25 Td (Our) Tj ET Q q 0 0 0 rg BT 71.60 685.25 Td ( Company ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 664.25 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 664.25 Td (e are a leading education and technology company built for learners. ) Tj ET Q q 0 0 0 rg BT 357.01 664.25 Td (W) Tj ET Q q 0 0 0 rg BT 365.65 664.25 Td (e serve the higher education, school \(consisting ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 652.25 Td (of grade levels of kinder) Tj ET Q q 0 0 0 rg BT 151.56 652.25 Td (garten to the 12th grade, or K-12\), professional, library and workforce training markets worldwide. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 640.25 Td (W) Tj ET Q q 0 0 0 rg BT 62.64 640.25 Td (e create high quality and af) Tj ET Q q 0 0 0 rg BT 171.02 640.25 Td (fordable learning experiences that build confidence and momentum toward the future students ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 628.25 Td (want. Our educational solutions deliver tailored authoritative information to increase student engagement, foster academic ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 616.25 Td (excellence and improve learning and professional development. Our heritage as a leading educational publisher coupled with ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 604.25 Td (our significant investments in technology and customer services and long-standing customer relationships positions us as the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 592.25 Td (second lar) Tj ET Q q 0 0 0 rg BT 94.63 592.25 Td (gest provider of learning solutions in the approximately $3.2 billion U.S. higher education learning solutions ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 580.25 Td (industry) Tj ET Q q 0 0 0 rg BT 86.13 580.25 Td (. In addition, operating under our Gale brand, we are a leading global provider of library reference materials with a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 568.25 Td (vast collection of primary source content. ) Tj ET Q q 0 0 0 rg BT 222.00 568.25 Td (As Cengage, we enrich the relationship between educators and students by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 556.25 Td (advancing the way students learn.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 538.25 Td (For the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 173.35 538.25 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 236.95 538.25 Td (, we had ) Tj ET Q q 0 0 0 rg BT 272.49 538.25 Td (Adjusted Revenues of approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.57 538.25 Td ($1,460.1 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 489.96 538.25 Td ( and ) Tj ET Q q 0 0 0 rg BT 508.85 538.25 Td (Adjusted ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 526.25 Td (EBITDA) Tj ET Q q 0 0 0 rg BT 90.11 526.25 Td ( less Pre-Publication Costs of approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 270.64 526.25 Td ($277.3 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 329.53 526.25 Td (. See Management) Tj ET Q q 0 0 0 rg BT 410.89 526.25 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 480.06 526.25 Td (Analysis of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 514.25 Td (Financial Condition and Results of Operations for our definition of ) Tj ET Q q 0 0 0 rg BT 328.40 514.25 Td (Adjusted Revenues and ) Tj ET Q q 0 0 0 rg BT 424.77 514.25 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 499.49 514.25 Td ( less Pre-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 502.25 Td (Publication Costs and a reconciliation of ) Tj ET Q q 0 0 0 rg BT 218.41 502.25 Td (Adjusted Revenues to revenues and ) Tj ET Q q 0 0 0 rg BT 363.10 502.25 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 437.82 502.25 Td ( less Pre-Publication Costs to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 490.25 Td (net loss. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 472.25 Td (The global education industry encompasses a diverse set of products, systems and services, including digital solutions, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 460.25 Td (textbooks and supplementary educational materials, infrastructure and services directed at students, faculty and educational ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 448.25 Td (institutions. ) Tj ET Q q 0 0 0 rg BT 103.27 448.25 Td (The industry enjoys positive growth fundamentals: it has expanded over the last decade, driven primarily by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 436.25 Td (population growth, increasing economic development and greater recognition of the value of education as measured by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 424.25 Td (increased earnings power associated with higher levels of education. In the U.S. over the last couple of years, enrollment ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 412.25 Td (headwinds and lower student spending on new print materials has been compensated for by growth in recurring and more ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 400.25 Td (af) Tj ET Q q 0 0 0 rg BT 61.59 400.25 Td (fordable revenue streams from digital solutions, eBooks and purchases of rental textbooks. On the digital front, learners and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 388.25 Td (educators continue to increasingly recognize and embrace the power of digital solutions that improve learning outcomes by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 376.25 Td (enabling personalized learning suited to each class and learner) Tj ET Q q 0 0 0 rg BT 303.71 376.25 Td () Tj ET Q q 0 0 0 rg BT 306.49 376.25 Td (s specific needs and desired outcomes. ) Tj ET Q q 0 0 0 rg BT 462.83 376.25 Td (As a result, our total ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 364.25 Td (addressable market is growing as students transition from print textbooks to digital solutions. In addition, our strategic ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 352.25 Td (partnerships with two of the lar) Tj ET Q q 0 0 0 rg BT 179.07 352.25 Td (gest rental providers, covering approximately 60% of the market , provide Cengage with more ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 340.25 Td (predictable, recurring sales into print adoptions. ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 322.25 Td (Proposed Merger) Tj ET Q q 0 0 0 rg BT 142.83 322.25 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 147.83 322.25 Td (On May 1, 2019, Cengage Learning Holdings II, Inc. \(Cengage\), Cengage Learning Holdco, Inc. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 310.25 Td (\(Cengage Intermediate Holdco \), Cengage Learning, Inc. \(Cengage Issuer\), McGraw-Hill Education, Inc. \(McGraw-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 298.25 Td (Hill\), and McGraw-Hill Global Educations Holdings, LLC \(McGraw-Hill Issuer\) entered into an ) Tj ET Q q 0 0 0 rg BT 456.11 298.25 Td (Agreement and Plan of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 286.25 Td (Mer) Tj ET Q q 0 0 0 rg BT 70.48 286.25 Td (ger \(the Mer) Tj ET Q q 0 0 0 rg BT 124.71 286.25 Td (ger ) Tj ET Q q 0 0 0 rg BT 139.43 286.25 Td (Agreement\). ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 268.25 Td (Pursuant to and subject to the terms and conditions of the Mer) Tj ET Q q 0 0 0 rg BT 320.38 268.25 Td (ger ) Tj ET Q q 0 0 0 rg BT 335.10 268.25 Td (Agreement, upon completion of the proposed ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 256.25 Td (transaction, Cengage will mer) Tj ET Q q 0 0 0 rg BT 173.78 256.25 Td (ge with and into McGraw-Hill Issuer \(the Mer) Tj ET Q q 0 0 0 rg BT 363.27 256.25 Td (ger\), with McGraw-Hill Issuer continuing as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 244.25 Td (the surviving entity following the Mer) Tj ET Q q 0 0 0 rg BT 206.85 244.25 Td (ger) Tj ET Q q 0 0 0 rg BT 219.07 244.25 Td (. ) Tj ET Q q 0 0 0 rg BT 223.52 244.25 Td (At the ef) Tj ET Q q 0 0 0 rg BT 258.32 244.25 Td (fective time of the Mer) Tj ET Q q 0 0 0 rg BT 350.32 244.25 Td (ger \(the Ef) Tj ET Q q 0 0 0 rg BT 397.33 244.25 Td (fective ) Tj ET Q q 0 0 0 rg BT 426.86 244.25 Td (T) Tj ET Q q 0 0 0 rg BT 432.61 244.25 Td (ime\) \(1\) each share of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 232.25 Td (McGraw-Hill common stock, par value $0.01 per share, will convert into one share of Class ) Tj ET Q q 0 0 0 rg BT 423.91 232.25 Td (A) Tj ET Q q 0 0 0 rg BT 430.58 232.25 Td ( Common Stock of the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 220.25 Td (combined company) Tj ET Q q 0 0 0 rg BT 131.94 220.25 Td (, and \(2\) each share of Cengage common stock, par value $0.01 per share, will convert into a certain ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 208.25 Td (number of shares of Class B Common Stock of the combined company such that, as of the Ef) Tj ET Q q 0 0 0 rg BT 427.64 208.25 Td (fective ) Tj ET Q q 0 0 0 rg BT 457.16 208.25 Td (T) Tj ET Q q 0 0 0 rg BT 462.92 208.25 Td (ime, the aggregate ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 196.25 Td (number of issued and outstanding shares of Class ) Tj ET Q q 0 0 0 rg BT 253.42 196.25 Td (A) Tj ET Q q 0 0 0 rg BT 260.09 196.25 Td ( Common Stock will equal the aggregate number of issued and outstanding ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 184.25 Td (shares of Class B Common Stock. ) Tj ET Q q 0 0 0 rg BT 192.61 184.25 Td (Accordingly) Tj ET Q q 0 0 0 rg BT 241.95 184.25 Td (, the legacy stockholders of McGraw-Hill and the legacy stockholders of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 172.25 Td (Cengage will, as of the Ef) Tj ET Q q 0 0 0 rg BT 157.68 172.25 Td (fective ) Tj ET Q q 0 0 0 rg BT 187.20 172.25 Td (T) Tj ET Q q 0 0 0 rg BT 192.96 172.25 Td (ime, each collectively own exactly 50% of the issued and outstanding shares of voting ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 160.25 Td (common stock of the combined company) Tj ET Q q 0 0 0 rg BT 218.59 160.25 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 142.25 Td (The proposed transaction is subject to certain closing conditions, including receipt of regulatory approvals. ) Tj ET Q q 0 0 0 rg BT 501.70 142.25 Td (W) Tj ET Q q 0 0 0 rg BT 510.34 142.25 Td (e have also ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 130.25 Td (agreed to various customary covenants and agreements, including, among others, to conduct our business in the ordinary ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 118.25 Td (course during the period between the execution of the Mer) Tj ET Q q 0 0 0 rg BT 287.90 118.25 Td (ger ) Tj ET Q q 0 0 0 rg BT 302.62 118.25 Td (Agreement and the Ef) Tj ET Q q 0 0 0 rg BT 390.46 118.25 Td (fective ) Tj ET Q q 0 0 0 rg BT 419.98 118.25 Td (T) Tj ET Q q 0 0 0 rg BT 425.73 118.25 Td (ime, and to use reasonable best ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 106.25 Td (ef) Tj ET Q q 0 0 0 rg BT 61.59 106.25 Td (forts to obtain all requisite regulatory approvals.) Tj ET Q endstream endobj 15 0 obj <> endobj 16 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 760.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 296.00 30.20 Td (- 2 -) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 742.25 Td (Reportable segments adjusted financial results. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 268.68 742.25 Td (W) Tj ET Q q 0 0 0 rg BT 277.32 742.25 Td (e are or) Tj ET Q q 0 0 0 rg BT 307.11 742.25 Td (ganized into three reportable segments on the basis of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 730.25 Td (production process and products and services provided by each segment, identified as follows: Learning, Gale and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 718.25 Td (International. For the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 211.44 718.25 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 275.04 718.25 Td (, our total ) Tj ET Q q 0 0 0 rg BT 315.59 718.25 Td (Adjusted Revenues were ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 417.50 718.25 Td ($1,460.1 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 483.89 718.25 Td (. Segment ) Tj ET Q q 0 0 0 rg BT 525.84 718.25 Td (Adjusted ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 706.25 Td (Revenues for the past three fiscal years were as follows \(in millions\):) Tj ET Q /GS0 gs q 325.00 0 0 221.00 54.00 474.25 cm /I2 Do Q BT /F1 10.00 Tf ET BT /F4 10.00 Tf ET q 0 0 0 rg BT 54.00 461.25 Td (Learning) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 90.67 461.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 443.25 Td (In the United States, we produce a variety of digital and print educational solutions and associated services for the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 431.25 Td (academic \(non-profit and for) Tj ET Q q 0 0 0 rg BT 169.02 431.25 Td (-profit higher education institutions\), school \(K-12\) and skills markets. For the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 419.25 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 117.60 419.25 Td (, our Learning segment generated approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 314.47 419.25 Td ($934.7 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 373.36 419.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 392.80 419.25 Td ($165.3 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 451.69 419.25 Td ( of our total ) Tj ET Q q 0 0 0 rg BT 500.57 419.25 Td (Adjusted ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 407.25 Td (Revenues and ) Tj ET Q q 0 0 0 rg BT 111.76 407.25 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 186.48 407.25 Td ( less Pre-Publication Costs, respectively) Tj ET Q q 0 0 0 rg BT 346.08 407.25 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 389.25 Td (For the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 173.35 389.25 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 236.95 389.25 Td (, our total Learning digital product sales comprised approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 504.09 389.25 Td (55%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.42 389.25 Td ( of our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 377.25 Td (total Learning ) Tj ET Q q 0 0 0 rg BT 112.32 377.25 Td (Adjusted Revenues compared with ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 254.50 377.25 Td (53%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 272.83 377.25 Td ( for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 374.45 377.25 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 438.05 377.25 Td (. Over the last year) Tj ET Q q 0 0 0 rg BT 513.45 377.25 Td (, core ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 365.25 Td (digital gross sales increased by 3%, while student activation of our digital solutions grew by 19%. ) Tj ET Q q 0 0 0 rg BT 447.82 365.25 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.26 365.25 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 535.86 365.25 Td (, our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 353.25 Td (core digital solutions were available for approximately 95% of our academic portfolio of learning solutions. See ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 341.25 Td (Management) Tj ET Q q 0 0 0 rg BT 113.42 341.25 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 182.59 341.25 Td (Analysis of Financial Condition and Results of Operations for our definition of digital ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 329.25 Td (product sales.) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 54.00 311.25 Td (Gale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 293.25 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 293.25 Td (e of) Tj ET Q q 0 0 0 rg BT 95.73 293.25 Td (fer research platforms around the world which provide access to our original content, collections of primary source ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 281.25 Td (materials and aggregated periodicals to learners at libraries, colleges, universities, schools and businesses. For the fiscal year ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 269.25 Td (ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 80.38 269.25 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 143.98 269.25 Td (, our Gale segment generated approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 323.63 269.25 Td ($227.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 382.52 269.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.96 269.25 Td ($61.8 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 455.85 269.25 Td ( of our total ) Tj ET Q q 0 0 0 rg BT 504.73 269.25 Td (Adjusted ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 257.25 Td (Revenues and ) Tj ET Q q 0 0 0 rg BT 111.76 257.25 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 186.48 257.25 Td ( less Pre-Publication Costs, respectively) Tj ET Q q 0 0 0 rg BT 346.08 257.25 Td (.) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 54.00 239.25 Td (International) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 106.77 239.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 221.25 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 221.25 Td (e distribute educational solutions across all major academic disciplines, provide English language teaching \(EL) Tj ET Q q 0 0 0 rg BT 529.03 221.25 Td (T\) ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 209.25 Td (products and adapt our Learning of) Tj ET Q q 0 0 0 rg BT 194.61 209.25 Td (ferings for use in approximately 170 countries and territories around the world. For the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 197.25 Td (fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 124.24 197.25 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 187.84 197.25 Td (, our International segment generated approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 399.70 197.25 Td ($297.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.59 197.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 478.03 197.25 Td ($50.2 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.92 197.25 Td ( of our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 185.25 Td (total ) Tj ET Q q 0 0 0 rg BT 73.72 185.25 Td (Adjusted Revenues and ) Tj ET Q q 0 0 0 rg BT 170.09 185.25 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 244.81 185.25 Td ( less Pre-Publication Costs, respectively) Tj ET Q q 0 0 0 rg BT 404.42 185.25 Td (.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 164.25 Td (Industry Overview ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 143.25 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 143.25 Td (e compete in three specific industries within our Learning segment: academic, school and skills. Each of these ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 131.25 Td (industries as well as our Gale and International segments are discussed separately below) Tj ET Q q 0 0 0 rg BT 406.57 131.25 Td (. ) Tj ET Q q 0 0 0 rg BT 411.39 131.25 Td (W) Tj ET Q q 0 0 0 rg BT 420.43 131.25 Td (ithin Learning, for the fiscal year ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 119.25 Td (ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 80.38 119.25 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 143.98 119.25 Td (, gross sales from the academic and skills markets comprised 84% of total gross sales and the school ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 107.25 Td (market comprised 16% of total gross sales. ) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 54.00 89.25 Td (Academic ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 71.25 Td (The academic industry is comprised of students, professors and institutions of higher education, primarily two- and four) Tj ET Q q 0 0 0 rg BT 551.69 71.25 Td (-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 59.25 Td (year colleges and universities, as well as for) Tj ET Q q 0 0 0 rg BT 229.85 59.25 Td (-profit schools. ) Tj ET Q q 0 0 0 rg BT 292.72 59.25 Td (The United States has the lar) Tj ET Q q 0 0 0 rg BT 407.78 59.25 Td (gest higher education system in the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 47.25 Td (world with approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 160.37 47.25 Td (18million students) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 237.04 47.25 Td ( enrolled each year at approximately 4,400 two- and four) Tj ET Q q 0 0 0 rg BT 464.53 47.25 Td (-year post-secondary ) Tj ET Q endstream endobj 17 0 obj <> endobj 18 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 760.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 296.00 30.20 Td (- 3 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 742.10 Td (institutions. Enrollments in the U.S. higher education market are stable and countercyclical, with a 30-year compound annual ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 730.10 Td (growth rate \(CAGR\) of 2%.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 712.10 Td (W) Tj ET Q q 0 0 0 rg BT 81.04 712.10 Td (ithin the academic industry) Tj ET Q q 0 0 0 rg BT 188.97 712.10 Td (, total domestic spending on new learning materials was approximately $3.2 billion in 2018 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 700.10 Td (including new digital and print solutions, as well as purchases of used and rental print products. Industry estimates and internal ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 688.10 Td (research suggest that approximately 45% of learning solutions purchases are in formats such as rental and used textbooks. ) Tj ET Q q 0 0 0 rg BT 543.96 688.10 Td (W) Tj ET Q q 0 0 0 rg BT 552.60 688.10 Td (e ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 676.10 Td (believe that the continued growth in the industry of digital solutions, which provide better outcomes and more ef) Tj ET Q q 0 0 0 rg BT 504.27 676.10 Td (ficient ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 664.10 Td (learning solutions for students, enables us to capture a greater share of the total market, given the embedded and gradeable/) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 652.10 Td (assessable orientation of our digital products and more af) Tj ET Q q 0 0 0 rg BT 282.64 652.10 Td (fordable price points. ) Tj ET Q q 0 0 0 rg BT 370.21 652.10 Td (W) Tj ET Q q 0 0 0 rg BT 378.85 652.10 Td (e have developed and successfully penetrated ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 640.10 Td (the industry with our MindT) Tj ET Q q 0 0 0 rg BT 167.18 640.10 Td (ap solution, which is a complete course solution that includes assessment, immediate feedback ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 628.10 Td (and analytics for instructors and students. ) Tj ET Q q 0 0 0 rg BT 222.02 628.10 Td (Additionally) Tj ET Q q 0 0 0 rg BT 271.92 628.10 Td (, with the launch of Cengage Unlimited, our all-you-can-learn digital ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 616.10 Td (subscription for $1) Tj ET Q q 0 0 0 rg BT 129.18 616.10 Td (19.99 per semester or $179.99 per year) Tj ET Q q 0 0 0 rg BT 284.83 616.10 Td (, we believe we have more opportunity to even further penetrate the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 604.10 Td (market.) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 54.00 586.10 Td (School ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 568.10 Td (The United States K-12 industry consists of approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 309.74 568.10 Td (57million students) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 386.41 568.10 Td ( and is driven by state adoption sales, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 556.10 Td (wherein states approve certain products for use in public schools statewide, and open territory sales, where individual public ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 544.10 Td (school districts determine which educational products to use. ) Tj ET Q q 0 0 0 rg BT 300.15 544.10 Td (This market is linked, in part, to state and local budget cycles. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 532.10 Td (W) Tj ET Q q 0 0 0 rg BT 63.04 532.10 Td (ithin the United States school industry) Tj ET Q q 0 0 0 rg BT 215.43 532.10 Td (, we are focused on specific disciplines that are closer to our core higher education ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 520.10 Td (of) Tj ET Q q 0 0 0 rg BT 62.15 520.10 Td (fering and have more attractive growth potential, including ) Tj ET Q q 0 0 0 rg BT 300.13 520.10 Td (Advanced Placement & Electives \(AP&E\), English language ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 508.10 Td (learning and specific non-common core programs in K-12 where we believe our National Geographic content, brand and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 496.10 Td (technology creates competitive advantages.) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 54.00 478.10 Td (Skills ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 460.10 Td (Providers in the skills market create learning solutions and other related materials for learners who are seeking job ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 448.10 Td (training, certification or continuing professional education in vocational schools, academic institutions and continuing ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 436.10 Td (education programs. ) Tj ET Q q 0 0 0 rg BT 137.96 436.10 Td (The skills industry spans a wide range of vocational study areas and customers include academic ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 424.10 Td (institutions and learners, employers who provide training to their employees, workforce boards and individuals who are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 412.10 Td (seeking professional advancement. ) Tj ET Q q 0 0 0 rg BT 195.99 412.10 Td (This market is fueled by the close link between improvement in training and skills and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 400.10 Td (employee success in the form of job placement, promotion and productivity) Tj ET Q q 0 0 0 rg BT 356.33 400.10 Td (. ) Tj ET Q q 0 0 0 rg BT 361.15 400.10 Td (The online skills industry) Tj ET Q q 0 0 0 rg BT 462.44 400.10 Td (, which we serve ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 388.10 Td (through MindT) Tj ET Q q 0 0 0 rg BT 114.69 388.10 Td (ap course solutions as well as stand-alone businesses, continues to grow as learners migrate from traditional ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 376.10 Td (classrooms to virtual learning environments.) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 54.00 358.10 Td (Gale ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 340.10 Td (Content and solution providers in the research market create and sell specialized encyclopedias and directories, periodical ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 328.10 Td (databases, primary-source research collections and other reference materials. ) Tj ET Q q 0 0 0 rg BT 363.66 328.10 Td (These materials are principally sold to academic, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 316.10 Td (public, K-12, corporate and government libraries. ) Tj ET Q q 0 0 0 rg BT 254.59 316.10 Td (T) Tj ET Q q 0 0 0 rg BT 260.00 316.10 Td (otal institutional spending by libraries in schools and universities was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 304.10 Td (nearly $6.0 billion in the U.S. and $17.0 billion globally in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 291.48 304.10 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 311.48 304.10 Td (. ) Tj ET Q q 0 0 0 rg BT 316.30 304.10 Td (The research industry has experienced increased demand for ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 292.10 Td (digital materials with enhanced functionality and accessibility as well as authoritative content with credibility) Tj ET Q q 0 0 0 rg BT 491.28 292.10 Td (, or) Tj ET Q q 0 0 0 rg BT 504.42 292.10 Td (ganization ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 280.10 Td (and depth that are dif) Tj ET Q q 0 0 0 rg BT 138.79 280.10 Td (ferentiated from free content available on the Internet.) Tj ET Q BT /F1 1.00 Tf ET q 0 0 0 rg BT 54.00 262.10 Td () Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 54.25 262.10 Td (International) Tj ET Q BT /F5 10.00 Tf ET q 0 0 0 rg BT 107.02 262.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 244.10 Td (In the international market, we adapt and provide U.S. course materials for various local industries. ) Tj ET Q q 0 0 0 rg BT 471.42 244.10 Td (W) Tj ET Q q 0 0 0 rg BT 480.06 244.10 Td (e also publish and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 232.10 Td (sell course materials produced by local authors and we provide learning and reference solutions in various formats to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 220.10 Td (individuals and businesses located outside the United States. Individual industries are generally defined by country) Tj ET Q q 0 0 0 rg BT 512.96 220.10 Td (, each with ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 208.10 Td (unique customer needs, distribution channels and sales strategies. Many international industries have grown rapidly) Tj ET Q q 0 0 0 rg BT 515.74 208.10 Td (, driven ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 196.10 Td (primarily by population growth and a growing recognition of the power of education to improve lives. In higher education, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 184.10 Td (most international industries are at the beginning of the digital transformation.) Tj ET Q endstream endobj 19 0 obj <> endobj 20 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 760.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 296.00 30.20 Td (- 4 -) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 742.25 Td (Our) Tj ET Q q 0 0 0 rg BT 71.60 742.25 Td ( Str) Tj ET Q q 0 0 0 rg BT 87.25 742.25 Td (engths) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 721.25 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 721.25 Td (e believe the following competitive strengths are instrumental to our success and position us to increase our revenues ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 709.25 Td (and profitability: ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 691.25 Td (Industry leadership with an evolving brand.) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 252.03 691.25 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 257.59 691.25 Td (W) Tj ET Q q 0 0 0 rg BT 266.22 691.25 Td (e have developed a well-known learning franchise with a scaled ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 679.25 Td (infrastructure designed to serve our clients with a broad array of learning solutions. In higher education, we believe we have ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 667.25 Td (leading positions in the United States in many of the lar) Tj ET Q q 0 0 0 rg BT 276.56 667.25 Td (gest academic disciplines, including the number one position in several ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 655.25 Td (areas such as Business Law and Business Communications, Social ) Tj ET Q q 0 0 0 rg BT 322.67 655.25 Td (W) Tj ET Q q 0 0 0 rg BT 331.31 655.25 Td (ork, Introductory Computing, Nutrition, Calculus, and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 643.25 Td (Cosmetology and have the number two position in areas such as Economics, Introductory and Or) Tj ET Q q 0 0 0 rg BT 442.34 643.25 Td (ganic Chemistry) Tj ET Q q 0 0 0 rg BT 507.52 643.25 Td (, Political ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 631.25 Td (Science, Criminal Justice, and Business Statistics. Gale research digital ebooks, databases and archives are found in nearly all ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 619.25 Td (academic, school and public libraries in North ) Tj ET Q q 0 0 0 rg BT 240.61 619.25 Td (America, and increasingly) Tj ET Q q 0 0 0 rg BT 345.20 619.25 Td (, in universities in growth markets like China and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 607.25 Td (Brazil. Gale publishes the world's lar) Tj ET Q q 0 0 0 rg BT 201.70 607.25 Td (gest collection of primary source archives and is a technology innovator in the growing ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 595.25 Td (field of digital humanities. ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 577.25 Td (Industry-leading authors, content and content development capabilities) Tj ET Q BT /F7 10.00 Tf ET q 0 0 0 rg BT 365.07 577.25 Td (.) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 367.85 577.25 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 373.41 577.25 Td (Our ability to develop authoritative, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 565.25 Td (pedagogically-sound content linked to our digital solutions and assessments that leads to demonstrably better learning ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 553.25 Td (outcomes is one of our core competencies. Our content dif) Tj ET Q q 0 0 0 rg BT 287.63 553.25 Td (ferentiation is a result of our long-term partnerships with authors ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 541.25 Td (who are recognized experts in their fields and with third-party licensors of authoritative research materials. ) Tj ET Q q 0 0 0 rg BT 483.66 541.25 Td (W) Tj ET Q q 0 0 0 rg BT 492.30 541.25 Td (e have been ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 529.25 Td (successful in attracting talented authors and developing long-term, collaborative relationships. For example, two of our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 517.25 Td (leading authors include \(1\) N. Gregory Mankiw) Tj ET Q q 0 0 0 rg BT 244.69 517.25 Td (, former Chairman of the President) Tj ET Q q 0 0 0 rg BT 386.87 517.25 Td (s Council of Economic ) Tj ET Q q 0 0 0 rg BT 480.75 517.25 Td (Advisers and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 505.25 Td (among the most respected authors of texts in introductory economics, and \(2\) Carl ) Tj ET Q q 0 0 0 rg BT 385.40 505.25 Td (W) Tj ET Q q 0 0 0 rg BT 394.04 505.25 Td (arren, the author of our well-known ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 493.25 Td (accounting franchise now in its 27th edition. ) Tj ET Q q 0 0 0 rg BT 234.34 493.25 Td (W) Tj ET Q q 0 0 0 rg BT 242.97 493.25 Td (e typically own the copyright of the materials our authors produce and our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 481.25 Td (agreements with authors usually include favorable non-compete clauses. ) Tj ET Q q 0 0 0 rg BT 346.22 481.25 Td (W) Tj ET Q q 0 0 0 rg BT 354.86 481.25 Td (e have demonstrated our content development ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 469.25 Td (capabilities across disciplines and product formats, including a deep understanding of, and commitment to, the process needed ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 457.25 Td (to produce high-quality learning solutions. In the research industry) Tj ET Q q 0 0 0 rg BT 320.23 457.25 Td (, we also maintain long-term agreements for third-party ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 445.25 Td (licensed materials from leading content providers, including the ) Tj ET Q q 0 0 0 rg BT 311.43 445.25 Td (American ) Tj ET Q q 0 0 0 rg BT 352.80 445.25 Td (Antiquarian Society) Tj ET Q q 0 0 0 rg BT 432.41 445.25 Td (, ) Tj ET Q q 0 0 0 rg BT 437.23 445.25 Td (The British Library) Tj ET Q q 0 0 0 rg BT 514.34 445.25 Td (, ) Tj ET Q q 0 0 0 rg BT 519.16 445.25 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 433.25 Td (Financial ) Tj ET Q q 0 0 0 rg BT 93.53 433.25 Td (T) Tj ET Q q 0 0 0 rg BT 99.29 433.25 Td (imes, and ) Tj ET Q q 0 0 0 rg BT 139.93 433.25 Td (The Smithsonian. In the EL) Tj ET Q q 0 0 0 rg BT 249.83 433.25 Td (T) Tj ET Q q 0 0 0 rg BT 255.76 433.25 Td ( and school industries, we operate National Geographic Learning, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 421.25 Td (leveraging the world class National Geographic brand and content. ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 403.25 Td (Innovative technology platforms and digital solutions) Tj ET Q BT /F7 10.00 Tf ET q 0 0 0 rg BT 291.75 403.25 Td (.) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 294.52 403.25 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 300.08 403.25 Td (Our digital solutions are designed to enhance and complement ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 391.25 Td (our content to improve student engagement and learning outcomes. ) Tj ET Q q 0 0 0 rg BT 325.41 391.25 Td (These digital solutions include courseware solutions, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 379.25 Td (assessment solutions, adaptive tools, and analytics. ) Tj ET Q q 0 0 0 rg BT 260.18 379.25 Td (W) Tj ET Q q 0 0 0 rg BT 268.81 379.25 Td (e have made substantial investments in our technology infrastructure and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 367.25 Td (are a leader in the development of digital content, pedagogy) Tj ET Q q 0 0 0 rg BT 293.26 367.25 Td (, and tools in our industry) Tj ET Q q 0 0 0 rg BT 395.38 367.25 Td (. Our MindT) Tj ET Q q 0 0 0 rg BT 445.51 367.25 Td (ap solution includes ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 355.25 Td (MindT) Tj ET Q q 0 0 0 rg BT 81.08 355.25 Td (aps developed by Cengage or by third-party providers that are customized for dif) Tj ET Q q 0 0 0 rg BT 404.68 355.25 Td (ferent disciplines, and best-in-class ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 343.25 Td (customization capabilities that allow professors to easily build their own digital course by adding their own or third-party ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 331.25 Td (media and content. MindT) Tj ET Q q 0 0 0 rg BT 159.39 331.25 Td (ap has grown to 2.7 million users, out of our over 5.1 million annual digital users. Our MindT) Tj ET Q q 0 0 0 rg BT 533.92 331.25 Td (ap ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 319.25 Td (of) Tj ET Q q 0 0 0 rg BT 62.15 319.25 Td (ferings are based on a student-centered approach to the industry) Tj ET Q q 0 0 0 rg BT 316.68 319.25 Td (. Over the past few years, Cengage has distinguished itself ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 307.25 Td (from competitors by focusing its digital product development on serving students as well as faculty) Tj ET Q q 0 0 0 rg BT 450.49 307.25 Td (. ) Tj ET Q q 0 0 0 rg BT 454.94 307.25 Td (As a result, MindT) Tj ET Q q 0 0 0 rg BT 529.79 307.25 Td (ap ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 295.25 Td (complements traditional faculty tools and assessments with student-centered features such as resource centers, personalized ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 283.25 Td (learning tools and proprietary analytics to analyze and help advance each student) Tj ET Q q 0 0 0 rg BT 380.82 283.25 Td (s individual learning. ) Tj ET Q q 0 0 0 rg BT 467.84 283.25 Td (W) Tj ET Q q 0 0 0 rg BT 476.48 283.25 Td (e are able to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 271.25 Td (demonstrate to our customers the impact of our student focus on increased student engagement leading to better learning ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 259.25 Td (outcomes. ) Tj ET Q q 0 0 0 rg BT 96.77 259.25 Td (Additionally) Tj ET Q q 0 0 0 rg BT 146.68 259.25 Td (, our student focus in developing MindT) Tj ET Q q 0 0 0 rg BT 307.34 259.25 Td (ap has allowed us to successfully grow MindT) Tj ET Q q 0 0 0 rg BT 492.45 259.25 Td (ap in disciplines ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 247.25 Td (that have been resistant to previous digital of) Tj ET Q q 0 0 0 rg BT 233.49 247.25 Td (ferings \(such as Psychology) Tj ET Q q 0 0 0 rg BT 344.77 247.25 Td (, College Success and ) Tj ET Q q 0 0 0 rg BT 433.92 247.25 Td (Art\) as learning in these ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 235.25 Td (disciplines is not suited for typical assessments and homework solutions of) Tj ET Q q 0 0 0 rg BT 353.79 235.25 Td (fered by competitors. Driven by MindT) Tj ET Q q 0 0 0 rg BT 511.38 235.25 Td (ap and our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 223.25 Td (other core digital of) Tj ET Q q 0 0 0 rg BT 132.96 223.25 Td (ferings, higher education core digital gross sales have grown at an approximately 7% CAGR over the last ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 211.25 Td (three years. In the fiscal year ended March 31, 2019, MindT) Tj ET Q q 0 0 0 rg BT 294.05 211.25 Td (ap activations, including through Cengage Unlimited, have ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 199.25 Td (increased 50%, demonstrating our success in the digital market.) Tj ET Q endstream endobj 21 0 obj <> endobj 22 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 760.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 296.00 30.20 Td (- 5 -) Tj ET Q /GS0 gs q 296.00 0 0 203.00 169.00 541.00 cm /I3 Do Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 528.00 Td (Additional digital solutions include SAM \(our proficiency-based assessment and training tool for Computing\), ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 516.00 Td (W) Tj ET Q q 0 0 0 rg BT 62.64 516.00 Td (ebAssign \(our assessment and homework solution for the STEM disciplines - science, technology) Tj ET Q q 0 0 0 rg BT 452.75 516.00 Td (, engineering and math\), ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 504.00 Td (OWL) Tj ET Q q 0 0 0 rg BT 76.40 504.00 Td ( \(our online learning system for Chemistry\), and CNOWv2 \(formerly) Tj ET Q q 0 0 0 rg BT 352.91 504.00 Td (, CNOW\) \(our assessment and homework solution ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 492.00 Td (for ) Tj ET Q q 0 0 0 rg BT 67.61 492.00 Td (Accounting and ) Tj ET Q q 0 0 0 rg BT 133.52 492.00 Td (T) Tj ET Q q 0 0 0 rg BT 138.93 492.00 Td (axation\). In the research industry) Tj ET Q q 0 0 0 rg BT 270.18 492.00 Td (, we have digitized virtually all of our reference content and enhanced it ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 480.00 Td (with interactive digital tools. ) Tj ET Q q 0 0 0 rg BT 170.92 480.00 Td (As a result, we derive more than 80% of our domestic revenues in this market from digital ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 468.00 Td (products. ) Tj ET Q q 0 0 0 rg BT 92.89 468.00 Td (Across the Company) Tj ET Q q 0 0 0 rg BT 176.11 468.00 Td (, we employ approximately 1,800 full-time product development and technology employees to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 456.00 Td (grow our digital of) Tj ET Q q 0 0 0 rg BT 129.08 456.00 Td (ferings and have made approximately 350 new technology hires within the last three years.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 438.00 Td (Over the last four years, our higher education non-profit core digital business has increased by a CAGR of 4% over the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 426.00 Td (same period. ) Tj ET Q q 0 0 0 rg BT 107.41 426.00 Td (This increase in core digital gross revenue has resulted in digital sales constituting a growing amount of our gross ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 414.00 Td (sales, with digital sales constituting 67% of our gross sales in the fiscal year ended March 31, 2019.) 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Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 296.00 30.20 Td (- 6 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 742.10 Td (Additionally) Tj ET Q q 0 0 0 rg BT 121.90 742.10 Td (, the shift away from print has allowed us to decrease capital spend over time while steadily reducing levels ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 730.10 Td (of inventory) Tj ET Q q 0 0 0 rg BT 102.51 730.10 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 573.10 Td ( ) Tj ET Q /GS0 gs q 253.00 0 0 146.00 56.50 573.10 cm /I6 Do Q /GS0 gs q 242.00 0 0 145.00 309.50 573.10 cm /I7 Do Q BT /F1 10.00 Tf ET BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 555.10 Td (Industry-leading distribution capabilities and customer relationships) Tj ET Q BT /F7 10.00 Tf ET q 0 0 0 rg BT 354.55 555.10 Td (.) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 357.33 555.10 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 362.88 555.10 Td (Our industry positions are driven by a U.S. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 543.10 Td (higher education sales force of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 179.22 543.10 Td (approximately 450) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 254.48 543.10 Td ( sales consultants who directly interact on a daily basis and maintain long-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 531.10 Td (standing relationships with our adopting instructors and customers. Our sales force scope and relationships allow us to sell ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 519.10 Td (multiple products across our industry and more easily introduce and train customers on our new digital product of) Tj ET Q q 0 0 0 rg BT 508.99 519.10 Td (ferings. In ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 507.10 Td (addition, our customer support and services or) Tj ET Q q 0 0 0 rg BT 239.05 507.10 Td (ganization of approximately 375 employees works directly with customers to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 495.10 Td (support product adoption, customization and implementation. In any given season, we directly interact with customers in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 483.10 Td (thousands of institutions to introduce and explain our products, secure adoptions, ensure product availability through on-site ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 471.10 Td (and of) Tj ET Q q 0 0 0 rg BT 79.09 471.10 Td (f-site channel partners, and support implementation and usage of our solutions. ) Tj ET Q q 0 0 0 rg BT 397.44 471.10 Td (W) Tj ET Q q 0 0 0 rg BT 406.08 471.10 Td (e are a best-in-class provider of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 459.10 Td (services to faculty and institutions to help them set-up, customize and grow usage of their adopted digital solutions. Our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 447.10 Td (distribution network and customer relationships are distinct competitive advantages. Our long-standing relationships with ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 435.10 Td (customers additionally provide a source of stability for our business through repeat business across the industry) Tj ET Q q 0 0 0 rg BT 499.09 435.10 Td (.) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 501.59 435.10 Td ( ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 417.10 Td (Significant economies of scale.) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 199.77 417.10 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 205.33 417.10 Td (Our leading positions facilitate our ability to:) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 385.84 417.10 Td ( ) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 109.00 399.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 399.10 Td (develop publications in a timely and cost-ef) Tj ET Q q 0 0 0 rg BT 300.77 399.10 Td (fective manner;) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 109.00 381.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 381.10 Td (significantly invest in our digital solutions, which are fundamental for our customers;) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 109.00 363.10 Td ( ) Tj ET Q q 0 0 0 rg BT 126.00 363.10 Td (leverage our content and technology over multiple media and industries; ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 108.00 345.10 Td ( ) Tj ET Q q 0 0 0 rg BT 126.00 345.10 Td (use our extensive sales force of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 253.73 345.10 Td (approximately 450) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 328.99 345.10 Td ( sales consultants to sell multiple products across our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 333.10 Td (industry and more easily introduce new product of) Tj ET Q q 0 0 0 rg BT 327.71 333.10 Td (ferings; ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 109.00 315.10 Td ( ) Tj ET Q q 0 0 0 rg BT 126.00 315.10 Td (obtain volume purchasing benefits from our suppliers; ) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 108.00 297.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 297.10 Td (distribute our product at scale, both physically and digitally) Tj ET Q q 0 0 0 rg BT 363.35 297.10 Td (, to ensure we are well-positioned within all ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 285.10 Td (student purchases paths; and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 109.00 267.10 Td ( ) Tj ET Q q 0 0 0 rg BT 126.00 267.10 Td (leverage our fixed costs, including our distribution systems, to enhance profitability) Tj ET Q q 0 0 0 rg BT 460.28 267.10 Td (. ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 249.10 Td (Strong operating cash flow and diversified revenues) Tj ET Q BT /F7 10.00 Tf ET q 0 0 0 rg BT 285.90 249.10 Td (.) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 288.67 249.10 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 294.23 249.10 Td (Our leading positions, the breadth of our products, and our author ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 237.10 Td (and customer relationships generate strong, consistent operating cash flow) Tj ET Q q 0 0 0 rg BT 350.77 237.10 Td (. ) Tj ET Q q 0 0 0 rg BT 355.59 237.10 Td (The majority of our sales in the academic industry ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 225.10 Td (come from established products. For example, over 90% of our gross sales in this market in the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 507.76 225.10 Td (March31, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 213.10 Td (2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 74.00 213.10 Td ( were attributable to titles in their second and later editions. In addition, only approximately 6% of fiscal year ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 513.59 213.10 Td (2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 533.59 213.10 Td ( total ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 201.10 Td (Learning gross sales came from for) Tj ET Q q 0 0 0 rg BT 195.14 201.10 Td (-profit schools. In the research industry) Tj ET Q q 0 0 0 rg BT 351.67 201.10 Td (, approximately 70% of our revenues are derived ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 189.10 Td (from recurring subscriptions and sales, and approximately 90% of our digital subscription-based revenues are generated from ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 177.10 Td (our previous year) Tj ET Q q 0 0 0 rg BT 124.35 177.10 Td () Tj ET Q q 0 0 0 rg BT 127.13 177.10 Td (s customer base. ) Tj ET Q q 0 0 0 rg BT 194.89 177.10 Td (As a result, we have been able to maintain strong operating cash flows throughout the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 165.10 Td (education market) Tj ET Q q 0 0 0 rg BT 125.91 165.10 Td (s continuing digital transformation. ) Tj ET Q q 0 0 0 rg BT 269.32 165.10 Td (W) Tj ET Q q 0 0 0 rg BT 277.96 165.10 Td (e also have a diversified revenue stream, which reduces our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 153.10 Td (dependence on any one product, author) Tj ET Q q 0 0 0 rg BT 210.76 153.10 Td (, discipline or industry) Tj ET Q q 0 0 0 rg BT 300.10 153.10 Td (. For example, no single author represented more than 2% of our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 141.10 Td (total ) Tj ET Q q 0 0 0 rg BT 73.72 141.10 Td (Adjusted Revenues for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 252.82 141.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 316.42 141.10 Td (. ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 123.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.15 123.10 Td (orld-class management team and culture) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 248.49 123.10 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 250.99 123.10 Td (Over the past several years, Cengage rebuilt its senior management team by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 111.10 Td (hiring a world-class executive team, led by Chief Executive Of) Tj ET Q q 0 0 0 rg BT 305.95 111.10 Td (ficer \(CEO\) Michael Hansen. Mr) Tj ET Q q 0 0 0 rg BT 446.73 111.10 Td (. Hansen previously served ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 99.10 Td (as CEO for Elsevier Health Sciences, a division of Reed Elsevier \(an information services provider operating in the science, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 87.10 Td (medical, legal, risk, and business sectors\). In his role he led the successful transformation of the business from print to digital. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 75.10 Td (Prior to this he was President and CEO of Harcourt ) Tj ET Q q 0 0 0 rg BT 261.19 75.10 Td (Assessment, the educational materials division of Reed Elsevier) Tj ET Q q 0 0 0 rg BT 516.83 75.10 Td (, where he ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 63.10 Td (led a successful turnaround and sale of that business. Mr) Tj ET Q q 0 0 0 rg BT 279.50 63.10 Td (. Hansen and the senior management team have engendered a culture ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 51.10 Td (that values engagement, empowerment and discovery and one that is accountable to and for each other) Tj ET Q q 0 0 0 rg BT 463.85 51.10 Td (. ) Tj ET Q q 0 0 0 rg BT 468.67 51.10 Td (The culture throughout ) Tj ET Q endstream endobj 25 0 obj <> endobj 26 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 760.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 296.00 30.20 Td (- 7 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 742.10 Td (Cengage is one that promotes the power and joy of learning and is focused on enriching the relationship between educators ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 730.10 Td (and students by advancing the way students learn, in a measurable and repeatable fashion.) 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Cengage Unlimited is ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 577.10 Td (the first-of-its-kind subscription service for digital higher education materials. ) Tj ET Q q 0 0 0 rg BT 385.80 577.10 Td (A) Tj ET Q q 0 0 0 rg BT 392.47 577.10 Td ( subscription provides access to more than ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 565.10 Td (22,000 products across 70 disciplines and more than 675 courses for one price-$1) Tj ET Q q 0 0 0 rg BT 397.94 565.10 Td (19.99 a semester) Tj ET Q q 0 0 0 rg BT 464.46 565.10 Td (, no matter how many ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 553.10 Td (Cengage products are used. Students using the digital platforms also have the option of a print textbook for $7.99 and free ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 541.10 Td (shipping. ) Tj ET Q q 0 0 0 rg BT 110.90 541.10 Td (Additionally) Tj ET Q q 0 0 0 rg BT 160.80 541.10 Td (, we have secured partnerships with leading student centric, educational focused brands, such as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 529.10 Td (Kaplan, Evernote, Chegg and Quizlet, to of) Tj ET Q q 0 0 0 rg BT 245.38 529.10 Td (fer services such as tutoring, test prep, flash cards and more as part of the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 517.10 Td (subscription price. ) Tj ET Q q 0 0 0 rg BT 148.19 517.10 Td (This is over $200 of value included within the $1) Tj ET Q q 0 0 0 rg BT 344.73 517.10 Td (19.99 price.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 499.10 Td (Accelerate penetration of our high quality digital courseware. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 328.39 499.10 Td (W) Tj ET Q q 0 0 0 rg BT 337.03 499.10 Td (e continue to invest in the expansion, development, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 487.10 Td (stability and ef) Tj ET Q q 0 0 0 rg BT 113.25 487.10 Td (fectiveness of our digital products while also focusing our Go-T) Tj ET Q q 0 0 0 rg BT 368.88 487.10 Td (o-Market team on the sales of these digital ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 475.10 Td (solutions and services. Our digital solutions are based on deep research and understanding of today) Tj ET Q q 0 0 0 rg BT 453.06 475.10 Td (s students and their ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 463.10 Td (workflow) Tj ET Q q 0 0 0 rg BT 92.23 463.10 Td (, which increases the usefulness and desirability of the solutions by both faculty and end users. ) Tj ET Q q 0 0 0 rg BT 473.08 463.10 Td (The growth in our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 451.10 Td (digital business gives us access to a greater number of students in any given classroom and generates new sources of revenue ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 439.10 Td (from our existing adoption customers. In contrast to print publications, our digital products cannot be resold or transferred. ) Tj ET Q q 0 0 0 rg BT 547.32 439.10 Td (W) Tj ET Q q 0 0 0 rg BT 555.95 439.10 Td (e ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 427.10 Td (therefore realize revenue from every end user) Tj ET Q q 0 0 0 rg BT 235.56 427.10 Td (. Digital formats also free us from traditional publishing cycles, increasing our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 415.10 Td (speed-to-market and af) Tj ET Q q 0 0 0 rg BT 146.00 415.10 Td (fording us greater ability to tailor our of) Tj ET Q q 0 0 0 rg BT 305.49 415.10 Td (ferings by course and even by specific faculty and student ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 403.10 Td (preferences.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 102.57 403.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 105.07 403.10 Td (W) Tj ET Q q 0 0 0 rg BT 113.71 403.10 Td (e plan to continue to aggressively invest in the growth of our digital products and platforms while increasingly ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 391.10 Td (focusing and incentivizing our Go-T) Tj ET Q q 0 0 0 rg BT 199.38 391.10 Td (o-Market team in this area.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 373.10 Td (Lead the industry in af) Tj ET Q q 0 0 0 rg BT 165.72 373.10 Td (fordability and increasingly monetize our print base. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 384.07 373.10 Td (This fiscal year) Tj ET Q q 0 0 0 rg BT 445.31 373.10 Td (, we launched a number of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 361.10 Td (initiatives to lower the barrier of entry to af) Tj ET Q q 0 0 0 rg BT 227.09 361.10 Td (fordable learning while preserving student and instructor choice. ) Tj ET Q q 0 0 0 rg BT 487.66 361.10 Td (The key pillar of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 349.10 Td (our af) Tj ET Q q 0 0 0 rg BT 77.42 349.10 Td (fordability strategy was Cengage Unlimited, our subscription service that provides access to our full catalog of digital ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 337.10 Td (courseware \(when enrolled in a course\) and eBooks for $1) Tj ET Q q 0 0 0 rg BT 287.15 337.10 Td (19.99 a semester \($179.99 for annual, $239.99 for two year ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 325.10 Td (subscriptions\). In addition to Cengage Unlimited, we expanded our other af) Tj ET Q q 0 0 0 rg BT 355.97 325.10 Td (fordability initiatives including expanded rental, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 313.10 Td (Open Education Resources, and Inclusive ) Tj ET Q q 0 0 0 rg BT 222.84 313.10 Td (Access of) Tj ET Q q 0 0 0 rg BT 261.81 313.10 Td (ferings by continuing to methodically evaluate and lower the price of key ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 301.10 Td (disciplines through our commercial/pricing Center of Excellence. ) Tj ET Q q 0 0 0 rg BT 318.17 301.10 Td (This strategic pricing ef) Tj ET Q q 0 0 0 rg BT 413.24 301.10 Td (fort has optimized for af) Tj ET Q q 0 0 0 rg BT 510.25 301.10 Td (fordability ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 289.10 Td (and digital penetration, shifting users towards the most ef) Tj ET Q q 0 0 0 rg BT 283.49 289.10 Td (fective and accessible digital solutions. ) Tj ET Q q 0 0 0 rg BT 442.15 289.10 Td (While we continue to help ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 277.10 Td (our customers migrate to digital solutions that provide better learning outcomes, there are certain customers and disciplines ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 265.10 Td (that are more embedded in the use of print products, either as a stand-alone solution or in combination with a digital product. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 253.10 Td (This is another mechanism in which Cengage Unlimited supports student success agnostic of the instructor adoption. ) Tj ET Q q 0 0 0 rg BT 524.01 253.10 Td (W) Tj ET Q q 0 0 0 rg BT 532.65 253.10 Td (e are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 241.10 Td (actively pursuing new business and commercial models as well as go-to-market strategies to increase the af) Tj ET Q q 0 0 0 rg BT 483.40 241.10 Td (fordability and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 229.10 Td (access of our print products for those students that want to purchase print. For example, for those who choose not to adopt the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 217.10 Td (all-inclusive model where a print complement is available as a $7.99 rental, we now provide students across all our disciplines ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 205.10 Td (the option to augment their digital solution with a print product that costs between $15 to $35 to the student, depending on the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 193.10 Td (discipline. ) Tj ET Q q 0 0 0 rg BT 97.33 193.10 Td (Additionally) Tj ET Q q 0 0 0 rg BT 147.23 193.10 Td (, in 2017 we launched rental partnerships based on a revenue share model with several of the lar) Tj ET Q q 0 0 0 rg BT 531.36 193.10 Td (gest ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 181.10 Td (rental providers in the higher education industry to benefit from the growing rental trend. ) Tj ET Q q 0 0 0 rg BT 412.88 181.10 Td (W) Tj ET Q q 0 0 0 rg BT 421.52 181.10 Td (e are now in the third year of the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 169.10 Td (program, allowing us to re-capture revenue from an increasing number of seats in traditional print adoptions and helping to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 157.10 Td (establish a reliable base of revenue from these adoptions. In addition to the rental partnerships, we will continue to of) Tj ET Q q 0 0 0 rg BT 522.85 157.10 Td (fer direct ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 145.10 Td (to student rentals and purchase on our proprietary e-commerce site, Cengage.com.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 127.10 Td (Nourish our growth engines. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 193.43 127.10 Td ( Over the course of many years, we have pursued a corporate portfolio diversification ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 115.10 Td (strategy that provides balance to our higher education business while, more importantly) Tj ET Q q 0 0 0 rg BT 403.81 115.10 Td (, ensuring our high quality learning ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 103.10 Td (materials can be enjoyed by students throughout their educational and career journey) Tj ET Q q 0 0 0 rg BT 392.95 103.10 Td (. Our Cengage Global Businesses ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 91.10 Td (\(CGB\) \(inclusive of English language teaching \(EL) Tj ET Q q 0 0 0 rg BT 272.45 91.10 Td (T\), International Higher Education, Gale and National Geographic/) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 79.10 Td (K12\) and Online Skills business have been taking focused approaches to growth and achieving great results.) Tj ET Q endstream endobj 27 0 obj <> endobj 28 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 760.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 296.00 30.20 Td (- 8 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 742.10 Td (For our Cengage Global Business units, we extend our global reach by adapting Cengage) Tj ET Q q 0 0 0 rg BT 431.92 742.10 Td (s domestic products, services ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 730.10 Td (and technology to local markets and customer requirements. Our EL) Tj ET Q q 0 0 0 rg BT 326.89 730.10 Td (T) Tj ET Q q 0 0 0 rg BT 332.81 730.10 Td ( business, operating as National Geographic Learning, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 718.10 Td (competes in an addressable content industry estimated to be around $1.8 billion and growing at a rate of approximately 5% per ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 706.10 Td (year) Tj ET Q q 0 0 0 rg BT 70.66 706.10 Td (. Our National Geographic Learning business focuses on expanding Cengage) Tj ET Q q 0 0 0 rg BT 381.68 706.10 Td (s market share by concentrating investment ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 694.10 Td (on flagship products and on Go-T) Tj ET Q q 0 0 0 rg BT 188.56 694.10 Td (o-Market teams addressing the most profitable segments in Latin ) Tj ET Q q 0 0 0 rg BT 450.44 694.10 Td (America, the Middle East ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 682.10 Td (and ) Tj ET Q q 0 0 0 rg BT 70.39 682.10 Td (Asia. In the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 189.50 682.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 253.10 682.10 Td (, our global EL) Tj ET Q q 0 0 0 rg BT 312.73 682.10 Td (T) Tj ET Q q 0 0 0 rg BT 318.65 682.10 Td ( business grew 3% outside the United States. Our higher ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 670.10 Td (education business also saw industry-leading growth, and while our revenue remains lar) Tj ET Q q 0 0 0 rg BT 405.95 670.10 Td (gely print-based, digital gross sales ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 658.10 Td (now represent 15% of gross sales and activations of our flagship MindT) Tj ET Q q 0 0 0 rg BT 341.29 658.10 Td (ap product grew 56%. ) Tj ET Q q 0 0 0 rg BT 431.92 658.10 Td (The reach of our International ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 646.10 Td (segment is exemplified through the diversity of its ) Tj ET Q q 0 0 0 rg BT 257.30 646.10 Td (Adjusted Revenues for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 436.40 646.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 500.00 646.10 Td (, of which 32% ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 634.10 Td (was derived from ) Tj ET Q q 0 0 0 rg BT 125.92 634.10 Td (Australia, 22% from Europe, the Middle East and ) Tj ET Q q 0 0 0 rg BT 326.43 634.10 Td (Africa \(EMEA\), 20% from ) Tj ET Q q 0 0 0 rg BT 445.55 634.10 Td (Asia, 14% from Latin ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 622.10 Td (America, and 12% from North ) Tj ET Q q 0 0 0 rg BT 178.41 622.10 Td (America. Our Gale business continues to be a global leader in education, learning, and research ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 610.10 Td (resources online, with a vast digital archive of research databases, reference books \(both eBook and print\), and more. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 592.10 Td (Our National Geographic/K12, declined 10% following a record year of 18% growth in fiscal year 2018. ) Tj ET Q q 0 0 0 rg BT 493.35 592.10 Td (The performance ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 580.10 Td (was lar) Tj ET Q q 0 0 0 rg BT 82.42 580.10 Td (gely in-line with the broader K12 industry which experienced cyclically lower funding following lar) Tj ET Q q 0 0 0 rg BT 483.51 580.10 Td (ge adoptions in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 568.10 Td (both California and ) Tj ET Q q 0 0 0 rg BT 134.08 568.10 Td (T) Tj ET Q q 0 0 0 rg BT 139.49 568.10 Td (exas in the previous year) Tj ET Q q 0 0 0 rg BT 238.35 568.10 Td (. National Geographic has a highly focused strategy on ) Tj ET Q q 0 0 0 rg BT 459.95 568.10 Td (AP&E courses at the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 556.10 Td (High School level, which leverages and adapts our Higher Ed content and platforms. ) Tj ET Q q 0 0 0 rg BT 395.11 556.10 Td (While this niche focus limits Cengage's ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 544.10 Td (direct exposure to the lar) Tj ET Q q 0 0 0 rg BT 153.22 544.10 Td (ge basal adoption investment requirements and revenue cycles, overall funding tends to align with the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 532.10 Td (broader basal adoption. ) Tj ET Q q 0 0 0 rg BT 149.90 532.10 Td (W) Tj ET Q q 0 0 0 rg BT 158.54 532.10 Td (e anticipate a return to growth in fiscal 2020 as the market funding environment improves. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 514.10 Td (Our online skills business, under the Ed2Go brand, is and will continue to be a core focus. ) Tj ET Q q 0 0 0 rg BT 435.08 514.10 Td (While most students we serve ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 502.10 Td (pursue a two-year or four) Tj ET Q q 0 0 0 rg BT 155.43 502.10 Td (-year degree and learn on a course-based structure, learning is increasingly taking place outside the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 490.10 Td (traditional course set-up. ) Tj ET Q q 0 0 0 rg BT 155.08 490.10 Td (As a result, we are investing in providing learners in dif) Tj ET Q q 0 0 0 rg BT 377.90 490.10 Td (ferent settings our trusted solutions ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 478.10 Td (leveraging our content and technology) Tj ET Q q 0 0 0 rg BT 207.19 478.10 Td (. ) Tj ET Q q 0 0 0 rg BT 212.01 478.10 Td (This includes comprehensive program or institutional of) Tj ET Q q 0 0 0 rg BT 436.78 478.10 Td (ferings, online and hybrid ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 466.10 Td (learning formats, competency-based programs, add-on learning and certification and workforce development programs. 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Tj ET Q BT /F1 10.00 Tf ET /GS0 gs q 4.00 0 0 10.09 144.00 571.94 cm /I9 Do Q q 0 0 0 rg BT 148.00 574.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 162.00 574.10 Td (Instructors using MindT) Tj ET Q q 0 0 0 rg BT 258.52 574.10 Td (ap saw a 17% reduction in the number of drops, fails, and withdrawals in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 162.00 562.10 Td (their course. ) Tj ET Q BT /F1 10.00 Tf ET /GS0 gs q 4.00 0 0 10.09 144.00 541.94 cm /I10 Do Q q 0 0 0 rg BT 148.00 544.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 162.00 544.10 Td (71% of students said MindT) Tj ET Q q 0 0 0 rg BT 274.63 544.10 Td (ap increased their confidence in understanding course materials. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 108.00 526.10 Td ( ) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 126.00 526.10 Td (Homework Solutions. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 214.61 526.10 Td (Cengage provides online homework solutions that combine our high quality content ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 514.10 Td (with digitally assignable and gradeable work for students. 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Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 108.00 436.10 Td ( ) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 126.00 436.10 Td (Other Digital Solutions.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 222.39 436.10 Td ( ) Tj ET Q q 0 0 0 rg BT 224.71 436.10 Td (These include fully customized online course programs, institutional learning ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.00 424.10 Td (platforms, online skills solutions and supplementary materials.) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 72.00 406.10 Td ( ) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 90.00 406.10 Td (Cengage Unlimited.) Tj ET Q BT /F4 10.00 Tf ET 1 1 1 rg /GS0 gs 170.54 413.04 2.50 -9.10 re f /GS0 gs q 0 0 0 rg BT 170.54 406.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 173.04 413.03 379.65 -9.10 re f /GS0 gs q 0 0 0 rg BT 173.04 406.10 Td (Cengage is the first to introduce to the industry a subscription model, Cengage Unlimited, that ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 90.00 401.03 469.91 -9.09 re f /GS0 gs q 0 0 0 rg BT 90.00 394.10 Td (gives students on-demand access to all of our digital learning platforms, ebooks, online homework and study tools in ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 90.00 389.03 467.42 -9.09 re f /GS0 gs q 0 0 0 rg BT 90.00 382.10 Td (one place and for one af) Tj ET Q q 0 0 0 rg BT 186.16 382.10 Td (fordable low price. Cengage Unlimited will drastically reduce the cost of learning materials ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 90.00 377.03 473.33 -9.09 re f /GS0 gs q 0 0 0 rg BT 90.00 370.10 Td (and provide seamless access to high-quality content for all students. ) Tj ET Q q 0 0 0 rg BT 363.92 370.10 Td (W) Tj ET Q q 0 0 0 rg BT 372.55 370.10 Td (e have secured joint distribution and marketing ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 90.00 365.03 439.96 -9.09 re f /GS0 gs q 0 0 0 rg BT 90.00 358.10 Td (partnerships with key channel partners such as Barnes & Noble, Follett, ) Tj ET Q q 0 0 0 rg BT 379.10 358.10 Td (Amazon, ) Tj ET Q q 0 0 0 rg BT 417.80 358.10 Td (V) Tj ET Q q 0 0 0 rg BT 424.42 358.10 Td (italsource, Redshelf, MBS) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 529.96 358.10 Td (, Chegg ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 346.10 Td (and more. ) Tj ET Q q 0 0 0 rg BT 132.30 346.10 Td (These partnerships allow students to easily purchase Cengage Unlimited virtually everywhere - either at ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 334.10 Td (the local campus bookstore, online or on our proprietary eCommerce channel, Cengage.com. ) Tj ET Q q 0 0 0 rg BT 463.77 334.10 Td (As of March 31, 2019, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 322.10 Td (we are eight months post launch and have already attracted one million Cengage Unlimited subscribers and saved ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 310.10 Td (students cumulatively over $60 million dollars.) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 72.00 292.10 Td ( ) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 90.00 292.10 Td (Print textbooks and materials. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 213.60 292.10 Td (Cengage publishes a wide variety of print products including textbooks, study guides, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 280.10 Td (laboratory exercises, instructor editions and supplemental products. ) Tj ET Q q 0 0 0 rg BT 362.25 280.10 Td (These materials are based on best-in-class ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 268.10 Td (authoritative, reliable and current content from our extensive list of leading authors across all major academic ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 256.10 Td (disciplines and maintain leading positions in many major disciplines. ) Tj ET Q q 0 0 0 rg BT 368.67 256.10 Td (W) Tj ET Q q 0 0 0 rg BT 377.30 256.10 Td (e publish textbooks by several of the most ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 244.10 Td (talented and well-known academic authors such as Ron Larson in mathematics and N. Gregory Mankiw in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 232.10 Td (economics. In many cases, our print products are sold together and complement our digital solutions.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 214.10 Td ( ) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 90.00 214.10 Td (Services. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 128.32 214.10 Td (Cengage of) Tj ET Q q 0 0 0 rg BT 173.95 214.10 Td (fers a variety of services to complement our products. 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Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 30.20 Td (- 10 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 742.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 742.10 Td (e distribute our products primarily through brick and mortar college bookstores and online book retailers which sell ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 730.10 Td (directly to students. ) Tj ET Q q 0 0 0 rg BT 134.92 730.10 Td (W) Tj ET Q q 0 0 0 rg BT 143.56 730.10 Td (e also sell directly to students through Cengage.com, with gross sales of approximately $160 million for ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 718.10 Td (the fiscal year ended March 31, 2019, of) Tj ET Q q 0 0 0 rg BT 215.70 718.10 Td (fering digital solutions, e-books, textbook rentals, print books, study aids, and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 706.10 Td (supplemental materials, designed to enable students to choose solutions that have been adopted for their specific course and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 694.10 Td (best satisfy their individual needs. ) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 54.00 673.10 Td (Skills) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 652.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 652.10 Td (e provide materials in a wide range of skill areas, often extending our of) Tj ET Q q 0 0 0 rg BT 368.69 652.10 Td (ferings for the education industry to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 640.10 Td (professionals already in the workforce. Our products include customized materials for employers to provide training to their ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 628.10 Td (employees. For example, we of) Tj ET Q q 0 0 0 rg BT 179.34 628.10 Td (fer Milady Beauty & ) Tj ET Q q 0 0 0 rg BT 265.25 628.10 Td (W) Tj ET Q q 0 0 0 rg BT 273.88 628.10 Td (ellness solutions to train licensed beauty technicians and spa and salon ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 616.10 Td (managers. Cengage employs a direct professional sales force focused on sales to employers, training programs and directly to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 604.10 Td (professionals seeking additional skills training.) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 54.00 583.10 Td (School) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 562.10 Td (Cengage holds leading positions in select elective disciplines, including ) Tj ET Q q 0 0 0 rg BT 360.83 562.10 Td (AP&E and EL) Tj ET Q q 0 0 0 rg BT 418.24 562.10 Td (T) Tj ET Q q 0 0 0 rg BT 423.61 562.10 Td (. ) Tj ET Q q 0 0 0 rg BT 428.43 562.10 Td (These disciplines have more ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 550.10 Td (attractive growth fundamentals than the school industry as a whole, enabling Cengage to leverage our existing assets in this ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 538.10 Td (market, while avoiding the impact of the cyclicality of the broader school industry on our business. Cengage) Tj ET Q q 0 0 0 rg BT 490.55 538.10 Td (s of) Tj ET Q q 0 0 0 rg BT 505.09 538.10 Td (ferings to the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 526.10 Td (school market are part of a partnership with National Geographic and the brand and content are leveraged across our EL) Tj ET Q q 0 0 0 rg BT 533.72 526.10 Td (T) Tj ET Q q 0 0 0 rg BT 539.65 526.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 514.10 Td (products, the National Geographic Science series, elementary school level science curriculum and a vast collection of National ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 502.10 Td (Geographic content including images, video, maps, illustrations, and articles. ) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 54.00 481.10 Td (Gale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 460.10 Td (Gale dif) Tj ET Q q 0 0 0 rg BT 104.30 460.10 Td (ferentiates itself as an education-focused company serving lifelong learning needs in K-12, public and academic ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 448.10 Td (libraries. It holds a unique position within the research space as both a producer of original content in digital and print form, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 436.10 Td (and an aggregator of one of the lar) Tj ET Q q 0 0 0 rg BT 191.81 436.10 Td (gest archives of primary source material, journals, and databases. Gale has partnerships with ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 424.10 Td (leading institutions to digitize rare historical content from around the world, af) Tj ET Q q 0 0 0 rg BT 368.18 424.10 Td (fording a truly global product experience and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 412.10 Td (opening new avenues of scholarship for researchers. Its digital content repository serves as the source for hundreds of online ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 400.10 Td (research databases that are used in libraries and learning institutions worldwide. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 382.10 Td (Gale extends its presence from the library to the classroom by integrating its reference content into Cengage) Tj ET Q q 0 0 0 rg BT 507.41 382.10 Td (s academic ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 370.10 Td (products. ) Tj ET Q q 0 0 0 rg BT 93.26 370.10 Td (Through innovative digital products that are mobile-responsive and easily adaptable, Gale delivers content and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 358.10 Td (technology that integrate seamlessly into classroom curriculum, driving utilization within student, faculty and researcher ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 346.10 Td (workflow) Tj ET Q q 0 0 0 rg BT 92.23 346.10 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 328.10 Td (Gale sells directly to libraries in communities, schools and universities as well as to library consortia. Gale has direct ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 316.10 Td (representatives in all major developed countries and is expanding its sales presence in the Middle East and ) Tj ET Q q 0 0 0 rg BT 481.93 316.10 Td (Asian markets. In ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 304.10 Td (addition to selling to libraries, Gale also licenses its proprietary and third party content for integration within ) Tj ET Q q 0 0 0 rg BT 490.93 304.10 Td (W) Tj ET Q q 0 0 0 rg BT 499.57 304.10 Td (eb-based ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 292.10 Td (information providers. Gale currently has strategic business distribution arrangements with many leading information services, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 280.10 Td (including ) Tj ET Q q 0 0 0 rg BT 93.72 280.10 Td (Apple, Inc., ) Tj ET Q q 0 0 0 rg BT 142.88 280.10 Td (Associated Press, ) Tj ET Q q 0 0 0 rg BT 214.82 280.10 Td (Amazon.com, Inc., Bloomber) Tj ET Q q 0 0 0 rg BT 333.49 280.10 Td (g, Dow Jones & Company) Tj ET Q q 0 0 0 rg BT 438.67 280.10 Td (, Inc., Google, Inc., ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 268.10 Td (LexisNexis, National Geographic Society) Tj ET Q q 0 0 0 rg BT 219.97 268.10 Td (, Smithsonian Institution, ) Tj ET Q q 0 0 0 rg BT 323.41 268.10 Td (The British Library) Tj ET Q q 0 0 0 rg BT 400.52 268.10 Td (, and ) Tj ET Q q 0 0 0 rg BT 422.28 268.10 Td (Thomson Reuters ) Tj ET Q q 0 0 0 rg BT 495.42 268.10 Td (W) Tj ET Q q 0 0 0 rg BT 504.06 268.10 Td (estlaw) Tj ET Q q 0 0 0 rg BT 528.96 268.10 Td (.) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 54.00 247.10 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 226.10 Td (Cengage is a leading international provider in the global industry for course materials with operations in ) Tj ET Q q 0 0 0 rg BT 490.78 226.10 Td (Asia, EMEA, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 214.10 Td (Australia and Latin ) Tj ET Q q 0 0 0 rg BT 133.15 214.10 Td (America. Cengage adapts domestic course materials for various local industries internationally) Tj ET Q q 0 0 0 rg BT 511.54 214.10 Td (. ) Tj ET Q q 0 0 0 rg BT 516.36 214.10 Td (W) Tj ET Q q 0 0 0 rg BT 525.00 214.10 Td (e also ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 202.10 Td (publish and sell course materials produced by local authors and provide learning and reference solutions in various formats to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 190.10 Td (individuals and businesses located outside the United States.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 172.10 Td (Cengage serves the higher education, vocational, K-12, library reference, and EL) Tj ET Q q 0 0 0 rg BT 395.39 172.10 Td (T) Tj ET Q q 0 0 0 rg BT 401.32 172.10 Td ( industries in select geographic areas ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 160.10 Td (with a focus on high-growth industries throughout the world. Our business covers four principal regions that serve a number ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 148.10 Td (of industries generally through local of) Tj ET Q q 0 0 0 rg BT 209.61 148.10 Td (fices and staf) Tj ET Q q 0 0 0 rg BT 262.18 148.10 Td (f with experience in the industries they serve. Our four major regional ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 136.10 Td (industries are served by physical locations in ) Tj ET Q q 0 0 0 rg BT 235.35 136.10 Td (Asia \(based in Singapore\), EMEA) Tj ET Q q 0 0 0 rg BT 371.71 136.10 Td ( \(based in ) Tj ET Q q 0 0 0 rg BT 412.54 136.10 Td (Andover) Tj ET Q q 0 0 0 rg BT 447.13 136.10 Td (, England\), ) Tj ET Q q 0 0 0 rg BT 493.23 136.10 Td (Australia \(based ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 124.10 Td (in Melbourne, ) Tj ET Q q 0 0 0 rg BT 112.60 124.10 Td (Australia\), and Latin ) Tj ET Q q 0 0 0 rg BT 197.58 124.10 Td (America \(based in Mexico City) Tj ET Q q 0 0 0 rg BT 323.00 124.10 Td (, Mexico\).) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 106.10 Td (The business mix and strategic focus of these units dif) Tj ET Q q 0 0 0 rg BT 288.72 106.10 Td (fer based on prevailing local industry demand for learning products. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 94.10 Td (Our regional operations publish adaptations of domestic course materials as well as indigenous course materials, and distribute ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 82.10 Td (other available content, including research databases. ) Tj ET Q q 0 0 0 rg BT 269.28 82.10 Td (W) Tj ET Q q 0 0 0 rg BT 278.32 82.10 Td (ith of) Tj ET Q q 0 0 0 rg BT 299.53 82.10 Td (fices in more than 25 countries, a sales force in nearly 40 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 70.10 Td (countries, and billings into approximately 170 countries and territories around the globe, we believe we are well positioned to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 58.10 Td (take advantage of specific favorable international growth dynamics. ) Tj ET Q q 0 0 0 rg BT 327.88 58.10 Td (W) Tj ET Q q 0 0 0 rg BT 336.92 58.10 Td (ith our global reach we have a strong presence in the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 46.10 Td (education market transitioning to digital, and we are beginning to scale our MindT) Tj ET Q q 0 0 0 rg BT 383.49 46.10 Td (ap and other premium platforms. ) Tj ET Q endstream endobj 33 0 obj <> endobj 34 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 760.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.20 30.20 Td (- 1) Tj ET Q q 0 0 0 rg BT 305.75 30.20 Td (1 -) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 742.25 Td (Competition) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 721.25 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 721.25 Td (e operate in a highly competitive industry with significant established competitors. Dif) Tj ET Q q 0 0 0 rg BT 427.04 721.25 Td (ferentiating factors in our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 709.25 Td (industry includes content quality) Tj ET Q q 0 0 0 rg BT 184.16 709.25 Td (, author reputation, digital platforms, customer service and price. Our lar) Tj ET Q q 0 0 0 rg BT 474.44 709.25 Td (gest competitors in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 697.25 Td (the U.S. higher education industry are Pearson, McGraw-Hill, ) Tj ET Q q 0 0 0 rg BT 304.31 697.25 Td (W) Tj ET Q q 0 0 0 rg BT 313.35 697.25 Td (iley & Sons, MacMillan, digital solutions providers, and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 685.25 Td (alternative materials such as Open Educational Resources. Competitive positions and players can vary significantly on a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 673.25 Td (discipline-specific basis.In addition, we compete for student share of wallet with alternative options to a new textbook sale, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 661.25 Td (including used and rental options and, at times, non-consumption.) Tj ET Q q 0 0 0 rg BT 319.89 661.25 Td (The continued focus on technology and digital of) Tj ET Q q 0 0 0 rg BT 516.60 661.25 Td (ferings ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 649.25 Td (may result in additional competition from nontraditional competitors including various technology providers and online ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 637.25 Td (distributors. ) Tj ET Q q 0 0 0 rg BT 104.38 637.25 Td (W) Tj ET Q q 0 0 0 rg BT 113.01 637.25 Td (e compete primarily on the basis of price, the quality of our content and author reputation, the ef) Tj ET Q q 0 0 0 rg BT 497.98 637.25 Td (fectiveness of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 625.25 Td (our digital solutions, and customer familiarity with our products.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 604.25 Td (History ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 583.25 Td (On July 2, 2013, Cengage Learning Holdings II, L.P) Tj ET Q q 0 0 0 rg BT 280.86 583.25 Td (. and all of its domestic wholly-owned subsidiaries \(collectively) Tj ET Q q 0 0 0 rg BT 535.99 583.25 Td (, the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 571.25 Td (Predecessor\) filed voluntary petitions for reor) Tj ET Q q 0 0 0 rg BT 245.14 571.25 Td (ganization under Chapter 1) Tj ET Q q 0 0 0 rg BT 353.34 571.25 Td (1 of the United States Bankruptcy Code \(Chapter ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 559.25 Td (1) Tj ET Q q 0 0 0 rg BT 58.63 559.25 Td (1\) in the Bankruptcy Court for the Eastern District of New ) Tj ET Q q 0 0 0 rg BT 299.02 559.25 Td (Y) Tj ET Q q 0 0 0 rg BT 305.25 559.25 Td (ork \(Bankruptcy Court\). Our foreign subsidiaries were not ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 547.25 Td (part of the bankruptcy filing. On March 13, 2014, the Predecessor received confirmation of the Plan of Reor) Tj ET Q q 0 0 0 rg BT 486.47 547.25 Td (ganization from ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 535.25 Td (the Bankruptcy Court and emer) Tj ET Q q 0 0 0 rg BT 179.89 535.25 Td (ged from bankruptcy proceedings as of the end of the day on March 31, 2014 \(the Ef) Tj ET Q q 0 0 0 rg BT 523.21 535.25 Td (fective ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 523.25 Td (Date\). Prior to the Ef) Tj ET Q q 0 0 0 rg BT 142.40 523.25 Td (fective Date, the Debtors operated their businesses as debtors-in-possession under the jurisdiction of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 511.25 Td (the Bankruptcy Court and in accordance with the applicable provisions of Chapter 1) Tj ET Q q 0 0 0 rg BT 390.20 511.25 Td (1 and the orders of the Bankruptcy Court. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 499.25 Td (Our foreign subsidiaries continued to operate in the ordinary course of business during the post-petition period. Following the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 487.25 Td (Ef) Tj ET Q q 0 0 0 rg BT 63.26 487.25 Td (fective Date, Cengage Learning Holdings II, Inc., together with its consolidated subsidiaries, became the successor company ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 475.25 Td (to Cengage Learning Holdings II, L.P) Tj ET Q q 0 0 0 rg BT 204.25 475.25 Td (. Prior to July 2, 2013, the Predecessor was controlled by investment funds associated ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 463.25 Td (with or designated by ) Tj ET Q q 0 0 0 rg BT 142.32 463.25 Td (Apax Partners, L.P) Tj ET Q q 0 0 0 rg BT 217.31 463.25 Td (, together with OMERS Private Equity) Tj ET Q q 0 0 0 rg BT 371.65 463.25 Td (, Inc. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 442.25 Td (Organization and Operations) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 54.00 421.25 Td (Printing and binding; raw materials; fulfillment and distribution) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 403.25 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 403.25 Td (e manage the preparation of products within an approved portfolio of pre-press vendors, printers, and paper suppliers ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 391.25 Td (within strict buying guidelines and pricing agreements. ) Tj ET Q q 0 0 0 rg BT 276.55 391.25 Td (T) Tj ET Q q 0 0 0 rg BT 281.96 391.25 Td (ogether with leading providers of print-on-demand technology) Tj ET Q q 0 0 0 rg BT 531.24 391.25 Td (, we ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 379.25 Td (have implemented print-on-demand services that enable us to more ef) Tj ET Q q 0 0 0 rg BT 332.89 379.25 Td (ficiently produce certain print products. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 361.25 Td (The primary raw material we use is paper) Tj ET Q q 0 0 0 rg BT 237.77 361.25 Td (. Paper prices may fluctuate significantly from time to time. ) Tj ET Q q 0 0 0 rg BT 479.18 361.25 Td (W) Tj ET Q q 0 0 0 rg BT 487.82 361.25 Td (e attempt to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 349.25 Td (manage our exposure to fluctuations in price by entering into single- and multi-year supply contracts with multiple paper ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 337.25 Td (suppliers and having alternative suppliers available. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 319.25 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 319.25 Td (e execute our fulfillment and distribution functions primarily from Independence, Kentucky) Tj ET Q q 0 0 0 rg BT 447.38 319.25 Td (. ) Tj ET Q q 0 0 0 rg BT 451.82 319.25 Td (Additionally) Tj ET Q q 0 0 0 rg BT 501.73 319.25 Td (, we maintain ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 307.25 Td (small distribution and customer service points \(some outsourced\) to support publishing programs in ) Tj ET Q q 0 0 0 rg BT 454.78 307.25 Td (Australia, Latin ) Tj ET Q q 0 0 0 rg BT 519.49 307.25 Td (America, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 295.25 Td (Asia and EMEA. By making use of modern distribution systems and materials-handling technologies, we have created ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 283.25 Td (ef) Tj ET Q q 0 0 0 rg BT 61.59 283.25 Td (ficiencies and reduced operating costs.) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 54.00 265.25 Td (Employees) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 247.25 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 96.44 247.25 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 160.04 247.25 Td (, we had approximately 4,900 employees. ) Tj ET Q q 0 0 0 rg BT 328.98 247.25 Td (W) Tj ET Q q 0 0 0 rg BT 337.62 247.25 Td (e believe that we have an engaged and active workforce ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 235.25 Td (and that relations with our employees are satisfactory) Tj ET Q q 0 0 0 rg BT 266.89 235.25 Td (.) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 54.00 217.25 Td (Seasonality and comparability ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 199.25 Td (Our revenues, operating profit and operating cash flows are impacted by the inherent seasonality of our business. For the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 187.25 Td (fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 124.24 187.25 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 187.84 187.25 Td (, we derived approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 299.74 187.25 Td (58.6%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 325.57 187.25 Td ( of our ) Tj ET Q q 0 0 0 rg BT 354.18 187.25 Td (Adjusted Revenues and approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 511.36 187.25 Td (84.2%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.19 187.25 Td ( of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 175.25 Td (our ) Tj ET Q q 0 0 0 rg BT 69.28 175.25 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 144.00 175.25 Td ( less Pre-Publication Costs in the second and fourth fiscal quarters, which coincide with the academic ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 163.25 Td (calendar) Tj ET Q q 0 0 0 rg BT 87.31 163.25 Td (. ) Tj ET Q q 0 0 0 rg BT 92.13 163.25 Td (This seasonality af) Tj ET Q q 0 0 0 rg BT 166.93 163.25 Td (fects our working capital requirements and hence our overall financing needs. For example, we ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 151.25 Td (typically incur a net cash deficit from all of our activities in the first and fourth fiscal quarters of our fiscal year) Tj ET Q q 0 0 0 rg BT 498.01 151.25 Td (. Changes in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 139.25 Td (our customers) Tj ET Q q 0 0 0 rg BT 112.96 139.25 Td ( ordering patterns may impact the comparison of our results in a quarter with the same quarter of the previous ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 127.25 Td (year) Tj ET Q q 0 0 0 rg BT 70.81 127.25 Td (, or in a fiscal year with the prior fiscal year) Tj ET Q q 0 0 0 rg BT 245.61 127.25 Td (, where our customers may shift the timing of material orders for a number of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 115.25 Td (reasons, including, but not limited to, changes in academic semester start dates or changes in inventory management practices.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 97.25 Td (As we continue to migrate our product and service of) Tj ET Q q 0 0 0 rg BT 284.81 97.25 Td (ferings towards hosted digital solutions that are delivered over a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 85.25 Td (period of time, the associated revenues will be recognized ratably over the applicable subscription period, with amounts in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 73.25 Td (excess of revenues recognized reflected as deferred revenue. ) Tj ET Q q 0 0 0 rg BT 298.40 73.25 Td (This represents a change from traditional print products where ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 61.25 Td (revenues are typically recognized upon shipment of the materials to our customer) Tj ET Q q 0 0 0 rg BT 379.17 61.25 Td (. Consequently) Tj ET Q q 0 0 0 rg BT 438.52 61.25 Td (, reported revenues may not be ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 49.25 Td (comparable to prior periods as a growing proportion of our revenues are recognized in subsequent periods.) Tj ET Q endstream endobj 35 0 obj <> endobj 36 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 760.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 30.20 Td (- 12 -) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 54.00 742.10 Td (Intellectual pr) Tj ET Q q 0 0 0 rg BT 110.56 742.10 Td (operty) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 724.10 Td (Substantially all of our proprietary publications and products, including our proprietary customer facing technology) Tj ET Q q 0 0 0 rg BT 534.01 724.10 Td (, are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 712.10 Td (covered by copyright in the United States and by virtue of international treaties and conventions, in most developed countries ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 700.10 Td (throughout the world. ) Tj ET Q q 0 0 0 rg BT 142.88 700.10 Td (As the copyright holder) Tj ET Q q 0 0 0 rg BT 237.18 700.10 Td (, we have the exclusive right to reproduce, distribute, publicly display) Tj ET Q q 0 0 0 rg BT 515.63 700.10 Td (, perform, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 688.10 Td (and create derivative versions of the copyrighted works. ) Tj ET Q q 0 0 0 rg BT 280.68 688.10 Td (W) Tj ET Q q 0 0 0 rg BT 289.32 688.10 Td (e also obtain significant content, materials and technology through ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 676.10 Td (license arrangements with third-party licensors.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 658.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 658.10 Td (e do not own any franchises or concessions, but we have registered certain patents, trademarks and service marks in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 646.10 Td (connection with our publishing businesses. ) Tj ET Q q 0 0 0 rg BT 228.25 646.10 Td (W) Tj ET Q q 0 0 0 rg BT 236.89 646.10 Td (e also obtain domain name protection for our Internet domains. ) Tj ET Q q 0 0 0 rg BT 491.91 646.10 Td (W) Tj ET Q q 0 0 0 rg BT 500.55 646.10 Td (e believe we ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 634.10 Td (have taken, and continue to take, in the ordinary course of business, all appropriate available legal steps to protect our material ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 622.10 Td (intellectual property in relevant jurisdictions.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 604.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 604.10 Td (e rely on our authors for substantially all of the content for our learning solutions. In almost all cases, copyright ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 592.10 Td (ownership has been assigned to us by the original author\(s\). In certain specific instances, the author may retain the copyright, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 580.10 Td (granting us an exclusive license to utilize the work. In both cases, the term of copyright under United States law is generally ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 568.10 Td (the life of the author plus 70 years \(works first published prior to 1978 generally have a copyright term of 95 years from the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 556.10 Td (date of first publication\). ) Tj ET Q q 0 0 0 rg BT 155.73 556.10 Td (W) Tj ET Q q 0 0 0 rg BT 164.77 556.10 Td (ith respect to materials created as works made for hire, the term of copyright is the shorter of 95 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 544.10 Td (years from publication or 120 years from creation. For works assigned or licensed on or after January 1, 1978, authors \(or their ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 532.10 Td (heirs or estates\) have a statutory right to terminate such assignment or license for a five-year period generally commencing 35 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 520.10 Td (years from the date of the assignment or license, or if the grant covers the right to publish the work, the shorter of 35 years ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 508.10 Td (from the date of publication or 40 years from the date of the assignment or license. For works first assigned or licensed prior ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 496.10 Td (to January 1, 1978, authors \(or their heirs or estates\) have a statutory right to terminate such assignment or license for a five-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 484.10 Td (year period generally commencing at the end of 56 years from the date on which the copyright was first secured or January 1, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 472.10 Td (1978, whichever is later) Tj ET Q q 0 0 0 rg BT 149.53 472.10 Td (.) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 54.00 454.10 Td (Envir) Tj ET Q q 0 0 0 rg BT 75.85 454.10 Td (onmental matters) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 436.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 436.10 Td (e generally contract with independent printers and binders for their services, and our operations are generally not ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 424.10 Td (otherwise materially af) Tj ET Q q 0 0 0 rg BT 146.00 424.10 Td (fected by environmental laws and regulations. However) Tj ET Q q 0 0 0 rg BT 369.14 424.10 Td (, as the owner and lessee of real property) Tj ET Q q 0 0 0 rg BT 532.03 424.10 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 412.10 Td (regardless of fault, we could face liability or our operations could be disrupted if contamination were to be discovered on the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 400.10 Td (properties we own or lease. ) Tj ET Q q 0 0 0 rg BT 166.00 400.10 Td (W) Tj ET Q q 0 0 0 rg BT 174.64 400.10 Td (e are currently unaware of any material environmental liabilities or other material environmental ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 388.10 Td (issues relating to our properties or operations and anticipate no material expenditures for compliance with environmental laws ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 376.10 Td (or regulations. See Properties for a description of our significant leased premises.) Tj ET Q endstream endobj 37 0 obj <> endobj 38 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 760.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 13 -) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 269.05 731.25 Td (RISK F) Tj ET Q q 0 0 0 rg BT 301.37 731.25 Td (ACT) Tj ET Q q 0 0 0 rg BT 322.30 731.25 Td (ORS) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 72.00 707.25 Td (The following factors affect our business and the industry in which we operate. The risks and uncertainties described ) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 54.00 695.25 Td (below could materially adversely affect our business, r) Tj ET Q q 0 0 0 rg BT 273.04 695.25 Td (esults of operations or financial condition. Furthermor) Tj ET Q q 0 0 0 rg BT 492.94 695.25 Td (e, the risks and ) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 54.00 683.25 Td (uncertainties described below ar) Tj ET Q q 0 0 0 rg BT 185.00 683.25 Td (e not the only ones we face. ) Tj ET Q q 0 0 0 rg BT 297.56 683.25 Td (Additional risks and uncertainties not pr) Tj ET Q q 0 0 0 rg BT 459.68 683.25 Td (esently known or those ) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 54.00 671.25 Td (we curr) Tj ET Q q 0 0 0 rg BT 84.46 671.25 Td (ently consider immaterial may also have an adverse effect on our business, r) Tj ET Q q 0 0 0 rg BT 390.98 671.25 Td (esults of operations or financial ) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 54.00 659.25 Td (condition. Certain factors make r) Tj ET Q q 0 0 0 rg BT 187.23 659.25 Td (efer) Tj ET Q q 0 0 0 rg BT 202.40 659.25 Td (ences to non-GAAP) Tj ET Q q 0 0 0 rg BT 281.08 659.25 Td ( measur) Tj ET Q q 0 0 0 rg BT 312.66 659.25 Td (es. See Management) Tj ET Q q 0 0 0 rg BT 402.17 659.25 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 472.28 659.25 Td (Analysis of Financial ) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 54.00 647.25 Td (Condition and Results of Operations for our definition of ) Tj ET Q q 0 0 0 rg BT 290.22 647.25 Td (Adjusted Revenues and ) Tj ET Q q 0 0 0 rg BT 385.29 647.25 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 457.04 647.25 Td ( less Pr) Tj ET Q q 0 0 0 rg BT 486.67 647.25 Td (e-Publication ) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 54.00 635.25 Td (Costs and a r) Tj ET Q q 0 0 0 rg BT 107.25 635.25 Td (econciliation of ) Tj ET Q q 0 0 0 rg BT 172.06 635.25 Td (Adjusted Revenues to r) Tj ET Q q 0 0 0 rg BT 263.60 635.25 Td (evenues and ) Tj ET Q q 0 0 0 rg BT 315.07 635.25 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 386.82 635.25 Td ( less Pr) Tj ET Q q 0 0 0 rg BT 416.45 635.25 Td (e-Publication Costs to our net loss.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 614.25 Td (W) Tj ET Q q 0 0 0 rg BT 62.15 614.25 Td (e operate in highly competitive and rapidly changing industry) Tj ET Q q 0 0 0 rg BT 315.12 614.25 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 593.25 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 593.25 Td (e operate in a highly competitive industry with significant established competitors, such as Pearson, McGraw-Hill, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 581.25 Td (John ) Tj ET Q q 0 0 0 rg BT 75.21 581.25 Td (W) Tj ET Q q 0 0 0 rg BT 84.25 581.25 Td (iley & Sons, Inc., Macmillan, Scholastic Inc., ProQuest-CSA) Tj ET Q q 0 0 0 rg BT 328.39 581.25 Td ( LLC, and EBSCO Industries, Inc. ) Tj ET Q q 0 0 0 rg BT 468.47 581.25 Td (W) Tj ET Q q 0 0 0 rg BT 477.51 581.25 Td (ith the overall ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 569.25 Td (industry shift to digital, we also have nontraditional competitors including various technology providers and online ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 557.25 Td (distributors.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 536.25 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 536.25 Td (e compete primarily on the basis of price, the quality of our content and author reputation, the ef) Tj ET Q q 0 0 0 rg BT 465.61 536.25 Td (fectiveness of our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 524.25 Td (digital solutions, and customer familiarity with our products. Similar to us, our competitors are continuously enhancing their ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 512.25 Td (products and services, developing new business models and investing in technology) Tj ET Q q 0 0 0 rg BT 389.12 512.25 Td (. Some of our competitors are also ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 500.25 Td (acquiring additional businesses in key sectors in order to broaden their of) Tj ET Q q 0 0 0 rg BT 346.80 500.25 Td (ferings.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 479.25 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 479.25 Td (e continue to adjust our business, including our pricing and delivery models, based on industry conditions and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 467.25 Td (customer demand. ) Tj ET Q q 0 0 0 rg BT 129.63 467.25 Td (W) Tj ET Q q 0 0 0 rg BT 138.27 467.25 Td (e consider additional capital investments, as needed, which may af) Tj ET Q q 0 0 0 rg BT 404.39 467.25 Td (fect profit mar) Tj ET Q q 0 0 0 rg BT 461.95 467.25 Td (gins as we strive to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 455.25 Td (maintain or grow industry share, ensure the health of the business and deliver af) Tj ET Q q 0 0 0 rg BT 373.73 455.25 Td (fordable access to quality learning for ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 443.25 Td (students.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 422.25 Td (Consolidation in the industry in which we operate could place us at a competitive disadvantage.) Tj ET Q BT /F8 10.00 Tf ET q 0 0 0 rg BT 446.52 422.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 401.25 Td (Some of the industries in which we operate have experienced consolidation. In particular) Tj ET Q q 0 0 0 rg BT 427.31 401.25 Td (, the combinations of traditional ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 389.25 Td (media content companies and new media distribution companies have resulted in new business models and strategies. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 377.25 Td (Similarly) Tj ET Q q 0 0 0 rg BT 90.57 377.25 Td (, the consolidation of book retailers has increased our reliance on certain customers. ) Tj ET Q q 0 0 0 rg BT 428.33 377.25 Td (W) Tj ET Q q 0 0 0 rg BT 436.96 377.25 Td (e cannot predict with ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 365.25 Td (certainty the extent to which these types of business combinations may occur or the impact that they may have. ) Tj ET Q q 0 0 0 rg BT 500.91 365.25 Td (These ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 353.25 Td (combinations could place us at a competitive disadvantage with respect to negotiations, scale, resources and our ability to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 341.25 Td (develop and exploit new media technologies, which could adversely impact our business, financial condition and results of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 329.25 Td (operations) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 95.66 329.25 Td (.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 308.25 Td (Failure to successfully introduce new products, services or technologies could impact our profitability) Tj ET Q q 0 0 0 rg BT 472.24 308.25 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 287.25 Td (In order to maintain a competitive position, we must continue to invest in new of) Tj ET Q q 0 0 0 rg BT 395.36 287.25 Td (ferings and new ways to deliver our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 275.25 Td (products and services. ) Tj ET Q q 0 0 0 rg BT 144.90 275.25 Td (These investments may not be profitable or may be less profitable than what we have experienced ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 263.25 Td (historically) Tj ET Q q 0 0 0 rg BT 98.34 263.25 Td (. Our failure to successfully introduce new products, services or technologies to the industry could have a material ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 251.25 Td (adverse impact on our results of operations, profitability and financial condition.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 230.25 Td (W) Tj ET Q q 0 0 0 rg BT 62.15 230.25 Td (e face competition from the used textbook industry and rental textbook programs for sales of our textbooks. The growth ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 218.25 Td (of the used textbook and/or rental textbook programs may materially adversely af) Tj ET Q q 0 0 0 rg BT 387.96 218.25 Td (fect our business. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 197.25 Td (The academic used textbook industry has grown in recent years, driven primarily by more ef) Tj ET Q q 0 0 0 rg BT 441.98 197.25 Td (ficient distribution of used ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 185.25 Td (books and the cost of new textbooks. Our textbook customers are often presented with the option to purchase a new or used ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 173.25 Td (textbook, and we do not generate revenues from any sale after the initial sale of our printed textbooks. In addition, an ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 161.25 Td (increasing number of bookstores and online companies are of) Tj ET Q q 0 0 0 rg BT 299.85 161.25 Td (fering textbook rental programs. Historically) Tj ET Q q 0 0 0 rg BT 478.32 161.25 Td (, the dif) Tj ET Q q 0 0 0 rg BT 508.97 161.25 Td (ficulty in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 149.25 Td (making used textbooks available to students limited the growth of the used textbook market. ) Tj ET Q q 0 0 0 rg BT 425.69 149.25 Td (The Internet, however) Tj ET Q q 0 0 0 rg BT 513.86 149.25 Td (, has made ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 137.25 Td (the used textbook industry more ef) Tj ET Q q 0 0 0 rg BT 192.96 137.25 Td (ficient and has significantly increased student access to used textbooks. ) Tj ET Q q 0 0 0 rg BT 480.75 137.25 Td (The rental market ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 125.25 Td (also increases the ef) Tj ET Q q 0 0 0 rg BT 134.06 125.25 Td (ficiency of the used textbook industry by increasing the return rate of rented used textbooks which are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 113.25 Td (rented multiple times. If the supply of used textbooks and/or textbook rental programs increases, students may increasingly ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 101.25 Td (look to purchase used textbooks and/or rent textbooks as an alternative to purchasing our new textbooks. ) Tj ET Q q 0 0 0 rg BT 475.11 101.25 Td (W) Tj ET Q q 0 0 0 rg BT 483.75 101.25 Td (e primarily ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 89.25 Td (compete against used and rental textbooks on the basis of supply and price. If we are unable to ef) Tj ET Q q 0 0 0 rg BT 442.31 89.25 Td (fectively compete with ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 77.25 Td (growing competition presented by the used textbook and rental textbook market, we could experience a loss in sales and our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 65.25 Td (business, financial position and results of operations may be materially adversely af) Tj ET Q q 0 0 0 rg BT 388.73 65.25 Td (fected.) Tj ET Q endstream endobj 39 0 obj <> endobj 40 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 760.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 14 -) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 731.25 Td (Increased accessibility of free or relatively inexpensive information and materials may reduce demand for or negatively ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 719.25 Td (impact the pricing of our products and services.) Tj ET Q BT /F8 10.00 Tf ET q 0 0 0 rg BT 250.11 719.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 698.25 Td (In recent years, more public sources of free or relatively inexpensive information and research materials have become ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 686.25 Td (available, particularly in digital formats and through the Internet, and digital versions of products have been of) Tj ET Q q 0 0 0 rg BT 495.90 686.25 Td (fered at lower ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 674.25 Td (pricing than similar products of) Tj ET Q q 0 0 0 rg BT 179.90 674.25 Td (fered in traditional media such as print. ) Tj ET Q q 0 0 0 rg BT 339.12 674.25 Td (W) Tj ET Q q 0 0 0 rg BT 347.75 674.25 Td (e expect these trends to continue. For example, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 662.25 Td (some governmental and regulatory agencies have increased the amount of information they make publicly available for free ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 650.25 Td (and certain educational institutions have increased demand for lower priced educational materials, including e-books at prices ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 638.25 Td (below the price of print books. ) Tj ET Q q 0 0 0 rg BT 179.07 638.25 Td (T) Tj ET Q q 0 0 0 rg BT 184.48 638.25 Td (echnological changes and the availability of free or relatively inexpensive information and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 626.25 Td (materials have also af) Tj ET Q q 0 0 0 rg BT 140.72 626.25 Td (fected changes in consumer behavior and expectations. Public and private sources of free or relatively ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 614.25 Td (inexpensive information and lower pricing for digital products may reduce demand and impact the prices we can char) Tj ET Q q 0 0 0 rg BT 524.48 614.25 Td (ge for ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 602.25 Td (our products and services. ) Tj ET Q q 0 0 0 rg BT 160.73 602.25 Td (T) Tj ET Q q 0 0 0 rg BT 166.14 602.25 Td (o the extent that technological changes and the availability of free or relatively inexpensive ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 590.25 Td (information and materials limit the prices we can char) Tj ET Q q 0 0 0 rg BT 269.85 590.25 Td (ge or demand for our products and services, our business, financial ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 578.25 Td (position and results of operations may be materially adversely af) Tj ET Q q 0 0 0 rg BT 312.35 578.25 Td (fected. ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 557.25 Td (Increased availability of lower priced international versions of our products in the domestic industry or higher prices for ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 545.25 Td (our products overseas may cause our sales to decline. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 524.25 Td (On March 19, 2013, the United States Supreme Court, in Kirtsaeng v) Tj ET Q q 0 0 0 rg BT 347.97 524.25 Td (. John ) Tj ET Q q 0 0 0 rg BT 374.18 524.25 Td (W) Tj ET Q q 0 0 0 rg BT 383.22 524.25 Td (iley & Sons, Inc. reversed existing case law ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 512.25 Td (that had made it illegal to import into the United States foreign manufactured versions of U.S. Copyrighted products ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 500.25 Td (\(Foreign-Manufactured ) Tj ET Q q 0 0 0 rg BT 154.61 500.25 Td (V) Tj ET Q q 0 0 0 rg BT 160.72 500.25 Td (ersions\), without the copyright owner) Tj ET Q q 0 0 0 rg BT 315.78 500.25 Td () Tj ET Q q 0 0 0 rg BT 318.56 500.25 Td (s consent. ) Tj ET Q q 0 0 0 rg BT 360.32 500.25 Td (The Kirtsaeng ruling could cause us to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 488.25 Td (experience a loss in domestic sales if increased units of Foreign-Manufactured ) Tj ET Q q 0 0 0 rg BT 370.10 488.25 Td (V) Tj ET Q q 0 0 0 rg BT 376.22 488.25 Td (ersions and other international versions are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 476.25 Td (imported and resold within the United States in competition with our own domestic product of) Tj ET Q q 0 0 0 rg BT 431.53 476.25 Td (ferings. Further) Tj ET Q q 0 0 0 rg BT 493.34 476.25 Td (, we may ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 464.25 Td (experience a loss in sales outside the United States due to increased prices overseas. If we experience a loss of sales ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 452.25 Td (domestically due to increased competition from lower priced Foreign-Manufactured ) Tj ET Q q 0 0 0 rg BT 392.87 452.25 Td (V) Tj ET Q q 0 0 0 rg BT 398.99 452.25 Td (ersions or internationally due to lower ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 440.25 Td (demand in overseas industries for higher priced products, our business, financial position and results of operations could be ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 428.25 Td (adversely af) Tj ET Q q 0 0 0 rg BT 102.40 428.25 Td (fected.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 407.25 Td (Increases in the cost of paper and other operating costs could negatively af) Tj ET Q q 0 0 0 rg BT 361.59 407.25 Td (fect our results. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 386.25 Td (Paper is the principal raw material used in our business. ) Tj ET Q q 0 0 0 rg BT 297.22 386.25 Td (As a result, our business may be negatively impacted by an ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 374.25 Td (increase in paper prices. ) Tj ET Q q 0 0 0 rg BT 152.94 374.25 Td (The price of paper may fluctuate significantly in the future, and changes in the market supply of or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 362.25 Td (demand for paper could af) Tj ET Q q 0 0 0 rg BT 159.33 362.25 Td (fect delivery times and prices. Paper suppliers may consolidate and as a result, there may be future ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 350.25 Td (shortfalls in supplies necessary to meet the demands of the entire marketplace. ) Tj ET Q q 0 0 0 rg BT 370.10 350.25 Td (W) Tj ET Q q 0 0 0 rg BT 378.74 350.25 Td (e may need to find alternative sources for ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 338.25 Td (paper from time to time. ) Tj ET Q q 0 0 0 rg BT 153.79 338.25 Td (W) Tj ET Q q 0 0 0 rg BT 162.43 338.25 Td (e may not continue to have access to paper in the necessary amounts or at reasonable prices and a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 326.25 Td (material increase in the cost of paper may have an adverse ef) Tj ET Q q 0 0 0 rg BT 297.31 326.25 Td (fect on our business, financial condition and results of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 314.25 Td (operations. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 293.25 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 293.25 Td (e also have other significant operating costs, and unanticipated increases in these costs could adversely af) Tj ET Q q 0 0 0 rg BT 501.98 293.25 Td (fect our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 281.25 Td (operating mar) Tj ET Q q 0 0 0 rg BT 109.63 281.25 Td (gins. Higher ener) Tj ET Q q 0 0 0 rg BT 178.59 281.25 Td (gy costs and other factors af) Tj ET Q q 0 0 0 rg BT 290.88 281.25 Td (fecting the cost of publishing, transporting and distributing our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 269.25 Td (products could adversely af) Tj ET Q q 0 0 0 rg BT 164.06 269.25 Td (fect our financial results. Our inability to absorb the impact of increases in paper costs and other ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 257.25 Td (costs or any strategic determination not to pass on all or a portion of these increases to customers could adversely af) Tj ET Q q 0 0 0 rg BT 517.57 257.25 Td (fect our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 245.25 Td (business, financial condition and results of operations.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 224.25 Td (Our inability to attract or retain the key authors that we need to remain competitive and grow) Tj ET Q q 0 0 0 rg BT 436.98 224.25 Td (, obtain rights to our ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 212.25 Td (authors' works and avoid disputes with our authors may result in a material adverse ef) Tj ET Q q 0 0 0 rg BT 409.99 212.25 Td (fect on our results of operations. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 191.25 Td (Our success is dependent, in part, on our ability to attract and retain talented authors and develop long-term, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 179.25 Td (collaborative relationships with them. ) Tj ET Q q 0 0 0 rg BT 207.39 179.25 Td (W) Tj ET Q q 0 0 0 rg BT 216.03 179.25 Td (e operate in a number of highly visible industries where there is intense competition ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 167.25 Td (for successful, published authors. ) Tj ET Q q 0 0 0 rg BT 189.90 167.25 Td (W) Tj ET Q q 0 0 0 rg BT 198.54 167.25 Td (e enter into publishing agreements with authors that set forth the terms of our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 155.25 Td (relationships, including the payment of royalties and the transfer of copyrights. Our rights to exclusively of) Tj ET Q q 0 0 0 rg BT 482.33 155.25 Td (fer authors) Tj ET Q q 0 0 0 rg BT 527.96 155.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 143.25 Td (content are dependent on the authors) Tj ET Q q 0 0 0 rg BT 203.48 143.25 Td ( transfer of copyrights to us. ) Tj ET Q q 0 0 0 rg BT 318.55 143.25 Td (The United States Copyright ) Tj ET Q q 0 0 0 rg BT 435.21 143.25 Td (Act of 1976, as amended, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 131.25 Td (allows an author \(or his or her heirs or estate\), during a five-year window) Tj ET Q q 0 0 0 rg BT 346.59 131.25 Td (, to terminate the copyright transfer and thereby ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 119.25 Td (regain certain United States rights to their works. For copyrights transferred on or after January 1, 1978, the five-year ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 107.25 Td (window begins 35 years from the date of transfer) Tj ET Q q 0 0 0 rg BT 250.21 107.25 Td (, or if the grant provides a right to publish, the shorter of 35 years from the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 95.25 Td (date of publication or 40 years from the date of transfer) Tj ET Q q 0 0 0 rg BT 275.03 95.25 Td (. For copyrights transferred before January 1, 1978, the five-year ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 83.25 Td (window begins from 56 years from the date on which the copyright was first secured or January 1, 1978, whichever is later) Tj ET Q q 0 0 0 rg BT 545.81 83.25 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 71.25 Td (An author that terminates the grant of rights to his or her work could seek to terminate all rights in their works transferred to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 59.25 Td (us or else negotiate more favorable economic or other terms. Further) Tj ET Q q 0 0 0 rg BT 328.22 59.25 Td (, we may become engaged in disputes with our authors ) Tj ET Q endstream endobj 41 0 obj <> endobj 42 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 760.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 15 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 731.10 Td (from time to time regarding the terms of the publishing agreements and calculation of the royalty we owe them. Our inability ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (to attract new authors, the loss of certain of our high profile authors, increased costs incurred in attracting or retaining ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 707.10 Td (authors, changes in our rights to our authors) Tj ET Q q 0 0 0 rg BT 232.67 707.10 Td ( works, or becoming engaged in any disputes with our authors could harm our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 695.10 Td (business, results of operations and financial condition.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 674.10 Td (W) Tj ET Q q 0 0 0 rg BT 62.15 674.10 Td (e may not be able to attract or retain key employees. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 653.10 Td (Our future success depends on the continued services of key employees and our ability to attract and retain new ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 641.10 Td (employees with the experience and capabilities necessary to support our needs. ) Tj ET Q q 0 0 0 rg BT 372.60 641.10 Td (The loss of any of the key employees or the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 629.10 Td (failure to attract and retain suitably skilled new employees could adversely af) Tj ET Q q 0 0 0 rg BT 363.43 629.10 Td (fect our business, financial condition and our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 617.10 Td (results of operations.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 596.10 Td (W) Tj ET Q q 0 0 0 rg BT 62.15 596.10 Td (e are dependent on third-party distributors, representatives and retailers for a substantial portion of our sales.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 578.10 Td (In addition to our own sales force, we of) Tj ET Q q 0 0 0 rg BT 233.72 578.10 Td (fer our products through a variety of third-party distributors, representatives and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 566.10 Td (retailers. ) Tj ET Q q 0 0 0 rg BT 91.02 566.10 Td (W) Tj ET Q q 0 0 0 rg BT 99.66 566.10 Td (e do not ultimately control the performance of our third-party distributors, representatives and retailers to perform ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 554.10 Td (as required or to our expectations and we do not control these parties) Tj ET Q q 0 0 0 rg BT 332.06 554.10 Td ( actions. In addition, some of our distributors, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 542.10 Td (representatives or retailers may market other products that compete with our products. ) Tj ET Q q 0 0 0 rg BT 401.20 542.10 Td (The loss of one or more of our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 530.10 Td (distributors, representatives or retailers or their failure to ef) Tj ET Q q 0 0 0 rg BT 290.67 530.10 Td (fectively promote our products or otherwise perform in their ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 518.10 Td (functions in the expected manner could adversely af) Tj ET Q q 0 0 0 rg BT 262.35 518.10 Td (fect our ability to bring our products to market and impact our revenues.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 500.10 Td (W) Tj ET Q q 0 0 0 rg BT 62.15 500.10 Td (e are a party to at-will contracts with customers and the termination of these contracts could harm our business.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 479.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 479.10 Td (e currently provide or have agreements to provide products and services to governmental agencies, school districts and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 467.10 Td (educational institutions under contracts that are generally terminable at-will. ) Tj ET Q q 0 0 0 rg BT 361.49 467.10 Td (The fact that these customers have at-will ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 455.10 Td (contracts with us gives rise to the possibility that we may have no recourse in the event of customer cancellation of a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 443.10 Td (contract. In addition, contracts awarded by the federal government or states pursuant to a procurement process are subject to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 431.10 Td (challenge by competitors and other parties during and after that process and require that we comply with certain regulatory ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 419.10 Td (and pricing requirements. ) Tj ET Q q 0 0 0 rg BT 158.79 419.10 Td (W) Tj ET Q q 0 0 0 rg BT 167.42 419.10 Td (e anticipate that we will continue to rely upon a number of customers under such at-will ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 407.10 Td (contractual arrangements. ) Tj ET Q q 0 0 0 rg BT 159.23 407.10 Td (As a result of this reliance, the election by these customers to terminate any or all of their at-will ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 395.10 Td (contracts with us, or the loss of or decrease in business from several of our lar) Tj ET Q q 0 0 0 rg BT 365.40 395.10 Td (ge customers, could materially and adversely ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 383.10 Td (af) Tj ET Q q 0 0 0 rg BT 61.59 383.10 Td (fect our business, financial condition and results of operations.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 362.10 Td (W) Tj ET Q q 0 0 0 rg BT 62.15 362.10 Td (e may not be willing or able to maintain the availability of information obtained through licensing arrangements or the ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 350.10 Td (terms of our licensing arrangements may change, which may reduce our profit margins or our industry share. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 329.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 329.10 Td (e obtain significant information through licensing arrangements with content providers. Some content providers may ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 317.10 Td (seek to increase licensing fees for providing their proprietary content to us. In such case, our profit mar) Tj ET Q q 0 0 0 rg BT 466.18 317.10 Td (gins may be reduced if ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 305.10 Td (we are unable to pass along such price increases to our customers. If we are unable to renegotiate acceptable licensing ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 293.10 Td (arrangements with these content providers or find alternative sources of equivalent content, the quality of our content may ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 281.10 Td (decline and as a result we may experience a reduction in our industry share, and our business, financial condition and results ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 269.10 Td (of operations may be materially adversely af) Tj ET Q q 0 0 0 rg BT 232.08 269.10 Td (fected. ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 248.10 Td (W) Tj ET Q q 0 0 0 rg BT 62.15 248.10 Td (e have and may continue to outsource certain functions to third parties and these arrangements may not be successful, ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 236.10 Td (thereby resulting in increased costs, or may materially adversely af) Tj ET Q q 0 0 0 rg BT 328.24 236.10 Td (fect service levels, results of operations and our ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 224.10 Td (financial reporting. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 203.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 203.10 Td (e rely on third party providers of outsourced services to provide services on a timely and ef) Tj ET Q q 0 0 0 rg BT 444.79 203.10 Td (fective basis. ) Tj ET Q q 0 0 0 rg BT 499.31 203.10 Td (These services ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 191.10 Td (include, among others, printing of textbooks, content development, payroll and benefits administration and specific activities ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 179.10 Td (related to general accounting, fixed asset and accounts payable functions. ) Tj ET Q q 0 0 0 rg BT 349.82 179.10 Td (W) Tj ET Q q 0 0 0 rg BT 358.45 179.10 Td (e do not ultimately control the performance of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 167.10 Td (our outsourcing partners and the failure of third-party providers of outsourced services to perform as required by contract or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 155.10 Td (to our expectations could result in significant disruptions and costs to our operations, which could materially adversely af) Tj ET Q q 0 0 0 rg BT 539.26 155.10 Td (fect ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 143.10 Td (our business, financial condition and results of operations and our ability to report financial information accurately and in a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 131.10 Td (timely manner) Tj ET Q q 0 0 0 rg BT 111.49 131.10 Td (.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 110.10 Td (A) Tj ET Q q 0 0 0 rg BT 60.12 110.10 Td ( reduction in enrollment at colleges and universities may reduce our revenues or profitability) Tj ET Q q 0 0 0 rg BT 441.69 110.10 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 89.10 Td (A) Tj ET Q q 0 0 0 rg BT 78.67 89.10 Td ( reduction in student enrollment at colleges and universities could lead to decreased demand for our products. Increases ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 77.10 Td (in tuition rates, decreases in family income and net worth and a perception that higher education is not connected to the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 65.10 Td (economy) Tj ET Q q 0 0 0 rg BT 90.01 65.10 Td (, among other factors, can adversely af) Tj ET Q q 0 0 0 rg BT 244.76 65.10 Td (fect demand for higher education. Further) Tj ET Q q 0 0 0 rg BT 411.51 65.10 Td (, enrollment levels at colleges and ) Tj ET Q endstream endobj 43 0 obj <> endobj 44 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 760.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 16 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 731.10 Td (universities outside the United States are influenced by the global and local economic climate, local political conditions and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (other factors that make predicting foreign enrollment levels dif) Tj ET Q q 0 0 0 rg BT 305.40 719.10 Td (ficult. Reductions in expected levels of enrollment at colleges ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 707.10 Td (and universities both within and outside the United States could adversely af) Tj ET Q q 0 0 0 rg BT 360.14 707.10 Td (fect demand for our higher education products ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 695.10 Td (and, therefore, reduce our revenues or profitability) Tj ET Q q 0 0 0 rg BT 255.48 695.10 Td (.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 674.10 Td (Changes in governmental programs and private lending practices may reduce our revenues or profitability) Tj ET Q q 0 0 0 rg BT 491.69 674.10 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 653.10 Td (Students comprise a lar) Tj ET Q q 0 0 0 rg BT 165.41 653.10 Td (ge portion of our consumer base. Many of these students depend on government and private ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 641.10 Td (funding, in the form of loans or grants, to pay for their education. Many of these programs are highly regulated and subject to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 629.10 Td (frequent and substantial changes. ) Tj ET Q q 0 0 0 rg BT 189.05 629.10 Td (W) Tj ET Q q 0 0 0 rg BT 198.09 629.10 Td (ithout suf) Tj ET Q q 0 0 0 rg BT 235.97 629.10 Td (ficient government-sponsored loan programs, some of these students may have ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 617.10 Td (to for) Tj ET Q q 0 0 0 rg BT 75.76 617.10 Td (go higher education opportunities. ) Tj ET Q q 0 0 0 rg BT 214.90 617.10 Td (As a result, any decreases or delays in government-sponsored student loans or grants ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 605.10 Td (could reduce enrollment and thereby lead to decreased demand for our products, negatively impacting our business.) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 516.90 605.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 587.10 Td (In addition, our library reference customers rely on various sources of governmental funding, primarily from state and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 575.10 Td (local governments, to purchase products and services we of) Tj ET Q q 0 0 0 rg BT 291.80 575.10 Td (fer) Tj ET Q q 0 0 0 rg BT 302.34 575.10 Td (. ) Tj ET Q q 0 0 0 rg BT 306.79 575.10 Td (Accordingly) Tj ET Q q 0 0 0 rg BT 356.13 575.10 Td (, any decreases or delays in government funding ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 563.10 Td (for libraries, decreases in budgets or changes in spending patterns could negatively impact our business, financial position ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 551.10 Td (and our results of operations.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 530.10 Td (Changes in U.S. federal, state and local or foreign tax law) Tj ET Q q 0 0 0 rg BT 292.81 530.10 Td (, interpretations of existing tax law) Tj ET Q q 0 0 0 rg BT 435.79 530.10 Td (, or adverse determinations ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 518.10 Td (by tax authorities, could significantly af) Tj ET Q q 0 0 0 rg BT 217.72 518.10 Td (fect the Company and its shareholders and af) Tj ET Q q 0 0 0 rg BT 404.49 518.10 Td (fect our financial condition or ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 506.10 Td (results of operations.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 485.10 Td (As a global company) Tj ET Q q 0 0 0 rg BT 156.05 485.10 Td (, we are subject to taxation at the federal, state and local levels in the U.S. and various other ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 473.10 Td (countries and jurisdictions. ) Tj ET Q q 0 0 0 rg BT 163.99 473.10 Td (As a result, our ef) Tj ET Q q 0 0 0 rg BT 235.17 473.10 Td (fective tax rate is derived from a combination of applicable tax rates in the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 461.10 Td (various places in which we operate. Our ef) Tj ET Q q 0 0 0 rg BT 224.86 461.10 Td (fective tax rate, however) Tj ET Q q 0 0 0 rg BT 323.30 461.10 Td (, may be dif) Tj ET Q q 0 0 0 rg BT 370.88 461.10 Td (ferent than experienced in the past due to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 449.10 Td (numerous factors, including tax reform, such as the recent ) Tj ET Q q 0 0 0 rg BT 288.46 449.10 Td (T) Tj ET Q q 0 0 0 rg BT 293.87 449.10 Td (ax ) Tj ET Q q 0 0 0 rg BT 305.26 449.10 Td (Act, changes in the mix of our profitability) Tj ET Q q 0 0 0 rg BT 476.24 449.10 Td (, the results of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 437.10 Td (examinations of our tax filings, and changes in accounting for income taxes.) Tj ET Q q 0 0 0 rg BT 361.14 437.10 Td (Any of these factors could cause us to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 425.10 Td (experience an ef) Tj ET Q q 0 0 0 rg BT 119.33 425.10 Td (fective tax rate significantly dif) Tj ET Q q 0 0 0 rg BT 244.65 425.10 Td (ferent from previous periods or our current expectations.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 404.10 Td (The specific impacts of the ) Tj ET Q q 0 0 0 rg BT 182.61 404.10 Td (T) Tj ET Q q 0 0 0 rg BT 188.02 404.10 Td (ax ) Tj ET Q q 0 0 0 rg BT 199.41 404.10 Td (Act, included among other things, \(1\) a corporate income tax rate reduction to 21%, \(2\) ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 392.10 Td (limitations of the tax deduction for interest expense to 30% of adjusted earnings, \(3\) limitations of the deduction for net ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 380.10 Td (operating losses to 80% of current year taxable income, \(4\) one time taxation of of) Tj ET Q q 0 0 0 rg BT 383.99 380.10 Td (fshore earnings, \(5\) potential elimination ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 368.10 Td (of U.S. tax on foreign earnings, \(6\) immediate deductions for certain new investments, \(7\) modifications and/or repeals of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 356.10 Td (many business deductions and credits and \(8\) putting into ef) Tj ET Q q 0 0 0 rg BT 294.61 356.10 Td (fect the migration from a worldwide system of taxation to a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 344.10 Td (territorial system. Notwithstanding the reduction in the corporate income tax rate, the overall impact of the new federal tax ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 332.10 Td (law is uncertain and our business and financial condition could be adversely af) Tj ET Q q 0 0 0 rg BT 368.72 332.10 Td (fected. In addition, it is uncertain if and to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 320.10 Td (what extent various states will adjust their policies in response to the newly enacted federal tax law) Tj ET Q q 0 0 0 rg BT 449.89 320.10 Td (. ) Tj ET Q q 0 0 0 rg BT 454.71 320.10 Td (The impact of this tax ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 308.10 Td (reform on holders of our common stock is uncertain and could materially adversely af) Tj ET Q q 0 0 0 rg BT 397.88 308.10 Td (fect our business, financial condition ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 296.10 Td (and results of operations.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 275.10 Td (Our failure to win state adoptions could adversely af) Tj ET Q q 0 0 0 rg BT 269.38 275.10 Td (fect our revenue.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 254.10 Td (A) Tj ET Q q 0 0 0 rg BT 78.67 254.10 Td ( significant portion of our revenue is derived from sales ofK-12instructional materials pursuant to pre-determined ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 242.10 Td (adoption schedules and, in most states, legislative approval of funding for each adoption. Due to the revolving and staggered ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 230.10 Td (nature of state adoption schedules sales ofK-12 instructional materials have traditionally been cyclical, with some years ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 218.10 Td (of) Tj ET Q q 0 0 0 rg BT 62.15 218.10 Td (fering more sales opportunities than others. Precursory to the state board of education or other adopting authority's ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 206.10 Td (selection process of approving materials for the state-adopted list, investments are made to develop or modify instructional ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 194.10 Td (materials to meet the individual adoptions curriculum standards. If state funding is delayed or adoption cycles are canceled or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 182.10 Td (postponed our return on investment could be adversely af) Tj ET Q q 0 0 0 rg BT 283.76 182.10 Td (fected. ) Tj ET Q q 0 0 0 rg BT 312.63 182.10 Td (Additionally) Tj ET Q q 0 0 0 rg BT 362.53 182.10 Td (, in the adoption process for each state, our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 170.10 Td (instructional materials face exclusion from being on the state-adopted list and furthermore, even if our program is approved ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 158.10 Td (by the state, we face significant competition in the individual school districts selecting our program. Our failure to develop ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 146.10 Td (instructional materials that are selected for the state-adopted list, cancellation or postponement of adoptions, and changes in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 134.10 Td (state funding could materially and adversely af) Tj ET Q q 0 0 0 rg BT 241.53 134.10 Td (fect our sales revenue for the year of adoption and subsequent years. ) Tj ET Q endstream endobj 45 0 obj <> endobj 46 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 760.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 17 -) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 731.25 Td (Conducting and expanding our operations outside the United States involves special challenges that we may not be able to ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 719.25 Td (meet and that may adversely af) Tj ET Q q 0 0 0 rg BT 181.29 719.25 Td (fect our business.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 698.25 Td (While our primary markets are in the United States, we operate globally and have tar) Tj ET Q q 0 0 0 rg BT 411.42 698.25 Td (geted certain markets outside North ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 686.25 Td (America for continued growth. For the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 281.70 686.25 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 345.29 686.25 Td (, approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 410.55 686.25 Td (78%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 428.88 686.25 Td ( of our ) Tj ET Q q 0 0 0 rg BT 457.49 686.25 Td (Adjusted Revenues were ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 674.25 Td (from the United States and approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 223.96 674.25 Td (22%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 242.29 674.25 Td ( were from markets outside the United States. International operations and any ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 662.25 Td (foreign business expansion we may undertake present numerous risks, including: ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 643.05 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 643.05 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 643.05 Td (challenges in penetrating new markets due, in part, to established and entrenched competitors, ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 623.85 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 623.85 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 623.85 Td (challenges in developing products and services that are tailored to the needs of local customers, ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 604.65 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 604.65 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 604.65 Td (challenges in developing and delivering technological infrastructure required to service and support products in local ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 592.65 Td (markets ,) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 573.45 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 573.45 Td (customers in certain foreign countries may have longer payment cycles,) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 554.25 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 554.25 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 554.25 Td (limitations on the repatriation of funds to the United States,) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 535.05 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 535.05 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 535.05 Td (challenges in enforcing agreements and collecting receivables under certain foreign legal systems, ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 515.85 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 515.85 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 515.85 Td (lack of local acceptance or knowledge of our products and services, ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 496.65 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 496.65 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 496.65 Td (lack of recognition of our brands, ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 477.45 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 477.45 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 477.45 Td (unavailability of joint venture partners or local companies for acquisition, ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 458.25 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 458.25 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 458.25 Td (instability of international economies and governments, ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 439.05 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 439.05 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 439.05 Td (changes in legal, regulatory and tax requirements, ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 419.85 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 419.85 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 419.85 Td (exposure to varying legal standards, including intellectual property protection laws, in other jurisdictions,) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 400.65 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 400.65 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 400.65 Td (general economic and political conditions in the countries in which we operate, and) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 381.45 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 381.45 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 381.45 Td (changes in foreign governmental regulations or other governmental actions that would have a direct or indirect ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 369.45 Td (adverse impact on our business and market opportunities.) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 319.95 369.45 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 351.45 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 351.45 Td (e are also subject to the United States Foreign Corrupt Practices ) Tj ET Q q 0 0 0 rg BT 338.07 351.45 Td (Act and the United Kingdom ) Tj ET Q q 0 0 0 rg BT 456.11 351.45 Td (Anti-Bribery ) Tj ET Q q 0 0 0 rg BT 509.71 351.45 Td (Act of 2010 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 339.45 Td (\(the UK ) Tj ET Q q 0 0 0 rg BT 92.88 339.45 Td (Anti-Bribery ) Tj ET Q q 0 0 0 rg BT 146.48 339.45 Td (Act\), which generally prohibit companies and their intermediaries from making payments to foreign ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 327.45 Td (of) Tj ET Q q 0 0 0 rg BT 62.15 327.45 Td (ficials, and with respect to the UK ) Tj ET Q q 0 0 0 rg BT 201.00 327.45 Td (Anti-Bribery ) Tj ET Q q 0 0 0 rg BT 254.61 327.45 Td (Act, non-government persons as well, for the purpose of obtaining or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 315.45 Td (keeping business, and similar requirements in other jurisdictions. ) Tj ET Q q 0 0 0 rg BT 316.55 315.45 Td (The procedures we have in place that are designed to ensure ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 303.45 Td (our compliance with such laws may fail or may not protect us against liability as a result of actions that may be taken in the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 291.45 Td (future by our agents and other intermediaries, including those over whom we may have limited or no control. Our success ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 279.45 Td (will depend, in part, on our ability to anticipate and ef) Tj ET Q q 0 0 0 rg BT 269.31 279.45 Td (fectively manage these and other risks associated with our operations ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 267.45 Td (outside the United States.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 246.45 Td (Fluctuations between foreign currencies and the United States dollar could have an unfavorable impact on our financial ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 234.45 Td (results. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 213.45 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 213.45 Td (e derived approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 180.32 213.45 Td (22%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 198.65 213.45 Td ( of our ) Tj ET Q q 0 0 0 rg BT 227.26 213.45 Td (Adjusted Revenues during both the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 441.09 213.45 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 504.69 213.45 Td ( and 2018, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 201.45 Td (and approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 131.20 201.45 Td (20%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 149.53 201.45 Td ( during the fiscal year ended March 31, 2017 from our international operations. ) Tj ET Q q 0 0 0 rg BT 468.97 201.45 Td (The financial ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 189.45 Td (condition and results of operations of our international operations are primarily measured using the foreign currency in the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 177.45 Td (jurisdiction of operation of such business as the functional currency) Tj ET Q q 0 0 0 rg BT 324.11 177.45 Td (. ) Tj ET Q q 0 0 0 rg BT 328.56 177.45 Td (As a result, we are exposed to currency fluctuations both ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 165.45 Td (in receiving cash from our international operations and in translating our financial results back into United States dollars. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 153.45 Td (Assets and liabilities of our international operations are translated at the exchange rate in ef) Tj ET Q q 0 0 0 rg BT 419.24 153.45 Td (fect at each balance sheet date. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 141.45 Td (Our income statement accounts are translated at the average rate of exchange during the period. ) Tj ET Q q 0 0 0 rg BT 438.28 141.45 Td (A) Tj ET Q q 0 0 0 rg BT 444.95 141.45 Td ( strengthening of the United ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 129.45 Td (States dollar against the relevant foreign currency reduces the amount of income we recognize from our international ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 117.45 Td (operations.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 99.45 Td (In addition, certain of our international operations generate a portion of their revenues in the applicable local currency or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 87.45 Td (in currencies other than the United States dollar) Tj ET Q q 0 0 0 rg BT 244.37 87.45 Td (, but purchase inventory and incur costs primarily in United States dollars or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 75.45 Td (currencies whose exchange rates are mechanically tied to the value of the United States dollar) Tj ET Q q 0 0 0 rg BT 428.85 75.45 Td (. ) Tj ET Q q 0 0 0 rg BT 433.67 75.45 Td (The results of our international ) Tj ET Q endstream endobj 47 0 obj <> endobj 48 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 760.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 18 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 731.10 Td (operations may be adversely af) Tj ET Q q 0 0 0 rg BT 178.21 731.10 Td (fected by an increase in the value of the United States dollar and we may experience ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (transactional gains or losses because of volatility in foreign currency exchange rates.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 701.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 701.10 Td (e cannot predict the ef) Tj ET Q q 0 0 0 rg BT 169.30 701.10 Td (fects of further exchange rate fluctuations on our future operating results. ) Tj ET Q q 0 0 0 rg BT 464.19 701.10 Td (As exchange rates ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 689.10 Td (vary) Tj ET Q q 0 0 0 rg BT 71.12 689.10 Td (, our results of operations and profitability may be materially adversely impacted. ) Tj ET Q q 0 0 0 rg BT 399.73 689.10 Td (The risks we face in foreign currency ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 677.10 Td (transactions and translation may continue to increase as we further develop and expand our international operations, which ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 665.10 Td (could adversely af) Tj ET Q q 0 0 0 rg BT 127.12 665.10 Td (fect our business, financial condition and results of operations.) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 377.61 665.10 Td ( ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 644.10 Td (Our revenues and operating results are seasonal and fluctuate on a quarterly basis. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 623.10 Td (Our business is seasonal. For the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 275.84 623.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 339.44 623.10 Td (, we derived approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 451.34 623.10 Td (58.6%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 477.17 623.10 Td ( of our ) Tj ET Q q 0 0 0 rg BT 505.78 623.10 Td (Adjusted ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 611.10 Td (Revenues and approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 172.57 611.10 Td (84.2%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 198.40 611.10 Td ( of our ) Tj ET Q q 0 0 0 rg BT 227.01 611.10 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 301.73 611.10 Td ( less Pre-Publication Costs in our second and fourth fiscal ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 599.10 Td (quarters, which coincide with the academic calendar) Tj ET Q q 0 0 0 rg BT 263.07 599.10 Td (. ) Tj ET Q q 0 0 0 rg BT 267.89 599.10 Td (This seasonality af) Tj ET Q q 0 0 0 rg BT 342.69 599.10 Td (fects our working capital requirements and hence our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 587.10 Td (overall financing needs. For example, we typically incur a net cash deficit from all of our activities in the first and fourth ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 575.10 Td (fiscal quarters of our fiscal year) Tj ET Q q 0 0 0 rg BT 180.48 575.10 Td (, which ends on March 31. If these seasonal fluctuations are greater than anticipated, our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 563.10 Td (business, financial condition and results of operations may be adversely af) Tj ET Q q 0 0 0 rg BT 351.24 563.10 Td (fected. ) Tj ET Q q 0 0 0 rg BT 380.11 563.10 Td (As we continue to migrate our product and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 551.10 Td (service of) Tj ET Q q 0 0 0 rg BT 92.96 551.10 Td (ferings towards hosted digital solutions that are delivered over a period of time, the associated revenues will be ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 539.10 Td (deferred and recognized ratably over the applicable subscription period. ) Tj ET Q q 0 0 0 rg BT 343.70 539.10 Td (W) Tj ET Q q 0 0 0 rg BT 352.74 539.10 Td (ith the growth of digital products, accelerated with ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 527.10 Td (the launch of Cengage Unlimited in fiscal year 2019 of) Tj ET Q q 0 0 0 rg BT 274.03 527.10 Td (fering 4 month, 12 month, and 24 month subscriptions, we expect our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 515.10 Td (revenue will be recognized over longer periods corresponding to the longer subscription periods. ) Tj ET Q q 0 0 0 rg BT 443.15 515.10 Td (This represents a change ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 503.10 Td (from traditional print products where revenues are typically recognized upon shipment of the materials to our customer) Tj ET Q q 0 0 0 rg BT 529.96 503.10 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 491.10 Td (Consequently) Tj ET Q q 0 0 0 rg BT 108.35 491.10 Td (, reported revenues may not be comparable to prior periods as a growing proportion of our revenues are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 479.10 Td (deferred and recognized in subsequent periods. In addition, changes in our customers) Tj ET Q q 0 0 0 rg BT 397.32 479.10 Td ( ordering patterns may impact the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 467.10 Td (comparison of our results in a quarter with the same quarter of the previous year) Tj ET Q q 0 0 0 rg BT 374.61 467.10 Td (, in a quarter with the consecutive quarter or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 455.10 Td (in a fiscal year with the prior fiscal year) Tj ET Q q 0 0 0 rg BT 212.82 455.10 Td (. ) Tj ET Q q 0 0 0 rg BT 217.27 455.10 Td (As a result of Cengage Unlimited we expect an increase in direct to student sales and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 443.10 Td (a shift in the timing of sales closer to the start of the semester) Tj ET Q q 0 0 0 rg BT 298.81 443.10 Td (, which can result in sales shifting quarters compared to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 431.10 Td (historical quarterly sales. ) Tj ET Q q 0 0 0 rg BT 156.56 431.10 Td (The results of a quarter may be materially impacted as our customers may shift the timing of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 419.10 Td (material orders for a number of reasons, including, but not limited to, changes in academic semester start dates and changes ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 407.10 Td (in their inventory levels and inventory management practices. ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 389.10 Td (If we cannot successfully implement our business strategy) Tj ET Q q 0 0 0 rg BT 292.25 389.10 Td (, then our business, financial condition and results of ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 377.10 Td (operations could be materially adversely af) Tj ET Q q 0 0 0 rg BT 230.18 377.10 Td (fected.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 359.10 Td (Our ability to successfully implement our business strategy is subject to a number of risks, many of which are beyond ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 347.10 Td (our control, including: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 329.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 329.10 Td (rising development costs due to customers) Tj ET Q q 0 0 0 rg BT 262.28 329.10 Td ( requirements for more customized instructional materials and assessment ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 317.10 Td (programs) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 127.77 317.10 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 299.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 299.10 Td (higher technology and process costs due to increased external cybersecurity threats and increased customer privacy ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 287.10 Td (expectations,) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 269.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 269.10 Td (rising advances for popular authors and industry pressures to maintain competitive retail pricing,) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 249.90 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 249.90 Td (a material increase in product returns or in certain production costs, ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 230.70 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 230.70 Td (regulatory pressure on textbook prices, ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 211.50 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 211.50 Td (increased rental of new and used print books,) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 192.30 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 192.30 Td (industry acceptance of new technology products, including online or computer) Tj ET Q q 0 0 0 rg BT 404.15 192.30 Td (-based learning, ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 173.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 173.10 Td (higher education enrollment trends,) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 153.90 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 153.90 Td (changing demographics and preferences of college students and professors that may af) Tj ET Q q 0 0 0 rg BT 436.08 153.90 Td (fect product of) Tj ET Q q 0 0 0 rg BT 494.77 153.90 Td (ferings and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 141.90 Td (revenues, and) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 123.90 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 123.90 Td (consolidation in the retail and wholesale book industry) Tj ET Q q 0 0 0 rg BT 308.47 123.90 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 105.90 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 105.90 Td (e may not be able to successfully implement our business strategy and, even if successfully implemented, our strategy ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 93.90 Td (may not improve our operating results. In addition, we may decide to alter or discontinue aspects of our business strategy and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 81.90 Td (may adopt alternative or additional strategies due to business or competitive factors or factors not currently expected, such as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 69.90 Td (unforeseen costs and expenses or events beyond our control. If we are unable to successfully implement our business ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 57.90 Td (strategy) Tj ET Q q 0 0 0 rg BT 85.01 57.90 Td (, our business, financial condition and results of operations could be adversely af) Tj ET Q q 0 0 0 rg BT 408.07 57.90 Td (fected. ) Tj ET Q endstream endobj 49 0 obj <> endobj 50 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 760.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 19 -) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 731.25 Td (If we are unable to identify) Tj ET Q q 0 0 0 rg BT 165.01 731.25 Td (, complete and successfully integrate acquisitions, our ability to grow our business may be ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 719.25 Td (limited and our business, financial condition and results of operations may be adversely impacted. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 698.25 Td (Our acquisition strategy involves a number of risks, including:) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 322.23 698.25 Td ( ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 679.05 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 679.05 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 679.05 Td (our ability to find suitable businesses to acquire at af) Tj ET Q q 0 0 0 rg BT 300.60 679.05 Td (fordable valuations or on other acceptable terms, ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 659.85 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 659.85 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 659.85 Td (competition for acquisition tar) Tj ET Q q 0 0 0 rg BT 211.18 659.85 Td (gets may lead to higher purchase prices or one of our competitors acquiring one of our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 647.85 Td (acquisition tar) Tj ET Q q 0 0 0 rg BT 146.75 647.85 Td (gets, ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 628.65 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 628.65 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 628.65 Td (prohibition of any of our proposed acquisitions under United States or foreign antitrust laws, ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 609.45 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 609.45 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 609.45 Td (the diversion of management) Tj ET Q q 0 0 0 rg BT 209.13 609.45 Td (s attention from existing operations to the integration of acquired companies, ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 590.25 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 590.25 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 590.25 Td (our inability to realize expected cost savings and syner) Tj ET Q q 0 0 0 rg BT 308.64 590.25 Td (gies, ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 571.05 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 571.05 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 571.05 Td (expenses, delays and dif) Tj ET Q q 0 0 0 rg BT 187.01 571.05 Td (ficulties of integrating acquired businesses into our existing business structure,) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 551.85 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 551.85 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 551.85 Td (privacy) Tj ET Q q 0 0 0 rg BT 119.34 551.85 Td (, security) Tj ET Q q 0 0 0 rg BT 155.34 551.85 Td (, or compliance risks that exist in the acquired business, and) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 532.65 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 532.65 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 532.65 Td (dif) Tj ET Q q 0 0 0 rg BT 100.93 532.65 Td (ficulty in retaining key customers and management personnel.) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 349.74 532.65 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 514.65 Td (If we are unable to continue to acquire and ef) Tj ET Q q 0 0 0 rg BT 253.12 514.65 Td (ficiently integrate suitable acquisition candidates, our ability to increase ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 502.65 Td (revenues and fully implement our business strategy may be adversely impacted, which could adversely af) Tj ET Q q 0 0 0 rg BT 476.19 502.65 Td (fect our business, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 490.65 Td (financial condition and results of operations.) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 232.29 490.65 Td ( ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 469.65 Td (The announcement and pendency of the merger with McGraw-Hill could adversely af) Tj ET Q q 0 0 0 rg BT 406.86 469.65 Td (fect our business, results of ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 457.65 Td (operations and financial conditions.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 436.65 Td (On May 1, 2019, we entered into a definitive agreement with McGraw-Hill, pursuant to which, at the Ef) Tj ET Q q 0 0 0 rg BT 488.65 436.65 Td (fective ) Tj ET Q q 0 0 0 rg BT 518.17 436.65 Td (T) Tj ET Q q 0 0 0 rg BT 523.92 436.65 Td (ime and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 424.65 Td (subject to the terms and conditions of the Mer) Tj ET Q q 0 0 0 rg BT 237.67 424.65 Td (ger ) Tj ET Q q 0 0 0 rg BT 252.38 424.65 Td (Agreement, our Company and McGraw-Hill will combine in a mer) Tj ET Q q 0 0 0 rg BT 524.90 424.65 Td (ger of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 412.65 Td (equals transaction and our stockholders will receive shares of capital stock representing exactly 50% of the issued and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 400.65 Td (outstanding shares of voting common stock of the combined company) Tj ET Q q 0 0 0 rg BT 334.13 400.65 Td (. ) Tj ET Q q 0 0 0 rg BT 338.95 400.65 Td (W) Tj ET Q q 0 0 0 rg BT 347.59 400.65 Td (e have agreed to operate our business in the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 388.65 Td (ordinary course during the period between the execution of the Mer) Tj ET Q q 0 0 0 rg BT 324.28 388.65 Td (ger ) Tj ET Q q 0 0 0 rg BT 339.00 388.65 Td (Agreement and the Ef) Tj ET Q q 0 0 0 rg BT 426.83 388.65 Td (fective ) Tj ET Q q 0 0 0 rg BT 456.35 388.65 Td (T) Tj ET Q q 0 0 0 rg BT 462.11 388.65 Td (ime, subject to certain ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 376.65 Td (agreed exceptions. Completion of the Mer) Tj ET Q q 0 0 0 rg BT 222.66 376.65 Td (ger is subject to certain conditions, including receipt of regulatory approvals. ) Tj ET Q q 0 0 0 rg BT 532.66 376.65 Td (There ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 364.65 Td (are numerous risks related to the Mer) Tj ET Q q 0 0 0 rg BT 203.21 364.65 Td (ger) Tj ET Q q 0 0 0 rg BT 215.58 364.65 Td (, including the following: ) Tj ET Q BT /F6 11.00 Tf ET q 0 0 0 rg BT 72.00 345.45 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 345.45 Td (various conditions to the closing of the Mer) Tj ET Q q 0 0 0 rg BT 264.51 345.45 Td (ger may not be satisfied or waived in a timely manner) Tj ET Q q 0 0 0 rg BT 479.60 345.45 Td (, or not at all) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 530.42 345.45 Td (, ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 326.25 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 326.25 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 326.25 Td (potential customer deferral or reconsideration of adoption and purchasing decisions,) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 308.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 308.25 Td (lawsuits may be filed against us challenging the Mer) Tj ET Q q 0 0 0 rg BT 300.32 308.25 Td (ger) Tj ET Q q 0 0 0 rg BT 312.69 308.25 Td (, and an adverse ruling may delay the Mer) Tj ET Q q 0 0 0 rg BT 481.06 308.25 Td (ger or prevent it ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 296.25 Td (from being completed, ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 277.05 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 277.05 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 277.05 Td (our ability to attract, recruit, retain and motivate current and prospective employees may be adversely af) Tj ET Q q 0 0 0 rg BT 506.60 277.05 Td (fected, ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 257.85 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 257.85 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 257.85 Td (the attention of our employees and management may be diverted due to activities related to the Mer) Tj ET Q q 0 0 0 rg BT 488.57 257.85 Td (ger) Tj ET Q q 0 0 0 rg BT 500.94 257.85 Td (, and) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 238.65 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 238.65 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 238.65 Td (the Mer) Tj ET Q q 0 0 0 rg BT 121.20 238.65 Td (ger ) Tj ET Q q 0 0 0 rg BT 135.91 238.65 Td (Agreement restricts us from engaging in certain actions without McGraw-Hill's approval, which may ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 226.65 Td (restrict our ability to respond ef) Tj ET Q q 0 0 0 rg BT 216.17 226.65 Td (fectively to competitive pressures, industry developments and future opportunities ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 214.65 Td (and may otherwise adversely af) Tj ET Q q 0 0 0 rg BT 216.44 214.65 Td (fect our business, results of operations and financial condition.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 196.65 Td (In addition, we have incurred, and will continue to incur) Tj ET Q q 0 0 0 rg BT 296.81 196.65 Td (, significant costs, expenses and fees for professional services ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 184.65 Td (and other transaction costs in connection with the Mer) Tj ET Q q 0 0 0 rg BT 270.98 184.65 Td (ger) Tj ET Q q 0 0 0 rg BT 283.35 184.65 Td (, and these fees and costs are payable by us regardless of whether ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 172.65 Td (the Mer) Tj ET Q q 0 0 0 rg BT 85.20 172.65 Td (ger is completed. ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 151.65 Td (Our business relies on our hosting facilities and electronic delivery systems and any failures or disruptions may adversely ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 139.65 Td (af) Tj ET Q q 0 0 0 rg BT 62.15 139.65 Td (fect our ability to serve our customers. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 118.65 Td (As we continue to drive our digital business, our dependence on the capacity) Tj ET Q q 0 0 0 rg BT 378.21 118.65 Td (, reliability and security of our hosting ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 106.65 Td (facilities and electronic delivery systems to provide our online library reference materials and other online products to our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 94.65 Td (customers continues to grow) Tj ET Q q 0 0 0 rg BT 168.05 94.65 Td (. Certain events, such as loss of service from third parties, operational failures, sabotage, break-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 82.65 Td (ins, and similar disruptions from unauthorized tampering or hacking, human error) Tj ET Q q 0 0 0 rg BT 380.74 82.65 Td (, national disasters, power loss, or computer ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 70.65 Td (viruses, could cause our electronic delivery systems to operate slowly or interrupt their availability for periods of time. ) Tj ET Q q 0 0 0 rg BT 530.53 70.65 Td (Any ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 58.65 Td (back-up systems or facilities we maintain may also experience interruptions and loss of service. ) Tj ET Q q 0 0 0 rg BT 438.98 58.65 Td (W) Tj ET Q q 0 0 0 rg BT 447.62 58.65 Td (e do not have a back-up ) Tj ET Q endstream endobj 51 0 obj <> endobj 52 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 760.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 20 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 731.10 Td (facility for some of our online products. If disruptions, failures or slowdowns of our facilities, electronic delivery systems, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (back-up systems or facilities occur) Tj ET Q q 0 0 0 rg BT 192.44 719.10 Td (, our ability to distribute our products and services ef) Tj ET Q q 0 0 0 rg BT 403.88 719.10 Td (fectively and to serve our customers ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 707.10 Td (may be adversely af) Tj ET Q q 0 0 0 rg BT 134.06 707.10 Td (fected and we may experience loss of revenues and harm to our reputations, resulting in loss of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 695.10 Td (customers. ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 674.10 Td (W) Tj ET Q q 0 0 0 rg BT 62.15 674.10 Td (e have made, and may be required to make in the future, substantial investments in our technology infrastructure. If we ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 662.10 Td (do not make such investments or do not ef) Tj ET Q q 0 0 0 rg BT 227.16 662.10 Td (fectively make such investments, our business, financial condition and results of ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 650.10 Td (operations may be materially adversely af) Tj ET Q q 0 0 0 rg BT 224.62 650.10 Td (fected.) Tj ET Q BT /F8 10.00 Tf ET q 0 0 0 rg BT 251.54 650.10 Td ( ) Tj ET Q BT /F6 10.00 Tf ET q 0 0 0 rg BT 254.32 650.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 629.10 Td (The method of delivering our products is subject to technological change. Over the past several years, we have made ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 617.10 Td (significant investments in technology) Tj ET Q q 0 0 0 rg BT 203.05 617.10 Td (, including spending on computer hardware, software, electronic systems, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 605.10 Td (telecommunications infrastructure and digitization of our content. ) Tj ET Q q 0 0 0 rg BT 319.29 605.10 Td (W) Tj ET Q q 0 0 0 rg BT 327.93 605.10 Td (e expect our investment in technology to continue at ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 593.10 Td (significant levels. If we do not make such investments or do not ef) Tj ET Q q 0 0 0 rg BT 319.59 593.10 Td (fectively make such investments, our business, financial ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 581.10 Td (condition and results of operations may be materially adversely af) Tj ET Q q 0 0 0 rg BT 317.90 581.10 Td (fected. In addition, we cannot predict whether ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 569.10 Td (technological innovations will, in the future, make some of our products, particularly those printed in traditional formats, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 557.10 Td (wholly or partially obsolete. If we are unable to identify) Tj ET Q q 0 0 0 rg BT 277.17 557.10 Td (, develop and successfully integrate such technological innovations, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 545.10 Td (or our competitors are able to better integrate such technological innovations, we may not be able to ef) Tj ET Q q 0 0 0 rg BT 464.23 545.10 Td (fectively compete, and, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 533.10 Td (therefore, we may experience a loss in sales or we may be required to invest additional significant resources to further adapt ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 521.10 Td (to the changing competitive environment.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 500.10 Td (In addition, without continued investment in our technology) Tj ET Q q 0 0 0 rg BT 311.87 500.10 Td (, we have increased risk of cybersecurity incident af) Tj ET Q q 0 0 0 rg BT 519.65 500.10 Td (fecting ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 488.10 Td (the confidentiality of data we have collected about students, the availability of our systems for use by students, and the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 476.10 Td (integrity of the content and student data, such as test or assignment results. ) Tj ET Q q 0 0 0 rg BT 355.14 476.10 Td (This could lead to erosion of confidence in our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 464.10 Td (digital of) Tj ET Q q 0 0 0 rg BT 90.20 464.10 Td (ferings, and a loss in sales. ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 443.10 Td (T) Tj ET Q q 0 0 0 rg BT 59.19 443.10 Td (echnology failure could result in liability) Tj ET Q q 0 0 0 rg BT 226.88 443.10 Td (, loss of revenue and reputational harm.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 425.10 Td (T) Tj ET Q q 0 0 0 rg BT 77.41 425.10 Td (echnology failure may lead to service disruption for our digital solutions and may result from failure in end-user ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 413.10 Td (software functionality) Tj ET Q q 0 0 0 rg BT 141.38 413.10 Td (, hosting and/or business system infrastructure, and connectivity) Tj ET Q q 0 0 0 rg BT 397.62 413.10 Td (.) Tj ET Q q 0 0 0 rg BT 402.44 413.10 Td (T) Tj ET Q q 0 0 0 rg BT 407.85 413.10 Td (o meet the demand for innovation ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 401.10 Td (and for us to maintain our competitive advantage in the rapidly changing digital industry) Tj ET Q q 0 0 0 rg BT 407.98 401.10 Td (, we generally deliver and launch ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 389.10 Td (products more quickly) Tj ET Q q 0 0 0 rg BT 143.33 389.10 Td (, which may increase the risks of defects that only become apparent after product launch.Prolonged ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 377.10 Td (remediation periods or digital product performance issues may result in liability) Tj ET Q q 0 0 0 rg BT 372.71 377.10 Td (, loss of revenue and reputational harm. ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 356.10 Td (A) Tj ET Q q 0 0 0 rg BT 60.12 356.10 Td ( security breach or cyberattack involving our technology infrastructure, our products and services, or our customers) Tj ET Q q 0 0 0 rg BT 540.22 356.10 Td ( ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 344.10 Td (credit and debit card and private data could subject us to material claims and additional costs and could harm our ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 332.10 Td (reputation.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 311.10 Td (Our customers rely on our products and services to collect, secure, store and transmit confidential information. In ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 299.10 Td (relation to our credit card sales, we transmit and store confidential credit and debit card information. ) Tj ET Q q 0 0 0 rg BT 457.56 299.10 Td (W) Tj ET Q q 0 0 0 rg BT 466.20 299.10 Td (e are driving more ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 287.10 Td (digital usage resulting in further exposure of our technology infrastructure due to an increased userbase. In relation to our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 275.10 Td (credit card sales, we transmit and store confidential credit and debit card information. ) Tj ET Q q 0 0 0 rg BT 398.41 275.10 Td (W) Tj ET Q q 0 0 0 rg BT 407.05 275.10 Td (e also have access to, collect or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 263.10 Td (maintain private or confidential information regarding our customers, employees, and our business. Our customers rely on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 251.10 Td (the data in our systems being secured from exposure and protected from manipulation. ) Tj ET Q q 0 0 0 rg BT 402.61 251.10 Td (The complexity of our information ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 239.10 Td (technology systems makes them vulnerable to a cyberattack, malicious intrusion, and other significant disruptions. Our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 227.10 Td (information systems require an ongoing commitment of significant resources to maintain, protect, and enhance existing ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 215.10 Td (systems and develop new systems that meet our customer's needs while also providing security) Tj ET Q q 0 0 0 rg BT 433.69 215.10 Td (, privacy) Tj ET Q q 0 0 0 rg BT 468.02 215.10 Td (, and compliance with ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 203.10 Td (ever) Tj ET Q q 0 0 0 rg BT 71.01 203.10 Td (-changing threats, regulatory landscape, and customer patterns. ) Tj ET Q q 0 0 0 rg BT 325.73 203.10 Td (Third party cyberattacks, malicious intrusions, physical ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 191.10 Td (or electronic, or other significant disruptions could lead to interruptions and delays in customer processing, loss of data, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 179.10 Td (manipulation of data. ) Tj ET Q q 0 0 0 rg BT 141.20 179.10 Td (Any such event for which we are, or perceived to be, responsible, in whole or in part, could subject us ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 167.10 Td (to claims that could harm our reputation and result in significant costs to defend, settle or satisfy) Tj ET Q q 0 0 0 rg BT 438.54 167.10 Td (. ) Tj ET Q q 0 0 0 rg BT 442.98 167.10 Td (Any imposition of liability) Tj ET Q q 0 0 0 rg BT 549.28 167.10 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 155.10 Td (particularly liability that is not covered by insurance or is in excess of insurance coverage, could materially harm our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 143.10 Td (operating results. ) Tj ET Q q 0 0 0 rg BT 125.19 143.10 Td (W) Tj ET Q q 0 0 0 rg BT 133.83 143.10 Td (e might be required to expend significant financial and other resources to protect against further security ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 131.10 Td (breaches or improve our technology infrastructure against further security related incidents. ) Tj ET Q q 0 0 0 rg BT 422.20 131.10 Td (As cybersecurity related incidents ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 119.10 Td (continue to evolve, and regulatory focus on these issues continues to expand, additional investments may be required.) Tj ET Q endstream endobj 53 0 obj <> endobj 54 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 760.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 21 -) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 731.25 Td (If we do not adequately manage and develop our operational and managerial systems and processes, our ability to manage ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 719.25 Td (and grow our business may be harmed. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 698.25 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 698.25 Td (e need to continue to improve existing and implement new operational and managerial systems to manage our business ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 686.25 Td (ef) Tj ET Q q 0 0 0 rg BT 61.59 686.25 Td (fectively) Tj ET Q q 0 0 0 rg BT 95.92 686.25 Td (. ) Tj ET Q q 0 0 0 rg BT 100.37 686.25 Td (Any delay in the implementation of, or disruption in the transition to, our new or enhanced systems, could ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 674.25 Td (adversely af) Tj ET Q q 0 0 0 rg BT 102.40 674.25 Td (fect our business, financial condition and results of operations.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 653.25 Td (Failure to comply with privacy laws may cause financial loss and reputational damage.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 632.25 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 632.25 Td (e are subject to a wide array of dif) Tj ET Q q 0 0 0 rg BT 217.06 632.25 Td (ferent privacy laws, regulations and standards in the United States and in foreign ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 620.25 Td (jurisdictions where we conduct business. Our failure to comply with applicable privacy laws, regulations and standards could ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 608.25 Td (lead to significant reputational damage and other penalties and costs, including loss of revenue. Our brand and customer trust ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 596.25 Td (are critical assets for our Company) Tj ET Q q 0 0 0 rg BT 193.02 596.25 Td (. In the event of negative publicity regarding our adherence to applicable privacy laws, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 584.25 Td (regulations, and standards, whether valid or not valid, the resulting reputational damage could reduce demand for our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 572.25 Td (products and adversely af) Tj ET Q q 0 0 0 rg BT 156.28 572.25 Td (fect our relationship with teachers, educators and institutions. ) Tj ET Q q 0 0 0 rg BT 404.37 572.25 Td (This reaction may have an immediate ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 560.25 Td (and/or long term impact on both new and renewed sales, and may lead to short and/or long term revenue loss.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 539.25 Td (Our intellectual property and proprietary rights may not be adequately protected under current laws which could harm ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 527.25 Td (our competitive position and materially adversely af) Tj ET Q q 0 0 0 rg BT 266.57 527.25 Td (fect our business, financial condition and results of operations. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 506.25 Td (Our success depends, in part, on our proprietary content. Our products are lar) Tj ET Q q 0 0 0 rg BT 380.89 506.25 Td (gely comprised of intellectual property ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 494.25 Td (content delivered through a variety of media, including textbooks, digital learning solutions and the Internet. ) Tj ET Q q 0 0 0 rg BT 490.37 494.25 Td (W) Tj ET Q q 0 0 0 rg BT 499.01 494.25 Td (e rely on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 482.25 Td (copyright, trademark and other intellectual property laws to establish and protect our proprietary rights in these products. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 470.25 Td (However) Tj ET Q q 0 0 0 rg BT 90.25 470.25 Td (, our proprietary rights may be challenged, invalidated or circumvented. Our intellectual property rights in the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 458.25 Td (United States, the primary jurisdiction in which we conduct business, are well-established. However) Tj ET Q q 0 0 0 rg BT 454.89 458.25 Td (, we also conduct ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 446.25 Td (business in other countries, such as China and India, where the extent of ef) Tj ET Q q 0 0 0 rg BT 352.90 446.25 Td (fective legal protection for intellectual property ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 434.25 Td (rights is uncertain, and this uncertainty could af) Tj ET Q q 0 0 0 rg BT 244.32 434.25 Td (fect our current performance and future growth. Moreover) Tj ET Q q 0 0 0 rg BT 477.15 434.25 Td (, despite copyright ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 422.25 Td (and trademark protection, third parties may be able to copy) Tj ET Q q 0 0 0 rg BT 289.93 422.25 Td (, infringe, illegally distribute, import or resell or otherwise profit ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 410.25 Td (from our proprietary rights without our authorization. ) Tj ET Q q 0 0 0 rg BT 270.44 410.25 Td (These unauthorized activities may be more easily facilitated by the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 398.25 Td (Internet. In addition, the lack of Internet-specific legislation relating to intellectual property protection creates an additional ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 386.25 Td (challenge for us in protecting our proprietary rights relating to our online business processes and other digital technology ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 374.25 Td (rights. ) Tj ET Q q 0 0 0 rg BT 81.60 374.25 Td (The steps taken by us to protect our proprietary information may not be adequate to prevent misappropriation of our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 362.25 Td (content or technology) Tj ET Q q 0 0 0 rg BT 140.55 362.25 Td (. In addition, our proprietary rights may not be adequately protected because: ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 343.05 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 343.05 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 343.05 Td (people may not be deterred from misappropriating our technologies despite the existence of laws or contracts ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 331.05 Td (prohibiting it, ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 311.85 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 311.85 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 311.85 Td (policing unauthorized use of our intellectual property can be dif) Tj ET Q q 0 0 0 rg BT 345.01 311.85 Td (ficult, expensive and time-consuming \(which may ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 299.85 Td (divert our management from implementing our business strategy\), and we may be unable to determine the extent of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 287.85 Td (any unauthorized use, and ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 268.65 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 268.65 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 268.65 Td (the laws of other countries in which we may market our products may of) Tj ET Q q 0 0 0 rg BT 380.57 268.65 Td (fer little or no ef) Tj ET Q q 0 0 0 rg BT 445.92 268.65 Td (fective protection for our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 256.65 Td (proprietary technologies. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 238.65 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 238.65 Td (e may also be required to initiate expensive and time-consuming litigation to defend our intellectual property or to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 226.65 Td (maintain our intellectual property) Tj ET Q q 0 0 0 rg BT 187.47 226.65 Td (. If there is an increase in the scale of unauthorized copying and redistribution of our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 214.65 Td (products, or if we are unable to adequately protect and enforce our intellectual property rights, it would adversely impact our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 202.65 Td (product sales and reduce our revenue, thereby adversely af) Tj ET Q q 0 0 0 rg BT 288.43 202.65 Td (fecting our results of operations and financial condition, as well as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 190.65 Td (our competitive position.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 169.65 Td (W) Tj ET Q q 0 0 0 rg BT 62.15 169.65 Td (e may face intellectual property infringement claims that could be time-consuming and costly to defend and could result ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 157.65 Td (in our loss of significant rights.) Tj ET Q BT /F8 10.00 Tf ET q 0 0 0 rg BT 183.48 157.65 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 136.65 Td (Litigation regarding copyrights and other intellectual property rights is extensive in the publishing industry , including ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 124.65 Td (claims involving the terms by which photographs and other content are licensed to us for inclusion in our textbooks and other ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 112.65 Td (products. ) Tj ET Q q 0 0 0 rg BT 93.26 112.65 Td (W) Tj ET Q q 0 0 0 rg BT 101.90 112.65 Td (e may be subject to such claims in the future. Our third-party suppliers may also become subject to infringement ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 100.65 Td (claims, which in turn could negatively impact our business. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 82.65 Td (Litigation is expensive and time-consuming and could divert management) Tj ET Q q 0 0 0 rg BT 371.37 82.65 Td (s attention from our business and could have ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 70.65 Td (an adverse ef) Tj ET Q q 0 0 0 rg BT 106.56 70.65 Td (fect on our business, financial condition and results of operations. If there is a successful claim of infringement ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 58.65 Td (against us, our customers or our third-party intellectual property providers, we may be required to pay substantial damages to ) Tj ET Q endstream endobj 55 0 obj <> endobj 56 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 760.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 22 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 731.10 Td (the party claiming infringement, stop selling products or using technology that contains the allegedly infringing intellectual ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (property) Tj ET Q q 0 0 0 rg BT 87.23 719.10 Td (, or enter into royalty or license agreements that may not be available on acceptable terms, if at all. ) Tj ET Q q 0 0 0 rg BT 483.74 719.10 Td (All of these ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 707.10 Td (requirements could damage our business. ) Tj ET Q q 0 0 0 rg BT 221.55 707.10 Td (W) Tj ET Q q 0 0 0 rg BT 230.19 707.10 Td (e may have to develop non-infringing technology and our failure in doing so or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 695.10 Td (obtaining licenses to the proprietary rights on a reasonable or timely basis could have an adverse ef) Tj ET Q q 0 0 0 rg BT 450.36 695.10 Td (fect on our business, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 683.10 Td (financial condition and results of operations. ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 662.10 Td (Disputes with our customers regarding infringement and piracy of intellectual property may result in a material adverse ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 650.10 Td (ef) Tj ET Q q 0 0 0 rg BT 61.59 650.10 Td (fect on our results of operations.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 632.10 Td (In connection with defending our intellectual property rights and combating piracy) Tj ET Q q 0 0 0 rg BT 402.36 632.10 Td (, we may have disputes with our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 620.10 Td (customers which may require us to institute expensive and time consuming litigation. ) Tj ET Q q 0 0 0 rg BT 397.92 620.10 Td (These disputes could divert our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 608.10 Td (management's attention, lead to counter claims, and could result in loss of business from these and other customers, which ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 596.10 Td (may have a material adverse ef) Tj ET Q q 0 0 0 rg BT 177.92 596.10 Td (fect on our consolidated results of operations.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 575.10 Td (W) Tj ET Q q 0 0 0 rg BT 62.15 575.10 Td (e continue to be controlled by ) Tj ET Q q 0 0 0 rg BT 185.66 575.10 Td (Apax Partners, L.P) Tj ET Q q 0 0 0 rg BT 263.81 575.10 Td (., KKR ) Tj ET Q q 0 0 0 rg BT 293.45 575.10 Td (Asset Management, and Searchlight Capital Partners \(together) Tj ET Q q 0 0 0 rg BT 552.65 575.10 Td (, ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 563.10 Td (the Principal Equityholders\), and the interests of the Principal Equityholders may conflict with the interests of other ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 551.10 Td (stockholders.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 530.10 Td (The Principal Equityholders control CL) Tj ET Q q 0 0 0 rg BT 230.49 530.10 Td ( Holdings II, Inc. and representatives of the Principal Equityholders comprise a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 518.10 Td (majority of our directors. ) Tj ET Q q 0 0 0 rg BT 156.48 518.10 Td (As a result, the Principal Equityholders can control our ability to enter into significant corporate ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 506.10 Td (transactions such as mer) Tj ET Q q 0 0 0 rg BT 151.29 506.10 Td (gers, tender of) Tj ET Q q 0 0 0 rg BT 208.58 506.10 Td (fers and the sale of all or substantially all of our assets. ) Tj ET Q q 0 0 0 rg BT 430.29 506.10 Td (The interests of the Principal ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 494.10 Td (Equityholders and their respective af) Tj ET Q q 0 0 0 rg BT 200.99 494.10 Td (filiates could conflict with or dif) Tj ET Q q 0 0 0 rg BT 330.49 494.10 Td (fer from the interests of our other stockholders. For ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 482.10 Td (example, the concentration of ownership held by the Principal Equityholders could delay) Tj ET Q q 0 0 0 rg BT 409.36 482.10 Td (, defer or prevent a change of control ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 470.10 Td (of our company or impede a mer) Tj ET Q q 0 0 0 rg BT 184.88 470.10 Td (ger) Tj ET Q q 0 0 0 rg BT 197.25 470.10 Td (, takeover or other business combination which may otherwise be favorable for us. If we ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 458.10 Td (encounter financial dif) Tj ET Q q 0 0 0 rg BT 144.33 458.10 Td (ficulties or are unable to pay our debts as they mature, the interests of the Principal Equityholders and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 446.10 Td (certain of their respective af) Tj ET Q q 0 0 0 rg BT 165.98 446.10 Td (filiates as equityholders might conflict with the interests of holders of our debt. ) Tj ET Q q 0 0 0 rg BT 484.62 446.10 Td (The Principal ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 434.10 Td (Equityholders may also have an interest in pursuing acquisitions, divestitures, financings or other transactions that, in their ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 422.10 Td (judgment, could enhance their equity investments, even though such transactions might involve risks to holders of our debt.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 404.10 Td (Additionally) Tj ET Q q 0 0 0 rg BT 121.90 404.10 Td (, our Principal Equityholders are in the business of making investments in companies and may) Tj ET Q q 0 0 0 rg BT 498.68 404.10 Td (, from time to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 392.10 Td (time, acquire and hold interests in businesses that compete, directly or indirectly with us. ) Tj ET Q q 0 0 0 rg BT 411.79 392.10 Td (The Principal Equityholders may ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 380.10 Td (also pursue acquisition opportunities that may be complementary to our business, and as a result, those acquisition ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 368.10 Td (opportunities may not be available to us. So long as Principal Equityholders continue to indirectly own a significant amount ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 356.10 Td (of our equity) Tj ET Q q 0 0 0 rg BT 105.01 356.10 Td (, even if such amount is less than 50%, they will continue to be able to substantially influence or ef) Tj ET Q q 0 0 0 rg BT 500.56 356.10 Td (fectively ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 344.10 Td (control our ability to enter into corporate transactions.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 323.10 Td (W) Tj ET Q q 0 0 0 rg BT 62.15 323.10 Td (e could incur impairment charges for goodwill, long-lived assets, and identifiable intangible assets) Tj ET Q BT /F8 10.00 Tf ET q 0 0 0 rg BT 466.61 323.10 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 302.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 96.44 302.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 160.04 302.10 Td (, we had goodwill of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 245.03 302.10 Td ($1,629.1 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 311.42 302.10 Td ( and identifiable intangible assets, net, of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 477.76 302.10 Td ($912.7 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.65 302.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 290.10 Td (included on our consolidated balance sheet. On an annual basis and on the occurrence of certain events, we are required to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 278.10 Td (perform impairment tests on our goodwill. ) Tj ET Q q 0 0 0 rg BT 226.29 278.10 Td (W) Tj ET Q q 0 0 0 rg BT 234.93 278.10 Td (e test the carrying value of goodwill for impairment at a reporting unit level. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 266.10 Td (Prior to January 1, 2017, we tested the carrying value of goodwill for impairment using a two-step approach. For impairment ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 254.10 Td (tests to be performed after January 1, 2017, we early adopted the guidance issued in January 2017 by the Financial ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 242.10 Td (Accounting Standards Board \(F) Tj ET Q q 0 0 0 rg BT 184.62 242.10 Td (ASB\), which simplifies accounting for goodwill impairment and removes the second step ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 230.10 Td (of the goodwill impairment test, which required a hypothetical purchase price allocation, as described above. ) Tj ET Q q 0 0 0 rg BT 491.63 230.10 Td (A) Tj ET Q q 0 0 0 rg BT 498.30 230.10 Td ( goodwill ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 218.10 Td (impairment is now the amount by which a reporting unit) Tj ET Q q 0 0 0 rg BT 282.57 218.10 Td (s carrying value exceeds its fair value, not to exceed the carrying ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 206.10 Td (amount of goodwill. For the fiscal year ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 212.85 206.10 Td (2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 232.85 206.10 Td ( annual impairment test, we concluded the fair values of all of our reporting units ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 194.10 Td (exceeded their respective carrying values.During the fourth quarter of fiscal year 2019, subsequent to the completion of the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 182.10 Td (annual impairment test of goodwill, the Company identified two new operating segments based on newly available discrete ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 170.10 Td (financial information. ) Tj ET Q q 0 0 0 rg BT 143.51 170.10 Td (The two new operating segments are Higher Ed \(representing the academic and skills markets\) and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 158.10 Td (School, whom together comprises the Learning reportable segment. ) Tj ET Q q 0 0 0 rg BT 326.71 158.10 Td (As a result, an additional impairment test was completed ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 146.10 Td (on the new reporting units and we concluded the fair values of these two reporting units exceeded their respective carrying ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 134.10 Td (values. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 116.10 Td (The estimated fair value of our School reporting unit exceeded its carrying value by 4.0% and had $238.1 million of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 104.10 Td (goodwill as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 113.72 104.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 177.32 104.10 Td (. ) Tj ET Q q 0 0 0 rg BT 182.13 104.10 Td (The significant assumptions used in the discounted cash flow analysis include: revenue and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 92.10 Td (revenue growth, selling mar) Tj ET Q q 0 0 0 rg BT 166.01 92.10 Td (gins, other operating expenditures, projected capital expenditures, the discount rate used to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 80.10 Td (present value future cash flows and terminal growth rates. ) Tj ET Q q 0 0 0 rg BT 288.18 80.10 Td (The Company performed a sensitivity analysis of its significant ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 68.10 Td (assumptions used to determine the fair value of the School reporting unit and determined that a more than nominal change to ) Tj ET Q endstream endobj 57 0 obj <> endobj 58 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 760.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 23 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 731.10 Td (its significant assumptions would impact its conclusion. If actual results dif) Tj ET Q q 0 0 0 rg BT 355.16 731.10 Td (fer from the projections and assumptions used in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (the calculation of the School reporting unit fair value, we could be required to record future non-cash impairment char) Tj ET Q q 0 0 0 rg BT 526.70 719.10 Td (ges. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 701.10 Td (In addition, we review the carrying values of long-lived assets for impairment whenever events or changes in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 689.10 Td (circumstances indicate that their carrying amounts of the lowest level asset grouping may not be recoverable. Our initial test ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 677.10 Td (for impairment compares the asset carrying amounts with the sum of undiscounted cash flows related to that asset grouping. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 665.10 Td (If the carrying value is greater than the undiscounted cash flows of the asset, the individual assets are required to be written ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 653.10 Td (down to its estimated fair value. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 635.10 Td (If expectations for revenues and cash flows decline or if industry conditions deteriorate, we may not be able to realize the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 623.10 Td (carrying values of our goodwill and long-lived assets and could be required to record future char) Tj ET Q q 0 0 0 rg BT 440.08 623.10 Td (ges for impairment. In ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 611.10 Td (addition, future acquisitions may not be as successful as originally anticipated and may result in impairment char) Tj ET Q q 0 0 0 rg BT 505.64 611.10 Td (ges, which ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 599.10 Td (could adversely impact our business, financial condition and results of operations.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 578.10 Td (There are risks associated with our indebtedness.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 557.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 96.44 557.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 160.04 557.10 Td (, we had senior notes and a senior secured term loan with aggregate principal balances of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 518.52 557.10 Td ($620.0 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 545.10 Td (million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 82.89 545.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 102.33 545.10 Td ($1,663.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 168.72 545.10 Td (, respectively) Tj ET Q q 0 0 0 rg BT 221.38 545.10 Td (, excluding amortization of fees and discount. ) Tj ET Q q 0 0 0 rg BT 406.43 545.10 Td (W) Tj ET Q q 0 0 0 rg BT 415.06 545.10 Td (e also have an asset backed ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 533.10 Td (revolving credit facility with a maximum availability of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 279.49 533.10 Td ($250.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 338.38 533.10 Td (. ) Tj ET Q q 0 0 0 rg BT 342.83 533.10 Td (A) Tj ET Q q 0 0 0 rg BT 349.31 533.10 Td (vailability is recalculated monthly and equals the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 521.10 Td (sum of eligible accounts receivable and inventory) Tj ET Q q 0 0 0 rg BT 252.17 521.10 Td (, as defined in the asset based revolving credit facility agreement. ) Tj ET Q q 0 0 0 rg BT 515.68 521.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 509.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 117.60 509.10 Td (, we had ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 153.70 509.10 Td ($103.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 212.59 509.10 Td ( of availability) Tj ET Q q 0 0 0 rg BT 270.25 509.10 Td (, net of letters of credit. ) Tj ET Q q 0 0 0 rg BT 365.78 509.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 390.22 509.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 453.82 509.10 Td (, no borrowings were ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 497.10 Td (outstanding under this revolving credit facility) Tj ET Q q 0 0 0 rg BT 239.14 497.10 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 479.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 479.10 Td (e may incur additional indebtedness in the future, including under our revolving credit facility or through of) Tj ET Q q 0 0 0 rg BT 511.73 479.10 Td (ferings of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 467.10 Td (debt securities. Our outstanding indebtedness and any additional indebtedness we incur may have significant consequences, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 455.10 Td (including, without limitation, any of the following: ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 435.90 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 435.90 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 435.90 Td (we will be required to use cash reserves to pay the principal of and interest on our indebtedness;) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 416.70 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 416.70 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 416.70 Td (our indebtedness and leverage may increase our vulnerability to adverse changes in general economic and industry ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 404.70 Td (conditions, as well as to competitive pressure;) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 385.50 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 385.50 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 385.50 Td (adverse changes in the ratings assigned to our debt securities by credit rating agencies will likely increase our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 373.50 Td (borrowing costs on refinanced or new debt; ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 354.30 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 354.30 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 354.30 Td (our ability to obtain additional financing for working capital, capital expenditures, acquisitions or for general ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 342.30 Td (corporate and other purposes may be limited; and) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 323.10 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 323.10 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 323.10 Td (our flexibility in planning for) Tj ET Q q 0 0 0 rg BT 206.80 323.10 Td (, or reacting to, changes in our business and our industry may be limited.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 305.10 Td (Our ability to make payments of principal and interest on our indebtedness depends upon our future performance, which ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 293.10 Td (will be subject to general economic conditions, industry cycles and financial, business and other factors af) Tj ET Q q 0 0 0 rg BT 478.41 293.10 Td (fecting our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 281.10 Td (consolidated results of operations and financial condition, many of which are beyond our control. If we are unable to generate ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 269.10 Td (suf) Tj ET Q q 0 0 0 rg BT 66.04 269.10 Td (ficient cash flow from operations in the future to service our debt, we may be required to, among other things: ) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 249.90 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 249.90 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 249.90 Td (repatriate funds to the United States at potentially substantial tax cost;) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 230.70 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 230.70 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 230.70 Td (seek additional financing in the debt markets;) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 211.50 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 211.50 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 211.50 Td (refinance or restructure all or a portion of our indebtedness;) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 192.30 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 192.30 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 192.30 Td (sell selected assets; or) Tj ET Q BT /F1 11.00 Tf ET q 0 0 0 rg BT 72.00 173.10 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.85 173.10 Td ( ) Tj ET Q q 0 0 0 rg BT 90.00 173.10 Td (reduce or delay planned capital or operating expenditures.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 155.10 Td (Such measures might not be suf) Tj ET Q q 0 0 0 rg BT 199.30 155.10 Td (ficient to enable us to service our debt. Our failure to satisfy our obligations under the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 143.10 Td (agreements governing our indebtedness could result in an event of default, which could permit our secured lenders to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 131.10 Td (foreclose on our assets and stock securing such indebtedness. In addition, any such financing, refinancing or sale of assets ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 119.10 Td (might not be available on economically favorable terms or at all.) Tj ET Q endstream endobj 59 0 obj <> endobj 60 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 760.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 24 -) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 731.25 Td (Our internal controls over financial reporting are comparable but not identical to the requirements under the Sarbanes-) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 719.25 Td (Oxley ) Tj ET Q q 0 0 0 rg BT 80.01 719.25 Td (Act of 2002.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 698.25 Td (Because we are not a public company) Tj ET Q q 0 0 0 rg BT 222.40 698.25 Td (, we are not subject to the Sarbanes-Oxley ) Tj ET Q q 0 0 0 rg BT 393.18 698.25 Td (Act of 2002, which requires public ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 686.25 Td (companies to have and maintain ef) Tj ET Q q 0 0 0 rg BT 192.94 686.25 Td (fective disclosure controls and procedures to ensure timely disclosure of material ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 674.25 Td (information, and have management review the ef) Tj ET Q q 0 0 0 rg BT 250.13 674.25 Td (fectiveness of those controls on a quarterly basis. ) Tj ET Q q 0 0 0 rg BT 449.06 674.25 Td (The Sarbanes-Oxley ) Tj ET Q q 0 0 0 rg BT 532.92 674.25 Td (Act ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 662.25 Td (also generally requires public companies to have and maintain ef) Tj ET Q q 0 0 0 rg BT 313.45 662.25 Td (fective internal controls over financial reporting to provide ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 650.25 Td (reasonable assurance regarding the reliability of financial reporting and preparation of financial statements, and have ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 638.25 Td (management review the ef) Tj ET Q q 0 0 0 rg BT 159.60 638.25 Td (fectiveness of those controls on an annual basis \(and have the independent auditor attest to the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 626.25 Td (ef) Tj ET Q q 0 0 0 rg BT 61.59 626.25 Td (fectiveness of such internal controls\). ) Tj ET Q q 0 0 0 rg BT 213.58 626.25 Td (W) Tj ET Q q 0 0 0 rg BT 222.22 626.25 Td (e are not required to comply with these requirements and therefore we may not ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 614.25 Td (have procedures in place at all or that are as ef) Tj ET Q q 0 0 0 rg BT 239.28 614.25 Td (fective as those maintained by public companies.) Tj ET Q endstream endobj 61 0 obj <> endobj 62 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 760.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 25 -) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 274.20 731.25 Td (PROPER) Tj ET Q q 0 0 0 rg BT 314.96 731.25 Td (TIES) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.00 707.25 Td (Our principal executive of) Tj ET Q q 0 0 0 rg BT 178.05 707.25 Td (fice is currently located at 20 Channel Center Street, Boston, MA) Tj ET Q q 0 0 0 rg BT 439.10 707.25 Td ( and we expect to move to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 695.25 Td (our new location at 200 Pier Four Boulevard, Boston, MA) Tj ET Q q 0 0 0 rg BT 286.48 695.25 Td ( by the end of the first quarter of fiscal year 2020. ) Tj ET Q q 0 0 0 rg BT 487.61 695.25 Td (The following ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 683.25 Td (table describes our principal physical owned and leased properties as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 343.07 683.25 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 406.67 683.25 Td (, including the approximate space, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 671.25 Td (principal uses and lease expiration dates. ) Tj ET Q q 0 0 0 rg BT 219.60 671.25 Td (W) Tj ET Q q 0 0 0 rg BT 228.23 671.25 Td (e believe that these properties are suitable and adequate for our present and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 659.25 Td (anticipated business needs, satisfactory for the uses to which each is put, and, in general, fully utilized.) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 53.5 607.75 m 212.5 607.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 212.5 607.75 m 312.5 607.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 312.5 607.75 m 385.5 607.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 385.5 607.75 m 487.5 607.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 607.75 m 557.5 607.75 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 56.00 612.20 Td (Location) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 228.30 630.20 Td (Owned or) Tj ET Q q 0 0 0 rg BT 266.39 630.20 Td ( Leased) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 229.60 621.20 Td (\(Expiration Date) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 242.85 612.20 Td (of Leases\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 323.05 621.20 Td (Appr) Tj ET Q q 0 0 0 rg BT 343.39 621.20 Td (oximate) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 325.45 612.20 Td (Squar) Tj ET Q q 0 0 0 rg BT 348.80 612.20 Td (e Feet) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 392.85 612.20 Td (Principal Use of Space) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 505.50 612.20 Td (Segment) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 597.42 Td (Andover) Tj ET Q q 0 0 0 rg BT 90.79 597.42 Td (, England) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 241.70 597.42 Td (4/20/2091) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 332.25 597.42 Td (160,000) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 399.80 597.42 Td (W) Tj ET Q q 0 0 0 rg BT 408.84 597.42 Td (arehouse/Of) Tj ET Q q 0 0 0 rg BT 457.21 597.42 Td (fice) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 496.45 597.42 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 582.42 Td (Boston, Massachusetts ) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 149.61 586.95 Td (\(1\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 239.40 582.42 Td (1) Tj ET Q q 0 0 0 rg BT 244.21 582.42 Td (1/30/2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 332.25 582.42 Td (141,482) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.30 582.42 Td (Of) Tj ET Q q 0 0 0 rg BT 433.76 582.42 Td (fice) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 503.95 582.42 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 567.42 Td (Boston, Massachusetts) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 239.40 567.42 Td (1) Tj ET Q q 0 0 0 rg BT 244.21 567.42 Td (1/30/2029) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 332.25 567.42 Td (1) Tj ET Q q 0 0 0 rg BT 337.25 567.42 Td (17,820) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.30 567.42 Td (Of) Tj ET Q q 0 0 0 rg BT 433.76 567.42 Td (fice) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 503.95 567.42 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 552.42 Td (Chicago, Illinois) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 241.70 552.42 Td (8/31/2020) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 334.75 552.42 Td (29,595) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.30 552.42 Td (Of) Tj ET Q q 0 0 0 rg BT 433.76 552.42 Td (fice) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 512.55 552.42 Td (Gale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 537.42 Td (Clifton Park, New ) Tj ET Q q 0 0 0 rg BT 131.36 537.42 Td (Y) Tj ET Q q 0 0 0 rg BT 137.90 537.42 Td (ork) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 239.20 537.42 Td (12/31/2021) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 334.75 537.42 Td (92,745) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.30 537.42 Td (Of) Tj ET Q q 0 0 0 rg BT 433.76 537.42 Td (fice) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 503.95 537.42 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 522.42 Td (Farmington Hills, Michigan) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 247.55 522.42 Td (Owned) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 332.25 522.42 Td (158,364) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.30 522.42 Td (Of) Tj ET Q q 0 0 0 rg BT 433.76 522.42 Td (fice) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 512.55 522.42 Td (Gale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 507.42 Td (Independence, Kentucky) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 241.70 507.42 Td (9/30/2024) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 332.25 507.42 Td (835,000) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 399.80 507.42 Td (W) Tj ET Q q 0 0 0 rg BT 408.84 507.42 Td (arehouse/Of) Tj ET Q q 0 0 0 rg BT 457.21 507.42 Td (fice) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 503.95 507.42 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 492.42 Td (Mason, Ohio) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 241.70 492.42 Td (7/31/2021) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 332.25 492.42 Td (160,069) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.30 492.42 Td (Of) Tj ET Q q 0 0 0 rg BT 433.76 492.42 Td (fice) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 503.95 492.42 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 477.42 Td (Melbourne, ) Tj ET Q q 0 0 0 rg BT 104.60 477.42 Td (Australia) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 241.70 477.42 Td (10/5/2022) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 334.75 477.42 Td (33,336) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.30 477.42 Td (Of) Tj ET Q q 0 0 0 rg BT 433.76 477.42 Td (fice) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 496.45 477.42 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 462.42 Td (Mexico City) Tj ET Q q 0 0 0 rg BT 105.95 462.42 Td (, Mexico) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 241.70 462.42 Td (3/31/2020) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 334.75 462.42 Td (37,975) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 413.90 462.42 Td (W) Tj ET Q q 0 0 0 rg BT 422.94 462.42 Td (arehouse) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 496.45 462.42 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 447.42 Td (Monterey) Tj ET Q q 0 0 0 rg BT 94.55 447.42 Td (, California) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 241.70 447.42 Td (2/29/2020) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 334.75 447.42 Td (23,735) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.30 447.42 Td (Of) Tj ET Q q 0 0 0 rg BT 433.76 447.42 Td (fice) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 503.95 447.42 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 432.42 Td (Raleigh, North Carolina) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 241.70 432.42 Td (4/15/2021) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 334.75 432.42 Td (34,015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.30 432.42 Td (Of) Tj ET Q q 0 0 0 rg BT 433.76 432.42 Td (fice) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 503.95 432.42 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 417.42 Td (San Francisco, California ) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 160.42 421.95 Td (\(2\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 241.70 417.42 Td (9/30/2027) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 334.75 417.42 Td (45,625) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.30 417.42 Td (Of) Tj ET Q q 0 0 0 rg BT 433.76 417.42 Td (fice) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 503.95 417.42 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 402.42 Td (Sao Paulo, Brazil) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 241.70 402.42 Td (3/31/2022) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 334.75 402.42 Td (18,522) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 413.90 402.42 Td (W) Tj ET Q q 0 0 0 rg BT 422.94 402.42 Td (arehouse) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 496.45 402.42 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 387.42 Td (Singapore, Singapore) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 239.20 387.42 Td (12/31/2020) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 334.75 387.42 Td (16,706) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.30 387.42 Td (Of) Tj ET Q q 0 0 0 rg BT 433.76 387.42 Td (fice) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 496.45 387.42 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 372.42 Td (T) Tj ET Q q 0 0 0 rg BT 61.76 372.42 Td (emecula, California) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 241.70 372.42 Td (2/28/2024) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 334.75 372.42 Td (19,486) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.30 372.42 Td (Of) Tj ET Q q 0 0 0 rg BT 433.76 372.42 Td (fice) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 503.95 372.42 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 357.42 Td (W) Tj ET Q q 0 0 0 rg BT 64.64 357.42 Td (ashington, D.C.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 241.70 357.42 Td (3/31/2024) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 334.75 357.42 Td (14,497) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.30 357.42 Td (Of) Tj ET Q q 0 0 0 rg BT 433.76 357.42 Td (fice) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 503.95 357.42 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 329.25 Td (In addition, we lease several other of) Tj ET Q q 0 0 0 rg BT 219.26 329.25 Td (fices that are not material to our operations.) Tj ET Q BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 304.53 Td (\(1\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 300.45 Td (During the third quarter of fiscal year 2018, we signed a 10-year lease for a new corporate headquarters, and we expect to vacate ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 289.65 Td (our current headquarters by the end of the first quarter of fiscal year 2020.) Tj ET Q BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 276.93 Td (\(2\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 272.85 Td (As part of our continued ef) Tj ET Q q 0 0 0 rg BT 187.06 272.85 Td (forts to streamline operations, we vacated the San Francisco of) Tj ET Q q 0 0 0 rg BT 412.82 272.85 Td (fice ef) Tj ET Q q 0 0 0 rg BT 435.39 272.85 Td (fective March 29, 2019.) Tj ET Q endstream endobj 63 0 obj <> endobj 64 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 760.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 26 -) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 250.80 731.25 Td (LEGAL) Tj ET Q q 0 0 0 rg BT 285.26 731.25 Td ( PROCEEDINGS) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 707.25 Td (From time to time we may become involved in various claims, disputes and legal or regulatory proceedings that arise in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 695.25 Td (the ordinary course of business and/or may be related to contractual or other obligations of ours. ) Tj ET Q q 0 0 0 rg BT 441.21 695.25 Td (W) Tj ET Q q 0 0 0 rg BT 449.84 695.25 Td (e assess our potential ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 683.25 Td (contingent and other liabilities by analyzing our claims, disputes and legal and regulatory matters using all available ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 671.25 Td (information. ) Tj ET Q q 0 0 0 rg BT 106.03 671.25 Td (W) Tj ET Q q 0 0 0 rg BT 114.67 671.25 Td (e also develop our views on estimated losses, if any) Tj ET Q q 0 0 0 rg BT 320.64 671.25 Td (, in consultation with our legal and other advisors. ) Tj ET Q q 0 0 0 rg BT 523.48 671.25 Td (W) Tj ET Q q 0 0 0 rg BT 532.12 671.25 Td (e ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 659.25 Td (determine whether a loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 647.25 Td (reasonably estimated. If the contingency is not probable or cannot be reasonably estimated, disclosure of the contingency ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 635.25 Td (shall be made when there is at least a reasonable possibility that a loss may have been incurred by us. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 617.25 Td ( ) Tj ET Q q 0 0 0 rg BT 72.00 617.25 Td (Adverse developments relating to claims, disputes and legal and regulatory proceedings in which we are or become ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 605.25 Td (involved could cause a change in our determination as to an unfavorable outcome and result in the need to recognize a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 593.25 Td (material accrual. Should any of these matters result in a final adverse judgment, settlement or other final resolution involving ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 581.25 Td (material amounts, it could have a material adverse ef) Tj ET Q q 0 0 0 rg BT 265.12 581.25 Td (fect on our financial condition, results of operations and/or cash flows.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 563.25 Td (Based on a review of the information available at this time, we do not expect that the total cost of resolving current ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 551.25 Td (claims, disputes and legal regulatory proceedings will have a material adverse ef) Tj ET Q q 0 0 0 rg BT 375.92 551.25 Td (fect on our consolidated financial condition, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 539.25 Td (results of operations or cash flows. For additional information, see Management) Tj ET Q q 0 0 0 rg BT 381.70 539.25 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 450.87 539.25 Td (Analysis of Financial ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 527.25 Td (Condition and Results of Operations and Note ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 245.91 527.25 Td (18) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 255.91 527.25 Td (, Commitments and Contingencies.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 224.50 503.25 Td (MARKET) Tj ET Q q 0 0 0 rg BT 269.32 503.25 Td ( FOR ) Tj ET Q q 0 0 0 rg BT 295.25 503.25 Td (THE ISSUERS EQUITY) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 479.25 Td (CL) Tj ET Q q 0 0 0 rg BT 84.41 479.25 Td ( Holdings II, Inc. shares of common stock are held by most of the Company) Tj ET Q q 0 0 0 rg BT 391.01 479.25 Td (s debt holders and is not traded on any ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 467.25 Td (publicly listed exchange. ) Tj ET Q q 0 0 0 rg BT 156.01 467.25 Td (W) Tj ET Q q 0 0 0 rg BT 164.65 467.25 Td (e are aware that some shareholders have engaged in private transactions as transferees of CL) Tj ET Q q 0 0 0 rg BT 534.67 467.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 455.25 Td (Holdings II, Inc. common stock and are required to become a party to the CL) Tj ET Q q 0 0 0 rg BT 362.42 455.25 Td ( Holdings II, Inc. Shareholder ) Tj ET Q q 0 0 0 rg BT 483.79 455.25 Td (Agreement by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 443.25 Td (submitting an executed joinder agreement to us. CL) Tj ET Q q 0 0 0 rg BT 260.80 443.25 Td ( Holdings II, Inc. has not issued certificates representing shares of our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 431.25 Td (common stock. Rather) Tj ET Q q 0 0 0 rg BT 143.86 431.25 Td (, we have retained Computershare, Inc. to serve as our transfer agent and to maintain our stock ledger ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 419.25 Td (in book entry form. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 401.25 Td (Dividends) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 380.25 Td (There were no dividends declared in the fiscal years ended March 31, 2019 and 2018. ) Tj ET Q q 0 0 0 rg BT 416.98 380.25 Td (W) Tj ET Q q 0 0 0 rg BT 425.61 380.25 Td (e may declare cash dividends in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 368.25 Td (the future.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 80.25 335.25 Td (CHANGES IN ) Tj ET Q q 0 0 0 rg BT 145.26 335.25 Td (AND DISAGREEMENT) Tj ET Q q 0 0 0 rg BT 251.49 335.25 Td ( ) Tj ET Q q 0 0 0 rg BT 253.80 335.25 Td (WITH ) Tj ET Q q 0 0 0 rg BT 284.09 335.25 Td (ACCOUNT) Tj ET Q q 0 0 0 rg BT 333.91 335.25 Td (ANTS ON ) Tj ET Q q 0 0 0 rg BT 380.03 335.25 Td (ACCOUNTING ) Tj ET Q q 0 0 0 rg BT 451.43 335.25 Td (AND FINANCIAL) Tj ET Q q 0 0 0 rg BT 531.71 335.25 Td ( ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 273.45 323.25 Td (DISCLOSURE) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 299.25 Td (None.) Tj ET Q endstream endobj 65 0 obj <> endobj 66 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 760.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 27 -) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 207.00 731.25 Td (DIRECT) Tj ET Q q 0 0 0 rg BT 245.72 731.25 Td (ORS ) Tj ET Q q 0 0 0 rg BT 268.23 731.25 Td (AND EXECUTIVE OFFICERS) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 53.5 694.75 m 182.5 694.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 182.5 694.75 m 234.5 694.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 234.5 694.75 m 557.5 694.75 l s BT /F2 10.00 Tf ET q 0 0 0 rg BT 62.00 699.43 Td (Name) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 198.15 699.48 Td (Age) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 243.00 699.43 Td (Position) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 678.87 Td (Michael E. Hansen) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 201.50 678.87 Td (58) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 243.00 678.87 Td (Chief Executive Of) Tj ET Q q 0 0 0 rg BT 320.66 678.87 Td (ficer and Director) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 658.32 Td (Kermit Cook) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 201.50 657.87 Td (41) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 243.00 657.42 Td (Director) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 637.32 Td (W) Tj ET Q q 0 0 0 rg BT 71.04 637.32 Td (ade Davis) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 201.50 636.87 Td (47) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 243.00 636.42 Td (Director) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 615.87 Td (John D. Dionne) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 201.50 615.87 Td (55) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 243.00 615.87 Td (Director) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 595.32 Td (Marcelo Gigliani) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 201.50 594.87 Td (44) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 243.00 594.42 Td (Director) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 574.32 Td (Richard Sarnof) Tj ET Q q 0 0 0 rg BT 122.73 574.32 Td (f) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 201.50 573.87 Td (60) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 243.00 573.42 Td (Director) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 552.87 Td (Eric Sondag) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 201.50 552.87 Td (44) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 243.00 552.87 Td (Chairman and Director) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 528.87 Td (Fernando Bleichmar) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 201.50 528.87 Td (42) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 243.00 532.32 Td (Executive ) Tj ET Q q 0 0 0 rg BT 285.39 532.32 Td (V) Tj ET Q q 0 0 0 rg BT 292.22 532.32 Td (ice President, General Manager) Tj ET Q q 0 0 0 rg BT 417.78 532.32 Td (, U.S Higher Education and) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 243.00 522.37 Td (Skills) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 504.87 Td (Alexander Broich) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 201.50 504.87 Td (54) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 243.00 504.87 Td (Executive ) Tj ET Q q 0 0 0 rg BT 285.39 504.87 Td (V) Tj ET Q q 0 0 0 rg BT 292.22 504.87 Td (ice President, President, Cengage Global Businesses) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 483.87 Td (Gary Fortier) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 201.50 483.87 Td (47) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 243.00 483.87 Td (Executive ) Tj ET Q q 0 0 0 rg BT 285.39 483.87 Td (V) Tj ET Q q 0 0 0 rg BT 292.22 483.87 Td (ice President, Chief People Of) Tj ET Q q 0 0 0 rg BT 413.19 483.87 Td (ficer) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 463.32 Td (Sharon Loeb) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 201.50 463.32 Td (49) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 243.00 462.42 Td (Executive ) Tj ET Q q 0 0 0 rg BT 285.39 462.42 Td (V) Tj ET Q q 0 0 0 rg BT 292.22 462.42 Td (ice President, Chief Marketing Of) Tj ET Q q 0 0 0 rg BT 427.63 462.42 Td (ficer) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 443.87 Td (T) Tj ET Q q 0 0 0 rg BT 67.76 443.87 Td (odd Markson) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 201.50 443.87 Td (43) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 243.00 443.87 Td (Executive ) Tj ET Q q 0 0 0 rg BT 285.39 443.87 Td (V) Tj ET Q q 0 0 0 rg BT 292.22 443.87 Td (ice President, Chief Strategy Of) Tj ET Q q 0 0 0 rg BT 419.30 443.87 Td (ficer) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 423.32 Td (Geor) Tj ET Q q 0 0 0 rg BT 81.81 423.32 Td (ge Moore) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 201.50 422.87 Td (47) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 243.00 422.42 Td (Executive ) Tj ET Q q 0 0 0 rg BT 285.30 422.42 Td (V) Tj ET Q q 0 0 0 rg BT 291.92 422.42 Td (ice President, Chief ) Tj ET Q q 0 0 0 rg BT 372.83 422.42 Td (T) Tj ET Q q 0 0 0 rg BT 378.24 422.42 Td (echnology Of) Tj ET Q q 0 0 0 rg BT 432.77 422.42 Td (ficer) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 401.87 Td (Bob Munro) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 201.50 401.87 Td (53) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 243.00 401.87 Td (Executive ) Tj ET Q q 0 0 0 rg BT 285.39 401.87 Td (V) Tj ET Q q 0 0 0 rg BT 292.22 401.87 Td (ice President, Chief Financial Of) Tj ET Q q 0 0 0 rg BT 423.18 401.87 Td (ficer) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 381.87 Td (Laura Stevens) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 201.50 381.87 Td (45) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 243.00 381.87 Td (Executive ) Tj ET Q q 0 0 0 rg BT 285.30 381.87 Td (V) Tj ET Q q 0 0 0 rg BT 291.92 381.87 Td (ice President, General Counsel) Tj ET Q BT /F1 10.00 Tf ET BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 356.25 Td (Dir) Tj ET Q q 0 0 0 rg BT 68.26 356.25 Td (ectors) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 335.25 Td (Michael E. Hansen) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 152.83 335.25 Td ( became Chief Executive Of) Tj ET Q q 0 0 0 rg BT 265.94 335.25 Td (ficer of Cengage in September of 2012 and has been a Director of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 323.25 Td (Cengage since March 2014. He oversees all aspects of the global business. Under Mr) Tj ET Q q 0 0 0 rg BT 394.19 323.25 Td (. Hansen's leadership, Cengage has ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 311.25 Td (transformed from a print publisher to a company which today is creating some of the most highly rated digital learning ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 299.25 Td (products and platforms. In addition, Cengage has transformed the textbook publishing industry by of) Tj ET Q q 0 0 0 rg BT 456.80 299.25 Td (fering an af) Tj ET Q q 0 0 0 rg BT 502.71 299.25 Td (fordable 'all ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 287.25 Td (you can learn' subscription model \(Cengage Unlimited\) to college students within the United States. He has deep experience ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 275.25 Td (in equipping or) Tj ET Q q 0 0 0 rg BT 114.92 275.25 Td (ganizations with the structure necessary to support this transformation. ) Tj ET Q q 0 0 0 rg BT 399.86 275.25 Td (A) Tj ET Q q 0 0 0 rg BT 406.53 275.25 Td ( thought leader in the information ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 263.25 Td (services sector) Tj ET Q q 0 0 0 rg BT 112.18 263.25 Td (, Mr) Tj ET Q q 0 0 0 rg BT 128.85 263.25 Td (. Hansen has an extensive track record in developing successful business models and high-performing ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 251.25 Td (executive teams. Prior to joining Cengage, Mr) Tj ET Q q 0 0 0 rg BT 238.40 251.25 Td (. Hansen served as CEO of Elsevier Health Sciences, a division of Reed ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 239.25 Td (Elsevier) Tj ET Q q 0 0 0 rg BT 86.21 239.25 Td (. During his tenure, he developed and implemented a successful print-to-digital transition and accelerated new ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 227.25 Td (electronic product development. Prior to Elsevier Health Sciences, Mr) Tj ET Q q 0 0 0 rg BT 334.47 227.25 Td (. Hansen served as President and CEO of Harcourt ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 215.25 Td (Assessment, an education arm of Reed Elsevier) Tj ET Q q 0 0 0 rg BT 243.67 215.25 Td (. Early in his career) Tj ET Q q 0 0 0 rg BT 321.29 215.25 Td (, Mr) Tj ET Q q 0 0 0 rg BT 337.96 215.25 Td (. Hansen was Executive ) Tj ET Q q 0 0 0 rg BT 435.80 215.25 Td (V) Tj ET Q q 0 0 0 rg BT 442.42 215.25 Td (ice President of Operational ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 203.25 Td (Excellence at Bertelsmann, a $20 billion global media company) Tj ET Q q 0 0 0 rg BT 309.10 203.25 Td (. Prior to that Mr) Tj ET Q q 0 0 0 rg BT 376.05 203.25 Td (. Hansen was the lead partner and Chairman ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 191.25 Td (of the digital conver) Tj ET Q q 0 0 0 rg BT 134.63 191.25 Td (gence practice at the Boston Consulting Group. In addition, Mr) Tj ET Q q 0 0 0 rg BT 387.08 191.25 Td (. Hansen is currently a Board Member at ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 179.25 Td (Johns Hopkins ) Tj ET Q q 0 0 0 rg BT 115.12 179.25 Td (American Institute for Contemporary German Studies \(AICGS\) and an ) Tj ET Q q 0 0 0 rg BT 400.89 179.25 Td (Advisor to ProPublica. Mr) Tj ET Q q 0 0 0 rg BT 506.45 179.25 Td (. Hansen ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 167.25 Td (holds a Master of Law degree from the University of Bonn in Germany and an MBA) Tj ET Q q 0 0 0 rg BT 393.09 167.25 Td ( from Columbia University in New ) Tj ET Q q 0 0 0 rg BT 535.47 167.25 Td (Y) Tj ET Q q 0 0 0 rg BT 541.70 167.25 Td (ork.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 149.25 Td (Kermit Cook ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 130.88 149.25 Td (has) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 144.21 156.18 382.97 -8.93 re f /GS0 gs q 0 0 0 rg BT 144.21 149.25 Td ( been a Director of Cengage since February 2018. Mr) Tj ET Q q 0 0 0 rg BT 357.47 149.25 Td (. Cook joined KKR Capstone in 2007 and ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 144.18 458.64 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 137.25 Td (currently serves as Co-Head of KKR Capstone in the ) Tj ET Q q 0 0 0 rg BT 268.12 137.25 Td (Americas, and is a member of KKR's Portfolio Management ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 132.18 483.66 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 125.25 Td (Committees for ) Tj ET Q q 0 0 0 rg BT 118.44 125.25 Td (Americas Private Equity and for Special Situations. Mr) Tj ET Q q 0 0 0 rg BT 338.95 125.25 Td (. Cook also leads KKR Capstone's value creation ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 120.18 490.80 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 113.25 Td (ef) Tj ET Q q 0 0 0 rg BT 61.59 113.25 Td (forts for KKR's special situations and credit investing platforms. ) Tj ET Q q 0 0 0 rg BT 321.50 113.25 Td (While at KKR Capstone, Mr) Tj ET Q q 0 0 0 rg BT 435.65 113.25 Td (. Cook has worked in New ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 108.18 482.14 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 101.25 Td (Y) Tj ET Q q 0 0 0 rg BT 60.22 101.25 Td (ork, Sydney) Tj ET Q q 0 0 0 rg BT 107.90 101.25 Td (, Hong Kong and Menlo Park. He was based in Hong Kong and Sydney for over five years as he helped to ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 96.18 480.96 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 89.25 Td (develop KKR Capstone in ) Tj ET Q q 0 0 0 rg BT 161.21 89.25 Td (Asia and ) Tj ET Q q 0 0 0 rg BT 198.43 89.25 Td (Australia. Mr) Tj ET Q q 0 0 0 rg BT 251.75 89.25 Td (. Cook has worked with numerous KKR portfolio companies globally) Tj ET Q q 0 0 0 rg BT 529.96 89.25 Td (, ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 84.18 486.28 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 77.25 Td (including GenesisCare, Sundrop Farms, Bis Industries, Unisteel, US Foods, Education Management, Chembulk ) Tj ET Q q 0 0 0 rg BT 503.77 77.25 Td (T) Tj ET Q q 0 0 0 rg BT 509.18 77.25 Td (ankers, ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 72.18 495.77 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 65.25 Td (Amedisys, and Cengage. Previously he worked for McKinsey & Company in Boston, and he taught high school physics in ) Tj ET Q endstream endobj 67 0 obj <> endobj 68 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 760.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 28 -) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 738.03 501.55 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 731.10 Td (St. Louis with ) Tj ET Q q 0 0 0 rg BT 112.72 731.10 Td (T) Tj ET Q q 0 0 0 rg BT 118.13 731.10 Td (each for ) Tj ET Q q 0 0 0 rg BT 152.55 731.10 Td (America. Mr) Tj ET Q q 0 0 0 rg BT 203.64 731.10 Td (. Cook holds a B.A) Tj ET Q q 0 0 0 rg BT 279.76 731.10 Td ( and B.E from Dartmouth College, and an M.B.A. and M.A) Tj ET Q q 0 0 0 rg BT 517.51 731.10 Td ( Ed from ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 726.03 362.32 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 719.10 Td (Stanford University) Tj ET Q q 0 0 0 rg BT 132.51 719.10 Td (, where he graduated as the Henry Ford Scholar of the business school.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 701.10 Td (W) Tj ET Q q 0 0 0 rg BT 81.45 701.10 Td (ade Davis) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 122.84 701.10 Td ( has been a Director of Cengage since March 2014. Mr) Tj ET Q q 0 0 0 rg BT 341.93 701.10 Td (. Davis is currently the Executive ) Tj ET Q q 0 0 0 rg BT 477.54 701.10 Td (V) Tj ET Q q 0 0 0 rg BT 484.16 701.10 Td (ice President and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 689.10 Td (Chief Financial Of) Tj ET Q q 0 0 0 rg BT 128.80 689.10 Td (ficer at ) Tj ET Q q 0 0 0 rg BT 159.15 689.10 Td (V) Tj ET Q q 0 0 0 rg BT 165.77 689.10 Td (iacom, Inc. He has represented ) Tj ET Q q 0 0 0 rg BT 291.37 689.10 Td (V) Tj ET Q q 0 0 0 rg BT 297.99 689.10 Td (iacom) Tj ET Q q 0 0 0 rg BT 325.20 689.10 Td (s interests on the Board of Directors of ) Tj ET Q q 0 0 0 rg BT 482.76 689.10 Td (V) Tj ET Q q 0 0 0 rg BT 489.38 689.10 Td (iacom18 \(India\), ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 677.10 Td (MTV) Tj ET Q q 0 0 0 rg BT 76.04 677.10 Td ( Italia, Bellator and Rhapsody Roku. Mr) Tj ET Q q 0 0 0 rg BT 236.57 677.10 Td (. Davis joined ) Tj ET Q q 0 0 0 rg BT 294.72 677.10 Td (V) Tj ET Q q 0 0 0 rg BT 301.34 677.10 Td (iacom in October 2005 and prior to his current role at the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 665.10 Td (company) Tj ET Q q 0 0 0 rg BT 90.01 665.10 Td (, served as Executive ) Tj ET Q q 0 0 0 rg BT 176.73 665.10 Td (V) Tj ET Q q 0 0 0 rg BT 183.36 665.10 Td (ice President of Strategy) Tj ET Q q 0 0 0 rg BT 280.73 665.10 Td (, Mer) Tj ET Q q 0 0 0 rg BT 302.21 665.10 Td (gers & ) Tj ET Q q 0 0 0 rg BT 331.10 665.10 Td (Acquisitions. Prior to joining ) Tj ET Q q 0 0 0 rg BT 450.09 665.10 Td (V) Tj ET Q q 0 0 0 rg BT 456.71 665.10 Td (iacom, from 2004 to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 653.10 Td (2005, Mr) Tj ET Q q 0 0 0 rg BT 90.67 653.10 Td (. Davis was the Co-Founder and Executive ) Tj ET Q q 0 0 0 rg BT 264.34 653.10 Td (V) Tj ET Q q 0 0 0 rg BT 270.96 653.10 Td (ice President of Operations at ) Tj ET Q q 0 0 0 rg BT 391.20 653.10 Td (America) Tj ET Q q 0 0 0 rg BT 428.40 653.10 Td (s Choice Inc., a provider of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 641.10 Td (research-based school instructional solutions. Mr) Tj ET Q q 0 0 0 rg BT 249.79 641.10 Td (. Davis also founded ) Tj ET Q q 0 0 0 rg BT 333.95 641.10 Td (AdvancePath, which operates in-school academies on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 629.10 Td (high school campuses. Mr) Tj ET Q q 0 0 0 rg BT 158.43 629.10 Td (. Davis holds degrees with distinction and honors in both Philosophy and Economics from ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 617.10 Td (W) Tj ET Q q 0 0 0 rg BT 63.04 617.10 Td (illiams College.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 599.10 Td (John D. Dionne) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 138.41 599.10 Td ( has been a Director of Cengage since March 2014. Mr) Tj ET Q q 0 0 0 rg BT 357.50 599.10 Td (. Dionne is a Senior ) Tj ET Q q 0 0 0 rg BT 438.60 599.10 Td (Advisor of Blackstone Group ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 587.10 Td (L.P) Tj ET Q q 0 0 0 rg BT 67.06 587.10 Td (. and a Senior Lecturer and member of the faculty with the Harvard Business School. He was most recently a Senior ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 575.10 Td (Managing Director at Blackstone and Global Head of its Private Equity Investor Relations and Business Development ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 563.10 Td (Groups. He also served as a member of Blackstone) Tj ET Q q 0 0 0 rg BT 260.88 563.10 Td (s Private Equity Investment and ) Tj ET Q q 0 0 0 rg BT 390.96 563.10 Td (V) Tj ET Q q 0 0 0 rg BT 397.07 563.10 Td (aluation Committees.Mr) Tj ET Q q 0 0 0 rg BT 496.78 563.10 Td (. Dionne ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 551.10 Td (originally joined Blackstone in 2004 as the Founder and Chief Investment Of) Tj ET Q q 0 0 0 rg BT 362.93 551.10 Td (ficer of the Blackstone Distressed Securities ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 539.10 Td (Fund, the firm) Tj ET Q q 0 0 0 rg BT 114.27 539.10 Td (s initial entry into the single-manager hedge fund practice, with peak assets under management of $2 billion. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 527.10 Td (During this period, he also served on the Investment Committees of Blackstone) Tj ET Q q 0 0 0 rg BT 374.49 527.10 Td (s GSO and Kalix investment businesses. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 515.10 Td (Before joining Blackstone, Mr) Tj ET Q q 0 0 0 rg BT 175.65 515.10 Td (. Dionne was for several years a Partner and Portfolio Manager for Bennett Restructuring ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 503.10 Td (Funds, specializing in investing in financially troubled companies. Mr) Tj ET Q q 0 0 0 rg BT 333.95 503.10 Td (. Dionne currently serves on the Board of Directors of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 491.10 Td (Pelmorex Media Inc., Caesar's Entertainment Corporation, and Clear Channel Outdoor Holdings, Inc. He is a Chartered ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 479.10 Td (Financial ) Tj ET Q q 0 0 0 rg BT 93.16 479.10 Td (Analyst and Certified Public ) Tj ET Q q 0 0 0 rg BT 209.25 479.10 Td (Accountant \(inactive\). Mr) Tj ET Q q 0 0 0 rg BT 312.83 479.10 Td (. Dionne is a graduate of the Harvard Business School and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 467.10 Td (the University of Scranton.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 449.10 Td (Mar) Tj ET Q q 0 0 0 rg BT 90.70 449.10 Td (celo Gigliani) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 144.30 449.10 Td ( has been a Director of Cengage since January 2016. Mr) Tj ET Q q 0 0 0 rg BT 368.40 449.10 Td (. Gigliani is an Equity Partner of ) Tj ET Q q 0 0 0 rg BT 500.60 449.10 Td (Apax Partners ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 437.10 Td (and Managing Partner of ) Tj ET Q q 0 0 0 rg BT 155.64 437.10 Td (Apax Digital, focusing on growth buyout and growth equity investments in leading internet, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 425.10 Td (enterprise software, and technology-enabled services companies worldwide. Since joining ) Tj ET Q q 0 0 0 rg BT 416.39 425.10 Td (Apax in 2001, Mr) Tj ET Q q 0 0 0 rg BT 487.50 425.10 Td (. Gigliani has ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 413.10 Td (both led and participated in a number of the ) Tj ET Q q 0 0 0 rg BT 230.89 413.10 Td (Apax funds' investments across ) Tj ET Q q 0 0 0 rg BT 359.16 413.10 Td (T) Tj ET Q q 0 0 0 rg BT 364.57 413.10 Td (echnology) Tj ET Q q 0 0 0 rg BT 405.57 413.10 Td (, Digital, Media, and Services sectors ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 401.10 Td (throughout North ) Tj ET Q q 0 0 0 rg BT 125.67 401.10 Td (America, Europe, and ) Tj ET Q q 0 0 0 rg BT 215.35 401.10 Td (Asia, including Cengage, idealista, ) Tj ET Q q 0 0 0 rg BT 357.08 401.10 Td (T) Tj ET Q q 0 0 0 rg BT 362.84 401.10 Td (rader Corporation \(AutoT) Tj ET Q q 0 0 0 rg BT 465.79 401.10 Td (rader Canada\), ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 389.10 Td (Dealer) Tj ET Q q 0 0 0 rg BT 80.09 389.10 Td (.com, Boats Group, Solita, So ) Tj ET Q q 0 0 0 rg BT 201.67 389.10 Td (Y) Tj ET Q q 0 0 0 rg BT 207.89 389.10 Td (oung, and ) Tj ET Q q 0 0 0 rg BT 249.64 389.10 Td (W) Tj ET Q q 0 0 0 rg BT 258.68 389.10 Td (izeline. Mr) Tj ET Q q 0 0 0 rg BT 302.00 389.10 Td (. Gigliani currently also serves on the board of directors of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 377.10 Td (Boats Group, idealista, Solita, SoY) Tj ET Q q 0 0 0 rg BT 193.27 377.10 Td (oung, and ) Tj ET Q q 0 0 0 rg BT 235.03 377.10 Td (W) Tj ET Q q 0 0 0 rg BT 244.06 377.10 Td (izeline.Prior to joining ) Tj ET Q q 0 0 0 rg BT 338.78 377.10 Td (Apax Partners, Mr) Tj ET Q q 0 0 0 rg BT 412.37 377.10 Td (. Gigliani was a consultant at ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 365.10 Td (Mercer Management Consulting \(now Oliver ) Tj ET Q q 0 0 0 rg BT 237.38 365.10 Td (W) Tj ET Q q 0 0 0 rg BT 246.22 365.10 Td (yman\), a global management consulting firm where he advised leading ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 353.10 Td (European Media and Communications Companies in digital acceleration matters. Mr) Tj ET Q q 0 0 0 rg BT 393.36 353.10 Td (. Gigliani received an MBA) Tj ET Q q 0 0 0 rg BT 504.16 353.10 Td ( from ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 341.10 Td (Harvard Business School and a BS in Business ) Tj ET Q q 0 0 0 rg BT 244.00 341.10 Td (Administration from Boston University) Tj ET Q q 0 0 0 rg BT 401.39 341.10 Td (.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 323.10 Td (Richard Sarnoff ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 144.22 323.10 Td (has been a Director of Cengage since March 2014.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 346.64 323.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 349.14 323.10 Td (Mr) Tj ET Q q 0 0 0 rg BT 360.81 323.10 Td (. Sarnof) Tj ET Q q 0 0 0 rg BT 392.29 323.10 Td (f is Chairman of Media, Entertainment, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 311.10 Td (and Education for KKR's Private Equity platform in the ) Tj ET Q q 0 0 0 rg BT 278.81 311.10 Td (Americas, and serves as a member of the ) Tj ET Q q 0 0 0 rg BT 444.96 311.10 Td (TMT) Tj ET Q q 0 0 0 rg BT 465.88 311.10 Td ( growth equity ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 299.10 Td (investment committee. From 2014 through 2017, he served as Managing Director and Head of the Media and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 287.10 Td (Communications industry group, leading investments in the Media, ) Tj ET Q q 0 0 0 rg BT 326.01 287.10 Td (T) Tj ET Q q 0 0 0 rg BT 331.42 287.10 Td (elecom, Information Services, Digital Media and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 275.10 Td (Education sectors in the US. Prior to this position, Mr) Tj ET Q q 0 0 0 rg BT 268.71 275.10 Td (. Sarnof) Tj ET Q q 0 0 0 rg BT 300.19 275.10 Td (f served as a Senior ) Tj ET Q q 0 0 0 rg BT 380.45 275.10 Td (Adviser to KKR, working closely with both ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 263.10 Td (investment teams and portfolio companies. Until 201) Tj ET Q q 0 0 0 rg BT 266.09 263.10 Td (1, Mr) Tj ET Q q 0 0 0 rg BT 287.76 263.10 Td (. Sarnof) Tj ET Q q 0 0 0 rg BT 319.24 263.10 Td (f was Co-Chairman of Bertelsmann, Inc., and President of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 251.10 Td (Bertelsmann Digital Media Investments \(BDMI\). ) Tj ET Q q 0 0 0 rg BT 253.41 251.10 Td (A) Tj ET Q q 0 0 0 rg BT 260.08 251.10 Td ( longstanding senior executive at Bertelsmann, Mr) Tj ET Q q 0 0 0 rg BT 461.42 251.10 Td (. Sarnof) Tj ET Q q 0 0 0 rg BT 492.90 251.10 Td (f served as CFO ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 239.10 Td (and EVP) Tj ET Q q 0 0 0 rg BT 89.46 239.10 Td ( of Random House beginning in) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 217.50 246.03 319.08 -9.09 re f /GS0 gs q 0 0 0 rg BT 217.50 239.10 Td ( 1998 and became the first U.S. executive to serve on the Supervisory Board of ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 234.03 480.19 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 227.10 Td (Bertelsmann ) Tj ET Q q 0 0 0 rg BT 106.49 227.10 Td (AG in 2002. Starting in 2006, he established and ran its corporate digital media investing arm, BDMI, and ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 222.03 500.46 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 215.10 Td (concurrently served as Chairman of the ) Tj ET Q q 0 0 0 rg BT 213.39 215.10 Td (Association of ) Tj ET Q q 0 0 0 rg BT 273.38 215.10 Td (American Publishers. He was named the publishing industry) Tj ET Q q 0 0 0 rg BT 518.35 215.10 Td (s Person ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 210.03 495.40 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 203.10 Td (of the ) Tj ET Q q 0 0 0 rg BT 79.18 203.10 Td (Y) Tj ET Q q 0 0 0 rg BT 85.40 203.10 Td (ear by Publishers ) Tj ET Q q 0 0 0 rg BT 156.59 203.10 Td (W) Tj ET Q q 0 0 0 rg BT 165.23 203.10 Td (eekly magazine in 2009. Mr) Tj ET Q q 0 0 0 rg BT 277.14 203.10 Td (. Sarnof) Tj ET Q q 0 0 0 rg BT 308.62 203.10 Td (f graduated summa cum laude from Princeton University in ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 198.03 490.08 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 191.10 Td (1981 with a BA) Tj ET Q q 0 0 0 rg BT 117.06 191.10 Td ( in ) Tj ET Q q 0 0 0 rg BT 129.28 191.10 Td (Art and ) Tj ET Q q 0 0 0 rg BT 161.50 191.10 Td (Archaeology) Tj ET Q q 0 0 0 rg BT 212.50 191.10 Td (, and earned an MBA) Tj ET Q q 0 0 0 rg BT 297.75 191.10 Td ( from Harvard University in 1987. He serves on the Board of ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 186.03 485.88 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 179.10 Td (Directors of Chegg, ) Tj ET Q q 0 0 0 rg BT 135.46 179.10 Td (W) Tj ET Q q 0 0 0 rg BT 144.10 179.10 Td (eld North, UFC, ) Tj ET Q q 0 0 0 rg BT 211.42 179.10 Td (W) Tj ET Q q 0 0 0 rg BT 220.06 179.10 Td (ebMD, and RBMedia; and of not-for) Tj ET Q q 0 0 0 rg BT 367.05 179.10 Td (-profit or) Tj ET Q q 0 0 0 rg BT 403.25 179.10 Td (ganizations including the College ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 174.03 487.81 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 167.10 Td (Bound Initiative, the Center for Communication, the Princeton University Center for Information ) Tj ET Q q 0 0 0 rg BT 445.40 167.10 Td (T) Tj ET Q q 0 0 0 rg BT 450.81 167.10 Td (echnology Policy) Tj ET Q q 0 0 0 rg BT 519.87 167.10 Td (, and ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 162.03 61.23 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 155.10 Td (Pioneer ) Tj ET Q q 0 0 0 rg BT 86.87 155.10 Td (W) Tj ET Q q 0 0 0 rg BT 95.50 155.10 Td (orks.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 137.10 Td ( ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 74.50 137.10 Td (Eric Sondag) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 127.01 137.10 Td ( has been the Chairman of the Board of Cengage since May 2014 and has been a Director since March ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 125.10 Td (2014.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 76.50 125.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 79.00 125.10 Td (Mr) Tj ET Q q 0 0 0 rg BT 90.67 125.10 Td (. Sondag is a Partner at Searchlight Capital Partners. ) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL q 0.2 0.2 0.2 rg BT 302.56 125.10 Td (Prior to joining Searchlight in 201) Tj ET Q q 0.2 0.2 0.2 rg BT 439.13 125.10 Td (1, Mr) Tj ET Q q 0.2 0.2 0.2 rg BT 460.80 125.10 Td (. Sondag worked at ) Tj ET Q BT /F1 10.00 Tf ET q 0.2 0.2 0.2 rg BT 54.00 113.10 Td (GTCR Golder Rauner in Chicago, where he worked primarily on investments in the media, information services and ) Tj ET Q BT /F1 10.00 Tf ET q 0.2 0.2 0.2 rg BT 54.00 101.10 Td (consumer industries. He started his career in investment banking at ) Tj ET Q q 0.2 0.2 0.2 rg BT 324.58 101.10 Td (W) Tj ET Q q 0.2 0.2 0.2 rg BT 333.21 101.10 Td (asserstein Perella in Chicago in 1998. Mr) Tj ET Q q 0.2 0.2 0.2 rg BT 497.91 101.10 Td (. Sondag ) Tj ET Q BT /F1 10.00 Tf ET q 0.2 0.2 0.2 rg BT 54.00 89.10 Td (received a BSc from Geor) Tj ET Q q 0.2 0.2 0.2 rg BT 158.22 89.10 Td (getown University) Tj ET Q q 0.2 0.2 0.2 rg BT 231.72 89.10 Td (, and completed the Executive Management Program at INSEAD in Singapore. ) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL q 0 0 0 rg BT 54.00 77.10 Td (Mr) Tj ET Q q 0 0 0 rg BT 65.67 77.10 Td (. Sondag serves on the Board of Directors for ) Tj ET Q q 0 0 0 rg BT 249.33 77.10 Td (T) Tj ET Q q 0 0 0 rg BT 254.74 77.10 Td (ouchT) Tj ET Q q 0 0 0 rg BT 279.94 77.10 Td (unes Interactive Networks, Inc., M&M Food Market and Global ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 65.10 Td (Eagle Entertainment, and serves on the Board of ) Tj ET Q q 0 0 0 rg BT 249.77 65.10 Td (Advisors for Geor) Tj ET Q q 0 0 0 rg BT 322.35 65.10 Td (getown University) Tj ET Q q 0 0 0 rg BT 399.29 65.10 Td (s McDonough School of Business.) Tj ET Q endstream endobj 69 0 obj <> endobj 70 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 760.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 29 -) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 731.25 Td (Committees of the Board of Dir) Tj ET Q q 0 0 0 rg BT 188.51 731.25 Td (ectors) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 710.25 Td (Our board of directors has two committees: the ) Tj ET Q q 0 0 0 rg BT 262.51 710.25 Td (Audit Committee and the Compensation Committee. Both of these ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 698.25 Td (committees were established during the May 5, 2014 meeting of the board of directors.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 677.25 Td (The ) Tj ET Q q 0 0 0 rg BT 72.62 677.25 Td (Audit Committee) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 656.25 Td (The ) Tj ET Q q 0 0 0 rg BT 89.50 656.25 Td (Audit Committee is responsible for assisting the board of directors with respect to, among other things, reviewing ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 644.25 Td (our financial reporting procedures, internal audits and the performance of our external auditors. ) Tj ET Q q 0 0 0 rg BT 437.84 644.25 Td (The ) Tj ET Q q 0 0 0 rg BT 455.33 644.25 Td (Audit Committee has ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 632.25 Td (direct communication channels with our management, as well as with our external auditors to discuss and review specific ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 620.25 Td (issues as appropriate. ) Tj ET Q q 0 0 0 rg BT 141.57 620.25 Td (The committee is also responsible for reviewing the quarterly and annual financial statements. ) Tj ET Q q 0 0 0 rg BT 520.71 620.25 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 608.25 Td (current members of the ) Tj ET Q q 0 0 0 rg BT 148.97 608.25 Td (Audit Committee are ) Tj ET Q q 0 0 0 rg BT 235.71 608.25 Td (W) Tj ET Q q 0 0 0 rg BT 244.35 608.25 Td (ade Davis, John Dionne and Richard Sarnof) Tj ET Q q 0 0 0 rg BT 419.96 608.25 Td (f. Mr) Tj ET Q q 0 0 0 rg BT 439.96 608.25 Td (. Davis is chairman of the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 596.25 Td (Audit Committee. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 575.25 Td (The Compensation Committee) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 554.25 Td (The Compensation Committee is responsible for assisting the board of directors with respect to the assessment and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 542.25 Td (compensation of the chief executive of) Tj ET Q q 0 0 0 rg BT 209.03 542.25 Td (ficer and other executive of) Tj ET Q q 0 0 0 rg BT 318.79 542.25 Td (ficers of the Company) Tj ET Q q 0 0 0 rg BT 407.29 542.25 Td (, the assessment of compensation ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 530.25 Td (arrangements, plans, policies and programs and the assessment of benefit and welfare plans and programs of the Company) Tj ET Q q 0 0 0 rg BT 543.48 530.25 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 518.25 Td (The current members of the Compensation Committee are Kermit Cook, Richard Sarnof) Tj ET Q q 0 0 0 rg BT 407.61 518.25 Td (f, Eric Sondag and Marcelo Gigliani. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 506.25 Td (Mr) Tj ET Q q 0 0 0 rg BT 65.67 506.25 Td (. Cook is chairman of the Compensation Committee.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 485.25 Td (Code of Business Conduct and Ethics) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 464.25 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 464.25 Td (e have a Code of Business Conduct and Ethics \(the Code\) that applies to all employees, of) Tj ET Q q 0 0 0 rg BT 450.08 464.25 Td (ficers and directors. ) Tj ET Q q 0 0 0 rg BT 531.53 464.25 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 452.25 Td (Code is available without char) Tj ET Q q 0 0 0 rg BT 175.45 452.25 Td (ge by written request to the attention of our General Counsel at Cengage, 20 Channel Center ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 440.25 Td (Street, Boston, MA) Tj ET Q q 0 0 0 rg BT 131.23 440.25 Td ( 02210.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 419.25 Td (Executive Officers) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 398.25 Td (The following sets forth certain information regarding our executive of) Tj ET Q q 0 0 0 rg BT 355.89 398.25 Td (ficers, each of whom is a member of the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 386.25 Td (Executive ) Tj ET Q q 0 0 0 rg BT 96.30 386.25 Td (T) Tj ET Q q 0 0 0 rg BT 101.71 386.25 Td (eam and each of whom reports directly to the Chief Executive Of) Tj ET Q q 0 0 0 rg BT 362.82 386.25 Td (ficer) Tj ET Q q 0 0 0 rg BT 380.74 386.25 Td (, except as otherwise noted below) Tj ET Q q 0 0 0 rg BT 515.04 386.25 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 374.25 Td (Information regarding Michael Hansen, who serves as a director and executive of) Tj ET Q q 0 0 0 rg BT 379.81 374.25 Td (ficer of the Company) Tj ET Q q 0 0 0 rg BT 464.41 374.25 Td (, may be found in the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 362.25 Td (section entitled Directors.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 344.25 Td (Fernando Bleichmar) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 160.60 344.25 Td ( has been the Executive ) Tj ET Q q 0 0 0 rg BT 257.33 344.25 Td (V) Tj ET Q q 0 0 0 rg BT 263.95 344.25 Td (ice President and General Manager U.S. Higher Educations and Skills ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 332.25 Td (for Cengage since January 2019. In this role, Fernando leads a cross-functional team focused on delivering af) Tj ET Q q 0 0 0 rg BT 491.46 332.25 Td (fordable quality ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 320.25 Td (learning for students, as well as driving the continued success of Cengage Unlimited - the industry's first-of-its-kind ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 308.25 Td (subscription service for college textbooks and course materials. Mr) Tj ET Q q 0 0 0 rg BT 321.98 308.25 Td (. Bleichmar joined Cengage in January 2014 and prior to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 296.25 Td (his current role he served first as Chief Strategy Of) Tj ET Q q 0 0 0 rg BT 257.92 296.25 Td (ficer and later as Chief Product Of) Tj ET Q q 0 0 0 rg BT 395.46 296.25 Td (ficer) Tj ET Q q 0 0 0 rg BT 413.23 296.25 Td (. ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 418.23 303.18 120.27 -9.09 re f /GS0 gs q 0 0 0 rg BT 418.23 296.25 Td (Prior to joining Cengage, Mr) Tj ET Q q 0 0 0 rg BT 533.50 296.25 Td (. ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 291.18 254.33 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 284.25 Td (Bleichmar held various roles at ) Tj ET Q q 0 0 0 rg BT 180.91 284.25 Td (Altisource ) Tj ET Q q 0 0 0 rg BT 224.88 284.25 Td (T) Tj ET Q q 0 0 0 rg BT 230.29 284.25 Td (echnology Services) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 308.33 284.25 Td (, Reed Elsevier) Tj ET Q q 0 0 0 rg BT 368.74 284.25 Td (, and ) Tj ET Q q 0 0 0 rg BT 390.49 284.25 Td (The Boston Consulting Group. M) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 525.22 291.18 7.78 -9.09 re f /GS0 gs q 0 0 0 rg BT 525.22 284.25 Td (r) Tj ET Q q 0 0 0 rg BT 528.00 284.25 Td (. ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 279.18 460.27 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 272.25 Td (Bleichmar holds an MBA) Tj ET Q q 0 0 0 rg BT 156.49 272.25 Td ( from Columbia University and a Bachelor) Tj ET Q q 0 0 0 rg BT 327.93 272.25 Td () Tj ET Q q 0 0 0 rg BT 330.71 272.25 Td (s degree from the University of Pennsylvania.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 254.25 Td (Alexander) Tj ET Q q 0 0 0 rg BT 116.26 254.25 Td ( Br) Tj ET Q q 0 0 0 rg BT 129.69 254.25 Td (oich) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 147.46 254.25 Td ( has been the President of International for Cengage since July 2013. In ) Tj ET Q q 0 0 0 rg BT 435.16 254.25 Td (April 2017, Mr) Tj ET Q q 0 0 0 rg BT 495.44 254.25 Td (. Broich ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 242.25 Td (became President of Cengage Global Business which includes International, Gale Global and, as of January 2019, National ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 230.25 Td (Geographic Learning School. In this role, he is responsible for the growth and development of the Company) Tj ET Q q 0 0 0 rg BT 490.01 230.25 Td (s global ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 218.25 Td (operations. Mr) Tj ET Q q 0 0 0 rg BT 112.33 218.25 Td (. Broich brings to Cengage more than 20 years of corporate and operational senior) Tj ET Q q 0 0 0 rg BT 440.91 218.25 Td (-level management ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 206.25 Td (experience, specializing in building, growing and developing businesses in changing environments. He has a successful track ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 194.25 Td (record in setting up and growing new technology driven businesses, is skilled in strategic planning and marketing, and is ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 182.25 Td (familiar with intercultural business practices and communications. Prior to joining Cengage, Mr) Tj ET Q q 0 0 0 rg BT 437.53 182.25 Td (. Broich served as the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 170.25 Td (President of International at Pearson Clinical and ) Tj ET Q q 0 0 0 rg BT 252.93 170.25 Td (T) Tj ET Q q 0 0 0 rg BT 258.34 170.25 Td (alent ) Tj ET Q q 0 0 0 rg BT 279.72 170.25 Td (Assessment for five years. ) Tj ET Q q 0 0 0 rg BT 387.20 170.25 Td (At Pearson, he drove the international ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 158.25 Td (business to double-digit growth, while significantly increasing profitability and expanding into new territories. He led the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 146.25 Td (strategy development and implementation of the conversion from traditional print assessments into digital solutions and was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 134.25 Td (a member of Pearson) Tj ET Q q 0 0 0 rg BT 141.47 134.25 Td (s Innovation Board. Earlier in his career) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 301.49 141.18 226.19 -9.09 re f /GS0 gs q 0 0 0 rg BT 301.29 134.25 Td (, Mr) Tj ET Q q 0 0 0 rg BT 317.96 134.25 Td (. Broich was the Senior ) Tj ET Q q 0 0 0 rg BT 413.87 134.25 Td (V) Tj ET Q q 0 0 0 rg BT 420.49 134.25 Td (ice President of Corporate ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 129.18 496.51 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 122.25 Td (Development at Bertelsmann, Inc. for six years where he implemented development strategies in China, England, Germany ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 117.18 495.16 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 110.25 Td (and France, among other duties. He also held management positions with Bertelsmann Online Ltd., Health Online Services ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 105.18 502.18 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 98.25 Td (Multimedica, Bertelsmann ) Tj ET Q q 0 0 0 rg BT 162.59 98.25 Td (AG, and Headwork Consulting. Mr) Tj ET Q q 0 0 0 rg BT 303.69 98.25 Td (. Broich holds a PhD in Business ) Tj ET Q q 0 0 0 rg BT 437.58 98.25 Td (Administration from Ludwig ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 93.18 144.16 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 86.25 Td (Maximilians University in Munich. ) Tj ET Q endstream endobj 71 0 obj <> endobj 72 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 760.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 30 -) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 731.25 Td (Gary Fortier) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 127.25 731.25 Td ( has been the Chief People Of) Tj ET Q q 0 0 0 rg BT 246.48 731.25 Td (ficer for Cengage since March 2018. In this role, he is responsible for ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.25 Td (growing and nurturing the Cengage culture and operationalizing Cengage's ethos in guiding principles that clarify what is ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 707.25 Td (needed from employees to transform the company) Tj ET Q q 0 0 0 rg BT 254.40 707.25 Td (, revolutionize our industry and truly deliver learners. Mr) Tj ET Q q 0 0 0 rg BT 482.67 707.25 Td (. Fortier brings to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 695.25 Td (Cengage a proven cross-industry track record in driving ef) Tj ET Q q 0 0 0 rg BT 287.63 695.25 Td (fective change, with a major focus on tapping into the skills and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 683.25 Td (passions of people and the leaders who guide them as key ingredients for success. Prior to joining Cengage, Mr) Tj ET Q q 0 0 0 rg BT 498.90 683.25 Td (.) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 501.40 690.18 54.17 -9.09 re f /GS0 gs q 0 0 0 rg BT 501.40 683.25 Td ( Fortier most ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 678.18 471.86 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 671.25 Td (recently served as the CEO for ) Tj ET Q q 0 0 0 rg BT 179.33 671.25 Td (V) Tj ET Q q 0 0 0 rg BT 185.95 671.25 Td (ision Government Solutions, Inc. where he led a successful financial turnaround and ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 666.18 487.45 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 659.25 Td (or) Tj ET Q q 0 0 0 rg BT 62.15 659.25 Td (ganizational transformation. Earlier in his career he was COO for Raizlabs and managed Culture, Communications and ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 654.18 235.14 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 647.25 Td (Or) Tj ET Q q 0 0 0 rg BT 64.37 647.25 Td (ganizational Design, along with mer) Tj ET Q q 0 0 0 rg BT 209.43 647.25 Td (gers & acquisitions ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 289.14 647.25 Td (\(M&A\)) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 328.57 654.18 217.15 -9.09 re f /GS0 gs q 0 0 0 rg BT 328.57 647.25 Td (, and Strategy & Operations. Earlier in his career Mr) Tj ET Q q 0 0 0 rg BT 540.72 647.25 Td (. ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 642.18 485.73 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 635.25 Td (Fortier served in operational, finance and HR leadership and executive-level roles at companies as varied as GL) Tj ET Q q 0 0 0 rg BT 500.96 635.25 Td ( ) Tj ET Q q 0 0 0 rg BT 502.91 635.25 Td (Advisor) Tj ET Q q 0 0 0 rg BT 534.73 635.25 Td (, ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 630.18 330.27 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 623.25 Td (Power ) Tj ET Q q 0 0 0 rg BT 81.50 623.25 Td (Advocate, ) Tj ET Q q 0 0 0 rg BT 124.63 623.25 Td (The Home Depot and Deloitte, where his business career started.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 384.27 623.25 Td ( Mr) Tj ET Q q 0 0 0 rg BT 398.44 623.25 Td (. Fortier serves on the Board of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 611.25 Td (Directors for Harvard Student ) Tj ET Q q 0 0 0 rg BT 175.63 611.25 Td (Agencies. ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 217.84 618.18 321.88 -9.09 re f /GS0 gs q 0 0 0 rg BT 217.84 611.25 Td (Prior to attending business school, he served as an ) Tj ET Q q 0 0 0 rg BT 420.58 611.25 Td (Army Infantry Captain in the ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 606.18 480.76 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 599.25 Td (82nd ) Tj ET Q q 0 0 0 rg BT 75.95 599.25 Td (Airborne at Fort Bragg, NC. Mr) Tj ET Q q 0 0 0 rg BT 203.43 599.25 Td (. Fortier holds an MBA, specializing in Finance and Management, from Columbia ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 594.18 329.68 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 587.25 Td (Business School and a Bachelor's degree in Government from Harvard University) Tj ET Q q 0 0 0 rg BT 381.18 587.25 Td (.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 569.25 Td (Shar) Tj ET Q q 0 0 0 rg BT 92.38 569.25 Td (on Loeb) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 127.11 569.25 Td ( has been the Chief Marketing Of) Tj ET Q q 0 0 0 rg BT 260.78 569.25 Td (ficer for Cengage since January 2016. In this role, she is responsible for ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 557.25 Td (overseeing the marketing and communication programs, ensuring they support the Company's strategy) Tj ET Q q 0 0 0 rg BT 463.95 557.25 Td (. ) Tj ET Q q 0 0 0 rg BT 468.39 557.25 Td (As part of the core ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 545.25 Td (team that developed Cengage Unlimited, the industry's first-of-its-kind subscription for college textbooks and course ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 533.25 Td (material, Ms. Loeb led the team that designed and executed the launch campaign resulting in one million subscriptions in just ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 521.25 Td (seven months. ) Tj ET Q q 0 0 0 rg BT 113.54 521.25 Td (W) Tj ET Q q 0 0 0 rg BT 122.57 521.25 Td (ith a strong track record of proven success in the education industry) Tj ET Q q 0 0 0 rg BT 392.68 521.25 Td (, Ms. Loeb previously spent 15 years at ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 509.25 Td (McGraw-Hill Higher Education in a succession of entrepreneurial, high-impact leadership positions. Over this period, she led ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 497.25 Td (the successful launches of several disruptive and ultimately industry-leading of) Tj ET Q q 0 0 0 rg BT 370.12 497.25 Td (fers. Ms. Loeb began her career at Pearson ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 485.25 Td (Education in roles spanning product, sales and marketing. Ms. Loeb holds an MA) Tj ET Q q 0 0 0 rg BT 380.33 485.25 Td ( in Philosophy from the University of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 473.25 Td (T) Tj ET Q q 0 0 0 rg BT 59.41 473.25 Td (oronto and a Bachelor) Tj ET Q q 0 0 0 rg BT 148.36 473.25 Td () Tj ET Q q 0 0 0 rg BT 151.14 473.25 Td (s degree in Philosophy from ) Tj ET Q q 0 0 0 rg BT 266.03 473.25 Td (Y) Tj ET Q q 0 0 0 rg BT 272.25 473.25 Td (ork University) Tj ET Q q 0 0 0 rg BT 329.65 473.25 Td (.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 455.25 Td (T) Tj ET Q q 0 0 0 rg BT 77.75 455.25 Td (odd Markson ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 137.77 455.25 Td (has been the Executive ) Tj ET Q q 0 0 0 rg BT 231.99 455.25 Td (V) Tj ET Q q 0 0 0 rg BT 238.61 455.25 Td (ice President and Chief Strategy Of) Tj ET Q q 0 0 0 rg BT 380.33 455.25 Td (ficer \(CSO\) for Cengage since December ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 443.25 Td (2017. In this role, he is responsible for leading Cengage strategy and collaborating with the executive team and broader ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 431.25 Td (or) Tj ET Q q 0 0 0 rg BT 62.15 431.25 Td (ganization on the continuing evolution of Cengage corporate and portfolio strategy) Tj ET Q q 0 0 0 rg BT 393.07 431.25 Td (, as well as the oversight of corporate ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 419.25 Td (development, M&A, channel partnerships, commercial/pricing, central procurement and distribution. Mr) Tj ET Q q 0 0 0 rg BT 472.77 419.25 Td (. Markson's ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 407.25 Td (commitment to advancing the way students learn adds tremendous value by combining rigorous analytics with deep market ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 395.25 Td (knowledge to provide solutions that work for today's learners. Mr) Tj ET Q q 0 0 0 rg BT 315.75 395.25 Td (. Markson joined Cengage in 2014 and held the position of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 383.25 Td (Senior ) Tj ET Q q 0 0 0 rg BT 82.43 383.25 Td (V) Tj ET Q q 0 0 0 rg BT 89.05 383.25 Td (ice President of Go-T) Tj ET Q q 0 0 0 rg BT 174.71 383.25 Td (o-Market Strategy and Operations and as such he stepped into this role at Cengage already ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 371.25 Td (boasting a strong track record of driving meaningful and ef) Tj ET Q q 0 0 0 rg BT 290.13 371.25 Td (fective change at Cengage. Prior to joining Cengage, Mr) Tj ET Q q 0 0 0 rg BT 515.62 371.25 Td (. Markson ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 359.25 Td (served many years as a management consultant across the United States, Europe and the Middle East, most recently as a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 347.25 Td (Principal at ) Tj ET Q q 0 0 0 rg BT 102.14 347.25 Td (The Boston Consulting Group \(BCG\) where he advised senior clients across global Private Equity) Tj ET Q q 0 0 0 rg BT 494.48 347.25 Td (, Financial ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 335.25 Td (Services, ) Tj ET Q q 0 0 0 rg BT 92.70 335.25 Td (T) Tj ET Q q 0 0 0 rg BT 98.11 335.25 Td (elecom, Media and ) Tj ET Q q 0 0 0 rg BT 176.78 335.25 Td (T) Tj ET Q q 0 0 0 rg BT 182.19 335.25 Td (echnology companies in setting strategic direction as well as creating or) Tj ET Q q 0 0 0 rg BT 469.70 335.25 Td (ganizational ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 323.25 Td (structures and operating models making those strategies a reality) Tj ET Q q 0 0 0 rg BT 312.16 323.25 Td (. His work covered areas such as strategic direction, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 311.25 Td (financial due diligence, sales force ef) Tj ET Q q 0 0 0 rg BT 202.63 311.25 Td (fectiveness, product line strategy) Tj ET Q q 0 0 0 rg BT 333.60 311.25 Td (, operations, and change. Earlier in his career) Tj ET Q q 0 0 0 rg BT 513.68 311.25 Td (, Mr) Tj ET Q q 0 0 0 rg BT 530.35 311.25 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 299.25 Td (Markson was a technology entrepreneur in Silicon ) Tj ET Q q 0 0 0 rg BT 257.93 299.25 Td (V) Tj ET Q q 0 0 0 rg BT 264.04 299.25 Td (alley and Microfinance volunteer with the Peace Corps in Mali, ) Tj ET Q q 0 0 0 rg BT 520.73 299.25 Td (W) Tj ET Q q 0 0 0 rg BT 529.37 299.25 Td (est ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 287.25 Td (Africa. Mr) Tj ET Q q 0 0 0 rg BT 96.21 287.25 Td (. Markson holds an MBA) Tj ET Q q 0 0 0 rg BT 197.60 287.25 Td ( with Distinction from the University of Michigan and a Bachelor's degree from Brown ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 275.25 Td (University) Tj ET Q q 0 0 0 rg BT 95.57 275.25 Td (. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 257.25 Td (George Moor) Tj ET Q q 0 0 0 rg BT 129.29 257.25 Td (e) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 133.73 257.25 Td ( has been the Chief ) Tj ET Q q 0 0 0 rg BT 212.69 257.25 Td (T) Tj ET Q q 0 0 0 rg BT 218.10 257.25 Td (echnology Of) Tj ET Q q 0 0 0 rg BT 272.63 257.25 Td (ficer \(CT) Tj ET Q q 0 0 0 rg BT 313.81 257.25 Td (O\) for Cengage since January 2013. In this role, he is ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 245.25 Td (responsible for shaping Cengage) Tj ET Q q 0 0 0 rg BT 187.58 245.25 Td (s long-term technology vision and driving innovation across the Company during a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 233.25 Td (transformative time. Prior to joining Cengage, Mr) Tj ET Q q 0 0 0 rg BT 252.85 233.25 Td (. Moore served as CT) Tj ET Q q 0 0 0 rg BT 339.04 233.25 Td (O of Elsevier Health Science, where he was recruited ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 221.25 Td (to transform the world) Tj ET Q q 0 0 0 rg BT 146.48 221.25 Td (s leading medical publishing company into a medical information company) Tj ET Q q 0 0 0 rg BT 447.70 221.25 Td (. During his tenure, he was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 209.25 Td (instrumental in developing ClinicalKey) Tj ET Q q 0 0 0 rg BT 211.37 209.25 Td (, one of the most innovative and successful product introductions in the health-care ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 197.25 Td (information industry) Tj ET Q q 0 0 0 rg BT 135.84 197.25 Td (. Earlier in his career) Tj ET Q q 0 0 0 rg BT 219.00 197.25 Td (, he was SVP) Tj ET Q q 0 0 0 rg BT 271.97 197.25 Td ( of Product Development for ) Tj ET Q q 0 0 0 rg BT 389.26 197.25 Td (Thomson Reuters) Tj ET Q q 0 0 0 rg BT 462.67 197.25 Td ( Healthcare ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 185.25 Td (or) Tj ET Q q 0 0 0 rg BT 62.15 185.25 Td (ganization, where he led the consolidation ef) Tj ET Q q 0 0 0 rg BT 241.07 185.25 Td (fort of the company) Tj ET Q q 0 0 0 rg BT 322.99 185.25 Td (s disparate acquisitions into a consolidated product ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 173.25 Td (development or) Tj ET Q q 0 0 0 rg BT 116.30 173.25 Td (ganization. Mr) Tj ET Q q 0 0 0 rg BT 174.62 173.25 Td (. Moore has also held various roles with a number of commercial software companies. Most ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 161.25 Td (prominently) Tj ET Q q 0 0 0 rg BT 102.23 161.25 Td (, he was ) Tj ET Q q 0 0 0 rg BT 137.04 161.25 Td (VP) Tj ET Q q 0 0 0 rg BT 149.45 161.25 Td ( of Product Development at Liquent, the industry leader in Pharmaceutical Publishing and Enterprise ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 149.25 Td (Resource Planning software. ) Tj ET Q q 0 0 0 rg BT 170.64 149.25 Td (At Liquent, he led the company) Tj ET Q q 0 0 0 rg BT 300.05 149.25 Td (s ef) Tj ET Q q 0 0 0 rg BT 314.03 149.25 Td (forts in defining how pharmaceutical companies would ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 137.25 Td (develop their information management systems that support drug discovery and approval, and also played a leading role in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 125.25 Td (the sale and integration of Liquent into ) Tj ET Q q 0 0 0 rg BT 211.83 125.25 Td (Thomson Reuters. Mr) Tj ET Q q 0 0 0 rg BT 299.33 125.25 Td (. Moore serves on the Board of Directors for Junior ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 113.25 Td (Achievement of Northern New England.) Tj ET Q endstream endobj 73 0 obj <> endobj 74 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 760.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 31 -) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 731.25 Td (Bob Munr) Tj ET Q q 0 0 0 rg BT 116.55 731.25 Td (o) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 121.55 731.25 Td ( joined Cengage as Executive ) Tj ET Q q 0 0 0 rg BT 242.16 731.25 Td (V) Tj ET Q q 0 0 0 rg BT 248.78 731.25 Td (ice President and Chief Financial Of) Tj ET Q q 0 0 0 rg BT 394.39 731.25 Td (ficer for Cengage in ) Tj ET Q q 0 0 0 rg BT 476.58 731.25 Td (April 2019. In this ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.25 Td (role he is responsible for the oversight of all financial functions, including financial planning and analysis, accounting, M&A, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 707.25 Td (investor relations, tax and treasury) Tj ET Q q 0 0 0 rg BT 191.36 707.25 Td (. Prior to Cengage and since ) Tj ET Q q 0 0 0 rg BT 306.06 707.25 Td (April 2015, Mr) Tj ET Q q 0 0 0 rg BT 366.34 707.25 Td (. Munro served as Chief Financial Of) Tj ET Q q 0 0 0 rg BT 515.29 707.25 Td (ficer of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 695.25 Td (Callcredit Information Group, a credit reference agency and risk information solutions provider) Tj ET Q q 0 0 0 rg BT 435.69 695.25 Td (, which was acquired by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 683.25 Td (T) Tj ET Q q 0 0 0 rg BT 59.76 683.25 Td (ransUnion in June 2018. Earlier in his career) Tj ET Q q 0 0 0 rg BT 238.19 683.25 Td (, Mr) Tj ET Q q 0 0 0 rg BT 254.86 683.25 Td (. Munro served in a variety of senior management and financial roles at ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 671.25 Td (RELX \(formerly Reed Elsevier plc\), including Chief Financial Of) Tj ET Q q 0 0 0 rg BT 317.35 671.25 Td (ficer of Elsevier Health Sciences. His professional career ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 659.25 Td (started at Price ) Tj ET Q q 0 0 0 rg BT 115.74 659.25 Td (W) Tj ET Q q 0 0 0 rg BT 124.38 659.25 Td (aterhouse, where he qualified as a Chartered ) Tj ET Q q 0 0 0 rg BT 303.74 659.25 Td (Accountant, and is a member of the Institute of Chartered ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 647.25 Td (Accountants in England and ) Tj ET Q q 0 0 0 rg BT 169.35 647.25 Td (W) Tj ET Q q 0 0 0 rg BT 177.98 647.25 Td (ales. Mr) Tj ET Q q 0 0 0 rg BT 210.20 647.25 Td (. Munro holds a BSc in physics and microelectronics from the University of Essex.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 629.25 Td (Laura Stevens) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 133.39 629.25 Td ( has been the Executive ) Tj ET Q q 0 0 0 rg BT 230.12 629.25 Td (V) Tj ET Q q 0 0 0 rg BT 236.74 629.25 Td (ice President and General Counsel for Cengage since May 2018 and she has ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 617.25 Td (been an integral part of the or) Tj ET Q q 0 0 0 rg BT 172.10 617.25 Td (ganization since 2003. In her current role Ms. Stevens provides legal support for Cengage's ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 605.25 Td (business operations, including Cengage's Global Product and ) Tj ET Q q 0 0 0 rg BT 300.58 605.25 Td (T) Tj ET Q q 0 0 0 rg BT 305.99 605.25 Td (echnology groups, Sales and Marketing, and Finance, as well ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 593.25 Td (as its Global ) Tj ET Q q 0 0 0 rg BT 105.94 593.25 Td (Anti-Piracy program and Intellectual Property ) Tj ET Q q 0 0 0 rg BT 292.28 593.25 Td (Acquisitions and Granting functions. ) Tj ET Q q 0 0 0 rg BT 441.98 593.25 Td (Additionally) Tj ET Q q 0 0 0 rg BT 491.89 593.25 Td (, her team ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 581.25 Td (provides legal advice, contract negotiation support, dispute management and legal operational support for Cengage's content ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 569.25 Td (licensing and acquisition activities. Ms. Stevens realigned the Legal team, forming deep syner) Tj ET Q q 0 0 0 rg BT 430.10 569.25 Td (gies and equipping the group to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 557.25 Td (take on the challenges of an evolving business. ) Tj ET Q q 0 0 0 rg BT 244.05 557.25 Td (This forward-thinking approach helped enable the launch of Cengage ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 545.25 Td (Unlimited and propel the Company's rapid print-to-digital transformation. Ms. Stevens also founded Cengage) Tj ET Q q 0 0 0 rg BT 495.16 545.25 Td (s privacy ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 533.25 Td (of) Tj ET Q q 0 0 0 rg BT 62.15 533.25 Td (fice, creating industry-leading preparation and standards for responsible data stewardship. Ms. Stevens joined ) Tj ET Q q 0 0 0 rg BT 502.96 533.25 Td (Thomson ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 521.25 Td (Learning, now Cengage, in 2003 as Publishing Counsel; she held the position ) Tj ET Q q 0 0 0 rg BT 366.19 521.25 Td (Assistant General Counsel, Intellectual ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 509.25 Td (Property from 2007 to 2014 and Senior ) Tj ET Q q 0 0 0 rg BT 213.52 509.25 Td (V) Tj ET Q q 0 0 0 rg BT 220.14 509.25 Td (ice President, Deputy General Counsel from 2014 until May 2018. Prior to joining ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 497.25 Td (Thomson Learning, Ms. Stevens was an attorney at Brown Raysman in New ) Tj ET Q q 0 0 0 rg BT 362.46 497.25 Td (Y) Tj ET Q q 0 0 0 rg BT 368.68 497.25 Td (ork City) Tj ET Q q 0 0 0 rg BT 401.09 497.25 Td (. Ms. Stevens holds a J.D. from ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 485.25 Td (Columbia Law School and a Bachelor) Tj ET Q q 0 0 0 rg BT 206.83 485.25 Td () Tj ET Q q 0 0 0 rg BT 209.61 485.25 Td (s degree in Political Science and ) Tj ET Q q 0 0 0 rg BT 341.24 485.25 Td (Art History from the University of Rochester) Tj ET Q q 0 0 0 rg BT 521.20 485.25 Td (.) Tj ET Q endstream endobj 75 0 obj <> endobj 76 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 760.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 32 -) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 235.75 731.25 Td (PRINCIP) Tj ET Q q 0 0 0 rg BT 276.67 731.25 Td (AL) Tj ET Q q 0 0 0 rg BT 290.01 731.25 Td ( ST) Tj ET Q q 0 0 0 rg BT 304.56 731.25 Td (OCKHOLDERS) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 707.25 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 96.44 707.25 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 160.04 707.25 Td (, there were five beneficial owners with more than 5.0% of Cengage common stock registered in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 695.25 Td (one or more af) Tj ET Q q 0 0 0 rg BT 112.40 695.25 Td (filiated accounts: ) Tj ET Q q 0 0 0 rg BT 182.94 695.25 Td (Apax, KKR ) Tj ET Q q 0 0 0 rg BT 232.66 695.25 Td (Asset Management, Searchlight Capital Partners, Oaktree Capital Management ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 683.25 Td (LP) Tj ET Q q 0 0 0 rg BT 64.56 683.25 Td (, and Centerbridge Partners LP) Tj ET Q q 0 0 0 rg BT 187.03 683.25 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 665.25 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 665.25 Td (e adopted an equity incentive plan \(the 2014 Equity Incentive Plan\) for certain employees, of) Tj ET Q q 0 0 0 rg BT 461.71 665.25 Td (ficers and directors of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 653.25 Td (Cengage, as approved by the Bankruptcy Court, designed to promote our interests by providing eligible persons with the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 641.25 Td (opportunity to acquire common stock in Cengage as an incentive for them to remain in our employment or service. ) Tj ET Q q 0 0 0 rg BT 515.91 641.25 Td (The plan ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 629.25 Td (allowed for the grant of equity awards in various forms, including incentive stock options, non-qualified stock options, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 617.25 Td (restricted stock, restricted stock units \(RSUs\), stock appreciation rights or performance awards. In accordance with the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 605.25 Td (terms of the 2014 Equity Incentive Plan, we reserved 4,627,1) Tj ET Q q 0 0 0 rg BT 298.57 605.25 Td (18 shares of common stock available for grant, representing ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 593.25 Td (approximately 5.6% of the fully diluted outstanding common stock as of March 31, 2014. In December 2014, the number of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 581.25 Td (shares of common stock available for grant was increased to 5,103,650 shares upon execution of the 2014 leveraged ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 569.25 Td (recapitalization in accordance with the anti-dilution provisions of the plan. ) Tj ET Q q 0 0 0 rg BT 354.56 569.25 Td (The total amount of shares authorized was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 557.25 Td (additionally increased to 7,052,550 as of March 31, 2017 as a result of the one-time cash dividend paid in September 2016, in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 545.25 Td (accordance with the anti-dilution provisions of the plan, and the grant of performance-based RSUs during fiscal year 2017. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 533.25 Td (Stock options and RSUs were issued under the 2014 Equity Incentive Plan for no consideration and vest in 25% and 20% ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 521.25 Td (increments annually) Tj ET Q q 0 0 0 rg BT 134.16 521.25 Td (, respectively) Tj ET Q q 0 0 0 rg BT 186.82 521.25 Td (, on the last day of the first four or five fiscal years, respectively) Tj ET Q q 0 0 0 rg BT 442.47 521.25 Td (, following the grant date. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 509.25 Td (Performance-based RSUs are subject to two vesting requirements: a service period \(four years\) and a performance condition ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 497.25 Td (\(a liquidity event in the form of either a change of control or an initial public of) Tj ET Q q 0 0 0 rg BT 371.50 497.25 Td (fering, each as defined in the 2014 Equity ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 485.25 Td (Incentive Plan\) in order for the awards to fully vest. Ef) Tj ET Q q 0 0 0 rg BT 272.92 485.25 Td (fective as of November 15, 2018, the Company's Board of Directors ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 473.25 Td (and the majority shareholders adopted an equity incentive plan \(the 2018 Equity Incentive Plan\). ) Tj ET Q q 0 0 0 rg BT 451.75 473.25 Td (The 2018 Equity ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 461.25 Td (Incentive Plan provides for the grant of incentive stock options, certain other options, RSUs, restricted stock, and other stock-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 449.25 Td (based awards to directors, of) Tj ET Q q 0 0 0 rg BT 168.50 449.25 Td (ficers, and employees of the Company) Tj ET Q q 0 0 0 rg BT 321.70 449.25 Td (. Following the approval of the 2018 Equity Incentive ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 437.25 Td (Plan, the Company does not intend to grant any additional awards under the 2014 Equity Incentive Plan. Under the 2018 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 425.25 Td (Equity Incentive Plan, the majority shareholders and the Board of Directors authorized the grant over time of up to an ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 413.25 Td (additional 2,550,000 shares of common stock over and above those approved under the 2014 Equity Incentive Plan, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 401.25 Td (increasing the aggregate number of shares authorized and available for grant under any equity incentive plan adopted by the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 389.25 Td (Company to 9,602,550 shares as of March 31, 2019. In November 2018, there were 850,000, the maximum number of shares ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 377.25 Td (available for grant in a given fiscal year) Tj ET Q q 0 0 0 rg BT 212.69 377.25 Td (, authorized for grant under the 2018 Equity Incentive Plan. ) Tj ET Q q 0 0 0 rg BT 453.55 377.25 Td (The awards under the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 365.25 Td (2018 Equity Incentive Plan are subject to two vesting requirements: the service requirement is satisfied in 25% increments on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 353.25 Td (the last day of the first four fiscal years following the grant date and the performance condition is satisfied upon a liquidity ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 341.25 Td (event in the form of either a change of control or initial public of) Tj ET Q q 0 0 0 rg BT 312.90 341.25 Td (fering, in either case occurring prior to the sixth anniversary ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 329.25 Td (of the grant date. ) Tj ET Q q 0 0 0 rg BT 123.70 329.25 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 148.14 329.25 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 211.74 329.25 Td (, there were 4,889,529 stock options, RSUs, performance-based stock options and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 317.25 Td (performance-based RSUs outstanding, 424,947 RSUs vested, but unissued, 730,978 shares issued, and 3,557,096 shares of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 305.25 Td (common stock available for grant under the 2018 Equity Incentive Plan. ) Tj ET Q q 0 0 0 rg BT 344.85 305.25 Td (The stock options outstanding as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 489.28 305.25 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 552.88 305.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 293.25 Td (have a weighted-average exercise price per share of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 263.32 293.25 Td ($18.09) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 290.82 293.25 Td (. For additional information, see Management) Tj ET Q q 0 0 0 rg BT 481.60 293.25 Td (s Discussion and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 281.25 Td (Analysis of Financial Condition and Results of Operations, and Note ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 336.46 281.25 Td (13) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 346.46 281.25 Td (, Equity-Based Compensation.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 263.25 Td (In ) Tj ET Q q 0 0 0 rg BT 82.28 263.25 Td (August 2014, our shareholders approved and we adopted an equity plan authorizing an aggregate of 100,000 shares of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 251.25 Td (Cengage common stock to be made available for purchase by our of) Tj ET Q q 0 0 0 rg BT 326.23 251.25 Td (ficers, employees and directors \(the 2014 Equity ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 239.25 Td (Purchase Plan\). During the fiscal year ended March31, 2015, the Company issued ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 391.13 239.25 Td (76,000) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 418.63 239.25 Td ( common shares to certain ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 227.25 Td (directors, of) Tj ET Q q 0 0 0 rg BT 102.13 227.25 Td (ficers and employees for aggregate proceeds of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 293.43 227.25 Td ($1.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.33 227.25 Td (, respectively) Tj ET Q q 0 0 0 rg BT 394.99 227.25 Td (. ) Tj ET Q q 0 0 0 rg BT 399.81 227.25 Td (There have been no shares issued ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 215.25 Td (under the 2014 Equity Purchase Plan in the fiscal years succeeding March 31, 2015. ) Tj ET Q q 0 0 0 rg BT 392.25 215.25 Td (As of March 31, 2019, 24,000 shares ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 203.25 Td (remain available for issuance under the 2014 Equity Purchase Plan.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 185.25 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 185.25 Td (e repurchase shares from certain employees in order to satisfy employee tax withholding requirements in connection ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 173.25 Td (with the vesting of restricted stock units and delivery of shares. During the fiscal years ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 429.17 173.25 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 492.77 173.25 Td ( and 2018, we ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 161.25 Td (spent ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 77.61 161.25 Td ($7.8 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.50 161.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 145.94 161.25 Td ($5.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 194.83 161.25 Td (, respectively) Tj ET Q q 0 0 0 rg BT 247.49 161.25 Td (, to acquire shares in connection with net settlement of equity-based awards. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 149.25 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 78.44 149.25 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 142.04 149.25 Td (, there were ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 191.46 149.25 Td (61,547,310) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 236.46 149.25 Td ( shares of Cengage common stock issued and outstanding.) Tj ET Q endstream endobj 77 0 obj <> endobj 78 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 760.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 33 -) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 163.70 731.25 Td (CER) Tj ET Q q 0 0 0 rg BT 184.46 731.25 Td (T) Tj ET Q q 0 0 0 rg BT 190.39 731.25 Td (AIN RELA) Tj ET Q q 0 0 0 rg BT 238.27 731.25 Td (TIONSHIPS ) Tj ET Q q 0 0 0 rg BT 294.68 731.25 Td (AND RELA) Tj ET Q q 0 0 0 rg BT 345.88 731.25 Td (TED ) Tj ET Q q 0 0 0 rg BT 368.76 731.25 Td (TRANSACTIONS) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 707.25 Td (Agr) Tj ET Q q 0 0 0 rg BT 88.48 707.25 Td (eements with a former) Tj ET Q q 0 0 0 rg BT 184.09 707.25 Td ( affiliate) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 686.25 Td (Due to related party relationships, it is possible that the terms of the following transactions are not the same as those that ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 674.25 Td (would result from transactions among wholly unrelated parties.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 656.25 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 656.25 Td (e have a master services agreement \(MSA\) and a master distribution and licensing agreement \(MDLA\) with a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 644.25 Td (former af) Tj ET Q q 0 0 0 rg BT 91.29 644.25 Td (filiate \(the former af) Tj ET Q q 0 0 0 rg BT 176.90 644.25 Td (filiate\) of Cengage Learning Holdings II, L.P) Tj ET Q q 0 0 0 rg BT 361.29 644.25 Td (. \(the Predecessor\), the terms of which were ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 632.25 Td (agreed upon at the time the Predecessor and former af) Tj ET Q q 0 0 0 rg BT 269.56 632.25 Td (filiate were related parties. Under the MSA, we provide the former ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 620.25 Td (af) Tj ET Q q 0 0 0 rg BT 61.59 620.25 Td (filiate with various services including those relating to business and technology) Tj ET Q q 0 0 0 rg BT 378.65 620.25 Td (, content management, customers and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 608.25 Td (operations, management, fulfillment services and business information support. ) Tj ET Q q 0 0 0 rg BT 374.58 608.25 Td (The former af) Tj ET Q q 0 0 0 rg BT 429.92 608.25 Td (filiate provides us with certain ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 596.25 Td (real estate services. ) Tj ET Q q 0 0 0 rg BT 133.78 596.25 Td (The cost of each of the services provided under the MSA) Tj ET Q q 0 0 0 rg BT 361.49 596.25 Td ( is based on a fixed fee. ) Tj ET Q q 0 0 0 rg BT 457.56 596.25 Td (All services under the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 584.25 Td (MSA) Tj ET Q q 0 0 0 rg BT 75.12 584.25 Td ( are provided for a specified period of time, subject to extension by mutual agreement of the parties. ) Tj ET Q q 0 0 0 rg BT 477.58 584.25 Td (The former af) Tj ET Q q 0 0 0 rg BT 532.93 584.25 Td (filiate ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 572.25 Td (can generally terminate those services in advance upon 90 days written notice without penalty) Tj ET Q q 0 0 0 rg BT 429.62 572.25 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 554.25 Td (Under the MDLA, the former af) Tj ET Q q 0 0 0 rg BT 200.66 554.25 Td (filiate is our exclusive authorized distributor for sale and/or distribution of most of our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 542.25 Td (academic and professional digital and print publications in Canada. Subject to our prior approval on a product by product ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 530.25 Td (basis, the former af) Tj ET Q q 0 0 0 rg BT 131.01 530.25 Td (filiate also has the exclusive right to adapt, customize and translate our publications for sale and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 518.25 Td (distribution in Canada. ) Tj ET Q q 0 0 0 rg BT 147.70 518.25 Td (The agreement sets certain other restrictions on the use of our content. ) Tj ET Q q 0 0 0 rg BT 431.03 518.25 Td (The former af) Tj ET Q q 0 0 0 rg BT 486.37 518.25 Td (filiate is required ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 506.25 Td (by the agreement to pay us royalties as a percentage of net sales for certain specified publications, adaptations of our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 494.25 Td (textbooks, translations of our textbooks and certain of our customized products. ) Tj ET Q q 0 0 0 rg BT 375.14 494.25 Td (The agreement also requires the af) Tj ET Q q 0 0 0 rg BT 512.95 494.25 Td (filiate to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 482.25 Td (pay fixed technology platform fees and variable technology unit fees. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 464.25 Td (The MSA) Tj ET Q q 0 0 0 rg BT 111.17 464.25 Td ( was assumed by us upon the Ef) Tj ET Q q 0 0 0 rg BT 239.03 464.25 Td (fective Date and renewed on December 1, 2017 for a term that will end on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 452.25 Td (March 31, 2021, unless otherwise renewed. ) Tj ET Q q 0 0 0 rg BT 230.16 452.25 Td (The MDLA) Tj ET Q q 0 0 0 rg BT 277.10 452.25 Td ( was also assumed by us upon the Ef) Tj ET Q q 0 0 0 rg BT 423.57 452.25 Td (fective Date and was amended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 440.25 Td (ef) Tj ET Q q 0 0 0 rg BT 61.59 440.25 Td (fective March 17, 2017 and will end on December 31, 2029, unless canceled by one of the parties. Both agreements may be ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 428.25 Td (terminated upon material breach, bankruptcy or the mutual agreement of the parties. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 410.25 Td (In November 201) Tj ET Q q 0 0 0 rg BT 142.17 410.25 Td (1, the Predecessor entered into a new distribution agreement with the former af) Tj ET Q q 0 0 0 rg BT 458.26 410.25 Td (filiate, under which the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 398.25 Td (former af) Tj ET Q q 0 0 0 rg BT 91.29 398.25 Td (filiate is our exclusive authorized distributor) Tj ET Q q 0 0 0 rg BT 268.35 398.25 Td (, subject to certain exceptions, for the sale and distribution of certain ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 386.25 Td (research digital and print products in Canada. ) Tj ET Q q 0 0 0 rg BT 238.20 386.25 Td (This agreement was terminated March 31, 2017, and henceforth we will ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 374.25 Td (distribute these research products directly to Canadian customers.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 356.25 Td (The following is a summary of our activity and balances with the former af) Tj ET Q q 0 0 0 rg BT 372.56 356.25 Td (filiate:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 325.75 m 409.5 325.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 325.75 m 413.5 325.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 325.75 m 483.5 325.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 325.75 m 487.5 325.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 325.75 m 557.5 325.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 325.75 m 409.5 325.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 311.75 m 409.5 311.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 325.75 m 413.5 325.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 325.75 m 483.5 325.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 311.75 m 483.5 311.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 311.75 m 557.5 311.75 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 392.45 330.20 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 417.03 330.20 Td (Y) Tj ET Q q 0 0 0 rg BT 422.86 330.20 Td (ear) Tj ET Q q 0 0 0 rg BT 434.77 330.20 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 481.11 330.20 Td (ch 31,) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 316.00 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 365.00 316.20 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 439.00 316.20 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 513.00 316.20 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 301.42 Td (Revenue from former af) Tj ET Q q 0 0 0 rg BT 152.81 301.42 Td (filiate) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 301.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 301.42 Td (16.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 301.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 301.42 Td (18.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 301.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 301.42 Td (19.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 286.42 Td (Expenses to former af) Tj ET Q q 0 0 0 rg BT 143.84 286.42 Td (filiate) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 286.42 Td (1.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 286.42 Td (1.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 286.42 Td (1.4) Tj ET Q BT /F1 10.00 Tf ET 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 424.5 251.75 m 489.5 251.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 489.5 251.75 m 493.5 251.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 493.5 251.75 m 558.5 251.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 424.5 237.75 m 489.5 237.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 493.5 237.75 m 558.5 237.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 424.5 237.75 m 489.5 237.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 493.5 237.75 m 558.5 237.75 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 460.30 256.20 Td (As of Mar) Tj ET Q q 0 0 0 rg BT 499.21 256.20 Td (ch 31,) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 57.00 242.00 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 447.50 242.20 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 516.50 242.20 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 227.42 Td (Accounts receivable) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 427.00 227.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 473.15 227.42 Td (0.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 496.00 227.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 542.15 227.42 Td (1.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 212.42 Td (Accounts payable and accrued expenses) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 473.15 212.42 Td (0.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 542.15 212.42 Td (0.3) Tj ET Q BT /F1 10.00 Tf ET endstream endobj 79 0 obj <> endobj 80 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 760.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 34 -) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 186.30 731.25 Td (PRINCIP) Tj ET Q q 0 0 0 rg BT 227.22 731.25 Td (AL) Tj ET Q q 0 0 0 rg BT 240.56 731.25 Td ( ) Tj ET Q q 0 0 0 rg BT 242.51 731.25 Td (ACCOUNT) Tj ET Q q 0 0 0 rg BT 292.33 731.25 Td (ANTS FEES ) Tj ET Q q 0 0 0 rg BT 351.79 731.25 Td (AND SER) Tj ET Q q 0 0 0 rg BT 395.05 731.25 Td (VICES) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 76.00 707.25 Td (The table below provides a summary of the aggregate fees for professional services rendered to us by our auditors, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 695.25 Td (PricewaterhouseCoopers LLP) Tj ET Q q 0 0 0 rg BT 172.58 695.25 Td (, for the following periods:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 424.5 664.75 m 489.5 664.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 489.5 664.75 m 493.5 664.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 493.5 664.75 m 558.5 664.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 424.5 664.75 m 489.5 664.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 424.5 650.75 m 489.5 650.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 493.5 664.75 m 558.5 664.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 493.5 650.75 m 558.5 650.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 424.5 650.75 m 489.5 650.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 493.5 650.75 m 558.5 650.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 424.5 605.75 m 489.5 605.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 493.5 605.75 m 558.5 605.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 424.5 605.75 m 489.5 605.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 424.5 591.75 m 489.5 591.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 424.5 589.75 m 489.5 589.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 493.5 605.75 m 558.5 605.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 493.5 591.75 m 558.5 591.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 493.5 589.75 m 558.5 589.75 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 435.45 669.20 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 460.03 669.20 Td (Y) Tj ET Q q 0 0 0 rg BT 465.86 669.20 Td (ear) Tj ET Q q 0 0 0 rg BT 477.77 669.20 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 524.11 669.20 Td (ch 31,) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 57.00 655.00 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 447.50 655.20 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 516.50 655.20 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 640.42 Td (Audit fees) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 427.00 640.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 473.15 640.42 Td (2.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 496.00 640.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 542.15 640.42 Td (2.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 625.42 Td (T) Tj ET Q q 0 0 0 rg BT 62.76 625.42 Td (ax fees) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 473.15 625.42 Td (0.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 542.15 625.42 Td (0.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 610.42 Td (All Other fees) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 473.15 610.42 Td (1.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 544.65 610.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 595.42 Td (T) Tj ET Q q 0 0 0 rg BT 62.41 595.42 Td (otal) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 427.00 595.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 473.15 595.42 Td (4.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 496.00 595.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 542.15 595.42 Td (2.8) Tj ET Q BT /F1 10.00 Tf ET BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 573.25 Td (Audit Fees) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 117.83 573.25 Td ( were for professional services necessary to perform an audit of the Company) Tj ET Q q 0 0 0 rg BT 430.50 573.25 Td (s annual financial statements, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 561.25 Td (review of the quarterly reports, statutory and subsidiary audits and other services required to be performed by our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 549.25 Td (independent auditors. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 531.25 Td (T) Tj ET Q q 0 0 0 rg BT 77.75 531.25 Td (ax Fees) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 109.13 531.25 Td ( were for tax compliance, tax planning, and tax advice. Corporate tax services encompass a variety of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 519.25 Td (permissible services, including technical tax advice related to United States and international tax matters; assistance with ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 507.25 Td (foreign income and withholding tax matters, assistance with sales tax, value added tax and equivalent tax related matters in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 495.25 Td (local jurisdictions; preparation of reports to comply with local tax authority transfer pricing documentation requirements; and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 483.25 Td (assistance with tax audits.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 465.25 Td (All Other) Tj ET Q q 0 0 0 rg BT 112.64 465.25 Td ( Fees) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 134.02 465.25 Td ( primarily consisted of due diligence and other permissible mer) Tj ET Q q 0 0 0 rg BT 386.82 465.25 Td (ger) Tj ET Q q 0 0 0 rg BT 399.39 465.25 Td (-related services.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 447.25 Td (It is the policy of the ) Tj ET Q q 0 0 0 rg BT 156.99 447.25 Td (Audit Committee to review in advance, and grant any appropriate pre-approvals of all auditing ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 435.25 Td (services to be provided by the independent registered public accounting firm and all non-audit services to be provided by the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 423.25 Td (independent registered public accounting firm, and in connection therewith, to approve all fees and other terms of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 411.25 Td (engagement. For the fiscal years ended March 31, 2019 and 2018, the ) Tj ET Q q 0 0 0 rg BT 334.75 411.25 Td (Audit Committee approved all fees billed by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 399.25 Td (PricewaterhouseCoopers LLP) Tj ET Q q 0 0 0 rg BT 173.32 399.25 Td ( prior to the engagement.) Tj ET Q endstream endobj 81 0 obj <> endobj 82 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 760.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 35 -) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 203.20 731.25 Td (SELECTED QUAR) Tj ET Q q 0 0 0 rg BT 288.15 731.25 Td (TERL) Tj ET Q q 0 0 0 rg BT 314.46 731.25 Td (Y) Tj ET Q q 0 0 0 rg BT 321.31 731.25 Td ( FINANCIAL) Tj ET Q q 0 0 0 rg BT 379.93 731.25 Td ( DA) Tj ET Q q 0 0 0 rg BT 396.13 731.25 Td (T) Tj ET Q q 0 0 0 rg BT 402.06 731.25 Td (A) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 280.15 719.25 Td (\(Unaudited\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 695.25 Td (Our revenues, operating profit and operating cash flows are impacted by the inherent seasonality of the academic ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 683.25 Td (calendar) Tj ET Q q 0 0 0 rg BT 87.31 683.25 Td (. ) Tj ET Q q 0 0 0 rg BT 92.13 683.25 Td (This seasonality af) Tj ET Q q 0 0 0 rg BT 166.93 683.25 Td (fects our working capital requirements and hence our overall financing needs. For example, we ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 671.25 Td (typically incur a net cash deficit from all of our activities in our first and fourth fiscal quarters of our fiscal year) Tj ET Q q 0 0 0 rg BT 499.27 671.25 Td (, which ends ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 659.25 Td (on March 31. In addition, changes in our customers) Tj ET Q q 0 0 0 rg BT 262.65 659.25 Td ( ordering patterns may impact the comparison of our results in a quarter ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 647.25 Td (with the same quarter of the previous year) Tj ET Q q 0 0 0 rg BT 222.15 647.25 Td (, or in a fiscal year with the prior fiscal year) Tj ET Q q 0 0 0 rg BT 396.95 647.25 Td (, where our customers may shift the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 635.25 Td (timing of material orders for a number of reasons, including, but not limited to, changes in academic semester start dates or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 623.25 Td (changes in inventory management practices.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 605.25 Td (As we migrate our product and service of) Tj ET Q q 0 0 0 rg BT 237.60 605.25 Td (ferings towards hosted digital solutions that are delivered over a period of time, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 593.25 Td (more of our revenues will be recognized ratably over the applicable subscription period, with billings in excess of revenues ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 581.25 Td (recognized reflected as deferred revenue. ) Tj ET Q q 0 0 0 rg BT 220.93 581.25 Td (This represents a change from traditional print products where revenues are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 569.25 Td (typically recognized upon shipment of the materials to our customers. Consequently) Tj ET Q q 0 0 0 rg BT 390.22 569.25 Td (, reported revenues may not be ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 557.25 Td (comparable to prior periods as a growing proportion of our revenues are recognized in subsequent periods.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 539.25 Td (The following tables present certain unaudited consolidated quarterly financial information for each of the fiscal quarters ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 527.25 Td (during the fiscal years ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 171.46 527.25 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 235.05 527.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 254.49 527.25 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 274.49 527.25 Td (. Such information has been prepared on the same basis as the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 515.25 Td (Company) Tj ET Q q 0 0 0 rg BT 95.67 515.25 Td (s consolidated financial statements and includes all adjustments necessary to state fairly the information for the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 503.25 Td (periods presented.) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 265.5 478.75 m 335.5 478.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 335.5 478.75 m 339.5 478.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 478.75 m 409.5 478.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 478.75 m 413.5 478.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 478.75 m 483.5 478.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 478.75 m 487.5 478.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 478.75 m 557.5 478.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 265.5 464.75 m 335.5 464.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 464.75 m 409.5 464.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 464.75 m 483.5 464.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 464.75 m 557.5 464.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 265.5 464.75 m 335.5 464.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 464.75 m 409.5 464.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 464.75 m 483.5 464.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 464.75 m 557.5 464.75 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 402.00 483.20 Td (2019) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 469.00 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 277.70 469.20 Td (1st Quarter) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 349.95 469.20 Td (2nd Quarter) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 424.45 469.20 Td (3rd Quarter) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 498.95 469.20 Td (4th Quarter) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 454.42 Td (Revenues) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 268.00 454.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 309.15 454.42 Td (288.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 454.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.15 454.42 Td (474.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 454.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 454.42 Td (310.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 454.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 454.42 Td (372.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 436.32 Td (Gross profit) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 104.05 440.85 Td (\(1\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 309.15 436.32 Td (100.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.15 436.32 Td (231.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 436.32 Td (122.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 436.32 Td (177.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 418.32 Td (Net \(loss\) income) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 310.80 418.37 Td (\(68.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 331.65 418.32 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 418.32 Td (34.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 418.37 Td (\(47.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 418.32 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 418.37 Td (\(15.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 418.32 Td (\)) Tj ET Q BT /F1 10.00 Tf ET 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 265.5 383.75 m 335.5 383.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 335.5 383.75 m 339.5 383.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 383.75 m 409.5 383.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 383.75 m 413.5 383.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 383.75 m 483.5 383.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 383.75 m 487.5 383.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 383.75 m 557.5 383.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 265.5 369.75 m 335.5 369.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 369.75 m 409.5 369.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 369.75 m 483.5 369.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 369.75 m 557.5 369.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 265.5 369.75 m 335.5 369.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 369.75 m 409.5 369.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 369.75 m 483.5 369.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 369.75 m 557.5 369.75 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 402.00 388.20 Td (2018) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 374.00 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 277.70 374.20 Td (1st Quarter) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 349.95 374.20 Td (2nd Quarter) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 424.45 374.20 Td (3rd Quarter) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 498.95 374.20 Td (4th Quarter) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 360.32 Td (Revenues) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 268.00 360.32 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 309.15 360.32 Td (296.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 360.32 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.15 360.32 Td (522.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 360.32 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 360.32 Td (326.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 360.32 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 360.32 Td (321.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 342.32 Td (Gross profit) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 104.05 346.85 Td (\(2\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 309.15 342.32 Td (1) Tj ET Q q 0 0 0 rg BT 314.15 342.32 Td (13.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.15 342.32 Td (263.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 342.32 Td (138.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 342.32 Td (135.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 324.32 Td (Net \(loss\) income) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 310.80 324.37 Td (\(29.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 331.65 324.32 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 324.32 Td (55.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 324.32 Td (25.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 324.37 Td (\(53.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 324.32 Td (\)) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 54.00 306.78 Td (\(1\) ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 302.25 Td (Gross profit \(defined as net revenues less cost of sales, depreciation and amortization\) includes depreciation of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 517.13 302.25 Td ($13.4 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 290.25 Td (million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 100.89 290.25 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 105.89 290.25 Td ($14.3 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 159.78 290.25 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 164.78 290.25 Td ($14.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 218.67 290.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 238.11 290.25 Td ($14.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 292.00 290.25 Td ( for the quarters ended June 30, 2018, September 30, 2018, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 278.25 Td (December 31, 2018 and March 31, 2019, respectively) Tj ET Q q 0 0 0 rg BT 286.28 278.25 Td (.) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 54.00 264.78 Td (\(2\) ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 260.25 Td (Gross profit \(defined as net revenues less cost of sales, depreciation and amortization\) includes depreciation of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 517.13 260.25 Td ($15.2 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 248.25 Td (million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 100.89 248.25 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 105.89 248.25 Td ($14.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 159.78 248.25 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 164.78 248.25 Td ($14.3 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 218.67 248.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 238.11 248.25 Td ($13.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 292.00 248.25 Td ( for the quarters ended June 30, 2017, September 30, 2017, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 236.25 Td (December 31, 2017 and March 31, 2018, respectively) Tj ET Q q 0 0 0 rg BT 286.28 236.25 Td (.) Tj ET Q endstream endobj 83 0 obj <> endobj 84 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 217.00 760.75 Td (Management) Tj ET Q q 0 0 0 rg BT 276.06 760.75 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 348.04 760.75 Td (Analysis of) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.65 748.75 Td (Financial Condition and Results of Operations) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 36 -) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 82.90 731.25 Td (MANAGEMENTS DISCUSSION ) Tj ET Q q 0 0 0 rg BT 232.92 731.25 Td (AND ) Tj ET Q q 0 0 0 rg BT 256.54 731.25 Td (ANAL) Tj ET Q q 0 0 0 rg BT 283.95 731.25 Td (YSIS OF) Tj ET Q q 0 0 0 rg BT 322.21 731.25 Td ( FINANCIAL) Tj ET Q q 0 0 0 rg BT 380.82 731.25 Td ( CONDITION ) Tj ET Q q 0 0 0 rg BT 444.17 731.25 Td (AND RESUL) Tj ET Q q 0 0 0 rg BT 500.76 731.25 Td (TS OF) Tj ET Q q 0 0 0 rg BT 529.01 731.25 Td ( ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 273.30 719.25 Td (OPERA) Tj ET Q q 0 0 0 rg BT 307.56 719.25 Td (TIONS) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 73.00 698.25 Td (The following contains management) Tj ET Q q 0 0 0 rg BT 220.31 698.25 Td (s discussion and analysis of our financial condition and r) Tj ET Q q 0 0 0 rg BT 449.67 698.25 Td (esults of operations ) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 54.00 686.25 Td (\(MD&A\) and should be r) Tj ET Q q 0 0 0 rg BT 165.85 686.25 Td (ead in conjunction with our consolidated financial statements and the r) Tj ET Q q 0 0 0 rg BT 451.01 686.25 Td (elated notes ther) Tj ET Q q 0 0 0 rg BT 517.29 686.25 Td (eto ) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 54.00 674.25 Td (included elsewher) Tj ET Q q 0 0 0 rg BT 126.11 674.25 Td (e in this r) Tj ET Q q 0 0 0 rg BT 163.79 674.25 Td (eport. Certain historical amounts have been r) Tj ET Q q 0 0 0 rg BT 346.46 674.25 Td (eclassified to conform to the curr) Tj ET Q q 0 0 0 rg BT 479.13 674.25 Td (ent period) Tj ET Q q 0 0 0 rg BT 521.99 674.25 Td (s ) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 54.00 662.25 Td (pr) Tj ET Q q 0 0 0 rg BT 62.52 662.25 Td (esentation. This discussion contains forwar) Tj ET Q q 0 0 0 rg BT 235.77 662.25 Td (d-looking statements and involves numer) Tj ET Q q 0 0 0 rg BT 399.26 662.25 Td (ous risks and uncertainties, including, ) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 54.00 650.25 Td (but not limited to, those described in the Special note r) Tj ET Q q 0 0 0 rg BT 278.32 650.25 Td (egar) Tj ET Q q 0 0 0 rg BT 296.28 650.25 Td (ding forwar) Tj ET Q q 0 0 0 rg BT 343.42 650.25 Td (d-looking statements and Risk Factors sections ) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 54.00 638.25 Td (of this r) Tj ET Q q 0 0 0 rg BT 84.75 638.25 Td (eport. ) Tj ET Q q 0 0 0 rg BT 110.67 638.25 Td (Actual r) Tj ET Q q 0 0 0 rg BT 142.80 638.25 Td (esults may differ materially fr) Tj ET Q q 0 0 0 rg BT 261.30 638.25 Td (om those contained in any forwar) Tj ET Q q 0 0 0 rg BT 395.65 638.25 Td (d-looking statements. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 617.25 Td (Overview ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.00 596.25 Td (Cengage Learning Holdings II, Inc. \(CL) Tj ET Q q 0 0 0 rg BT 237.85 596.25 Td ( Holdings II, Inc.\), together with its consolidated subsidiaries, is hereinafter ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 584.25 Td (collectively referred to as Cengage, the Company) Tj ET Q q 0 0 0 rg BT 264.64 584.25 Td (, us, we and our) Tj ET Q q 0 0 0 rg BT 354.04 584.25 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.00 563.25 Td (W) Tj ET Q q 0 0 0 rg BT 81.64 563.25 Td (e are a leading global provider of high-quality content and innovative digital learning solutions for the global ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 551.25 Td (academic, school, skills and research markets.) Tj ET Q q 0 0 0 rg BT 240.69 551.25 Td (W) Tj ET Q q 0 0 0 rg BT 249.33 551.25 Td (e are a publisher of course materials in the United States higher education ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 539.25 Td (segment of the academic market, with strong positions across all major disciplines. Our of) Tj ET Q q 0 0 0 rg BT 414.57 539.25 Td (ferings to customers include ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 527.25 Td (technology and academic services, including digital homework solutions and support services for use of our digital products, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 515.25 Td (in response to market demand for more fully integrated solutions. In addition, operating under our Gale brand, we are a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 503.25 Td (leading global provider of library reference materials with a vast collection of primary source content. For a full description ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 491.25 Td (of our industry and or) Tj ET Q q 0 0 0 rg BT 141.03 491.25 Td (ganizational structure, see Description of Business.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 473.25 Td (In the second quarter of fiscal year 2019, we launched Cengage Unlimited, a digital subscription service of) Tj ET Q q 0 0 0 rg BT 499.46 473.25 Td (fering for our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 461.25 Td (U.S. higher education business within our Learning segment. Cengage Unlimited provides access to all of our digital learning ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 449.25 Td (platforms, ebooks, online homework and study tools as well as print rentals for a fixed price that can be subscribed to for one ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 437.25 Td (semester) Tj ET Q q 0 0 0 rg BT 88.58 437.25 Td (, one year or two years.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 419.25 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 419.25 Td (e are or) Tj ET Q q 0 0 0 rg BT 110.43 419.25 Td (ganized into three reportable segments on the basis of production process and products and services provided ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 407.25 Td (by each segment, identified as follows: ) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 72.00 389.25 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 117.56 389.25 Td (in the United States, we produce a variety of digital and print educational solutions and associated services ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 377.25 Td (for the academic, skills and school markets. ) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 72.00 359.25 Td (Gale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 100.33 359.25 Td (we of) Tj ET Q q 0 0 0 rg BT 122.64 359.25 Td (fer research platforms around the world which provide access to our original content, collections of primary ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 347.25 Td (source materials and aggregated periodicals to learners at libraries, colleges, universities, schools and businesses.) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 73.00 329.25 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 134.67 329.25 Td (we distribute educational solutions across all major academic disciplines, provide English language ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 317.25 Td (teaching \(EL) Tj ET Q q 0 0 0 rg BT 109.44 317.25 Td (T\) products and adapt our Learning of) Tj ET Q q 0 0 0 rg BT 266.42 317.25 Td (ferings for use in multiple countries and territories around the world.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.00 299.25 Td (When determining reportable segments, we aggregated operating segments based on their similar economic and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 287.25 Td (operating characteristics.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 269.25 Td (Throughout the MD&A, our discussion of revenues may include gross sales measures by channel, which represent ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 257.25 Td (amounts invoiced to our customers.Gross sales are reflected before any adjustments for sales returns provision or revenue ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 245.25 Td (deferral.) Tj ET Q q 0 0 0 rg BT 89.90 245.25 Td (W) Tj ET Q q 0 0 0 rg BT 98.54 245.25 Td (e believe this measure provides investors with a more comprehensive understanding of our underlying revenue ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 233.25 Td (results and trends by presenting amounts invoiced on a consistent basis. In addition, we may also discuss ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 475.88 240.18 24.15 -9.09 re f /GS0 gs q 0 0 0 rg BT 475.88 233.25 Td (core ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 500.02 233.25 Td (digital ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 221.25 Td (product sales) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 106.49 228.18 4.44 -9.09 re f /GS0 gs q 0 0 0 rg BT 106.49 221.25 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 110.92 221.25 Td ( which represents gross sales, less actual returns, of digital standalone products, as well as bundled print and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 209.25 Td (digital products. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 191.25 Td (Management reviews segment performance on a constant currency basis, which removes the impact of changes in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 179.25 Td (foreign currency exchange rates by converting current period and prior period amounts from local currency to U.S. dollars ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 167.25 Td (using standard internal currency exchange rates held constant for each year) Tj ET Q q 0 0 0 rg BT 353.87 167.25 Td (. ) Tj ET Q q 0 0 0 rg BT 358.69 167.25 Td (This allows us to evaluate underlying current ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 155.25 Td (operating performance in comparison to past operating performance. ) Tj ET Q q 0 0 0 rg BT 330.84 155.25 Td (As needed, we recast segment information for the prior ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 143.25 Td (period based on our internally-derived standard currency exchange rates used for the current period in order to remove the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 131.25 Td (impact of foreign currency exchange fluctuation.) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 72.00 120.18 459.42 -9.09 re f /GS0 gs q 0 0 0 rg BT 72.00 113.25 Td (T) Tj ET Q q 0 0 0 rg BT 77.41 113.25 Td (o supplement our consolidated financial statements presented in accordance with accounting principles generally ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 108.18 500.29 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 101.25 Td (accepted in the United States of ) Tj ET Q q 0 0 0 rg BT 182.85 101.25 Td (America \(GAAP\), we have presented certain non-GAAP) Tj ET Q q 0 0 0 rg BT 418.78 101.25 Td ( financial measures in addition to ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 96.18 472.31 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 89.25 Td (our GAAP) Tj ET Q q 0 0 0 rg BT 96.69 89.25 Td ( results. ) Tj ET Q q 0 0 0 rg BT 130.11 89.25 Td (W) Tj ET Q q 0 0 0 rg BT 138.75 89.25 Td (e believe that these non-GAAP) Tj ET Q q 0 0 0 rg BT 262.79 89.25 Td ( financial measures provide useful information for evaluating our ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 84.18 473.61 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 77.25 Td (business performance. ) Tj ET Q q 0 0 0 rg BT 145.73 77.25 Td (W) Tj ET Q q 0 0 0 rg BT 154.37 77.25 Td (e believe that the presentation of ) Tj ET Q q 0 0 0 rg BT 286.54 77.25 Td (Adjusted Revenues and ) Tj ET Q q 0 0 0 rg BT 382.92 77.25 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 457.63 77.25 Td ( is appropriate to ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 72.18 485.44 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 65.25 Td (provide additional information to investors about certain material non-cash items and about unusual items that we do not ) Tj ET Q endstream endobj 85 0 obj <> endobj 86 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 217.00 760.75 Td (Management) Tj ET Q q 0 0 0 rg BT 276.06 760.75 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 348.04 760.75 Td (Analysis of) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.65 748.75 Td (Financial Condition and Results of Operations) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 37 -) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 738.03 487.79 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 731.10 Td (expect to continue at the same level in the future as well as other items. Further) Tj ET Q q 0 0 0 rg BT 370.72 731.10 Td (, we believe ) Tj ET Q q 0 0 0 rg BT 420.70 731.10 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 495.42 731.10 Td ( provides a ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 726.03 497.06 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 719.10 Td (meaningful measure of operating profitability because we use it for evaluating our business performance and understanding ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 714.03 491.65 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 707.10 Td (certain significant items. ) Tj ET Q q 0 0 0 rg BT 154.90 707.10 Td (This information should be considered as supplemental in nature and should not be considered in ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 702.03 488.74 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 695.10 Td (isolation or as a substitute for the related financial information prepared in accordance with GAAP) Tj ET Q q 0 0 0 rg BT 447.76 695.10 Td (.In addition, these non-) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 690.03 428.95 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 683.10 Td (GAAP) Tj ET Q q 0 0 0 rg BT 80.86 683.10 Td ( financial measures may not be the same as similarly entitled measures reported by other companies.) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 72.00 672.03 480.79 -9.09 re f /GS0 gs q 0 0 0 rg BT 72.00 665.10 Td (Our definition of ) Tj ET Q q 0 0 0 rg BT 141.71 665.10 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 216.43 665.10 Td ( allows us to add back certain non-cash and other char) Tj ET Q q 0 0 0 rg BT 432.83 665.10 Td (ges or costs that are deducted ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 660.03 492.90 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 653.10 Td (in calculating net income from continuing operations. However) Tj ET Q q 0 0 0 rg BT 307.41 653.10 Td (, these are expenses that may recur) Tj ET Q q 0 0 0 rg BT 446.11 653.10 Td (, vary greatly and can be ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 648.03 499.29 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 641.10 Td (dif) Tj ET Q q 0 0 0 rg BT 64.93 641.10 Td (ficult to predict. ) Tj ET Q q 0 0 0 rg BT 131.39 641.10 Td (They can represent the ef) Tj ET Q q 0 0 0 rg BT 232.27 641.10 Td (fect of long-term strategies as opposed to short-term results. In addition, certain ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 636.03 404.57 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 629.10 Td (of these expenses can represent the reduction of cash that could be used for other corporate purposes.) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 72.00 618.03 281.81 -9.09 re f /GS0 gs q 0 0 0 rg BT 72.00 611.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 611.10 Td (e present the following non-GAAP) Tj ET Q q 0 0 0 rg BT 220.24 611.10 Td ( financial measures in this report:) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 57.00 585.33 Td (Measur) Tj ET Q q 0 0 0 rg BT 89.68 585.33 Td (e) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 181.00 585.33 Td (Definition) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 572.17 Td (Adjusted Revenues) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 181.00 572.17 Td (This measure is defined as revenues before the impact of changes in foreign currency) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 181.00 562.17 Td (exchange rates.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 538.17 Td (Adjusted EBITDA) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 181.00 538.17 Td (This measure is defined as net income \(loss\) before: \(benefit from\) provision for income) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 181.00 528.17 Td (taxes; reor) Tj ET Q q 0 0 0 rg BT 222.83 528.17 Td (ganization items, net; interest expense, net; loss on early extinguishment of debt,) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 181.00 518.17 Td (net; other \(income\) expense, net, in operating income \(loss\); amortization of identifiable) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 181.00 508.17 Td (intangible assets; depreciation; operational restructuring and other char) Tj ET Q q 0 0 0 rg BT 464.97 508.17 Td (ges, net; amortization) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 181.00 498.17 Td (of pre-publication costs; other income \(expense\), net, below operating income \(loss\); equity-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 181.00 488.17 Td (based compensation expense and non-core other operating expenses. ) Tj ET Q q 0 0 0 rg BT 458.31 488.17 Td (This measure also) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 181.00 478.17 Td (removes the impact of changes in foreign currency exchange rates on the items noted above.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 458.17 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 131.72 458.17 Td ( less ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.50 448.17 Td (Pre-Publication Costs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 181.00 458.17 Td (This measure reflects ) Tj ET Q q 0 0 0 rg BT 268.74 458.17 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 343.46 458.17 Td ( less additions to pre-publication costs on an accrual) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 181.00 448.17 Td (basis, which are costs incurred prior to the publication date of a title or release date of a) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 181.00 438.17 Td (product and represent activities associated with product development not limited to editorial) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 181.00 428.17 Td (review and fact verification, graphic art design and layout and the process of conversion) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 181.00 418.17 Td (from print to digital media or within various formats of digital media. In addition, pre-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 181.00 408.17 Td (publication costs include the cost to procure perpetual rights for the use of content which) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 181.00 398.17 Td (have been developed by third parties and are to be included in our products. Costs are) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 181.00 388.17 Td (capitalized when the title is expected to generate probable future economic benefits and are) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 181.00 378.17 Td (amortized upon publication of the title over its estimated operating life cycle.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 359.17 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 131.72 359.17 Td ( less) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.50 349.17 Td (Capital Expenditures) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 181.00 359.17 Td (This measure reflects ) Tj ET Q q 0 0 0 rg BT 268.47 359.17 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 343.18 359.17 Td ( less additions to pre-publication costs and property) Tj ET Q q 0 0 0 rg BT 548.88 359.17 Td (,) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 181.00 349.17 Td (equipment and capitalized internal-use software on an accrual basis.) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 72.00 333.03 473.93 -9.09 re f /GS0 gs q 0 0 0 rg BT 72.00 326.10 Td (See Reconciliations of Non-GAAP) Tj ET Q q 0 0 0 rg BT 216.32 326.10 Td ( Financial Measures for reconciliations to the most directly comparable financial ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 321.03 183.82 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 314.10 Td (measures prepared in accordance with GAAP) Tj ET Q q 0 0 0 rg BT 235.32 314.10 Td (.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 293.10 Td (Pr) Tj ET Q q 0 0 0 rg BT 64.37 293.10 Td (oposed Merger) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 275.10 Td (On May 1, 2019, we entered into a definitive agreement with McGraw-Hill, pursuant to which, at the Ef) Tj ET Q q 0 0 0 rg BT 488.65 275.10 Td (fective ) Tj ET Q q 0 0 0 rg BT 518.17 275.10 Td (T) Tj ET Q q 0 0 0 rg BT 523.92 275.10 Td (ime and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 263.10 Td (subject to the terms and conditions of the Mer) Tj ET Q q 0 0 0 rg BT 237.67 263.10 Td (ger ) Tj ET Q q 0 0 0 rg BT 252.38 263.10 Td (Agreement, our Company and McGraw-Hill will combine in a mer) Tj ET Q q 0 0 0 rg BT 524.90 263.10 Td (ger of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 251.10 Td (equals transaction and our stockholders will receive shares of capital stock representing exactly 50% of the issued and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 239.10 Td (outstanding shares of voting common stock of the combined company) Tj ET Q q 0 0 0 rg BT 334.13 239.10 Td (. ) Tj ET Q q 0 0 0 rg BT 338.95 239.10 Td (W) Tj ET Q q 0 0 0 rg BT 347.59 239.10 Td (e have agreed to operate our business in the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 227.10 Td (ordinary course during the period between the execution of the Mer) Tj ET Q q 0 0 0 rg BT 324.28 227.10 Td (ger ) Tj ET Q q 0 0 0 rg BT 339.00 227.10 Td (Agreement and the Ef) Tj ET Q q 0 0 0 rg BT 426.83 227.10 Td (fective ) Tj ET Q q 0 0 0 rg BT 456.35 227.10 Td (T) Tj ET Q q 0 0 0 rg BT 462.11 227.10 Td (ime, subject to certain ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 215.10 Td (agreed exceptions. Completion of the Mer) Tj ET Q q 0 0 0 rg BT 222.66 215.10 Td (ger is subject to certain conditions, including receipt of regulatory approvals.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 194.10 Td (Highlights of Our) Tj ET Q q 0 0 0 rg BT 129.39 194.10 Td ( Industry ) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 72.00 173.10 Td (Academic) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 155.10 Td (Operating performance in the academic market is af) Tj ET Q q 0 0 0 rg BT 279.77 155.10 Td (fected by enrollment levels, the extent of academic funding and the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 143.10 Td (amount of courses available. ) Tj ET Q q 0 0 0 rg BT 170.72 143.10 Td (The United States has the lar) Tj ET Q q 0 0 0 rg BT 285.79 143.10 Td (gest higher education system in the world with approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 131.10 Td (18million students) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 130.67 131.10 Td ( enrolled at approximately 4,400 two- and four) Tj ET Q q 0 0 0 rg BT 317.64 131.10 Td (-year post-secondary institutions. ) Tj ET Q q 0 0 0 rg BT 452.98 131.10 Td (W) Tj ET Q q 0 0 0 rg BT 462.02 131.10 Td (ithin the academic ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 119.10 Td (market, total domestic spending on new learning materials was approximately $3.2 billion in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 427.53 119.10 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.53 119.10 Td ( \(including spending ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 107.10 Td (relating to for) Tj ET Q q 0 0 0 rg BT 108.78 107.10 Td (-profit schools\). U.S. two- and four) Tj ET Q q 0 0 0 rg BT 249.67 107.10 Td (-year post-secondary enrollments are expected to increase by 3% between ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 95.10 Td (2016, the last year of actual data, and 2027 to approximately 20 million, according to the National Center for Education ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 83.10 Td (Statistics. In international markets, where government funding generally constitutes a lar) Tj ET Q q 0 0 0 rg BT 408.72 83.10 Td (ger percentage of the overall amount ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 71.10 Td (spent on education, including on our products, government spending generally decreases during recessionary periods, which ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 59.10 Td (can have an adverse ef) Tj ET Q q 0 0 0 rg BT 144.32 59.10 Td (fect on our revenues in such markets.) Tj ET Q endstream endobj 87 0 obj <> endobj 88 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 217.00 760.75 Td (Management) Tj ET Q q 0 0 0 rg BT 276.06 760.75 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 348.04 760.75 Td (Analysis of) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.65 748.75 Td (Financial Condition and Results of Operations) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 38 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 731.10 Td (T) Tj ET Q q 0 0 0 rg BT 77.41 731.10 Td (echnology continues to be a key driver of trends in the academic market for both course management and delivery of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (content. ) Tj ET Q q 0 0 0 rg BT 87.88 719.10 Td (As such, we continue to pursue our strategy to accelerate development of our innovative digital products and tools. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 707.10 Td (W) Tj ET Q q 0 0 0 rg BT 62.64 707.10 Td (e expect these ef) Tj ET Q q 0 0 0 rg BT 128.80 707.10 Td (forts will enable us to realize continued growth through new solutions that allow us to access a greater ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 695.10 Td (number of students and generate new sources of revenues from our existing customers. ) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 72.00 677.10 Td (School) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 659.10 Td (The United States school \(consisting of grade levels of kinder) Tj ET Q q 0 0 0 rg BT 318.70 659.10 Td (garten to the 12th grade, or K-12\) market consists of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 647.10 Td (approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 114.26 647.10 Td (57million students) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 190.93 647.10 Td ( and is driven by state adoption sales, wherein states approve certain products for use in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 635.10 Td (public schools statewide, and open territory sales, where individual public school districts determine which educational ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 623.10 Td (products to use to facilitate teaching of the curriculum. ) Tj ET Q q 0 0 0 rg BT 275.41 623.10 Td (This market is linked, in part, to state and local budgetary cycles. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 611.10 Td (W) Tj ET Q q 0 0 0 rg BT 63.04 611.10 Td (ithin the United States school market, we believe that certain disciplines, such as ) Tj ET Q q 0 0 0 rg BT 387.68 611.10 Td (AP&E and EL) Tj ET Q q 0 0 0 rg BT 445.08 611.10 Td (T) Tj ET Q q 0 0 0 rg BT 450.45 611.10 Td (, both of which are areas ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 599.10 Td (of focus for the Company) Tj ET Q q 0 0 0 rg BT 156.10 599.10 Td (, have more attractive growth potential.) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 72.00 581.10 Td (Resear) Tj ET Q q 0 0 0 rg BT 99.40 581.10 Td (ch) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 563.10 Td (Content and solution providers in the research market create and sell specialized encyclopedias and directories, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 551.10 Td (periodical databases, primary-source research collections and other reference materials. ) Tj ET Q q 0 0 0 rg BT 406.14 551.10 Td (These materials are principally sold ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 539.10 Td (to academic, public, K-12, corporate and government libraries. ) Tj ET Q q 0 0 0 rg BT 307.61 539.10 Td (T) Tj ET Q q 0 0 0 rg BT 313.02 539.10 Td (otal consumer spending in the research market was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 527.10 Td (approximately $6.0 billion in the U.S. and $17.0 billion globally in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 324.25 527.10 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 344.25 527.10 Td (. ) Tj ET Q q 0 0 0 rg BT 349.07 527.10 Td (The research market has seen increased demand for ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 515.10 Td (digital materials with enhanced functionality and accessibility as well as authoritative, proprietary content with credibility) Tj ET Q q 0 0 0 rg BT 540.70 515.10 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 503.10 Td (or) Tj ET Q q 0 0 0 rg BT 62.15 503.10 Td (ganization and depth that are dif) Tj ET Q q 0 0 0 rg BT 191.08 503.10 Td (ferentiated from free content otherwise available on the Internet. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 482.10 Td (Sour) Tj ET Q q 0 0 0 rg BT 74.38 482.10 Td (ces of Revenues) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 461.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 461.10 Td (e of) Tj ET Q q 0 0 0 rg BT 95.73 461.10 Td (fer a broad portfolio of products, including digital and print solutions. ) Tj ET Q q 0 0 0 rg BT 376.88 461.10 Td (W) Tj ET Q q 0 0 0 rg BT 385.52 461.10 Td (e compete primarily on the basis of price, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 449.10 Td (the quality of our content and author reputation, the ef) Tj ET Q q 0 0 0 rg BT 270.42 449.10 Td (fectiveness of our digital solutions and customers) Tj ET Q q 0 0 0 rg BT 470.74 449.10 Td ( familiarity with our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 437.10 Td (products.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 94.50 419.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 419.10 Td (W) Tj ET Q q 0 0 0 rg BT 121.54 419.10 Td (ithin the higher education market, we publish a wide variety of print products including textbooks, study ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 407.10 Td (guides, laboratory exercises, instructor editions and supplemental products.) Tj ET Q q 0 0 0 rg BT 415.85 407.10 Td (W) Tj ET Q q 0 0 0 rg BT 424.49 407.10 Td (e publish textbooks for all major ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 395.10 Td (academic disciplines of two- and four) Tj ET Q q 0 0 0 rg BT 263.08 395.10 Td (-year colleges as well as major disciplines of career studies.Our higher ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 383.10 Td (education of) Tj ET Q q 0 0 0 rg BT 162.02 383.10 Td (ferings also include a broad range of digital and print-digital hybrid products. Our of) Tj ET Q q 0 0 0 rg BT 500.08 383.10 Td (ferings to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 371.10 Td (customers include technology and academic services, including digital homework solutions and support ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 359.10 Td (services for use of our digital products, in response to market demand for fully integrated solutions. ) Tj ET Q q 0 0 0 rg BT 512.78 359.10 Td (W) Tj ET Q q 0 0 0 rg BT 521.42 359.10 Td (e ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 347.10 Td (distribute our products primarily through traditional brick and mortar college bookstores and online book ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 335.10 Td (retailers which sell directly to students. In the second quarter of fiscal year 2019, we launched Cengage ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 323.10 Td (Unlimited, a digital subscription service of) Tj ET Q q 0 0 0 rg BT 283.39 323.10 Td (fering for our U.S. higher education business. Cengage Unlimited ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 311.10 Td (provides access to all of our digital learning platforms, eBooks, online homework and study tools as well as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 299.10 Td (free print for a fixed price that can be subscribed to for one semester) Tj ET Q q 0 0 0 rg BT 385.60 299.10 Td (, one year) Tj ET Q q 0 0 0 rg BT 424.34 299.10 Td (, or two years.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 94.50 281.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 281.10 Td (W) Tj ET Q q 0 0 0 rg BT 121.54 281.10 Td (ithin the skills market, we create and sell textbooks, digital solutions and other related materials to students ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 269.10 Td (who are seeking job training, certification, or continuing skills training in the workplace and through ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 257.10 Td (professional training programs.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 94.50 239.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 239.10 Td (W) Tj ET Q q 0 0 0 rg BT 121.54 239.10 Td (ithin the school market, we compete in select elective disciplines, including ) Tj ET Q q 0 0 0 rg BT 425.62 239.10 Td (AP&E and EL) Tj ET Q q 0 0 0 rg BT 483.03 239.10 Td (T) Tj ET Q q 0 0 0 rg BT 488.39 239.10 Td (.) Tj ET Q q 0 0 0 rg BT 493.21 239.10 Td (The school ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 227.10 Td (market is composed of state adoption sales, where states approve certain products for use in public schools ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 215.10 Td (statewide, and open territory sales, where individual public school districts determine which educational ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 203.10 Td (products to use.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 94.50 185.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 185.10 Td (W) Tj ET Q q 0 0 0 rg BT 121.54 185.10 Td (ithin the research market, we operate principally under our Gale brand.) Tj ET Q q 0 0 0 rg BT 407.63 185.10 Td (W) Tj ET Q q 0 0 0 rg BT 416.26 185.10 Td (e sell directly to many libraries and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 173.10 Td (library consortia, and also sell via distributors.In addition to selling to libraries, we also license our content for ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 161.10 Td (integration within web-based information services.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 140.10 Td (Operating Expenses) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 119.10 Td (Our ) Tj ET Q q 0 0 0 rg BT 90.05 119.10 Td (operating ) Tj ET Q q 0 0 0 rg BT 130.32 119.10 Td (expenses ) Tj ET Q q 0 0 0 rg BT 168.91 119.10 Td (are ) Tj ET Q q 0 0 0 rg BT 183.62 119.10 Td (principally ) Tj ET Q q 0 0 0 rg BT 229.44 119.10 Td (the ) Tj ET Q q 0 0 0 rg BT 244.16 119.10 Td (following:) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 94.50 98.70 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 98.70 Td (Cost of revenues includes both fixed and variable costs directly related to publishing our digital products, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 86.70 Td (textbooks and printed proprietary reference materials. ) Tj ET Q q 0 0 0 rg BT 329.73 86.70 Td (This includes fixed and variable costs related to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 74.70 Td (activation fees/royalties on third party technology) Tj ET Q q 0 0 0 rg BT 310.96 74.70 Td (, royalty payments to our authors, cost of paper) Tj ET Q q 0 0 0 rg BT 499.40 74.70 Td (, printing and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 62.70 Td (binding, and distribution costs, all of which vary as revenues increase or decrease. ) Tj ET Q q 0 0 0 rg BT 442.95 62.70 Td (Also included in cost of ) Tj ET Q endstream endobj 89 0 obj <> endobj 90 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 217.00 760.75 Td (Management) Tj ET Q q 0 0 0 rg BT 276.06 760.75 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 348.04 760.75 Td (Analysis of) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.65 748.75 Td (Financial Condition and Results of Operations) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 39 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 731.10 Td (revenues are fixed direct and indirect costs incurred for the production, delivery and customer support of our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 719.10 Td (products and services such as occupancy and employee-related costs associated with editorial, product ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 707.10 Td (management, digital content development, customer service, technical product support and distribution. In ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 695.10 Td (addition, cost of revenues includes amortization of pre-publication costs, which are costs related to the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 683.10 Td (development and creation of a book, reference material or other digital and print content, as well as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 671.10 Td (amortization of certain technology-related and author buyout/content right identifiable intangible assets;) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 94.50 650.70 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 650.70 Td (Selling, general and administrative expenses includes salaries of our sales, marketing and administrative ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 638.70 Td (personnel, equity-based compensation expense, marketing and advertising expenses and other costs of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 626.70 Td (operating our business which typically do not vary as revenues increase or decrease. ) Tj ET Q q 0 0 0 rg BT 451.27 626.70 Td (Also classified within ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 614.70 Td (selling, general, and administrative expense are digital hosting and other technology costs, which are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 602.70 Td (increasing as our digital transformation continues and we continue to invest in technology;) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 94.50 582.30 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 582.30 Td (Operational restructuring and other char) Tj ET Q q 0 0 0 rg BT 272.81 582.30 Td (ges includes costs associated with exit or disposal activities, including ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 570.30 Td (lease termination costs and certain employee severance costs associated with approved restructuring plans, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 558.30 Td (facility closures or other similar activities, knowledge transfer costs, and business process reengineering ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 546.30 Td (consulting costs that are directly related to the restructuring initiatives; and) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 94.50 525.90 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 525.90 Td (Depreciation and amortization represents the depreciation of our property) Tj ET Q q 0 0 0 rg BT 406.18 525.90 Td (, equipment and capitalized internal-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 513.90 Td (use software as well as the amortization of our identifiable intangible assets.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 489.90 Td (Seasonality and Comparability) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 468.90 Td (Our revenues, operating profit and operating cash flows are impacted by the inherent seasonality of the academic ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 456.90 Td (calendar) Tj ET Q q 0 0 0 rg BT 87.31 456.90 Td (. ) Tj ET Q q 0 0 0 rg BT 92.13 456.90 Td (This seasonality af) Tj ET Q q 0 0 0 rg BT 166.93 456.90 Td (fects our working capital requirements and hence our overall financing needs. For example, we ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 444.90 Td (typically incur a net cash deficit from all of our activities in the first and fourth quarters of our fiscal year which ends on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 432.90 Td (March 31. In addition, changes in our customers) Tj ET Q q 0 0 0 rg BT 250.15 432.90 Td ( ordering patterns may impact the comparison of our results in a quarter with ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 420.90 Td (the same quarter of the previous year) Tj ET Q q 0 0 0 rg BT 201.87 420.90 Td (, or in a fiscal year with the prior fiscal year) Tj ET Q q 0 0 0 rg BT 376.68 420.90 Td (, where our customers may shift the timing ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 408.90 Td (of material orders for a number of reasons, including, but not limited to, changes in academic semester start dates, changes in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 396.90 Td (inventory management practices, and a shift in customer base driven by an increase in direct to student subscription products.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 378.90 Td (As we continue to migrate our service of) Tj ET Q q 0 0 0 rg BT 234.82 378.90 Td (ferings towards hosted digital solutions that are delivered over a period of time, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 366.90 Td (the associated revenues will be recognized ratably over the applicable subscription period, with amounts billed in excess of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 354.90 Td (revenues recognized reflected as deferred revenue. Deferred revenue represents amounts billed in advance from our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 342.90 Td (customers that will be recognized as revenue in subsequent periods as products and services are delivered to customers. ) Tj ET Q q 0 0 0 rg BT 534.50 342.90 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 330.90 Td (current portion of deferred revenue was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 215.04 330.90 Td ($182.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 273.93 330.90 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 293.37 330.90 Td ($178.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 352.26 330.90 Td ( as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 376.42 330.90 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 440.02 330.90 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 459.45 330.90 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.45 330.90 Td (, respectively) Tj ET Q q 0 0 0 rg BT 532.12 330.90 Td (, and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 318.90 Td (the non-current portion of deferred revenue was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 248.08 318.90 Td ($32.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.97 318.90 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 321.41 318.90 Td ($30.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 375.30 318.90 Td ( as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 399.46 318.90 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.06 318.90 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 482.50 318.90 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 502.50 318.90 Td (, respectively) Tj ET Q q 0 0 0 rg BT 555.16 318.90 Td (. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 297.90 Td (Dividends) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 276.90 Td (There were no dividends declared in the fiscal years ended March 31, 2019 and 2018.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 255.90 Td (On September 14, 2016, our board of directors authorized management to pay a one-time cash dividend of up to $200.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 243.90 Td (million payable to all common shareholders of record at the close of business on September 16, 2016, which was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 231.90 Td (subsequently paid on September 30, 2016 using a portion of the proceeds from the issuance of debt during the first quarter of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 219.90 Td (fiscal year 2017. Based on the 67,922,206 shares of common stock outstanding on the record date, the dividend payment was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 207.90 Td (approximately $2.94 per share. ) Tj ET Q q 0 0 0 rg BT 180.45 207.90 Td (The dividend reduced additional paid-in capital as we did not have retained earnings at the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 195.90 Td (time of the dividend. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 174.90 Td (Operational Restructuring and Other) Tj ET Q q 0 0 0 rg BT 214.64 174.90 Td ( Charges) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 153.90 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 99.88 153.90 Td (Y) Tj ET Q q 0 0 0 rg BT 104.88 153.90 Td (ear 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 132.90 Td (During the fourth quarter of fiscal year 2019, we initiated a restructuring program in our Learning segment to streamline ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 120.90 Td (operations. ) Tj ET Q q 0 0 0 rg BT 100.47 120.90 Td (W) Tj ET Q q 0 0 0 rg BT 109.11 120.90 Td (e incurred $3.6 million of severance related costs in connection with this program. ) Tj ET Q q 0 0 0 rg BT 440.41 120.90 Td (Additionally) Tj ET Q q 0 0 0 rg BT 490.31 120.90 Td (, as part of this ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 108.90 Td (initiative, we vacated and ceased use of one of our of) Tj ET Q q 0 0 0 rg BT 266.23 108.90 Td (fices and recorded a restructuring char) Tj ET Q q 0 0 0 rg BT 419.58 108.90 Td (ge of $0.2 million, representing ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 96.90 Td (the relative portion of remaining future lease payments, net of estimated sublease income, along with other exit costs related ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 84.90 Td (to the facility closure, and net of a $5.0 million non-cash write-of) Tj ET Q q 0 0 0 rg BT 315.13 84.90 Td (f of the related deferred rent and landlord inducement ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 72.90 Td (liability) Tj ET Q q 0 0 0 rg BT 84.46 72.90 Td (. ) Tj ET Q endstream endobj 91 0 obj <> endobj 92 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 217.00 760.75 Td (Management) Tj ET Q q 0 0 0 rg BT 276.06 760.75 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 348.04 760.75 Td (Analysis of) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.65 748.75 Td (Financial Condition and Results of Operations) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 40 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 731.10 Td (Also, during the fourth quarter of fiscal year 2019, we adjusted our estimated cease use liability on the floors within our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (of) Tj ET Q q 0 0 0 rg BT 62.15 719.10 Td (fices that were vacated during the third and fourth quarters of fiscal year 2018. ) Tj ET Q q 0 0 0 rg BT 378.79 719.10 Td (The Company recorded a $0.4 million ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 707.10 Td (increase in the estimated future sublease income.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 686.10 Td (During the third quarter of fiscal year 2019, we initiated a restructuring program in our Learning and International ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 674.10 Td (segments to continue the alignment of our operations to support the evolution of our changing business model, including ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 662.10 Td (Cengage Unlimited and its customer) Tj ET Q q 0 0 0 rg BT 199.88 662.10 Td (-focused approach. During fiscal year 2019 we incurred $8.0 million of severance related ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 650.10 Td (costs. ) Tj ET Q q 0 0 0 rg BT 78.82 650.10 Td (W) Tj ET Q q 0 0 0 rg BT 87.46 650.10 Td (e also incurred $0.6 million of process reengineering consulting costs during the fiscal year 2019. ) Tj ET Q q 0 0 0 rg BT 479.67 650.10 Td (These char) Tj ET Q q 0 0 0 rg BT 523.08 650.10 Td (ges are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 638.10 Td (expensed as incurred. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 617.10 Td (During the second quarter of fiscal year 2019, we initiated a restructuring program in our Learning segment to streamline ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 605.10 Td (our operations. During fiscal year 2019, we incurred $1.0 million of severance related costs. ) Tj ET Q q 0 0 0 rg BT 424.44 605.10 Td (As of March 31, 2019, this ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 593.10 Td (program was substantially completed.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 572.10 Td (During the first quarter of fiscal year 2019, we initiated a restructuring program in our Gale and International segments ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 560.10 Td (to better align our operations to current industry conditions and position the business for growth. ) Tj ET Q q 0 0 0 rg BT 442.64 560.10 Td (W) Tj ET Q q 0 0 0 rg BT 451.28 560.10 Td (e incurred $4.5 million of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 548.10 Td (severance related costs during fiscal year 2019. ) Tj ET Q q 0 0 0 rg BT 245.04 548.10 Td (As of March 31, 2019, this program was substantially completed.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 527.10 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 99.88 527.10 Td (Y) Tj ET Q q 0 0 0 rg BT 104.88 527.10 Td (ear 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 506.10 Td (During the fourth quarter of fiscal year 2018, we initiated restructuring programs to better align our operations to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 494.10 Td (position us for growth in anticipation of our continued shift to a subscription/digital model as well as to streamline and better ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 482.10 Td (align our operations to current industry conditions. ) Tj ET Q q 0 0 0 rg BT 259.34 482.10 Td (W) Tj ET Q q 0 0 0 rg BT 267.97 482.10 Td (e incurred aggregate severance char) Tj ET Q q 0 0 0 rg BT 411.03 482.10 Td (ges of $2.3 million in connection ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 470.10 Td (with these programs. ) Tj ET Q q 0 0 0 rg BT 139.54 470.10 Td (As of March 31, 2019, this program had been completed.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 449.10 Td (Also during fiscal year 2018, we exited a lease and vacated and ceased use of the space, as well as vacated and ceased ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 437.10 Td (use of space within two of our of) Tj ET Q q 0 0 0 rg BT 185.73 437.10 Td (fices. ) Tj ET Q q 0 0 0 rg BT 209.43 437.10 Td (W) Tj ET Q q 0 0 0 rg BT 218.07 437.10 Td (e recorded restructuring char) Tj ET Q q 0 0 0 rg BT 333.10 437.10 Td (ges of $3.6 million, representing the relative portion of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 425.10 Td (remaining future lease payments, net of estimated sublease income, and a $3.9 million non-cash write-of) Tj ET Q q 0 0 0 rg BT 472.30 425.10 Td (f of the related ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 413.10 Td (portion of the applicable landlord inducement liability) Tj ET Q q 0 0 0 rg BT 269.96 413.10 Td (. ) Tj ET Q q 0 0 0 rg BT 274.78 413.10 Td (The remaining future lease payments will be paid over the underlying ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 401.10 Td (remaining lease terms. In connection with exiting the existing facility) Tj ET Q q 0 0 0 rg BT 331.05 401.10 Td (, we received a $12 million incentive payment from a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 389.10 Td (third party that was included in other income \(expense\), net, in the accompanying consolidated statement of operations. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 368.10 Td (During the first quarter of fiscal year 2018, we initiated a restructuring program related to our initiatives to better align ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 356.10 Td (discipline and delivery strategies, to improve the development and enhancements of our digital products and assess our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 344.10 Td (operations, and to further support the shift from a textbook to a software sales and support model. ) Tj ET Q q 0 0 0 rg BT 446.78 344.10 Td (The Company incurred ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 332.10 Td (aggregate char) Tj ET Q q 0 0 0 rg BT 112.39 332.10 Td (ges of $3.4 million of severance related costs and aggregate char) Tj ET Q q 0 0 0 rg BT 370.71 332.10 Td (ges of $7.4 million of process reengineering ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 320.10 Td (consulting costs related to these actions. ) Tj ET Q q 0 0 0 rg BT 216.47 320.10 Td (As of March 31, 2018, this program had been completed. ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 299.10 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 99.88 299.10 Td (Y) Tj ET Q q 0 0 0 rg BT 104.88 299.10 Td (ear 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 278.10 Td (During the first quarter of fiscal year 2017, we initiated a restructuring program designed to streamline operations and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 266.10 Td (improve our cost structure. ) Tj ET Q q 0 0 0 rg BT 164.07 266.10 Td (This program included actions across our segments and corporate functions. Such actions ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 254.10 Td (included streamlining our or) Tj ET Q q 0 0 0 rg BT 167.40 254.10 Td (ganizational structure and spending at the functional, business and geographic levels. ) Tj ET Q q 0 0 0 rg BT 510.18 254.10 Td (W) Tj ET Q q 0 0 0 rg BT 518.81 254.10 Td (e ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 242.10 Td (incurred aggregate operational restructuring and other char) Tj ET Q q 0 0 0 rg BT 289.26 242.10 Td (ges of $23.8 million under this program, primarily related to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 230.10 Td (severance costs and process reengineering consulting costs. Management is estimating cost savings from this program of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 218.10 Td (approximately $37 million on an annualized basis. ) Tj ET Q q 0 0 0 rg BT 257.85 218.10 Td (As of March 31, 2018, this program had been completed.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 197.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 197.10 Td (e may incur additional operational restructuring costs in the future as we continue to identify ways to enhance the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 185.10 Td (ef) Tj ET Q q 0 0 0 rg BT 61.59 185.10 Td (ficiency and cost ef) Tj ET Q q 0 0 0 rg BT 139.42 185.10 Td (fectiveness of our operations. See Note ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 298.54 185.10 Td (9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 303.54 185.10 Td (, Operational Restructuring and Other Char) Tj ET Q q 0 0 0 rg BT 481.08 185.10 Td (ges, to our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 173.10 Td (consolidated financial statements.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 152.10 Td (Acquisitions) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 131.10 Td (From time to time, we may complete acquisitions that are complementary to our business initiatives and represent a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 119.10 Td (strategic fit with the vision of our Company) Tj ET Q q 0 0 0 rg BT 228.60 119.10 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 101.10 Td (In September 2016, we acquired all of the outstanding equity of ) Tj ET Q q 0 0 0 rg BT 329.16 101.10 Td (Advanced Instructional Systems, Inc. \(d/b/a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 89.10 Td (W) Tj ET Q q 0 0 0 rg BT 67.08 89.10 Td (ebAssign\), a leading provider of digital learning solutions for higher education based in Raleigh, N.C., for total ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 77.10 Td (consideration of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 121.20 77.10 Td ($50.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 175.09 77.10 Td (, which consisted of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 257.58 77.10 Td ($50.2 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 311.47 77.10 Td ( of cash paid at closing and the fair value of the ef) Tj ET Q q 0 0 0 rg BT 511.21 77.10 Td (fective ) Tj ET Q endstream endobj 93 0 obj <> endobj 94 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 217.00 760.75 Td (Management) Tj ET Q q 0 0 0 rg BT 276.06 760.75 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 348.04 760.75 Td (Analysis of) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.65 748.75 Td (Financial Condition and Results of Operations) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 41 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 731.10 Td (settlement of an accrued liability and other preexisting contractual obligations. ) Tj ET Q q 0 0 0 rg BT 370.66 731.10 Td (The transaction included ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.01 731.10 Td ($29.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 525.90 731.10 Td ( of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (goodwill and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 109.00 719.10 Td ($15.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 162.89 719.10 Td ( of identifiable intangible assets with a weighted-average useful life of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 446.95 719.10 Td (8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 451.95 719.10 Td ( years. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 701.10 Td (See Note ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 110.88 701.10 Td (2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 115.88 701.10 Td (, Acquisitions, to our consolidated financial statements for additional information.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 683.10 Td (Financial Performance) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 662.10 Td (Consolidated Results of Operations) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 641.10 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 99.88 641.10 Td (Y) Tj ET Q q 0 0 0 rg BT 104.88 641.10 Td (ear Ended ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 149.88 641.10 Td (March31, 2019) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 215.16 641.10 Td ( Compared with Fiscal ) Tj ET Q q 0 0 0 rg BT 311.10 641.10 Td (Y) Tj ET Q q 0 0 0 rg BT 316.10 641.10 Td (ear Ended ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 361.10 641.10 Td (March31, 2018) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 265.5 616.6 m 340.5 616.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 340.5 616.6 m 344.5 616.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 344.5 616.6 m 420.5 616.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 424.5 616.6 m 480.5 616.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 480.5 616.6 m 484.5 616.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 484.5 616.6 m 540.5 616.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 265.5 616.6 m 340.5 616.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 265.5 602.6 m 340.5 602.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 344.5 616.6 m 420.5 616.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 344.5 602.6 m 420.5 602.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 424.5 602.6 m 480.5 602.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 484.5 602.6 m 540.5 602.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 265.5 602.6 m 340.5 602.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 344.5 602.6 m 420.5 602.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 424.5 602.6 m 480.5 602.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 484.5 602.6 m 540.5 602.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 265.5 518.6 m 340.5 518.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 344.5 518.6 m 420.5 518.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 424.5 518.6 m 480.5 518.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 265.5 404.6 m 340.5 404.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 344.5 404.6 m 420.5 404.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 424.5 404.6 m 480.5 404.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 265.5 404.6 m 340.5 404.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 265.5 389.6 m 340.5 389.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 344.5 404.6 m 420.5 404.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 344.5 389.6 m 420.5 389.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 424.5 389.6 m 480.5 389.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 265.5 321.6 m 340.5 321.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 344.5 321.6 m 420.5 321.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 424.5 321.6 m 480.5 321.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 265.5 291.6 m 340.5 291.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 265.5 277.6 m 340.5 277.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 265.5 275.6 m 340.5 275.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 344.5 291.6 m 420.5 291.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 344.5 277.6 m 420.5 277.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 344.5 275.6 m 420.5 275.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 424.5 291.6 m 480.5 291.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 424.5 277.6 m 480.5 277.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 424.5 275.6 m 480.5 275.6 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 286.95 621.05 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 311.53 621.05 Td (Y) Tj ET Q q 0 0 0 rg BT 317.36 621.05 Td (ear) Tj ET Q q 0 0 0 rg BT 329.27 621.05 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 375.61 621.05 Td (ch 31,) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 467.20 621.05 Td (Change) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 57.00 606.85 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 293.50 607.05 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 373.00 607.05 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 449.75 607.05 Td ($) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 507.50 607.05 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 592.27 Td (Revenues) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 268.00 592.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 306.65 592.27 Td (1,445.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 347.00 592.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 386.65 592.27 Td (1,466.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 427.00 592.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 455.80 592.32 Td (\(20.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.65 592.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 512.45 592.27 Td (\(1.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.30 592.27 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 573.27 Td (Cost of revenues, excluding amortization of pre-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.50 563.27 Td (publication costs and identifiable intangible) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.50 553.27 Td (assets and depreciation stated below) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 314.15 553.27 Td (642.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 394.15 553.27 Td (625.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 459.15 553.27 Td (17.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 515.80 553.27 Td (2.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.65 553.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 538.27 Td (Amortization of pre-publication costs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 314.15 538.27 Td (109.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 394.15 538.27 Td (127.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 455.80 538.32 Td (\(17.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.65 538.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 507.45 538.27 Td (\(13.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.30 538.27 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 523.27 Td (Amortization of identifiable intangible assets) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 324.15 523.27 Td (4.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 404.15 523.27 Td (4.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 464.15 523.27 Td (0.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 510.75 523.27 Td (14.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.65 523.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 508.27 Td (T) Tj ET Q q 0 0 0 rg BT 74.41 508.27 Td (otal cost of revenues, excluding depreciation) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 82.50 498.27 Td (stated below) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 314.15 498.27 Td (757.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 394.15 498.27 Td (756.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 464.15 498.27 Td (0.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 515.80 498.27 Td (0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.65 498.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 479.27 Td (Selling, general and administrative expenses,) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.50 469.27 Td (excluding depreciation stated below) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 314.15 469.27 Td (459.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 394.15 469.27 Td (462.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 460.80 469.32 Td (\(2.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.65 469.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 512.45 469.27 Td (\(0.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.30 469.27 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 454.27 Td (Operational restructuring and other char) Tj ET Q q 0 0 0 rg BT 217.40 454.27 Td (ges, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.15 454.27 Td (17.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 399.15 454.27 Td (10.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 464.15 454.27 Td (6.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 510.75 454.27 Td (65.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.65 454.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 439.27 Td (Depreciation) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.15 439.27 Td (76.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 399.15 439.27 Td (72.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 464.15 439.27 Td (3.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 515.80 439.27 Td (5.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.65 439.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 424.27 Td (Amortization of identifiable intangible assets) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.15 424.27 Td (90.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 399.15 424.27 Td (90.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 460.80 424.32 Td (\(0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.65 424.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 512.45 424.27 Td (\(0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.30 424.27 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 409.27 Td (Other \(income\) expense, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 326.65 409.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 400.80 409.32 Td (\(0.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.65 409.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 464.15 409.27 Td (0.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 502.45 409.27 Td (\(100.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.30 409.27 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 394.27 Td (T) Tj ET Q q 0 0 0 rg BT 74.76 394.27 Td (otal costs and expenses) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 306.65 394.27 Td (1,400.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 386.65 394.27 Td (1,391.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 464.15 394.27 Td (8.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 515.80 394.27 Td (0.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.65 394.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 375.27 Td (Operating income) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.15 375.27 Td (45.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 399.15 375.27 Td (74.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 455.80 375.32 Td (\(29.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.65 375.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 507.45 375.27 Td (\(39.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.30 375.27 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 356.27 Td (Other income \(expense\), net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 324.15 356.27 Td (2.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 399.15 356.27 Td (10.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 460.80 356.32 Td (\(7.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.65 356.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 507.45 356.27 Td (\(77.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.30 356.27 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 341.27 Td (Interest income) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 324.15 341.27 Td (5.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 404.15 341.27 Td (2.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 464.15 341.27 Td (2.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 505.75 341.27 Td (107.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.65 341.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 326.27 Td (Interest expense) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 310.80 326.32 Td (\(177.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 336.65 326.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 390.80 326.32 Td (\(162.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.65 326.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 455.80 326.32 Td (\(15.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.65 326.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 515.80 326.27 Td (9.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.65 326.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 311.27 Td (Loss before taxes) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 310.80 311.32 Td (\(124.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 336.65 311.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.80 311.32 Td (\(74.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.65 311.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 455.80 311.32 Td (\(49.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.65 311.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 510.75 311.27 Td (66.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.65 311.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 296.27 Td (Benefit from income taxes) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.15 296.27 Td (27.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 399.15 296.27 Td (73.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 455.80 296.32 Td (\(45.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.65 296.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 507.45 296.27 Td (\(62.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.30 296.27 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 281.27 Td (Net loss) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 268.00 281.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 315.80 281.32 Td (\(97.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 336.65 281.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 347.00 281.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 400.80 281.32 Td (\(1.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.65 281.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 427.00 281.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 455.80 281.32 Td (\(95.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.65 281.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 520.85 281.27 Td (NM) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 262.27 Td (Adjusted Revenues) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 134.49 266.80 Td (\(1\)\(2\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 268.00 262.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 306.65 262.27 Td (1,460.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 347.00 262.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 386.65 262.27 Td (1,470.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 427.00 262.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 455.80 262.32 Td (\(10.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.65 262.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 512.45 262.27 Td (\(0.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.30 262.27 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 243.27 Td (Adjusted EBITDA) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 132.27 247.80 Td (\(1\)\(2\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 268.00 243.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 314.15 243.27 Td (372.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 347.00 243.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 394.15 243.27 Td (405.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 427.00 243.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 455.80 243.32 Td (\(33.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.65 243.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 512.45 243.27 Td (\(8.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.30 243.27 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 224.27 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 131.72 224.27 Td ( less Pre-Publication Costs) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 238.66 228.80 Td (\(1\)\(2\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 268.00 224.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 314.15 224.27 Td (277.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 347.00 224.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 394.15 224.27 Td (301.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 427.00 224.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 455.80 224.32 Td (\(24.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.65 224.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 512.45 224.27 Td (\(8.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.30 224.27 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 205.27 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 131.72 205.27 Td ( less Capital Expenditures) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 235.86 209.80 Td (\(1\)\(2\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 268.00 205.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 314.15 205.27 Td (218.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 347.00 205.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 394.15 205.27 Td (248.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 427.00 205.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 455.80 205.32 Td (\(29.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.65 205.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 507.45 205.27 Td (\(1) Tj ET Q q 0 0 0 rg BT 515.78 205.27 Td (1.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.30 205.27 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 188.38 Td (\(1\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 184.30 Td (See Overview for the definition of this non-GAAP) Tj ET Q q 0 0 0 rg BT 279.87 184.30 Td ( financial measure, Segment Operating Results for discussion and ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 173.50 Td (Reconciliations of Non-GAAP) Tj ET Q q 0 0 0 rg BT 204.64 173.50 Td ( Financial Measures for reconciliations to the most directly comparable financial measures ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 162.70 Td (prepared in accordance with GAAP) Tj ET Q q 0 0 0 rg BT 217.45 162.70 Td (.) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 54.00 148.90 Td ( ) Tj ET Q BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 152.98 Td (\(2\)) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 78.82 148.90 Td ( Prior year amounts have been recast to current year standard internal currency exchange rates.) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 72.00 135.10 Td (NM = Not meaningful) Tj ET Q endstream endobj 95 0 obj <> endobj 96 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 217.00 760.75 Td (Management) Tj ET Q q 0 0 0 rg BT 276.06 760.75 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 348.04 760.75 Td (Analysis of) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.65 748.75 Td (Financial Condition and Results of Operations) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 42 -) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 731.25 Td (Revenues) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 710.25 Td (Revenues) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 111.44 710.25 Td ( for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 213.05 710.25 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 276.65 710.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 279.15 710.25 Td (decrease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 313.57 710.25 Td (d by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 333.57 710.25 Td ($20.7 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 387.46 710.25 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 403.29 710.25 Td (1.4%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 424.12 710.25 Td (, to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 439.40 710.25 Td ($1,445.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 505.79 710.25 Td (. ) Tj ET Q q 0 0 0 rg BT 510.61 710.25 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 698.25 Td (decrease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 88.41 698.25 Td ( was primarily due to lower revenue from our Learning and Gale segments, which decreased $9.9 million and $6.5 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 686.25 Td (million, respectively) Tj ET Q q 0 0 0 rg BT 135.55 686.25 Td (. ) Tj ET Q q 0 0 0 rg BT 140.37 686.25 Td (The decrease in Learning revenue was primarily driven by lower sales into the school channel, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 674.25 Td (primarily in ) Tj ET Q q 0 0 0 rg BT 103.81 674.25 Td (T) Tj ET Q q 0 0 0 rg BT 109.22 674.25 Td (exas and California; a decline of new print textbooks sales and lower sales into the for) Tj ET Q q 0 0 0 rg BT 453.64 674.25 Td (-profit channel; partially ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 662.25 Td (of) Tj ET Q q 0 0 0 rg BT 62.15 662.25 Td (fset by an increase in core digital sales, including the launch of Cengage Unlimited; revenue from several lar) Tj ET Q q 0 0 0 rg BT 496.81 662.25 Td (ge sales ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 650.25 Td (including a significant software license and multiple content licenses; and revenue share from our rental partnerships. ) Tj ET Q q 0 0 0 rg BT 526.16 650.25 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 638.25 Td (Gale segment decline was primarily related to a decrease in the United States market and lower sales from a lar) Tj ET Q q 0 0 0 rg BT 498.92 638.25 Td (ge customer in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 626.25 Td (Latin ) Tj ET Q q 0 0 0 rg BT 77.05 626.25 Td (America, partially of) Tj ET Q q 0 0 0 rg BT 160.45 626.25 Td (fset by an increase in archive sales in EMEA. ) Tj ET Q q 0 0 0 rg BT 344.27 626.25 Td (Additionally) Tj ET Q q 0 0 0 rg BT 394.18 626.25 Td (, there was a reduction in revenue due to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 614.25 Td (adverse foreign exchange fluctuations of approximately $10.2 million. ) Tj ET Q q 0 0 0 rg BT 338.18 614.25 Td (These decreases were partially of) Tj ET Q q 0 0 0 rg BT 471.26 614.25 Td (fset by an increase of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 602.25 Td ($5.9 million in our International segment primarily related to strong sales of our school products in ) Tj ET Q q 0 0 0 rg BT 451.98 602.25 Td (Australia, including a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 590.25 Td (lar) Tj ET Q q 0 0 0 rg BT 64.37 590.25 Td (ge print deal, and sales growth in our EL) Tj ET Q q 0 0 0 rg BT 226.46 590.25 Td (T) Tj ET Q q 0 0 0 rg BT 232.39 590.25 Td ( products across ) Tj ET Q q 0 0 0 rg BT 298.77 590.25 Td (Asia and Latin ) Tj ET Q q 0 0 0 rg BT 359.59 590.25 Td (America, partially of) Tj ET Q q 0 0 0 rg BT 442.98 590.25 Td (fset by a decrease in sales of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 578.25 Td (higher education products in ) Tj ET Q q 0 0 0 rg BT 170.08 578.25 Td (Australia and a non-repeatable prior year order in EMEA. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 557.25 Td (Operating Costs and Expenses) Tj ET Q BT /F3 10.00 Tf ET 0 0 0 RG /GS0 gs 0.95 w 0 i [] 0 d 1 J 1 j 3 M 72 534.68505859375 m 143.1083984375 534.68505859375 l s q 0 0 0 rg BT 72.00 536.25 Td (Cost of Revenues) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 515.25 Td (T) Tj ET Q q 0 0 0 rg BT 77.19 515.25 Td (otal cost of revenues, excluding amortization of prepublication costs, amortization of intangible assets and ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 503.25 Td (depreciation ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 107.60 503.25 Td (increase) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 140.36 503.25 Td (d ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 147.86 503.25 Td ($17.1 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 201.75 503.25 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 217.58 503.25 Td (2.7%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 238.41 503.25 Td (, primarily due to a $1) Tj ET Q q 0 0 0 rg BT 326.91 503.25 Td (1.3 million increase in employee compensation and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 491.25 Td (related costs associated with our key strategic investments in higher education digital product teams and infrastructure, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 479.25 Td (including those related to Cengage Unlimited; a $7.3 million increase primarily related to enterprise-wide technology ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 467.25 Td (investments to support digital growth; a $6.2 million increase in the timing of paper) Tj ET Q q 0 0 0 rg BT 388.54 467.25 Td (, print and binding costs; and a $2.0 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 455.25 Td (million increase in software development costs. ) Tj ET Q q 0 0 0 rg BT 246.82 455.25 Td (These increases were partially of) Tj ET Q q 0 0 0 rg BT 378.24 455.25 Td (fset by a $6.0 million decrease in royalty ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 443.25 Td (expenses primarily related to lower sales, as well as the acquisition of author/content rights in fiscal year 2018; a $2.5 million ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 431.25 Td (decrease in distribution related expenses; and a $0.8 million decrease in inventory obsolescence expense. ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 407.25 Td (Amortization of prepublication costs ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 224.24 407.25 Td (decreased ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 266.16 407.25 Td ($17.3 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 320.05 407.25 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 335.88 407.25 Td (13.6%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 361.71 407.25 Td (, primarily related to the accelerated ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 395.25 Td (amortization of certain assets in fiscal year 2018 and an overall decrease in prepublication spend.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 371.25 Td (Amortization of intangible assets ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 209.80 371.25 Td (increased ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 250.06 371.25 Td ($0.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 298.95 371.25 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 314.78 371.25 Td (14.3%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 340.61 371.25 Td (, due to the acquisition of certain author/content rights ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 359.25 Td (in fiscal year 2018. ) Tj ET Q BT /F3 10.00 Tf ET 0 0 0 RG /GS0 gs 0.95 w 0 i [] 0 d 1 J 1 j 3 M 72 336.68505859375 m 155.0615234375 336.68505859375 l s q 0 0 0 rg BT 72.00 338.25 Td (Operating Expenses) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 317.25 Td ( ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 74.50 317.25 Td (Selling, general and administrative expenses, excluding depreciation ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 359.78 317.25 Td (decrease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 394.19 317.25 Td (d ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.69 317.25 Td ($2.7 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 450.58 317.25 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.41 317.25 Td (0.6%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.24 317.25 Td (, to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 502.52 317.25 Td ($459.3 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 305.25 Td (million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 82.89 305.25 Td ( for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 184.51 305.25 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 248.11 305.25 Td (, primarily due to a $9.5 million decrease in equity-based compensation ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 293.25 Td (expenses, a $5.9 million decrease in employee compensation and related costs, a $1.2 million decrease in computer and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 281.25 Td (software maintenance expenses, and a $1.0 million decrease in bad debt expenses. ) Tj ET Q q 0 0 0 rg BT 385.09 281.25 Td (These decreases were partially of) Tj ET Q q 0 0 0 rg BT 518.17 281.25 Td (fset by a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 269.25 Td ($6.8 million increase in acquisition and mer) Tj ET Q q 0 0 0 rg BT 229.61 269.25 Td (ger) Tj ET Q q 0 0 0 rg BT 242.18 269.25 Td (-related costs, a $4.0 million increase in rent expense, net incurred during the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 257.25 Td (build-out phase of our new headquarters in Boston, a $2.2 million increase in outside service fees, and a $0.8 million increase ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 245.25 Td (related to a contract termination cost in ) Tj ET Q q 0 0 0 rg BT 212.55 245.25 Td (Australia.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 227.25 Td (Operational restructuring and other charges, net ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 275.64 227.25 Td (increase) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 308.40 227.25 Td (d ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 315.90 227.25 Td ($6.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 364.79 227.25 Td ( to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 377.57 227.25 Td ($17.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 431.46 227.25 Td ( in the fiscal year ended) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 215.25 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 117.60 215.25 Td (. ) Tj ET Q q 0 0 0 rg BT 122.42 215.25 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 140.46 215.25 Td ($17.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 194.36 215.25 Td ( char) Tj ET Q q 0 0 0 rg BT 213.88 215.25 Td (ges, net, in 2019 includes $17.1 million of severance related costs, $0.6 million of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 203.25 Td (process reengineering consulting fees, and a reduction of $.2 million of net lease exit costs. Char) Tj ET Q q 0 0 0 rg BT 440.37 203.25 Td (ges in the prior period of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 191.25 Td ($10.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 107.89 191.25 Td ( includes $5.7 million related to severance related costs, $4.4 million of process reengineering consulting fees, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 179.25 Td (and $0.5 million of net lease exit costs. Refer to Note ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 269.78 179.25 Td (9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 274.78 179.25 Td (, Operational Restructuring and Other Char) Tj ET Q q 0 0 0 rg BT 452.32 179.25 Td (ges, for additional details ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 167.25 Td (on these char) Tj ET Q q 0 0 0 rg BT 106.57 167.25 Td (ges.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 149.25 Td (Depreciation ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 127.83 149.25 Td (increase) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 160.58 149.25 Td (d ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 168.08 149.25 Td ($3.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 216.97 149.25 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 232.80 149.25 Td (5.4%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 253.63 149.25 Td (, during the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 372.20 149.25 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 435.79 149.25 Td (, compared with the prior year ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 137.25 Td (period primarily due to the write-of) Tj ET Q q 0 0 0 rg BT 195.72 137.25 Td (f of leasehold improvement assets and furniture and fixture assets associated with the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 125.25 Td (closure of the San Francisco of) Tj ET Q q 0 0 0 rg BT 177.95 125.25 Td (fice and assets that were placed in service; partially of) Tj ET Q q 0 0 0 rg BT 394.06 125.25 Td (fset by certain assets becoming fully ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 113.25 Td (depreciated.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 95.25 Td (Amortization of identifiable intangible assets) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 256.46 95.25 Td ( was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 277.01 95.25 Td ($90.1 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 330.91 95.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 350.34 95.25 Td ($90.2 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 404.24 95.25 Td ( for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 505.85 95.25 Td (March31, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 83.25 Td (2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 74.00 83.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 93.44 83.25 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 113.44 83.25 Td (, respectively) Tj ET Q q 0 0 0 rg BT 166.10 83.25 Td (.) Tj ET Q endstream endobj 97 0 obj <> endobj 98 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 217.00 760.75 Td (Management) Tj ET Q q 0 0 0 rg BT 276.06 760.75 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 348.04 760.75 Td (Analysis of) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.65 748.75 Td (Financial Condition and Results of Operations) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 43 -) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 731.25 Td (Non-Operating Items) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 710.25 Td (Other income/\(expense\), net ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 190.87 710.25 Td (for the fiscal year ended March 31, 2019, was income of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 419.40 710.25 Td ($2.3 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 468.29 710.25 Td ( primarily due to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 698.25 Td (foreign currency transaction gains. ) Tj ET Q q 0 0 0 rg BT 195.15 698.25 Td (The same prior year period was income of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 366.75 698.25 Td ($10.1 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 420.65 698.25 Td ( primarily related to an incentive ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 686.25 Td (payment received from a third party in connection with exiting an existing facility) Tj ET Q q 0 0 0 rg BT 381.58 686.25 Td (, partially of) Tj ET Q q 0 0 0 rg BT 430.55 686.25 Td (fset by foreign currency ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 674.25 Td (transaction losses.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 653.25 Td (Interest expense ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 141.44 653.25 Td (increase) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 174.19 653.25 Td (d ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 181.69 653.25 Td ($15.4 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 235.58 653.25 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 251.41 653.25 Td (9.5%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 272.24 653.25 Td (, to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 287.52 653.25 Td ($177.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 346.41 653.25 Td ( for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 448.03 653.25 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 511.63 653.25 Td (, primarily ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 641.25 Td (due to an increase in the LIBOR rate applicable to our ) Tj ET Q q 0 0 0 rg BT 272.91 641.25 Td (T) Tj ET Q q 0 0 0 rg BT 278.32 641.25 Td (erm Loan.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 620.25 Td (Pr) Tj ET Q q 0 0 0 rg BT 82.37 620.25 Td (ovision for) Tj ET Q q 0 0 0 rg BT 127.46 620.25 Td ( Income ) Tj ET Q q 0 0 0 rg BT 163.94 620.25 Td (T) Tj ET Q q 0 0 0 rg BT 169.70 620.25 Td (ax) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 599.25 Td (Benefit from income taxes) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 180.60 599.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 183.10 599.25 Td (was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 201.15 599.25 Td ($27.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 255.04 599.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 274.48 599.25 Td ($73.1 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 328.37 599.25 Td ( for the fiscal years ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 433.88 599.25 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 497.48 599.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 516.92 599.25 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.92 599.25 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 587.25 Td (respectively) Tj ET Q q 0 0 0 rg BT 101.66 587.25 Td (. ) Tj ET Q q 0 0 0 rg BT 106.48 587.25 Td (The current year benefit from income taxes is primarily attributable to pre-tax loss, while the decrease in benefit ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 575.25 Td (compared to the same prior year period is primarily attributable to the enactment of the ) Tj ET Q q 0 0 0 rg BT 404.53 575.25 Td (T) Tj ET Q q 0 0 0 rg BT 409.94 575.25 Td (ax ) Tj ET Q q 0 0 0 rg BT 421.32 575.25 Td (Act that lowered the corporate tax ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 563.25 Td (rate in the United States from 35% to 21%, resulting in a significant tax benefit in fiscal year 2018. ) Tj ET Q endstream endobj 99 0 obj <> endobj 100 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 217.00 760.75 Td (Management) Tj ET Q q 0 0 0 rg BT 276.06 760.75 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 348.04 760.75 Td (Analysis of) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.65 748.75 Td (Financial Condition and Results of Operations) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 44 -) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 731.25 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 99.88 731.25 Td (Y) Tj ET Q q 0 0 0 rg BT 104.88 731.25 Td (ear Ended ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 149.88 731.25 Td (March31, 2018) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 215.16 731.25 Td ( Compared with Fiscal ) Tj ET Q q 0 0 0 rg BT 311.10 731.25 Td (Y) Tj ET Q q 0 0 0 rg BT 316.10 731.25 Td (ear Ended ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 361.10 731.25 Td (March31, 2017) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 426.38 731.25 Td ( ) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 697.75 m 343.5 697.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 343.5 697.75 m 347.5 697.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 697.75 m 427.5 697.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 697.75 m 491.5 697.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 491.5 697.75 m 495.5 697.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 495.5 697.75 m 555.5 697.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 697.75 m 343.5 697.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 683.75 m 343.5 683.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 697.75 m 427.5 697.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 683.75 m 427.5 683.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 683.75 m 491.5 683.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 495.5 683.75 m 555.5 683.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 683.75 m 427.5 683.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 683.75 m 491.5 683.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 495.5 683.75 m 555.5 683.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 599.75 m 343.5 599.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 599.75 m 427.5 599.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 599.75 m 491.5 599.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 599.75 m 343.5 599.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 485.75 m 343.5 485.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 485.75 m 491.5 485.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 485.75 m 343.5 485.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 470.75 m 343.5 470.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 485.75 m 427.5 485.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 470.75 m 427.5 470.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 470.75 m 491.5 470.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 372.75 m 343.5 372.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 372.75 m 427.5 372.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 372.75 m 491.5 372.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 342.75 m 427.5 342.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 342.75 m 491.5 342.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 342.75 m 343.5 342.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 328.75 m 343.5 328.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 326.75 m 343.5 326.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 342.75 m 427.5 342.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 328.75 m 427.5 328.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 326.75 m 427.5 326.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 342.75 m 491.5 342.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 328.75 m 491.5 328.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 326.75 m 491.5 326.75 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 289.45 702.20 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 314.03 702.20 Td (Y) Tj ET Q q 0 0 0 rg BT 319.86 702.20 Td (ear) Tj ET Q q 0 0 0 rg BT 331.77 702.20 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 378.11 702.20 Td (ch 31,) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 478.20 702.20 Td (Change) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 58.00 688.00 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 294.00 688.20 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 378.00 688.20 Td (2017) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 458.75 688.20 Td ($) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 520.50 688.20 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 673.42 Td (Revenues) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 266.00 673.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 309.65 673.42 Td (1,466.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 350.00 673.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.65 673.42 Td (1,460.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 434.00 673.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.15 673.42 Td (6.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 530.80 673.42 Td (0.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 673.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 654.42 Td (Cost of revenues, excluding amortization of pre-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 71.50 644.42 Td (publication costs and identifiable intangible ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 71.50 634.42 Td (assets and depreciation stated below) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 216.45 638.95 Td (\(2\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 634.42 Td (625.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.15 634.42 Td (632.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 471.80 634.47 Td (\(6.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 634.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.45 634.42 Td (\(1.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 634.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 619.42 Td (Amortization of pre-publication costs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 619.42 Td (127.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.15 619.42 Td (150.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.80 619.47 Td (\(23.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 619.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.45 619.42 Td (\(15.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 619.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 604.42 Td (Amortization of identifiable intangible assets) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 327.15 604.42 Td (4.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 411.15 604.42 Td (2.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.15 604.42 Td (1.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 525.80 604.42 Td (68.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 604.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 589.42 Td (T) Tj ET Q q 0 0 0 rg BT 75.76 589.42 Td (otal cost of revenues, excluding depreciation) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 579.42 Td (stated below) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 579.42 Td (756.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.15 579.42 Td (785.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.80 579.47 Td (\(28.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 579.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.45 579.42 Td (\(3.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 579.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 560.42 Td (Selling, general and administrative expenses,) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 76.00 550.42 Td (excluding depreciation stated below) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 550.42 Td (462.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.15 550.42 Td (384.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 470.15 550.42 Td (77.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 525.80 550.42 Td (20.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 550.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 535.42 Td (Operational restructuring and other char) Tj ET Q q 0 0 0 rg BT 218.40 535.42 Td (ges, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.15 535.42 Td (10.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 406.15 535.42 Td (26.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.80 535.47 Td (\(16.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 535.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.45 535.42 Td (\(60.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 535.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 520.42 Td (Depreciation) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.15 520.42 Td (72.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 406.15 520.42 Td (83.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.80 520.47 Td (\(1) Tj ET Q q 0 0 0 rg BT 475.13 520.47 Td (1.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 520.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.45 520.42 Td (\(13.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 520.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 505.42 Td (Amortization of identifiable intangible assets) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.15 505.42 Td (90.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 406.15 505.42 Td (90.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.15 505.42 Td (0.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 530.80 505.42 Td (0.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 505.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 490.42 Td (Other \(income\) expense, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 323.80 490.47 Td (\(0.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 339.65 490.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 411.15 490.42 Td (0.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 471.80 490.47 Td (\(0.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 490.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 517.45 490.42 Td (\(200.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 490.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 475.42 Td (T) Tj ET Q q 0 0 0 rg BT 75.76 475.42 Td (otal costs and expenses) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 309.65 475.42 Td (1,391.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.65 475.42 Td (1,370.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 470.15 475.42 Td (20.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 530.80 475.42 Td (1.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 475.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 456.42 Td (Operating income) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.15 456.42 Td (74.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 406.15 456.42 Td (89.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.80 456.47 Td (\(14.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 456.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.45 456.42 Td (\(16.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 456.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 437.42 Td (Loss on early extinguishment of debt, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 329.65 437.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 402.80 437.47 Td (\(10.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.65 437.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 470.15 437.42 Td (10.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 517.45 437.42 Td (\(100.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 437.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 422.42 Td (Other income \(expense\), net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.15 422.42 Td (10.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 407.80 422.47 Td (\(1.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.65 422.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 470.15 422.42 Td (1) Tj ET Q q 0 0 0 rg BT 475.15 422.42 Td (1.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 535.85 422.42 Td (NM) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 407.42 Td (Interest income) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 327.15 407.42 Td (2.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 411.15 407.42 Td (1.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.15 407.42 Td (1.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 520.75 407.42 Td (145.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 407.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 392.42 Td (Interest expense) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 313.80 392.47 Td (\(162.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 339.65 392.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 397.80 392.47 Td (\(157.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.65 392.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 471.80 392.47 Td (\(5.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 392.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 530.80 392.42 Td (3.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 392.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 377.42 Td (Reor) Tj ET Q q 0 0 0 rg BT 77.35 377.42 Td (ganization items, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 329.65 377.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 407.80 377.47 Td (\(0.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.65 377.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.15 377.42 Td (0.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 517.45 377.42 Td (\(100.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 377.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 362.42 Td (Loss before taxes) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.80 362.47 Td (\(74.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 339.65 362.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 402.80 362.47 Td (\(79.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.65 362.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.15 362.42 Td (4.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.45 362.42 Td (\(5.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 362.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 347.42 Td (Benefit from income taxes) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.15 347.42 Td (73.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 406.15 347.42 Td (36.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 470.15 347.42 Td (37.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 520.75 347.42 Td (103.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 347.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 332.42 Td (Net loss) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 266.00 332.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 323.80 332.47 Td (\(1.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 339.65 332.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 350.00 332.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 402.80 332.47 Td (\(43.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.65 332.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 434.00 332.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 470.15 332.42 Td (41.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.45 332.42 Td (\(95.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 332.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 313.42 Td (Adjusted Revenues) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 135.49 317.95 Td (\(1\)\(2\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 266.00 313.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 309.65 313.42 Td (1,470.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 350.00 313.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.65 313.42 Td (1,469.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 434.00 313.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.15 313.42 Td (1.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 530.80 313.42 Td (0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 313.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 294.42 Td (Adjusted EBITDA) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 133.27 298.95 Td (\(1\)\(2\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 266.00 294.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 294.42 Td (405.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 350.00 294.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.15 294.42 Td (473.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 434.00 294.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.80 294.47 Td (\(67.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 294.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.45 294.42 Td (\(14.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 294.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 275.42 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 132.72 275.42 Td ( less Pre-Publication Costs) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 239.66 279.95 Td (\(1\)\(2\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 266.00 275.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 275.42 Td (301.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 350.00 275.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.15 275.42 Td (353.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 434.00 275.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.80 275.47 Td (\(51.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 275.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.45 275.42 Td (\(14.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 275.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 256.42 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 132.72 256.42 Td ( less Capital Expenditures) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 236.86 260.95 Td (\(1\)\(2\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 266.00 256.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 256.42 Td (248.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 350.00 256.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.15 256.42 Td (288.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 434.00 256.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.80 256.47 Td (\(40.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 256.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.45 256.42 Td (\(13.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 256.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 239.53 Td (\(1\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 235.45 Td (See Overview for the definition of this non-GAAP) Tj ET Q q 0 0 0 rg BT 279.87 235.45 Td ( financial measure, Segment Operating Results for discussion and ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 224.65 Td (Reconciliations of Non-GAAP) Tj ET Q q 0 0 0 rg BT 204.64 224.65 Td ( Financial Measures for reconciliations to the most directly comparable financial measures ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 213.85 Td (prepared in accordance with GAAP) Tj ET Q q 0 0 0 rg BT 217.45 213.85 Td (.) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 54.00 200.05 Td ( ) Tj ET Q BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 204.13 Td (\(2\)) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 78.82 200.05 Td ( Prior year amounts have been recast to current year standard internal currency exchange rates.) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 72.00 186.25 Td (NM = Not meaningful) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 157.45 Td (Revenues) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 139.45 Td (Revenues) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 111.44 139.45 Td ( for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 213.05 139.45 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 276.65 139.45 Td ( increased ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.41 139.45 Td ($6.2 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.30 139.45 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 384.13 139.45 Td (0.4%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 404.96 139.45 Td (, to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 420.24 139.45 Td ($1,466.2 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 486.63 139.45 Td (. ) Tj ET Q q 0 0 0 rg BT 491.45 139.45 Td (The increase ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 127.45 Td (was primarily due to growth in our core digital product sales, and growth in our international businesses within both the Gale ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 115.45 Td (and International segments. ) Tj ET Q q 0 0 0 rg BT 169.06 115.45 Td (The increase was partially of) Tj ET Q q 0 0 0 rg BT 284.39 115.45 Td (fset by lower new print textbook sales from our lar) Tj ET Q q 0 0 0 rg BT 487.21 115.45 Td (gest segment, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 103.45 Td (Learning, compared with the prior year period and unfavorable foreign currency exchange fluctuations of approximately $5.6 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 91.45 Td (million. ) Tj ET Q q 0 0 0 rg BT 87.71 91.45 Td (The decrease in Learning revenues was impacted by lower enrollments, continued pressure on print products, and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 79.45 Td (ef) Tj ET Q q 0 0 0 rg BT 61.59 79.45 Td (forts to address student af) Tj ET Q q 0 0 0 rg BT 164.16 79.45 Td (fordability concerns which traded of) Tj ET Q q 0 0 0 rg BT 309.48 79.45 Td (f higher priced bundle units for lower) Tj ET Q q 0 0 0 rg BT 459.24 79.45 Td (-priced, more ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 67.45 Td (sustainable standalone units that do not feed the secondary market.) Tj ET Q endstream endobj 101 0 obj <> endobj 102 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 217.00 760.75 Td (Management) Tj ET Q q 0 0 0 rg BT 276.06 760.75 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 348.04 760.75 Td (Analysis of) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.65 748.75 Td (Financial Condition and Results of Operations) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 45 -) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 731.25 Td (Operating Costs and Expenses) Tj ET Q BT /F3 10.00 Tf ET 0 0 0 RG /GS0 gs 0.95 w 0 i [] 0 d 1 J 1 j 3 M 72 708.68505859375 m 143.1083984375 708.68505859375 l s q 0 0 0 rg BT 72.00 710.25 Td (Cost of Revenues) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 689.25 Td (T) Tj ET Q q 0 0 0 rg BT 77.19 689.25 Td (otal cost of revenues, excluding amortization of prepublication costs, amortization of intangible assets and ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 677.25 Td (depreciation ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 107.60 677.25 Td (decreased ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 149.52 677.25 Td ($6.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 198.41 677.25 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 214.24 677.25 Td (1.1%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 235.07 677.25 Td (, primarily due to $9.4 million of lower royalty expense related to lower ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 665.25 Td (revenues and ef) Tj ET Q q 0 0 0 rg BT 116.56 665.25 Td (ficiency initiatives from the Learning segment, an $8.0 million reduction in print, paper and binding costs ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 653.25 Td (reflective of the shift towards digital, and $5.6 million of lower inventory obsolescence expense. ) Tj ET Q q 0 0 0 rg BT 442.32 653.25 Td (These decreases were ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 641.25 Td (partially of) Tj ET Q q 0 0 0 rg BT 97.97 641.25 Td (fset by headcount investments in the digital production and infrastructure teams and a $1.8 million increase in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 629.25 Td (technology infrastructure char) Tj ET Q q 0 0 0 rg BT 174.32 629.25 Td (ges.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 605.25 Td (Amortization of prepublication costs ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 224.24 605.25 Td (decreased ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 266.16 605.25 Td ($23.3 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 320.05 605.25 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 335.88 605.25 Td (15.5%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 361.71 605.25 Td ( in the fiscal year ended March 31, 2018, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 593.25 Td (primarily due to the accelerated amortization associated with the abandonment of certain content projects during the fiscal ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 581.25 Td (year ended March 31, 2017. ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 557.25 Td (Amortization of intangible assets ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 209.80 557.25 Td (increased ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 250.06 557.25 Td ($1.7 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 298.95 557.25 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 314.78 557.25 Td (68.0%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 340.61 557.25 Td (, primarily related the acquisition of certain author/) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 545.25 Td (content rights in fiscal year 2018.) Tj ET Q BT /F3 10.00 Tf ET 0 0 0 RG /GS0 gs 0.95 w 0 i [] 0 d 1 J 1 j 3 M 72 522.68505859375 m 155.0615234375 522.68505859375 l s q 0 0 0 rg BT 72.00 524.25 Td (Operating Expenses) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 503.25 Td (Selling, general and administrative expenses, excluding depreciation ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 357.28 503.25 Td (increased ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 397.53 503.25 Td ($77.3 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 451.42 503.25 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.25 503.25 Td (20.1%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 493.08 503.25 Td (, to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 508.36 503.25 Td ($462.0 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 491.25 Td (million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 82.89 491.25 Td ( for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 184.51 491.25 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 248.11 491.25 Td (, primarily due to approximately $30.0 million in incentive compensation ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 479.25 Td (reductions recorded during the third and fourth quarters of fiscal year 2017, as well as an increase of approximately $34.0 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 467.25 Td (million in employee compensation and other related costs associated with our key strategic initiatives including investments ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 455.25 Td (in higher education digital product teams and infrastructure, international, skills and school business, and fleet renewal cost ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 443.25 Td (increase of $2.0 million. ) Tj ET Q q 0 0 0 rg BT 153.42 443.25 Td (Additionally) Tj ET Q q 0 0 0 rg BT 203.33 443.25 Td (, we recorded a $3.5 million aggregate reduction to our property and sales and use tax ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 431.25 Td (reserves as a result of the expiration of the statute of limitations for certain periods during fiscal year 2017.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 413.25 Td (Operational restructuring and other charges, net ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 275.64 413.25 Td (decreased ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.56 413.25 Td ($16.1 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 371.45 413.25 Td ( to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 384.23 413.25 Td ($10.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 438.12 413.25 Td ( in the fiscal year ended) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 401.25 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 117.60 401.25 Td (. ) Tj ET Q q 0 0 0 rg BT 122.42 401.25 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 140.46 401.25 Td ($10.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 194.36 401.25 Td ( char) Tj ET Q q 0 0 0 rg BT 213.88 401.25 Td (ges, net, in fiscal year 2018 includes $5.7 million of severance related costs, $4.4 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 389.25 Td (million of process reengineering consulting fees, and $0.5 million of net lease exit costs. Char) Tj ET Q q 0 0 0 rg BT 429.56 389.25 Td (ges in the prior period of $26.7 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 377.25 Td (million includes $15.9 million related to severance related costs and $10.1 million related to process reengineering consulting ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 365.25 Td (fees. Refer to Note ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 132.02 365.25 Td (9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 137.02 365.25 Td (, Operational Restructuring and Other Char) Tj ET Q q 0 0 0 rg BT 314.56 365.25 Td (ges, for additional details on these char) Tj ET Q q 0 0 0 rg BT 475.16 365.25 Td (ges.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 347.25 Td (Depreciation ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 127.83 347.25 Td (decreased ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 169.74 347.25 Td ($1) Tj ET Q q 0 0 0 rg BT 179.37 347.25 Td (1.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 223.26 347.25 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 239.09 347.25 Td (13.8%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 264.92 347.25 Td (, during the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.48 347.25 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.08 347.25 Td (, compared with the prior ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 335.25 Td (year period primarily due to the cumulative result of accelerated depreciation of $6.3 million in fiscal year 2017 associated ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 323.25 Td (with the abandonment of certain internally-developed software projects.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 305.25 Td (Amortization of identifiable intangible assets) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 256.46 305.25 Td ( was $90.2 million and $90.0 million for the fiscal year ended March31, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 293.25 Td (2018 and 2017, respectively) Tj ET Q q 0 0 0 rg BT 166.10 293.25 Td (.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 272.25 Td (Non-Operating Items) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 251.25 Td (Loss on early extinguishment of debt ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 226.45 251.25 Td (of $10.8 million for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 392.79 251.25 Td (March31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 456.39 251.25 Td ( represents) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 239.25 Td (accelerated amortization of debt issuance costs and discount costs related to the early extinguishment of the $2.0 billion prior) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 227.25 Td (term loan during the fiscal year ended March 31, 2017.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 209.25 Td (Other income \(expense\), net ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 190.59 209.25 Td (for the fiscal year ended March 31, 2018,) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 355.81 209.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 358.31 209.25 Td (was income of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 419.12 209.25 Td ($10.1 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 473.02 209.25 Td ( primarily related to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 197.25 Td (an incentive payment received from a third party in connection with exiting an existing facility) Tj ET Q q 0 0 0 rg BT 432.67 197.25 Td (, partially of) Tj ET Q q 0 0 0 rg BT 481.64 197.25 Td (fset by foreign ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 185.25 Td (currency transaction losses. ) Tj ET Q q 0 0 0 rg BT 166.56 185.25 Td (The same prior year period was expense of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 340.93 185.25 Td ($1.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.83 185.25 Td ( primarily due to an impairment char) Tj ET Q q 0 0 0 rg BT 536.82 185.25 Td (ge ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 173.25 Td (related to an other) Tj ET Q q 0 0 0 rg BT 126.27 173.25 Td (-than-temporary decline in the fair value of a cost method investment, partially of) Tj ET Q q 0 0 0 rg BT 452.36 173.25 Td (fset by foreign currency ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 161.25 Td (transaction gains.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 143.25 Td (Interest expense ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 141.44 143.25 Td (increased ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 181.69 143.25 Td ($5.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 230.58 143.25 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 246.41 143.25 Td (3.2%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 267.24 143.25 Td (, to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 282.52 143.25 Td ($162.1 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 341.41 143.25 Td ( for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 443.03 143.25 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 506.63 143.25 Td (, primarily ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 131.25 Td (due to timing and mix of interest rates on debt issuance in the first quarter of fiscal year 2017.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 113.25 Td (Reorganization items, net, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 182.29 113.25 Td (was $0.4 million for the fiscal year ended March 31, 2017 and consisted of professional and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 101.25 Td (administrative fees associated with our Chapter 1) Tj ET Q q 0 0 0 rg BT 250.79 101.25 Td (1 reor) Tj ET Q q 0 0 0 rg BT 274.21 101.25 Td (ganization ef) Tj ET Q q 0 0 0 rg BT 325.95 101.25 Td (forts. ) Tj ET Q endstream endobj 103 0 obj <> endobj 104 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 217.00 760.75 Td (Management) Tj ET Q q 0 0 0 rg BT 276.06 760.75 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 348.04 760.75 Td (Analysis of) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.65 748.75 Td (Financial Condition and Results of Operations) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 46 -) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 731.25 Td (Pr) Tj ET Q q 0 0 0 rg BT 82.37 731.25 Td (ovision for) Tj ET Q q 0 0 0 rg BT 127.46 731.25 Td ( Income ) Tj ET Q q 0 0 0 rg BT 163.94 731.25 Td (T) Tj ET Q q 0 0 0 rg BT 169.70 731.25 Td (ax) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 710.25 Td (Benefit from income taxes) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 180.60 710.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 183.10 710.25 Td (was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 201.15 710.25 Td ($73.1 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 255.04 710.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 274.48 710.25 Td ($36.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 328.37 710.25 Td ( for the fiscal years ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 433.88 710.25 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 497.48 710.25 Td ( and 2017, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 698.25 Td (respectively) Tj ET Q q 0 0 0 rg BT 101.66 698.25 Td (. ) Tj ET Q q 0 0 0 rg BT 106.48 698.25 Td (The fiscal year 2018 benefit from income taxes was almost entirely attributable to tax benefit resulting from the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 686.25 Td (enactment of the U.S. federal tax law changes in the third quarter of fiscal year 2018, which lowered the corporate tax rate in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 674.25 Td (the U.S from 35% to 21%, and the fiscal year 2018 generation of net operating losses. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 647.25 Td (Segment Operating Results) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 626.25 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 99.88 626.25 Td (Y) Tj ET Q q 0 0 0 rg BT 104.88 626.25 Td (ear Ended ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 149.88 626.25 Td (March31, 2019) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 215.16 626.25 Td ( Compared with Fiscal ) Tj ET Q q 0 0 0 rg BT 311.10 626.25 Td (Y) Tj ET Q q 0 0 0 rg BT 316.10 626.25 Td (ear Ended ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 361.10 626.25 Td (March31, 2018) Tj ET Q BT /F3 10.00 Tf ET 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 264.5 595.75 m 344.5 595.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 344.5 595.75 m 348.5 595.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 348.5 595.75 m 428.5 595.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 432.5 595.75 m 492.5 595.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 595.75 m 496.5 595.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 496.5 595.75 m 556.5 595.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 264.5 595.75 m 344.5 595.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 264.5 581.75 m 344.5 581.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 348.5 595.75 m 428.5 595.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 348.5 581.75 m 428.5 581.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 432.5 581.75 m 492.5 581.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 496.5 581.75 m 556.5 581.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 264.5 581.75 m 344.5 581.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 348.5 581.75 m 428.5 581.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 432.5 581.75 m 492.5 581.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 496.5 581.75 m 556.5 581.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 264.5 521.75 m 344.5 521.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 348.5 521.75 m 428.5 521.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 264.5 521.75 m 344.5 521.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 264.5 507.75 m 344.5 507.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 264.5 505.75 m 344.5 505.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 348.5 521.75 m 428.5 521.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 348.5 507.75 m 428.5 507.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 348.5 505.75 m 428.5 505.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 432.5 521.75 m 492.5 521.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 432.5 507.75 m 492.5 507.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 432.5 505.75 m 492.5 505.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 264.5 442.75 m 344.5 442.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 264.5 428.75 m 344.5 428.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 264.5 426.75 m 344.5 426.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 348.5 442.75 m 428.5 442.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 348.5 428.75 m 428.5 428.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 348.5 426.75 m 428.5 426.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 432.5 442.75 m 492.5 442.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 432.5 428.75 m 492.5 428.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 432.5 426.75 m 492.5 426.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 264.5 363.75 m 344.5 363.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 264.5 349.75 m 344.5 349.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 264.5 347.75 m 344.5 347.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 348.5 363.75 m 428.5 363.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 348.5 349.75 m 428.5 349.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 348.5 347.75 m 428.5 347.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 432.5 363.75 m 492.5 363.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 432.5 349.75 m 492.5 349.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 432.5 347.75 m 492.5 347.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 264.5 284.75 m 344.5 284.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 264.5 270.75 m 344.5 270.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 264.5 268.75 m 344.5 268.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 348.5 284.75 m 428.5 284.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 348.5 270.75 m 428.5 270.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 348.5 268.75 m 428.5 268.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 432.5 284.75 m 492.5 284.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 432.5 270.75 m 492.5 270.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 432.5 268.75 m 492.5 268.75 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 290.45 600.20 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 315.03 600.20 Td (Y) Tj ET Q q 0 0 0 rg BT 320.86 600.20 Td (ear) Tj ET Q q 0 0 0 rg BT 332.77 600.20 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 379.11 600.20 Td (ch 31,) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 479.20 600.20 Td (Change) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 57.00 586.00 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 295.00 586.20 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 375.55 586.20 Td (2018) Tj ET Q BT /F2 9.00 Tf ET BT /F2 5.85 Tf ET q 0 0 0 rg BT 393.55 590.28 Td (\(1\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 459.75 586.20 Td ($) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 521.50 586.20 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 571.42 Td (Adjusted Revenues) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 134.49 575.95 Td (\(2\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 556.42 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 267.00 556.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.15 556.42 Td (934.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 351.00 556.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 402.15 556.42 Td (944.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 435.00 556.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.80 556.47 Td (\(9.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 488.65 556.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.45 556.42 Td (\(1.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 544.30 556.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 541.42 Td (Gale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.15 541.42 Td (227.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 402.15 541.42 Td (234.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.80 541.47 Td (\(6.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 488.65 541.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.45 541.42 Td (\(2.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 544.30 541.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 526.42 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.15 526.42 Td (297.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 402.15 526.42 Td (292.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.15 526.42 Td (5.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.80 526.42 Td (2.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 547.65 526.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 511.42 Td (T) Tj ET Q q 0 0 0 rg BT 74.76 511.42 Td (otal) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 267.00 511.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 310.65 511.42 Td (1,460.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 351.00 511.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 394.65 511.42 Td (1,470.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 435.00 511.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.80 511.47 Td (\(10.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 488.65 511.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.45 511.42 Td (\(0.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 544.30 511.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 492.42 Td (Adjusted EBITDA) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 132.27 496.95 Td (\(2\)\(3\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 477.42 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 267.00 477.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.15 477.42 Td (217.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 351.00 477.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 402.15 477.42 Td (237.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 435.00 477.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.80 477.47 Td (\(20.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 488.65 477.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.45 477.42 Td (\(8.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 544.30 477.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 462.42 Td (Gale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 323.15 462.42 Td (83.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 407.15 462.42 Td (92.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.80 462.47 Td (\(9.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 488.65 462.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.45 462.42 Td (\(10.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 544.30 462.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 447.42 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 323.15 447.42 Td (71.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 407.15 447.42 Td (75.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.80 447.47 Td (\(3.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 488.65 447.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.45 447.42 Td (\(4.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 544.30 447.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 432.42 Td (T) Tj ET Q q 0 0 0 rg BT 74.76 432.42 Td (otal) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 267.00 432.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.15 432.42 Td (372.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 351.00 432.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 402.15 432.42 Td (405.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 435.00 432.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.80 432.47 Td (\(33.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 488.65 432.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.45 432.42 Td (\(8.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 544.30 432.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 413.42 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 131.72 413.42 Td ( less Pre-Publication Costs) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 238.66 417.95 Td (\(2\)\(3\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 398.42 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 267.00 398.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.15 398.42 Td (165.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 351.00 398.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 402.15 398.42 Td (183.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 435.00 398.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.80 398.47 Td (\(18.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 488.65 398.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.45 398.42 Td (\(9.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 544.30 398.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 383.42 Td (Gale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 323.15 383.42 Td (61.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 407.15 383.42 Td (66.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.80 383.47 Td (\(4.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 488.65 383.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.45 383.42 Td (\(7.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 544.30 383.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 368.42 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 323.15 368.42 Td (50.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 407.15 368.42 Td (51.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.80 368.47 Td (\(1.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 488.65 368.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.45 368.42 Td (\(2.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 544.30 368.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 353.42 Td (T) Tj ET Q q 0 0 0 rg BT 74.76 353.42 Td (otal) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 267.00 353.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.15 353.42 Td (277.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 351.00 353.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 402.15 353.42 Td (301.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 435.00 353.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.80 353.47 Td (\(24.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 488.65 353.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.45 353.42 Td (\(8.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 544.30 353.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 334.42 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 131.72 334.42 Td ( less Capital Expenditures) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 235.86 338.95 Td (\(2\)\(3\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 319.42 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 267.00 319.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.15 319.42 Td (1) Tj ET Q q 0 0 0 rg BT 323.15 319.42 Td (17.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 351.00 319.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 402.15 319.42 Td (140.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 435.00 319.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.80 319.47 Td (\(23.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 488.65 319.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.45 319.42 Td (\(16.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 544.30 319.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 304.42 Td (Gale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 323.15 304.42 Td (56.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 407.15 304.42 Td (61.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.80 304.47 Td (\(5.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 488.65 304.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.45 304.42 Td (\(9.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 544.30 304.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 289.42 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 323.15 289.42 Td (45.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 407.15 289.42 Td (46.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.80 289.47 Td (\(0.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 488.65 289.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.45 289.42 Td (\(1.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 544.30 289.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 274.42 Td (T) Tj ET Q q 0 0 0 rg BT 74.41 274.42 Td (otal) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 267.00 274.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.15 274.42 Td (218.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 351.00 274.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 402.15 274.42 Td (248.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 435.00 274.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.80 274.47 Td (\(29.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 488.65 274.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.45 274.42 Td (\(1) Tj ET Q q 0 0 0 rg BT 531.78 274.42 Td (1.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 544.30 274.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 257.53 Td (\(1\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 253.45 Td (Prior year amounts have been recast to current year standard internal currency exchange rates.) Tj ET Q BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 243.73 Td (\(2\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 239.65 Td (See Overview for the definition of this Non-GAAP) Tj ET Q q 0 0 0 rg BT 281.87 239.65 Td ( financial measure and Reconciliations of Non-GAAP) Tj ET Q q 0 0 0 rg BT 479.98 239.65 Td ( Financial Measures ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 228.85 Td (for reconciliations to the most directly comparable financial measures prepared in accordance with GAAP) Tj ET Q q 0 0 0 rg BT 471.11 228.85 Td (.) Tj ET Q BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 219.13 Td (\(3\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 215.05 Td (W) Tj ET Q q 0 0 0 rg BT 97.77 215.05 Td (e allocate our corporate and shared services costs to each of our segments using either number of employees, specific ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 204.25 Td (identification or activity) Tj ET Q q 0 0 0 rg BT 176.39 204.25 Td (, or revenue.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 175.45 Td (Learning ) Tj ET Q q 0 0 0 rg BT 112.47 175.45 Td (Adjusted Revenues for the fiscal year ended ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 294.95 175.45 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 360.23 175.45 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 362.73 175.45 Td (decrease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 397.15 175.45 Td (d ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 404.65 175.45 Td ($9.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 453.54 175.45 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.37 175.45 Td (1.0%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.20 175.45 Td (, primarily due ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 163.45 Td (to lower sales into the school channel and the continued secular decline of new print textbook sales in higher education, as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 151.45 Td (well as an increase in deferred revenue growth of Cengage Unlimited subscriptions, partially of) Tj ET Q q 0 0 0 rg BT 435.91 151.45 Td (fset by an increase in core ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 139.45 Td (digital sales, revenue from several lar) Tj ET Q q 0 0 0 rg BT 203.76 139.45 Td (ge deals including a software license and multiple content licenses, and revenue share ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 127.45 Td (from our rental partners.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 109.45 Td (Gale ) Tj ET Q q 0 0 0 rg BT 93.57 109.45 Td (Adjusted Revenues for the fiscal year ended ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 276.05 109.45 Td (March31, 2019) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 341.33 109.45 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 343.83 109.45 Td (decrease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 378.25 109.45 Td (d ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 385.75 109.45 Td ($6.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 434.64 109.45 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 450.47 109.45 Td (2.8%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 471.30 109.45 Td (, primarily driven by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 97.45 Td (a decrease in two non-repeatable sales in the United States and lower sales from a lar) Tj ET Q q 0 0 0 rg BT 393.97 97.45 Td (ge customer in Latin ) Tj ET Q q 0 0 0 rg BT 478.39 97.45 Td (America, partially ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 85.45 Td (of) Tj ET Q q 0 0 0 rg BT 62.15 85.45 Td (fset by an increase in archive sales in EMEA. ) Tj ET Q endstream endobj 105 0 obj <> endobj 106 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 217.00 760.75 Td (Management) Tj ET Q q 0 0 0 rg BT 276.06 760.75 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 348.04 760.75 Td (Analysis of) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.65 748.75 Td (Financial Condition and Results of Operations) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 47 -) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 731.25 Td (International ) Tj ET Q q 0 0 0 rg BT 129.15 731.25 Td (Adjusted Revenues for the fiscal year ended ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 311.63 731.25 Td (March31, 2019) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 376.91 731.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 379.41 731.25 Td (increase) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 412.17 731.25 Td (d ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 419.67 731.25 Td ($5.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 468.56 731.25 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 484.39 731.25 Td (2.0%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 505.22 731.25 Td (, primarily ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.25 Td (due to strong sales of our school products in ) Tj ET Q q 0 0 0 rg BT 232.59 719.25 Td (Australia, including a lar) Tj ET Q q 0 0 0 rg BT 331.82 719.25 Td (ge print deal, and sales growth in our EL) Tj ET Q q 0 0 0 rg BT 493.92 719.25 Td (T) Tj ET Q q 0 0 0 rg BT 499.84 719.25 Td ( products ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 707.25 Td (across ) Tj ET Q q 0 0 0 rg BT 80.94 707.25 Td (Asia and Latin ) Tj ET Q q 0 0 0 rg BT 141.76 707.25 Td (America, partially of) Tj ET Q q 0 0 0 rg BT 225.15 707.25 Td (fset by a decrease in sales of higher education products in ) Tj ET Q q 0 0 0 rg BT 457.57 707.25 Td (Australia and a non-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 695.25 Td (repeatable prior year order in EMEA.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 677.25 Td (Learning ) Tj ET Q q 0 0 0 rg BT 112.47 677.25 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 187.77 677.25 Td ( less Pre-Publication Costs for the fiscal year ended ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 402.47 677.25 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.76 677.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 470.26 677.25 Td (decrease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 504.67 677.25 Td (d ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 512.17 677.25 Td ($18.0 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 665.25 Td (million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 82.89 665.25 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 98.72 665.25 Td (9.8%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 119.55 665.25 Td (, to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 134.83 665.25 Td ($165.3 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 193.72 665.25 Td ( due to a decrease in Learning ) Tj ET Q q 0 0 0 rg BT 315.61 665.25 Td (Adjusted Revenues and an increase in costs primarily driven ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 653.25 Td (by our key strategic initiatives including investments in our school and on-line skills businesses and digital transformation, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 641.25 Td (primarily Cengage Unlimited. ) Tj ET Q q 0 0 0 rg BT 176.57 641.25 Td (These increases were partially of) Tj ET Q q 0 0 0 rg BT 307.99 641.25 Td (fset by a decrease in royalty expense, a decrease in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 629.25 Td (distribution related expense, lower inventory obsolescence expense, and a reduction in pre-publication spend costs. In ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 617.25 Td (addition, the increased investment in infrastructure was attributed and allocated to the operating segments.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 599.25 Td ( ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 77.00 599.25 Td (Gale ) Tj ET Q q 0 0 0 rg BT 98.57 599.25 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 173.87 599.25 Td ( less Pre-Publication Costs for the fiscal year ended ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 388.57 599.25 Td (March31, 2019) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 453.86 599.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 456.36 599.25 Td (decrease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.77 599.25 Td (d ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 498.27 599.25 Td ($4.7 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 547.16 599.25 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 587.25 Td (or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 64.83 587.25 Td (7.1%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 85.66 587.25 Td (, primarily due to the contribution of lower Gale ) Tj ET Q q 0 0 0 rg BT 280.61 587.25 Td (Adjusted Revenue, and an increase in paper) Tj ET Q q 0 0 0 rg BT 455.42 587.25 Td (, print, and binding costs, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 575.25 Td (an increase in bad debt expenses, an increase in outside service fees, partially of) Tj ET Q q 0 0 0 rg BT 373.97 575.25 Td (fset by a decrease in employee compensation ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 563.25 Td (and related costs, a decrease in sales and marketing costs, and a decrease in prepublication spend costs. In addition, there was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 551.25 Td (an increase in investments in infrastructure that was attributed and allocated to the operating segments.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 533.25 Td (International ) Tj ET Q q 0 0 0 rg BT 129.15 533.25 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 204.45 533.25 Td ( less Pre-Publication Costs for the fiscal year ended ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 419.15 533.25 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 484.44 533.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 486.94 533.25 Td (decrease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 521.35 533.25 Td (d ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.85 533.25 Td ($1.3 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 521.25 Td (million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 82.89 521.25 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 98.72 521.25 Td (2.5%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 119.55 521.25 Td (, to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 134.83 521.25 Td ($50.2 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 188.72 521.25 Td (, due to strategic investment initiatives in the expansion of Go-T) Tj ET Q q 0 0 0 rg BT 445.46 521.25 Td (o-Market teams and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 509.25 Td (operations support. ) Tj ET Q q 0 0 0 rg BT 132.97 509.25 Td (These decreases were partially of) Tj ET Q q 0 0 0 rg BT 266.06 509.25 Td (fset by the flow through on increased International ) Tj ET Q q 0 0 0 rg BT 470.44 509.25 Td (Adjusted Revenue, a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 497.25 Td (reduction in employee related compensation costs, and a reduction in EL) Tj ET Q q 0 0 0 rg BT 344.38 497.25 Td (T) Tj ET Q q 0 0 0 rg BT 350.30 497.25 Td ( prepublication spend costs. In addition, there was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 485.25 Td (an increase in investments in infrastructure that was attributed and allocated to the operating segments. ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 461.25 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 99.88 461.25 Td (Y) Tj ET Q q 0 0 0 rg BT 104.88 461.25 Td (ear Ended ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 149.88 461.25 Td (March31, 2018) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 215.16 461.25 Td ( Compared with Fiscal ) Tj ET Q q 0 0 0 rg BT 311.10 461.25 Td (Y) Tj ET Q q 0 0 0 rg BT 316.10 461.25 Td (ear Ended ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 361.10 461.25 Td (March31, 2017) Tj ET Q BT /F3 10.00 Tf ET 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 427.75 m 343.5 427.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 343.5 427.75 m 347.5 427.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 427.75 m 427.5 427.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 427.75 m 491.5 427.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 491.5 427.75 m 495.5 427.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 495.5 427.75 m 555.5 427.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 427.75 m 343.5 427.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 413.75 m 343.5 413.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 427.75 m 427.5 427.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 413.75 m 427.5 413.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 413.75 m 491.5 413.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 495.5 413.75 m 555.5 413.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 353.75 m 343.5 353.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 353.75 m 427.5 353.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 353.75 m 491.5 353.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 353.75 m 343.5 353.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 339.75 m 343.5 339.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 337.75 m 343.5 337.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 353.75 m 427.5 353.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 339.75 m 427.5 339.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 337.75 m 427.5 337.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 353.75 m 491.5 353.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 339.75 m 491.5 339.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 337.75 m 491.5 337.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 274.75 m 343.5 274.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 260.75 m 343.5 260.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 258.75 m 343.5 258.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 274.75 m 427.5 274.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 260.75 m 427.5 260.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 258.75 m 427.5 258.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 274.75 m 491.5 274.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 260.75 m 491.5 260.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 258.75 m 491.5 258.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 195.75 m 343.5 195.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 181.75 m 343.5 181.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 179.75 m 343.5 179.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 195.75 m 427.5 195.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 181.75 m 427.5 181.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 179.75 m 427.5 179.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 195.75 m 491.5 195.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 181.75 m 491.5 181.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 179.75 m 491.5 179.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 116.75 m 343.5 116.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 102.75 m 343.5 102.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 263.5 100.75 m 343.5 100.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 116.75 m 427.5 116.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 102.75 m 427.5 102.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 347.5 100.75 m 427.5 100.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 116.75 m 491.5 116.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 102.75 m 491.5 102.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 431.5 100.75 m 491.5 100.75 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 289.45 432.20 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 314.03 432.20 Td (Y) Tj ET Q q 0 0 0 rg BT 319.86 432.20 Td (ear) Tj ET Q q 0 0 0 rg BT 331.77 432.20 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 378.11 432.20 Td (ch 31,) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 478.20 432.20 Td (Change) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 58.00 418.00 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 290.55 418.20 Td (2018) Tj ET Q BT /F2 9.00 Tf ET BT /F2 5.85 Tf ET q 0 0 0 rg BT 308.55 422.28 Td (\(1\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 374.55 418.20 Td (2017) Tj ET Q BT /F2 9.00 Tf ET BT /F2 5.85 Tf ET q 0 0 0 rg BT 392.55 422.28 Td (\(1\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 458.75 418.20 Td ($) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 520.50 418.20 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 403.42 Td (Adjusted Revenues) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 135.49 407.95 Td (\(2\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 388.42 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 266.00 388.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 388.42 Td (944.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 350.00 388.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.15 388.42 Td (978.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 434.00 388.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.80 388.47 Td (\(33.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 388.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.45 388.42 Td (\(3.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 388.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 373.42 Td (Gale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 373.42 Td (234.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.15 373.42 Td (230.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.15 373.42 Td (3.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 530.80 373.42 Td (1.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 373.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 358.42 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 358.42 Td (292.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.15 358.42 Td (260.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 470.15 358.42 Td (31.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 525.80 358.42 Td (12.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 358.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 343.42 Td (T) Tj ET Q q 0 0 0 rg BT 75.76 343.42 Td (otal) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 266.00 343.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 309.65 343.42 Td (1,470.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 350.00 343.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.65 343.42 Td (1,469.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 434.00 343.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.15 343.42 Td (1.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 530.80 343.42 Td (0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 343.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 324.42 Td (Adjusted EBITDA) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 133.27 328.95 Td (\(2\)\(3\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 309.42 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 266.00 309.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 309.42 Td (237.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 350.00 309.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.15 309.42 Td (319.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 434.00 309.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.80 309.47 Td (\(82.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 309.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.45 309.42 Td (\(25.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 309.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 294.42 Td (Gale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.15 294.42 Td (92.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 406.15 294.42 Td (94.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 471.80 294.47 Td (\(2.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 294.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.45 294.42 Td (\(2.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 294.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 279.42 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.15 279.42 Td (75.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 406.15 279.42 Td (58.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 470.15 279.42 Td (16.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 525.80 279.42 Td (28.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 279.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 264.42 Td (T) Tj ET Q q 0 0 0 rg BT 75.76 264.42 Td (otal) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 266.00 264.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 264.42 Td (405.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 350.00 264.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.15 264.42 Td (473.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 434.00 264.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.80 264.47 Td (\(67.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 264.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.45 264.42 Td (\(14.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 264.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 245.42 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 132.72 245.42 Td ( less Pre-Publication Costs) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 239.66 249.95 Td (\(2\)\(3\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 230.42 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 266.00 230.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 230.42 Td (183.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 350.00 230.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.15 230.42 Td (250.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 434.00 230.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.80 230.47 Td (\(66.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 230.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.45 230.42 Td (\(26.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 230.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 215.42 Td (Gale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.15 215.42 Td (66.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 406.15 215.42 Td (63.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.15 215.42 Td (2.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 530.80 215.42 Td (4.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 215.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 200.42 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.15 200.42 Td (51.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 406.15 200.42 Td (39.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 470.15 200.42 Td (12.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 525.80 200.42 Td (31.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 200.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 185.42 Td (T) Tj ET Q q 0 0 0 rg BT 75.76 185.42 Td (otal) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 266.00 185.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 185.42 Td (301.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 350.00 185.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.15 185.42 Td (353.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 434.00 185.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.80 185.47 Td (\(51.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 185.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.45 185.42 Td (\(14.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 185.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 166.42 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 132.72 166.42 Td ( less Capital Expenditures) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 236.86 170.95 Td (\(2\)\(3\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 151.42 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 266.00 151.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 151.42 Td (140.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 350.00 151.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.15 151.42 Td (197.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 434.00 151.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.80 151.47 Td (\(56.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 151.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.45 151.42 Td (\(28.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 151.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 136.42 Td (Gale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.15 136.42 Td (61.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 406.15 136.42 Td (56.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.15 136.42 Td (5.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 530.80 136.42 Td (9.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 136.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 121.42 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.15 121.42 Td (46.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 406.15 121.42 Td (35.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 470.15 121.42 Td (1) Tj ET Q q 0 0 0 rg BT 475.15 121.42 Td (1.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 525.80 121.42 Td (31.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 121.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 106.42 Td (T) Tj ET Q q 0 0 0 rg BT 75.41 106.42 Td (otal) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 266.00 106.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 106.42 Td (248.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 350.00 106.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.15 106.42 Td (288.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 434.00 106.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.80 106.47 Td (\(40.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.65 106.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.45 106.42 Td (\(13.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.30 106.42 Td (\)%) Tj ET Q BT /F1 10.00 Tf ET BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 89.53 Td (\(1\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 85.45 Td (Prior year amounts have been recast to current year standard internal currency exchange rates.) Tj ET Q BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 75.73 Td (\(2\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 71.65 Td (See Overview for the definition of this Non-GAAP) Tj ET Q q 0 0 0 rg BT 281.87 71.65 Td ( financial measure and Reconciliations of Non-GAAP) Tj ET Q q 0 0 0 rg BT 479.98 71.65 Td ( Financial Measures ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 60.85 Td (for reconciliations to the most directly comparable financial measures prepared in accordance with GAAP) Tj ET Q q 0 0 0 rg BT 471.11 60.85 Td (.) Tj ET Q endstream endobj 107 0 obj <> endobj 108 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 217.00 760.75 Td (Management) Tj ET Q q 0 0 0 rg BT 276.06 760.75 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 348.04 760.75 Td (Analysis of) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.65 748.75 Td (Financial Condition and Results of Operations) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 48 -) Tj ET Q BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 735.88 Td (\(3\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 731.80 Td (W) Tj ET Q q 0 0 0 rg BT 97.77 731.80 Td (e allocate our corporate and shared services costs to each of our segments using either number of employees, specific ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 721.00 Td (identification or activity) Tj ET Q q 0 0 0 rg BT 176.39 721.00 Td (, or revenue.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 692.20 Td (Learning ) Tj ET Q q 0 0 0 rg BT 112.47 692.20 Td (Adjusted Revenues for the fiscal year ended ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 294.95 692.20 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 360.23 692.20 Td ( decreased ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 404.65 692.20 Td ($33.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.54 692.20 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 474.37 692.20 Td (3.4%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.20 692.20 Td (, primarily due ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 680.20 Td (to the decline of print products, as well as a shift in student preference toward lower) Tj ET Q q 0 0 0 rg BT 389.80 680.20 Td (-priced print \(rental\) and digital options, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 668.20 Td (partially of) Tj ET Q q 0 0 0 rg BT 97.97 668.20 Td (fset by growth of standalone core digital products and growth of sales of ) Tj ET Q q 0 0 0 rg BT 389.84 668.20 Td (Advanced Placement & Electives ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 656.20 Td (materials in the School channel.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 638.20 Td (Gale ) Tj ET Q q 0 0 0 rg BT 93.57 638.20 Td (Adjusted Revenues for the fiscal year ended ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 276.05 638.20 Td (March31, 2018) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 341.33 638.20 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 343.83 638.20 Td (increased ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 384.08 638.20 Td ($3.2 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 432.98 638.20 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 448.81 638.20 Td (1.4%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.64 638.20 Td (, primarily due to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 626.20 Td (strong performance in ) Tj ET Q q 0 0 0 rg BT 144.25 626.20 Td (Asia, ) Tj ET Q q 0 0 0 rg BT 167.03 626.20 Td (Australia, Latin ) Tj ET Q q 0 0 0 rg BT 231.73 626.20 Td (America, the U.S. public market, partially of) Tj ET Q q 0 0 0 rg BT 410.39 626.20 Td (fset by the ongoing decline in the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 614.20 Td (U.S. print business and declines in EMEA. ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 596.20 Td (International ) Tj ET Q q 0 0 0 rg BT 129.15 596.20 Td (Adjusted Revenues for the fiscal year ended ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 311.63 596.20 Td (March31, 2018) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 376.91 596.20 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 379.41 596.20 Td (increased ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 419.67 596.20 Td ($31.7 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 473.56 596.20 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 489.39 596.20 Td (12.2%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 515.22 596.20 Td (, primarily ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 584.20 Td (due to strong sales of our higher education products in ) Tj ET Q q 0 0 0 rg BT 273.40 584.20 Td (Australia, sales growth in our EL) Tj ET Q q 0 0 0 rg BT 405.23 584.20 Td (T) Tj ET Q q 0 0 0 rg BT 411.16 584.20 Td ( products in EMEA) Tj ET Q q 0 0 0 rg BT 488.65 584.20 Td ( and Latin ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 572.20 Td (America, partially of) Tj ET Q q 0 0 0 rg BT 137.39 572.20 Td (fset by a decline in sales of higher education products in ) Tj ET Q q 0 0 0 rg BT 364.27 572.20 Td (Asia.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 554.20 Td (Learning ) Tj ET Q q 0 0 0 rg BT 112.47 554.20 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 187.77 554.20 Td ( less Pre-Publication Costs for the fiscal year ended ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 402.47 554.20 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.76 554.20 Td ( decreased ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 512.17 554.20 Td ($66.8 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 542.20 Td (million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 82.89 542.20 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 98.72 542.20 Td (26.7%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 124.55 542.20 Td (, to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 139.83 542.20 Td ($183.3 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 198.72 542.20 Td (, primarily due to the contribution of lower Learning ) Tj ET Q q 0 0 0 rg BT 410.89 542.20 Td (Adjusted Revenues, operating ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 530.20 Td (expenses associated with our acquisition of ) Tj ET Q q 0 0 0 rg BT 229.33 530.20 Td (W) Tj ET Q q 0 0 0 rg BT 237.97 530.20 Td (ebAssign in September 2016, and higher employee compensation lar) Tj ET Q q 0 0 0 rg BT 513.00 530.20 Td (gely due to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 518.20 Td (a reduction in incentive compensation recorded during the third and fourth quarters of fiscal 2017 and investments in higher ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 506.20 Td (education digital product and technology infrastructure teams. ) Tj ET Q q 0 0 0 rg BT 304.48 506.20 Td (Additionally) Tj ET Q q 0 0 0 rg BT 354.38 506.20 Td (, during fiscal 2017 we recorded a $3.5 million ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 494.20 Td (aggregate reduction to our property and sales and use tax reserves as a result of the expiration of the statute of limitations.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 476.20 Td (Gale ) Tj ET Q q 0 0 0 rg BT 93.57 476.20 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 168.87 476.20 Td ( less Pre-Publication Costs for the fiscal year ended ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 383.57 476.20 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 448.86 476.20 Td ( increased ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 491.61 476.20 Td ($2.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 540.50 476.20 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 464.20 Td (4.1%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 74.83 464.20 Td (, to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.11 464.20 Td ($66.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 144.00 464.20 Td (, primarily due to the contribution of higher revenue and a decrease in prepublication spend, partially ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 452.20 Td (of) Tj ET Q q 0 0 0 rg BT 62.15 452.20 Td (fset by higher employee compensation and related costs.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 434.20 Td (International ) Tj ET Q q 0 0 0 rg BT 129.15 434.20 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 204.45 434.20 Td ( less Pre-Publication Costs for the fiscal year ended ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 419.15 434.20 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 484.44 434.20 Td ( increased ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.19 434.20 Td ($12.4 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 422.20 Td (million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 82.89 422.20 Td (, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 98.72 422.20 Td (31.7%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 124.55 422.20 Td (, to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 139.83 422.20 Td ($51.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 193.72 422.20 Td (. ) Tj ET Q q 0 0 0 rg BT 198.54 422.20 Td (The high flow-through on increased International ) Tj ET Q q 0 0 0 rg BT 397.93 422.20 Td (Adjusted Revenues was driven by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 410.20 Td (improved mar) Tj ET Q q 0 0 0 rg BT 110.19 410.20 Td (gins and operating ef) Tj ET Q q 0 0 0 rg BT 194.15 410.20 Td (ficiencies, partially of) Tj ET Q q 0 0 0 rg BT 281.43 410.20 Td (fset by higher employee compensation and related costs and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 398.20 Td (prepublication spend.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 375.40 Td (Reconciliations of Non-GAAP) Tj ET Q q 0 0 0 rg BT 199.22 375.40 Td ( Financial Measur) Tj ET Q q 0 0 0 rg BT 276.81 375.40 Td (es) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 354.40 Td (The following table reconciles ) Tj ET Q q 0 0 0 rg BT 195.85 354.40 Td (Adjusted Revenues to revenues per the consolidated statements of operations:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 312.5 323.9 m 391.5 323.9 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 391.5 323.9 m 395.5 323.9 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 395.5 323.9 m 474.5 323.9 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 474.5 323.9 m 478.5 323.9 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478.5 323.9 m 558.5 323.9 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 312.5 323.9 m 391.5 323.9 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 312.5 309.9 m 391.5 309.9 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 395.5 323.9 m 474.5 323.9 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 395.5 309.9 m 474.5 309.9 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478.5 323.9 m 558.5 323.9 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478.5 309.9 m 558.5 309.9 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 312.5 309.9 m 391.5 309.9 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 395.5 309.9 m 474.5 309.9 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478.5 309.9 m 558.5 309.9 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 312.5 279.9 m 391.5 279.9 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 312.5 265.9 m 391.5 265.9 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 312.5 263.9 m 391.5 263.9 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 395.5 279.9 m 474.5 279.9 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 395.5 265.9 m 474.5 265.9 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 395.5 263.9 m 474.5 263.9 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478.5 279.9 m 558.5 279.9 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478.5 265.9 m 558.5 265.9 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478.5 263.9 m 558.5 263.9 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 379.45 328.35 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 404.03 328.35 Td (Y) Tj ET Q q 0 0 0 rg BT 409.86 328.35 Td (ear) Tj ET Q q 0 0 0 rg BT 421.77 328.35 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 468.11 328.35 Td (ch 31,) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 57.00 314.15 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 342.50 314.35 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 422.05 314.35 Td (2018) Tj ET Q BT /F2 9.00 Tf ET BT /F2 5.85 Tf ET q 0 0 0 rg BT 440.05 318.43 Td (\(1\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 505.55 314.35 Td (2017) Tj ET Q BT /F2 9.00 Tf ET BT /F2 5.85 Tf ET q 0 0 0 rg BT 523.55 318.43 Td (\(1\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 299.57 Td (Revenues) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 315.00 299.57 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 357.65 299.57 Td (1,445.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 398.00 299.57 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 440.65 299.57 Td (1,466.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 481.00 299.57 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 524.65 299.57 Td (1,460.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 284.57 Td (Impact of foreign currency) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 370.15 284.57 Td (14.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.15 284.57 Td (4.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 542.15 284.57 Td (9.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 269.57 Td (Adjusted Revenues) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 315.00 269.57 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 357.65 269.57 Td (1,460.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 398.00 269.57 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 440.65 269.57 Td (1,470.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 481.00 269.57 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 524.65 269.57 Td (1,469.3) Tj ET Q BT /F1 10.00 Tf ET BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 247.88 Td (\(1\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 243.80 Td (Prior year amounts have been recast to current year standard internal currency exchange rates.) Tj ET Q endstream endobj 109 0 obj <> endobj 110 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 217.00 760.75 Td (Management) Tj ET Q q 0 0 0 rg BT 276.06 760.75 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 348.04 760.75 Td (Analysis of) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.65 748.75 Td (Financial Condition and Results of Operations) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 49 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 731.10 Td (The following table reconciles net loss to ) Tj ET Q q 0 0 0 rg BT 238.90 731.10 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 313.62 731.10 Td ( less Capital Expenditures, ) Tj ET Q q 0 0 0 rg BT 422.21 731.10 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 496.93 731.10 Td ( less Pre-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (Publication Costs, and ) Tj ET Q q 0 0 0 rg BT 145.67 719.10 Td (Adjusted EBITDA:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 312.5 694.6 m 379.5 694.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 379.5 694.6 m 383.5 694.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 383.5 694.6 m 451.5 694.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 451.5 694.6 m 455.5 694.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 455.5 694.6 m 536.5 694.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 312.5 694.6 m 379.5 694.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 312.5 680.6 m 379.5 680.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 383.5 694.6 m 451.5 694.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 383.5 680.6 m 451.5 680.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 451.5 694.6 m 455.5 694.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 455.5 694.6 m 536.5 694.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 455.5 680.6 m 536.5 680.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 312.5 680.6 m 379.5 680.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 383.5 680.6 m 451.5 680.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 455.5 680.6 m 536.5 680.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 312.5 470.6 m 379.5 470.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 383.5 470.6 m 451.5 470.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 455.5 470.6 m 536.5 470.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 312.5 440.6 m 379.5 440.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 383.5 440.6 m 451.5 440.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 455.5 440.6 m 536.5 440.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 312.5 400.6 m 379.5 400.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 312.5 386.6 m 379.5 386.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 312.5 384.6 m 379.5 384.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 383.5 400.6 m 451.5 400.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 383.5 386.6 m 451.5 386.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 383.5 384.6 m 451.5 384.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 455.5 400.6 m 536.5 400.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 455.5 386.6 m 536.5 386.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 455.5 384.6 m 536.5 384.6 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 368.45 699.05 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 393.03 699.05 Td (Y) Tj ET Q q 0 0 0 rg BT 398.86 699.05 Td (ear) Tj ET Q q 0 0 0 rg BT 410.77 699.05 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 457.11 699.05 Td (ch 31,) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 57.00 684.85 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 336.50 685.05 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 404.55 685.05 Td (2018) Tj ET Q BT /F2 9.00 Tf ET BT /F2 5.85 Tf ET q 0 0 0 rg BT 422.55 689.13 Td (\(1\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 483.05 685.05 Td (2017) Tj ET Q BT /F2 9.00 Tf ET BT /F2 5.85 Tf ET q 0 0 0 rg BT 501.05 689.13 Td (\(1\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 670.27 Td (Net loss) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 315.00 670.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 354.80 670.32 Td (\(97.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 375.65 670.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 386.00 670.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 431.80 670.32 Td (\(1.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 670.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.00 670.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 511.80 670.32 Td (\(43.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.65 670.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 655.27 Td (Impact of foreign currency) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 363.15 655.27 Td (4.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 435.15 655.27 Td (1.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 520.15 655.27 Td (3.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 640.27 Td (Equity-based compensation expense) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 363.15 640.27 Td (8.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 430.15 640.27 Td (17.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 515.15 640.27 Td (13.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 625.27 Td (Non-core other operating expenses) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 208.67 629.80 Td (\(2\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 363.15 625.27 Td (9.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 435.15 625.27 Td (7.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 515.15 625.27 Td (13.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 610.27 Td (Acquisition and mer) Tj ET Q q 0 0 0 rg BT 150.56 610.27 Td (ger) Tj ET Q q 0 0 0 rg BT 163.14 610.27 Td (-related costs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 363.15 610.27 Td (6.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 435.15 610.27 Td (0.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.65 610.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 595.27 Td (Loss on early extinguishment of debt) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 365.65 595.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 437.65 595.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 515.15 595.27 Td (10.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 580.27 Td (Amortization of pre-publication costs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 353.15 580.27 Td (109.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 425.15 580.27 Td (127.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 510.15 580.27 Td (150.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 565.27 Td (Operational restructuring and other char) Tj ET Q q 0 0 0 rg BT 229.40 565.27 Td (ges) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 358.15 565.27 Td (17.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 430.15 565.27 Td (10.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 515.15 565.27 Td (26.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 550.27 Td (Depreciation) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 358.15 550.27 Td (76.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 430.15 550.27 Td (72.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 515.15 550.27 Td (83.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 535.27 Td (Amortization of identifiable intangible assets) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 358.15 535.27 Td (94.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 430.15 535.27 Td (94.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 515.15 535.27 Td (92.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 520.27 Td (Other \(income\) expense, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 359.80 520.32 Td (\(2.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 375.65 520.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 426.80 520.32 Td (\(10.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 520.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 520.15 520.27 Td (1.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 505.27 Td (Interest expense, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 353.15 505.27 Td (171.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 425.15 505.27 Td (159.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 510.15 505.27 Td (156.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 490.27 Td (Reor) Tj ET Q q 0 0 0 rg BT 88.35 490.27 Td (ganization items, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 365.65 490.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 437.65 490.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 520.15 490.27 Td (0.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 475.27 Td (Benefit from income tax) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 354.80 475.32 Td (\(27.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 375.65 475.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 426.80 475.32 Td (\(73.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 475.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 511.80 475.32 Td (\(36.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.65 475.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 460.27 Td (Adjusted EBITDA) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 353.15 460.27 Td (372.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 425.15 460.27 Td (405.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 510.15 460.27 Td (473.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 445.27 Td (Additions to pre-publication costs) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 204.82 449.80 Td (\(3\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 354.80 445.32 Td (\(95.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 375.65 445.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 421.80 445.32 Td (\(104.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 445.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 506.80 445.32 Td (\(120.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.65 445.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 430.27 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 131.99 430.27 Td ( less Pre-Publication Costs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 353.15 430.27 Td (277.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 425.15 430.27 Td (301.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 510.15 430.27 Td (353.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 415.27 Td (Additions to property) Tj ET Q q 0 0 0 rg BT 154.45 415.27 Td (, equipment and capitalized ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 78.00 405.27 Td (internal-use software) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 162.13 409.80 Td (\(3\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 354.80 405.32 Td (\(58.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 375.65 405.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 426.80 405.32 Td (\(53.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 405.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 511.80 405.32 Td (\(64.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.65 405.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 390.27 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 131.72 390.27 Td ( less Capital Expenditures) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 315.00 390.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 353.15 390.27 Td (218.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 386.00 390.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 425.15 390.27 Td (248.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.00 390.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 510.15 390.27 Td (288.3) Tj ET Q BT /F1 10.00 Tf ET BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 376.38 Td (\(1\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 372.30 Td (Prior year amounts have been recast to current year standard internal currency exchange rates.) Tj ET Q BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 362.58 Td (\(2\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 358.50 Td (Non-core other operating expenses includes primarily bank fees, severance costs, duplicate rent expense, net, incurred during the ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 347.70 Td (build-out phase of the Company's new headquarters in Boston, contract termination costs, consulting costs and management fees.) Tj ET Q BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 337.98 Td (\(3\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 333.90 Td (Additions to pre-publication costs and property) Tj ET Q q 0 0 0 rg BT 259.63 333.90 Td (, equipment and capitalized internal-use software are excluded from segment ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 323.10 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 157.25 323.10 Td ( less Pre-Publication Costs on a constant currency and accrual basis. ) Tj ET Q q 0 0 0 rg BT 405.02 323.10 Td (The impact of foreign currency exchange ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 312.30 Td (related to additions to pre-publication costs was ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 264.21 312.30 Td ($0.6 million) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 308.21 312.30 Td (, ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 312.71 312.30 Td ($0.3 million) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 356.71 312.30 Td ( and ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 374.21 312.30 Td ($0.4 million) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 418.21 312.30 Td ( for the fiscal years ended March 31, ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 301.50 Td (2019, 2018 and 2017, respectively) Tj ET Q q 0 0 0 rg BT 213.39 301.50 Td (. ) Tj ET Q q 0 0 0 rg BT 217.73 301.50 Td (The impact of foreign currency exchange related to property) Tj ET Q q 0 0 0 rg BT 434.54 301.50 Td (, equipment and capitalized ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 290.70 Td (internal-use software was less than $0.1 million for all periods presented.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 255.90 Td (Liquidity and Capital Resour) Tj ET Q q 0 0 0 rg BT 197.68 255.90 Td (ces) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 222.39999999999998 m 488.5 222.39999999999998 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 488.5 222.39999999999998 m 492.5 222.39999999999998 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 222.39999999999998 m 557.5 222.39999999999998 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 208.39999999999998 m 488.5 208.39999999999998 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 208.39999999999998 m 557.5 208.39999999999998 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 208.39999999999998 m 488.5 208.39999999999998 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 208.39999999999998 m 557.5 208.39999999999998 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 470.30 226.85 Td (Mar) Tj ET Q q 0 0 0 rg BT 487.21 226.85 Td (ch 31,) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 212.65 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 446.50 212.85 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 515.50 212.85 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 198.07 Td (Cash and cash equivalents) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 426.00 198.07 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 198.07 Td (335.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.00 198.07 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 198.07 Td (319.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 183.07 Td (Current portion of long-term debt) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 190.41 187.60 Td (\(1\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 183.07 Td (17.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 183.07 Td (6.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 168.07 Td (Long-term debt) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 118.48 172.60 Td (\(1\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 454.65 168.07 Td (2,234.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 168.07 Td (2,244.9) Tj ET Q BT /F1 10.00 Tf ET BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 151.18 Td (\(1\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 147.10 Td (Includes capital lease and original issue discount.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 129.10 Td (Our principal sources of liquidity have historically been cash flows from operations and borrowings under our revolving ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 117.10 Td (credit facilities. Our cash flows from operations are impacted by the inherent seasonality of our business, whereby we ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 105.10 Td (typically generate operating cash during the second and third quarters of our fiscal year and utilize cash for operating ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 93.10 Td (activities throughout the first and fourth quarters of our fiscal year) Tj ET Q q 0 0 0 rg BT 318.37 93.10 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 75.10 Td (Our liquidity and the ability to service our debt, as well as fund future acquisitions, share repurchases, other purchase ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 63.10 Td (commitments, operating leases, working capital and capital expenditure requirements, is dependent on our future financial ) Tj ET Q endstream endobj 111 0 obj <> endobj 112 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 217.00 760.75 Td (Management) Tj ET Q q 0 0 0 rg BT 276.06 760.75 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 348.04 760.75 Td (Analysis of) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.65 748.75 Td (Financial Condition and Results of Operations) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 50 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 731.10 Td (performance, which is subject to general economic, financial and other factors that are beyond our control. ) Tj ET Q q 0 0 0 rg BT 482.82 731.10 Td (There can be no ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (assurance that our business will generate suf) Tj ET Q q 0 0 0 rg BT 231.54 719.10 Td (ficient cash flows from operations, that anticipated net sales growth and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 707.10 Td (operating improvements will be realized or that future borrowings will be available under our revolving credit facility) Tj ET Q q 0 0 0 rg BT 524.31 707.10 Td (, or any ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 695.10 Td (other facility) Tj ET Q q 0 0 0 rg BT 104.72 695.10 Td (, in an amount suf) Tj ET Q q 0 0 0 rg BT 176.47 695.10 Td (ficient to enable us to service our indebtedness or to fund our other liquidity needs. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 677.10 Td (Our principal uses of cash are to fund operating costs and capital expenditures, including investments in product and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 665.10 Td (technology of) Tj ET Q q 0 0 0 rg BT 109.08 665.10 Td (ferings, strategic acquisitions, the payment of interest and principal on our outstanding debt, and share ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 653.10 Td (repurchases. ) Tj ET Q q 0 0 0 rg BT 106.02 653.10 Td (W) Tj ET Q q 0 0 0 rg BT 114.65 653.10 Td (e expect our cash flows from operations, combined with availability under our revolving credit facility and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 641.10 Td (existing cash and cash equivalents, to provide suf) Tj ET Q q 0 0 0 rg BT 251.55 641.10 Td (ficient liquidity to fund our current obligations, debt service requirements, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 629.10 Td (projected working capital requirements, share repurchase program, restructuring obligations, scheduled long-term debt ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 617.10 Td (obligations and capital spending over the next twelve months. In addition, in February 2017, our board of directors approved ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 605.10 Td (an authorization of up to $100 million to purchase in the open market our 9.50% senior notes and/or senior secured term loan. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 593.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 78.44 593.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 142.04 593.10 Td (, we had ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 178.14 593.10 Td ($335.8 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 237.03 593.10 Td ( of cash and cash equivalents, of which approximately $85.0 million was held ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 581.10 Td (in our foreign subsidiaries. ) Tj ET Q q 0 0 0 rg BT 163.52 581.10 Td (W) Tj ET Q q 0 0 0 rg BT 172.16 581.10 Td (e may be required to incur U.S. and foreign tax liabilities if we repatriate these funds. ) Tj ET Q q 0 0 0 rg BT 516.03 581.10 Td (W) Tj ET Q q 0 0 0 rg BT 524.67 581.10 Td (e ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 569.10 Td (consider the earnings of our foreign subsidiaries to be permanently reinvested and based on our historical earnings, we ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 557.10 Td (believe any changes to this assertion would not have a material impact on our tax provision.) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 72.00 539.10 Td (Shar) Tj ET Q q 0 0 0 rg BT 90.52 539.10 Td (e Repur) Tj ET Q q 0 0 0 rg BT 121.53 539.10 Td (chase Pr) Tj ET Q q 0 0 0 rg BT 156.42 539.10 Td (ograms) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 521.10 Td (On June 6, 2017, we announced the authorization to extend our current $65.0 million share repurchase program until ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 509.10 Td (May 31, 2018. During fiscal year 2018, we completed this program, repurchasing 7,259,913 shares for $65.0 million in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 497.10 Td (aggregate. ) Tj ET Q q 0 0 0 rg BT 97.68 497.10 Td (The share repurchases were funded using a portion of the remaining proceeds from our issuance of long-term debt ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 485.10 Td (during fiscal year 2017.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 467.10 Td (During fiscal year 2017, we made share repurchases of $54.1 million, of which $50.0 million related to our March 14, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 455.10 Td (2016 share repurchase program and was funded utilizing cash from operations. ) Tj ET Q q 0 0 0 rg BT 371.68 455.10 Td (Additionally) Tj ET Q q 0 0 0 rg BT 421.58 455.10 Td (, we made share repurchases of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 443.10 Td ($4.1 million under our $65.0 million share repurchase program, which was funded using a portion of the remaining proceeds ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 431.10 Td (from our issuance of long-term debt during fiscal year 2017. ) Tj ET Q q 0 0 0 rg BT 297.92 431.10 Td (This program was reduced from $265.0 million, announced on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 419.10 Td (June 20, 2016, to $65.0 million on September 14, 2016, following the declaration of the one-time $200.0 million cash ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 407.10 Td (dividend paid on September 30, 2016.) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 72.00 389.10 Td (Dividends) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 368.10 Td (There were no dividends declared in the fiscal years ended March 31, 2019 and 2018. In fiscal year 2017, we paid a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 356.10 Td ($200.0 million dividend utilizing the net proceeds from our debt issuance in June 2016. ) Tj ET Q q 0 0 0 rg BT 405.98 356.10 Td (W) Tj ET Q q 0 0 0 rg BT 414.62 356.10 Td (e may declare additional dividend ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 344.10 Td (payments in the future using either cash from operations, long-term borrowings, or a combination of both.) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 72.00 323.10 Td (Long-term Debt) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 305.10 Td (On June 7, 2016, Cengage Learning, Inc., our wholly owned subsidiary) Tj ET Q q 0 0 0 rg BT 357.13 305.10 Td (, issued senior notes \(Senior Notes\) and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 293.10 Td (amended and restated its senior secured term loan facility \(T) Tj ET Q q 0 0 0 rg BT 299.59 293.10 Td (erm Loan\) and its asset based lending revolving line of credit ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 281.10 Td (\(ABL) Tj ET Q q 0 0 0 rg BT 81.40 281.10 Td ( Revolving Credit Facility\). ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 260.10 Td (Senior) Tj ET Q q 0 0 0 rg BT 99.60 260.10 Td ( Notes) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 242.10 Td (On June 7, 2016, Cengage Learning, Inc., our wholly owned subsidiary) Tj ET Q q 0 0 0 rg BT 357.13 242.10 Td (, issued $620.0 million aggregate principal ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 230.10 Td (amount Senior Notes in a private placement, maturing June 15, 2024. ) Tj ET Q q 0 0 0 rg BT 333.76 230.10 Td (The Senior Notes bear interest at a rate of 9.50% per ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 218.10 Td (annum, payable semi-annually in arrears on June 15 and December 15 of each year) Tj ET Q q 0 0 0 rg BT 386.24 218.10 Td (, commencing on December 15, 2016. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 206.10 Td (Cengage Learning, Inc. has the option to redeem the Senior Notes, in whole or in part, at any time on or before June 15, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 194.10 Td (2019, equal to 100% of the principal amount of the notes plus an applicable premium and accrued interest, as defined in the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 182.10 Td (indenture. ) Tj ET Q q 0 0 0 rg BT 96.58 182.10 Td (W) Tj ET Q q 0 0 0 rg BT 105.22 182.10 Td (e also have the option to redeem the Senior Notes, in whole or in part, at any time on or after June 15, 2019, at ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 170.10 Td (certain redemption prices as defined in the indenture. In addition, we may repurchase the Senior Notes in part, at any time, in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 158.10 Td (the open market, in accordance with federal securities regulations.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 140.10 Td (Pursuant to the indenture governing the Senior Notes, all material, wholly owned domestic subsidiaries of Cengage ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 128.10 Td (Learning, Inc., subject to certain exceptions, will guarantee the Senior Notes, up to applicable legal limits. ) Tj ET Q q 0 0 0 rg BT 480.91 128.10 Td (T) Tj ET Q q 0 0 0 rg BT 486.32 128.10 Td (o date, there are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 116.10 Td (no subsidiary guarantors of the Senior Notes. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 98.10 Td (The indenture related to the Senior Notes contains certain covenants that we may be subject to which restrict our and our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 86.10 Td (subsidiaries) Tj ET Q q 0 0 0 rg BT 103.80 86.10 Td ( ability to, among other things: incur additional indebtedness or issue certain disqualified shares and preferred ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 74.10 Td (shares; create liens; pay dividends or distributions or redeem or repurchase equity; prepay subordinated debt or make certain ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 62.10 Td (investments; transfer and sell assets; engage in a consolidation or mer) Tj ET Q q 0 0 0 rg BT 332.63 62.10 Td (ger or sell, transfer or otherwise dispose of all or ) Tj ET Q endstream endobj 113 0 obj <> endobj 114 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 217.00 760.75 Td (Management) Tj ET Q q 0 0 0 rg BT 276.06 760.75 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 348.04 760.75 Td (Analysis of) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.65 748.75 Td (Financial Condition and Results of Operations) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 51 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 731.10 Td (substantially all of our assets; and enter into certain transactions with af) Tj ET Q q 0 0 0 rg BT 340.13 731.10 Td (filiates. ) Tj ET Q q 0 0 0 rg BT 372.16 731.10 Td (W) Tj ET Q q 0 0 0 rg BT 380.80 731.10 Td (e will not be subject to these covenants if \(i\) ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (the Senior Notes have Investment Grade Ratings from the relevant rating agencies, as defined in the terms of the Senior ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 707.10 Td (Notes, and \(ii\) no default has occurred and is continuing under the indenture. ) Tj ET Q q 0 0 0 rg BT 363.63 707.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.08 707.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 451.68 707.10 Td (, no default has occurred ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 695.10 Td (and we are compliant with all of the covenants of the indenture.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 674.10 Td (T) Tj ET Q q 0 0 0 rg BT 77.75 674.10 Td (erm Loan) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 656.10 Td (The ) Tj ET Q q 0 0 0 rg BT 89.87 656.10 Td (T) Tj ET Q q 0 0 0 rg BT 95.28 656.10 Td (erm Loan provides for senior secured term loans in an aggregate principal amount of $1,710.0 million and matures ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 644.10 Td (on June 7, 2023. In addition, we may request one or more incremental credit facilities in an aggregate amount of up to $500.0 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 632.10 Td (million, plus additional amounts subject to certain requirements. Borrowings under the ) Tj ET Q q 0 0 0 rg BT 403.47 632.10 Td (T) Tj ET Q q 0 0 0 rg BT 408.88 632.10 Td (erm Loan bear interest at a rate equal ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 620.10 Td (to, at our option, either \(a\) a LIBOR rate determined by reference to the costs of funds for Eurodollar deposits for the interest ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 608.10 Td (period relevant to such borrowing, adjusted for certain additional costs, subject to a 1.00% floor \(Eurocurrency Rate Loan\), ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 596.10 Td (or \(b\) a base rate determined by reference to the highest of \(i\) the federal funds rate plus 0.50%, \(ii\) the prime rate and \(iii\) ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 584.10 Td (the one-month adjusted LIBOR rate plus 1.00%, in each case plus an applicable mar) Tj ET Q q 0 0 0 rg BT 391.22 584.10 Td (gin. ) Tj ET Q q 0 0 0 rg BT 408.44 584.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 432.89 584.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 496.49 584.10 Td (, we elected to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 572.10 Td (carry the ) Tj ET Q q 0 0 0 rg BT 91.57 572.10 Td (T) Tj ET Q q 0 0 0 rg BT 96.98 572.10 Td (erm Loan as a Eurocurrency Rate Loan with an ef) Tj ET Q q 0 0 0 rg BT 296.44 572.10 Td (fective interest rate of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 386.39 572.10 Td (6.74%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 412.22 572.10 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 554.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 554.10 Td (e are required to repay 0.25% of the original principal amount of the ) Tj ET Q q 0 0 0 rg BT 356.47 554.10 Td (T) Tj ET Q q 0 0 0 rg BT 361.88 554.10 Td (erm Loan on the last business day of each ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 542.10 Td (quarter commencing with the quarter ended September30, 2016. Following the end of each fiscal year) Tj ET Q q 0 0 0 rg BT 464.30 542.10 Td (, commencing with the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 530.10 Td (fiscal year ending March 31, 2017, we must prepay a percentage between 0% and 50%, based on our total leverage ratio, of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 518.10 Td (its Excess Cash Flow) Tj ET Q q 0 0 0 rg BT 138.63 518.10 Td (, as defined in the ) Tj ET Q q 0 0 0 rg BT 211.76 518.10 Td (T) Tj ET Q q 0 0 0 rg BT 217.17 518.10 Td (erm Loan agreement, within five business days after delivery of the financial ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 506.10 Td (statements. In fiscal year 2019, based on our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 234.50 506.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 298.10 506.10 Td ( consolidated financial statements, and in fiscal year 2018, based ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 494.10 Td (on our March 31, 2018 consolidated financial statements, we determined there were no prepayments due under the Excess ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 482.10 Td (Cash Flow provision. Prepayments made under the Excess Cash Flow provision are used to satisfy prospective mandatory ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 470.10 Td (quarterly principal repayments. ) Tj ET Q q 0 0 0 rg BT 181.55 470.10 Td (W) Tj ET Q q 0 0 0 rg BT 190.19 470.10 Td (e are also required to prepay loans with net proceeds from asset sales, casualty events, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 458.10 Td (issuances of indebtedness, subject to, in the case of asset sales and casualty events, reinvestment rights by us within certain ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 446.10 Td (time restrictions. In accordance with the Excess Cash Flow provisions of the ) Tj ET Q q 0 0 0 rg BT 362.36 446.10 Td (T) Tj ET Q q 0 0 0 rg BT 367.77 446.10 Td (erm Loan facility) Tj ET Q q 0 0 0 rg BT 436.53 446.10 Td (, we made a $27.7 million ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 434.10 Td (principal payment on June 8, 2017. In accordance with the Excess Cash Flow provisions of the previous term loan facility) Tj ET Q q 0 0 0 rg BT 541.29 434.10 Td (, we ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 422.10 Td (made a $25.6 million principal payment on June 2, 2016, which was reimbursed to us using the net proceeds of the issuance ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 410.10 Td (of debt. ) Tj ET Q q 0 0 0 rg BT 86.87 410.10 Td (W) Tj ET Q q 0 0 0 rg BT 95.50 410.10 Td (e may prepay or repurchase the ) Tj ET Q q 0 0 0 rg BT 223.04 410.10 Td (T) Tj ET Q q 0 0 0 rg BT 228.45 410.10 Td (erm Loan, in whole or in part, at any time, without penalty) Tj ET Q q 0 0 0 rg BT 462.18 410.10 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 389.10 Td (The obligations under the ) Tj ET Q q 0 0 0 rg BT 176.79 389.10 Td (T) Tj ET Q q 0 0 0 rg BT 182.21 389.10 Td (erm Loan are unconditionally guaranteed by Cengage Learning Holdco, Inc., a Delaware ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 377.10 Td (corporation, on a limited recourse basis, and all of our direct and indirect material, wholly owned domestic restricted ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 365.10 Td (subsidiaries, subject to certain exceptions. ) Tj ET Q q 0 0 0 rg BT 224.61 365.10 Td (The obligations will be secured by \(i\) second-priority security interests in all ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 353.10 Td (accounts receivable, loans receivable, other receivables, inventory) Tj ET Q q 0 0 0 rg BT 317.95 353.10 Td (, related books and records, certain related general ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 341.10 Td (intangibles \(excluding intellectual property and equity interests\), deposit accounts \(other than deposit accounts holding solely ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 329.10 Td (proceeds of Non-ABL) Tj ET Q q 0 0 0 rg BT 143.05 329.10 Td ( priority collateral \(as defined below\)\), cash and proceeds of the foregoing of Cengage Learning, Inc. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 317.10 Td (and each subsidiary guarantor \(collectively) Tj ET Q q 0 0 0 rg BT 225.50 317.10 Td (, the ABL) Tj ET Q q 0 0 0 rg BT 269.29 317.10 Td ( priority collateral\), with the ) Tj ET Q q 0 0 0 rg BT 388.69 317.10 Td (ABL) Tj ET Q q 0 0 0 rg BT 408.32 317.10 Td ( facility secured by first-priority ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 305.10 Td (security interests therein, and \(ii\) first-priority security interests in substantially all assets of Cengage Learning, Inc. and each ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 293.10 Td (subsidiary guarantor) Tj ET Q q 0 0 0 rg BT 135.52 293.10 Td (, in each case whether owned on the closing date or thereafter acquired, other than the ) Tj ET Q q 0 0 0 rg BT 480.93 293.10 Td (ABL) Tj ET Q q 0 0 0 rg BT 500.56 293.10 Td ( priority ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 281.10 Td (collateral, including a pledge of our capital stock \(prior to an IPO\), the capital stock of future subsidiary guarantors and 65% ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 269.10 Td (of the voting capital stock of first-tier foreign subsidiaries that are not subsidiary guarantors, in each case subject to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 257.10 Td (exceptions \(collectively) Tj ET Q q 0 0 0 rg BT 148.59 257.10 Td (, the Non-ABL) Tj ET Q q 0 0 0 rg BT 212.93 257.10 Td ( priority collateral\), with the ) Tj ET Q q 0 0 0 rg BT 332.33 257.10 Td (ABL) Tj ET Q q 0 0 0 rg BT 351.96 257.10 Td ( Facility secured by second-priority security ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 245.10 Td (interests therein.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 227.10 Td (The ) Tj ET Q q 0 0 0 rg BT 89.87 227.10 Td (T) Tj ET Q q 0 0 0 rg BT 95.28 227.10 Td (erm Loan agreement contains certain customary conditions to borrowing, restrictions, af) Tj ET Q q 0 0 0 rg BT 448.32 227.10 Td (firmative covenants, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 215.10 Td (negative covenants and events of default. ) Tj ET Q q 0 0 0 rg BT 221.26 215.10 Td (The ) Tj ET Q q 0 0 0 rg BT 239.12 215.10 Td (T) Tj ET Q q 0 0 0 rg BT 244.53 215.10 Td (erm Loan does not contain any financial maintenance covenants. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 197.10 Td (ABL) Tj ET Q q 0 0 0 rg BT 92.01 197.10 Td ( Revolving Cr) Tj ET Q q 0 0 0 rg BT 151.27 197.10 Td (edit Facility) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 179.10 Td (The availability of credit under the amended and restated five-year ) Tj ET Q q 0 0 0 rg BT 340.77 179.10 Td (ABL) Tj ET Q q 0 0 0 rg BT 360.40 179.10 Td ( Revolving Credit Facility) Tj ET Q q 0 0 0 rg BT 464.46 179.10 Td (, which expires on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 167.10 Td (June 7, 2021, is equal to the lesser of \(i\) $250.0 million and \(ii\) our borrowing base. ) Tj ET Q q 0 0 0 rg BT 391.81 167.10 Td (The borrowing base equals the sum of \(i\) ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 155.10 Td (90% of eligible credit card receivables, plus \(ii\) 85% of eligible receivables, plus \(iii\) 85% of the orderly liquidation value of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 143.10 Td (eligible inventory) Tj ET Q q 0 0 0 rg BT 124.17 143.10 Td (, plus \(iv\) 100% of cash not to exceed $35.0 million. ) Tj ET Q q 0 0 0 rg BT 336.35 143.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 360.80 143.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 424.40 143.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 443.83 143.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 507.43 143.10 Td (, the ) Tj ET Q q 0 0 0 rg BT 526.60 143.10 Td (ABL) Tj ET Q q 0 0 0 rg BT 546.23 143.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 131.10 Td (Revolving Credit Facility had no outstanding borrowings and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 302.31 131.10 Td ($22.8 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 356.20 131.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 375.64 131.10 Td ($22.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 429.53 131.10 Td ( respectively) Tj ET Q q 0 0 0 rg BT 479.69 131.10 Td (, in issued and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 119.10 Td (outstanding letters of credit. Our available borrowing base as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 311.42 119.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 375.02 119.10 Td (, which is based on the balance sheet at ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 107.10 Td (February 28, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 127.60 107.10 Td (, was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 150.65 107.10 Td ($103.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 209.54 107.10 Td (, net of letters of credit. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 89.10 Td (The unused commitment fee will range between ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 267.21 89.10 Td (0.25%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 293.04 89.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.48 89.10 Td (0.375%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 343.31 89.10 Td (, based upon the average facility usage for the most ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 77.10 Td (recently ended fiscal quarter) Tj ET Q q 0 0 0 rg BT 167.00 77.10 Td (. Outstanding letters of credit are also subject to a quarterly letter of credit participation fee which ) Tj ET Q endstream endobj 115 0 obj <> endobj 116 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 217.00 760.75 Td (Management) Tj ET Q q 0 0 0 rg BT 276.06 760.75 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 348.04 760.75 Td (Analysis of) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.65 748.75 Td (Financial Condition and Results of Operations) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 52 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 731.10 Td (will vary between ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 128.14 731.10 Td (1.75%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 153.97 731.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 173.41 731.10 Td (2.25%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 199.24 731.10 Td (, depending on the average daily availability) Tj ET Q q 0 0 0 rg BT 376.03 731.10 Td (. During the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 496.81 731.10 Td (March31, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 74.00 719.10 Td (, we incurred approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 189.23 719.10 Td ($0.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 238.13 719.10 Td ( of commitment fees and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 340.04 719.10 Td ($0.4 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.93 719.10 Td ( of letter of credit participation fees.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 701.10 Td ( ) Tj ET Q q 0 0 0 rg BT 74.32 701.10 Td (W) Tj ET Q q 0 0 0 rg BT 82.96 701.10 Td (e have the right to prepay outstanding borrowings under the ) Tj ET Q q 0 0 0 rg BT 324.01 701.10 Td (ABL) Tj ET Q q 0 0 0 rg BT 343.64 701.10 Td ( Revolving Credit Facility) Tj ET Q q 0 0 0 rg BT 447.70 701.10 Td (, in whole or in part, from ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 689.10 Td (time to time, without premium or penalty) Tj ET Q q 0 0 0 rg BT 218.60 689.10 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 671.10 Td (The obligations under the ) Tj ET Q q 0 0 0 rg BT 176.42 671.10 Td (ABL) Tj ET Q q 0 0 0 rg BT 196.05 671.10 Td ( Revolving Credit Facility are unconditionally guaranteed by Cengage Learning Holdco, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 659.10 Td (Inc., on a limited recourse basis, and all of our future direct and indirect material, wholly owned domestic restricted ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 647.10 Td (subsidiaries, subject to certain exceptions. ) Tj ET Q q 0 0 0 rg BT 224.61 647.10 Td (The guarantees of those obligations will be secured by \(i\) first-priority security ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 635.10 Td (interests in the ) Tj ET Q q 0 0 0 rg BT 114.27 635.10 Td (ABL) Tj ET Q q 0 0 0 rg BT 133.90 635.10 Td ( priority collateral, with the term loan facility secured by second-priority security interests therein, and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 623.10 Td (\(ii\) second-priority security interests in the Non-ABL) Tj ET Q q 0 0 0 rg BT 267.47 623.10 Td ( priority collateral, with the term loan facility secured by first-priority ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 611.10 Td (security interests therein.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 593.10 Td (The ) Tj ET Q q 0 0 0 rg BT 89.50 593.10 Td (ABL) Tj ET Q q 0 0 0 rg BT 109.12 593.10 Td ( Revolving Credit Facility also contains certain other customary conditions to borrowing, restrictions, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 581.10 Td (af) Tj ET Q q 0 0 0 rg BT 61.59 581.10 Td (firmative covenants, negative covenants and events of default.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 560.10 Td (Summary of Cash Flows) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 539.10 Td (Our cash flows from operating, investing and financing activities were as follows:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 508.6 m 409.5 508.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 508.6 m 413.5 508.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 508.6 m 483.5 508.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 508.6 m 487.5 508.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 508.6 m 557.5 508.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 508.6 m 409.5 508.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 494.6 m 409.5 494.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 508.6 m 483.5 508.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 494.6 m 483.5 494.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 508.6 m 557.5 508.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 494.6 m 557.5 494.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 409.6 m 409.5 409.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 409.6 m 483.5 409.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 409.6 m 557.5 409.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 409.6 m 409.5 409.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 395.6 m 409.5 395.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 393.6 m 409.5 393.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 409.6 m 483.5 409.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 395.6 m 483.5 395.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 393.6 m 483.5 393.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 409.6 m 557.5 409.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 395.6 m 557.5 395.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 393.6 m 557.5 393.6 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 392.45 513.05 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 417.03 513.05 Td (Y) Tj ET Q q 0 0 0 rg BT 422.86 513.05 Td (ear) Tj ET Q q 0 0 0 rg BT 434.77 513.05 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 481.11 513.05 Td (ch 31,) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 498.85 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 365.00 499.05 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 439.00 499.05 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 513.00 499.05 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 484.27 Td (Net cash provided by \(used in\):) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 469.27 Td (Operating activities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 469.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.15 469.27 Td (189.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 469.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 469.27 Td (253.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 469.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 469.27 Td (316.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 454.27 Td (Investing activities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 379.80 454.32 Td (\(152.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 454.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 453.80 454.32 Td (\(191.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 454.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.80 454.32 Td (\(217.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 454.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 439.27 Td (Financing activities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 384.80 439.32 Td (\(19.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 439.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 439.32 Td (\(95.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 439.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 439.32 Td (\(0.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 439.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 424.27 Td (Impact on cash and cash equivalents from changes in foreign) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 65.00 414.27 Td (currency) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.80 414.32 Td (\(1.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 414.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 414.27 Td (0.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 414.32 Td (\(0.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 414.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 399.27 Td (Net increase \(decrease\) cash and cash equivalents) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 399.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 399.27 Td (16.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 399.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 399.32 Td (\(33.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 399.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 399.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 399.27 Td (98.8) Tj ET Q BT /F1 10.00 Tf ET BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 377.10 Td (Operating activities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 359.10 Td (Net cash provided by operating activities for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 337.73 359.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.33 359.10 Td ( was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 421.88 359.10 Td ($189.7 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.77 359.10 Td (, a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 492.71 359.10 Td (decrease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.13 359.10 Td ( of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 347.10 Td ($63.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 107.89 347.10 Td ( from net cash provided by operating activities of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 307.55 347.10 Td ($253.3 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 366.45 347.10 Td ( for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 468.06 347.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.66 347.10 Td (. ) Tj ET Q q 0 0 0 rg BT 536.48 347.10 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 335.10 Td (decrease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 88.41 335.10 Td ( was primarily due to lower net income and an increase in cash used for net working capital. ) Tj ET Q q 0 0 0 rg BT 459.50 335.10 Td (The increase in cash ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 323.10 Td (used for net working capital was primarily driven by fiscal year 2018 incentive compensation payments made during the first ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 311.10 Td (quarter of fiscal year 2019 and a decrease in accrual and trade payable balances due to timing of purchases and payments. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 299.10 Td (These uses of cash were partially of) Tj ET Q q 0 0 0 rg BT 197.10 299.10 Td (fset by lower inventory levels related to the continued shift to digital sales coupled with ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 287.10 Td (leaner purchasing methods implemented for traditional print products.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 269.10 Td (Net cash provided by operating activities for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 337.73 269.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.33 269.10 Td ( was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 421.88 269.10 Td ($253.3 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.77 269.10 Td (, a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 492.71 269.10 Td (decrease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.13 269.10 Td ( of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 257.10 Td ($63.3 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 107.89 257.10 Td ( from net cash provided by operating activities of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 307.55 257.10 Td ($316.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 366.45 257.10 Td ( for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 468.06 257.10 Td (March31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.66 257.10 Td (. ) Tj ET Q q 0 0 0 rg BT 536.48 257.10 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 245.10 Td (decrease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 88.41 245.10 Td ( was primarily due to the benefit from deferred taxes, the extinguishment of debt in the prior year period, and an ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 233.10 Td (increase in cash used by net working capital, partially of) Tj ET Q q 0 0 0 rg BT 279.30 233.10 Td (fset by higher net income. ) Tj ET Q q 0 0 0 rg BT 385.75 233.10 Td (The increase in cash used for net working ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 221.10 Td (capital was primarily driven by timing of interest payments, current year stabilized inventory levels due to print ef) Tj ET Q q 0 0 0 rg BT 510.35 221.10 Td (ficiencies, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 209.10 Td (timing of trade payables, partially of) Tj ET Q q 0 0 0 rg BT 199.88 209.10 Td (fset by higher current year incentive compensation and timing of capital expenditure and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 197.10 Td (prepublication cost payables.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 179.10 Td (Investing activities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 161.10 Td (Net cash used in investing activities for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.20 161.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 380.79 161.10 Td ( was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.35 161.10 Td ($152.4 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 460.24 161.10 Td (, a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.18 161.10 Td (decrease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 506.59 161.10 Td ( of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 519.92 161.10 Td ($38.8 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 149.10 Td (million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 82.89 149.10 Td ( from net cash used in investing activities of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 262.02 149.10 Td ($191.2 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 320.91 149.10 Td ( for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 422.53 149.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 486.12 149.10 Td (.) Tj ET Q q 0 0 0 rg BT 490.94 149.10 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 508.99 149.10 Td (decrease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.40 149.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 137.10 Td (was primarily driven by a decrease in prepublication spend, a decrease in spend to acquire certain author/content rights, and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 125.10 Td (the prior year timing of capital expenditures spend.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 107.10 Td (Net cash used in investing activities for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.20 107.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 380.79 107.10 Td ( was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.35 107.10 Td ($191.2 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 460.24 107.10 Td (, a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.18 107.10 Td (decrease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 506.59 107.10 Td ( of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 519.92 107.10 Td ($25.8 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 95.10 Td (million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 82.89 95.10 Td ( from net cash used in investing activities of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 262.02 95.10 Td ($217.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 320.91 95.10 Td ( for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 422.53 95.10 Td (March31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 486.12 95.10 Td (.) Tj ET Q q 0 0 0 rg BT 490.94 95.10 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 508.99 95.10 Td (decrease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.40 95.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 83.10 Td (was primarily driven by prior year period cash used for the ) Tj ET Q q 0 0 0 rg BT 291.80 83.10 Td (W) Tj ET Q q 0 0 0 rg BT 300.44 83.10 Td (ebAssign acquisition, timing of capital expenditures and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 71.10 Td (prepublication spend, partially of) Tj ET Q q 0 0 0 rg BT 186.56 71.10 Td (fset by current year acquisition of author/content rights.) Tj ET Q endstream endobj 117 0 obj <> endobj 118 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 217.00 760.75 Td (Management) Tj ET Q q 0 0 0 rg BT 276.06 760.75 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 348.04 760.75 Td (Analysis of) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.65 748.75 Td (Financial Condition and Results of Operations) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 53 -) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 731.25 Td (Financing activities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 713.25 Td (Net cash used in financing activities for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.29 713.25 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 381.89 713.25 Td ( was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 402.44 713.25 Td ($19.4 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 456.34 713.25 Td (, a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 468.27 713.25 Td (decrease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 502.69 713.25 Td ( of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 516.02 713.25 Td ($76.0 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 701.25 Td (million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 82.89 701.25 Td ( from net cash used by financing activities of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 265.34 701.25 Td ($95.4 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.23 701.25 Td ( in the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.96 701.25 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.56 701.25 Td (. ) Tj ET Q q 0 0 0 rg BT 485.38 701.25 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 503.43 701.25 Td (decrease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.84 701.25 Td ( in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 689.25 Td (cash used was primarily due to the prior year cash used which included $27.7 million prepayment due under the Excess Cash ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 677.25 Td (Flow provision of the ) Tj ET Q q 0 0 0 rg BT 142.71 677.25 Td (T) Tj ET Q q 0 0 0 rg BT 148.12 677.25 Td (erm Loan facility and share repurchases of approximately $60.9 million. ) Tj ET Q q 0 0 0 rg BT 440.06 677.25 Td (The decrease in use of cash ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 665.25 Td (was partially of) Tj ET Q q 0 0 0 rg BT 116.02 665.25 Td (fset by current year cash used of $7.8 million to acquire shares in connection with net settlement of equity ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 653.25 Td (based awards, $4.9 million of dividend equivalents paid in connection with the delivery of shares under vested RSUs, $6.4 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 641.25 Td (million scheduled quarterly principal term loan repayment, and $0.3 million monthly capital lease payments. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 623.25 Td (Net cash used in financing activities for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.29 623.25 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 381.89 623.25 Td ( was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 402.44 623.25 Td ($95.4 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 456.34 623.25 Td (, an ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 473.27 623.25 Td (increase) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 506.03 623.25 Td ( of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 519.36 623.25 Td ($94.9 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 611.25 Td (million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 82.89 611.25 Td ( from net cash used in financing activities of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 263.12 611.25 Td ($0.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.01 611.25 Td ( in the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 409.74 611.25 Td (March31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 473.34 611.25 Td (. ) Tj ET Q q 0 0 0 rg BT 478.16 611.25 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 496.21 611.25 Td (increase) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.96 611.25 Td ( in) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 539.24 611.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 599.25 Td (cash used was primarily due to current year share repurchases of $60.9 million, $5.6 million to acquire shares in connection ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 587.25 Td (with net settlement of equity-based awards, and payment of the Excess Cash Flow provision of the ) Tj ET Q q 0 0 0 rg BT 451.23 587.25 Td (T) Tj ET Q q 0 0 0 rg BT 456.64 587.25 Td (erm Loan facility of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 575.25 Td ($27.7 million. ) Tj ET Q q 0 0 0 rg BT 115.21 575.25 Td (The prior year source of cash included the debt issuance, net, principal payments, and repayment of our prior ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 563.25 Td (term loan which provided net cash proceeds of $265 million that was primarily of) Tj ET Q q 0 0 0 rg BT 380.68 563.25 Td (fset by a $200 million one-time dividend, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 551.25 Td (share repurchases of $54.1 million, and $0.9 million to acquire shares in connection with net settlement of equity-based ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 539.25 Td (awards.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 518.25 Td (Contractual Obligations and Commitments) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 497.25 Td (The following table summarizes our future contractual obligations as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 361.36 497.25 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 424.96 497.25 Td (:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 266.5 457.75 m 321.5 457.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 325.5 457.75 m 380.5 457.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 384.5 457.75 m 439.5 457.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 443.5 457.75 m 498.5 457.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 502.5 457.75 m 557.5 457.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 384.5 457.75 m 439.5 457.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 502.5 457.75 m 557.5 457.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 266.5 367.75 m 321.5 367.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 325.5 367.75 m 380.5 367.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 384.5 367.75 m 439.5 367.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 443.5 367.75 m 498.5 367.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 266.5 367.75 m 321.5 367.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 266.5 353.75 m 321.5 353.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 266.5 351.75 m 321.5 351.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 325.5 367.75 m 380.5 367.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 325.5 353.75 m 380.5 353.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 325.5 351.75 m 380.5 351.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 384.5 367.75 m 439.5 367.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 384.5 353.75 m 439.5 353.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 384.5 351.75 m 439.5 351.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 443.5 367.75 m 498.5 367.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 443.5 353.75 m 498.5 353.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 443.5 351.75 m 498.5 351.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 502.5 367.75 m 557.5 367.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 502.5 353.75 m 557.5 353.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 502.5 351.75 m 557.5 351.75 l s BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 462.00 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 275.10 471.20 Td (Less than ) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 281.35 462.20 Td (1 ) Tj ET Q q 0 0 0 rg BT 287.77 462.20 Td (Y) Tj ET Q q 0 0 0 rg BT 293.27 462.20 Td (ear) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 334.75 462.20 Td (1-3 ) Tj ET Q q 0 0 0 rg BT 348.83 462.20 Td (Y) Tj ET Q q 0 0 0 rg BT 354.66 462.20 Td (ears) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 393.75 462.20 Td (3-5 ) Tj ET Q q 0 0 0 rg BT 407.83 462.20 Td (Y) Tj ET Q q 0 0 0 rg BT 413.66 462.20 Td (ears) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 450.20 471.20 Td (Mor) Tj ET Q q 0 0 0 rg BT 467.03 471.20 Td (e than ) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 456.50 462.20 Td (5 ) Tj ET Q q 0 0 0 rg BT 462.92 462.20 Td (Y) Tj ET Q q 0 0 0 rg BT 468.42 462.20 Td (ears) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 519.65 462.20 Td (T) Tj ET Q q 0 0 0 rg BT 524.83 462.20 Td (otal) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 447.42 Td (Long-term debt) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 269.00 447.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 300.15 447.42 Td (17.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 328.00 447.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 359.15 447.42 Td (34.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 387.00 447.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 447.42 Td (1,61) Tj ET Q q 0 0 0 rg BT 423.15 447.42 Td (1.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 446.00 447.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.15 447.42 Td (620.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 505.00 447.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 447.42 Td (2,283.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 432.42 Td (Interest payments on outstanding debt) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 208.19 436.95 Td (\(1\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.15 432.42 Td (169.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 354.15 432.42 Td (326.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 413.15 432.42 Td (243.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 477.15 432.42 Td (29.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 432.42 Td (768.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 417.42 Td (Operating lease obligations) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 165.41 421.95 Td (\(2\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 300.15 417.42 Td (27.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 359.15 417.42 Td (45.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 418.15 417.42 Td (33.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 477.15 417.42 Td (67.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 417.42 Td (173.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 402.42 Td (Capital lease obligations) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 305.15 402.42 Td (0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 366.65 402.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 425.65 402.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 484.65 402.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 402.42 Td (0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 387.42 Td (Purchase obligations) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 139.04 391.95 Td (\(3\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 300.15 387.42 Td (33.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 359.15 387.42 Td (28.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.15 387.42 Td (5.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 482.15 387.42 Td (2.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 387.42 Td (70.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 372.42 Td (Other) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 307.65 372.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 364.15 372.42 Td (0.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.15 372.42 Td (0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 484.65 372.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 372.42 Td (0.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 357.42 Td (T) Tj ET Q q 0 0 0 rg BT 61.41 357.42 Td (otal) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 269.00 357.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.15 357.42 Td (246.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 328.00 357.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 354.15 357.42 Td (435.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 387.00 357.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 357.42 Td (1,893.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 446.00 357.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.15 357.42 Td (720.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 505.00 357.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 357.42 Td (3,295.8) Tj ET Q BT /F1 10.00 Tf ET BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 343.53 Td (\(1\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 339.45 Td (Interest on variable rate debt is estimated based upon the benchmark forward interest rates as of ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 436.87 339.45 Td (March31, 2019) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 494.11 339.45 Td (. ) Tj ET Q q 0 0 0 rg BT 498.45 339.45 Td (W) Tj ET Q q 0 0 0 rg BT 506.22 339.45 Td (e expect our ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 328.65 Td (cash flows from operations, combined with availability of funds under our ) Tj ET Q q 0 0 0 rg BT 359.44 328.65 Td (ABL) Tj ET Q q 0 0 0 rg BT 377.11 328.65 Td ( revolving credit facility) Tj ET Q q 0 0 0 rg BT 463.74 328.65 Td (, to pay for these ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 317.85 Td (obligations.) Tj ET Q BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 308.13 Td (\(2\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 304.05 Td (Represents minimum rental payments for operating leases having non-cancelable lease terms in excess of one year) Tj ET Q q 0 0 0 rg BT 502.11 304.05 Td (. Minimum ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 293.25 Td (rental payments do not take into account any expectations of future sublease income.) Tj ET Q BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 283.53 Td (\(3\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 279.45 Td (Purchase obligations are agreements to purchase goods or services that are enforceable and legally binding. Our purchase ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 268.65 Td (obligations primarily consist of outsourcing arrangements related to general accounting, fixed asset and accounts payable ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 257.85 Td (functions, as well as purchased or licensed content to be used in our educational products and royalty guarantees derived from ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 247.05 Td (minimum usage requirements in agreements with content providers. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.00 229.05 Td (In addition, lar) Tj ET Q q 0 0 0 rg BT 131.97 229.05 Td (gely related to internally developed software and the new Boston headquarters, we anticipate capital ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 217.05 Td (expenditures, including pre-publication costs, in the range of $135 million to $165 million in the fiscal year ending March 31, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 205.05 Td (2020) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 74.00 205.05 Td (. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 184.05 Td (Off-Balance Sheet ) Tj ET Q q 0 0 0 rg BT 151.80 184.05 Td (T) Tj ET Q q 0 0 0 rg BT 157.73 184.05 Td (ransactions) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 163.05 Td (In the ordinary course of business, we may engage in financial transactions that are not recorded, or may be recorded, on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 151.05 Td (the consolidated balance sheets in amounts that are dif) Tj ET Q q 0 0 0 rg BT 271.52 151.05 Td (ferent than the full contract or notional amount of the transactions, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 139.05 Td (including, but not limited to facilities and other operating equipment leases. ) Tj ET Q q 0 0 0 rg BT 359.02 139.05 Td (W) Tj ET Q q 0 0 0 rg BT 368.06 139.05 Td (ith the exception of the contractual obligations ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 127.05 Td (and purchase commitments described in Note ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 238.95 127.05 Td (18) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 248.95 127.05 Td (, Commitments and Contingencies, to our consolidated financial ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 115.05 Td (statements and in the Contractual Obligations and Commitments section above, we do not currently have any material of) Tj ET Q q 0 0 0 rg BT 545.90 115.05 Td (f-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 103.05 Td (balance sheet transactions.) Tj ET Q endstream endobj 119 0 obj <> endobj 120 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 217.00 760.75 Td (Management) Tj ET Q q 0 0 0 rg BT 276.06 760.75 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 348.04 760.75 Td (Analysis of) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.65 748.75 Td (Financial Condition and Results of Operations) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 54 -) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 731.25 Td (Application of Critical ) Tj ET Q q 0 0 0 rg BT 170.05 731.25 Td (Accounting Policies and Estimates) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 710.25 Td (Our consolidated financial statements are prepared in conformity with GAAP) Tj ET Q q 0 0 0 rg BT 381.08 710.25 Td (. In preparing our consolidated financial ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 698.25 Td (statements, we apply various accounting policies and are required to use estimates and assumptions. ) Tj ET Q q 0 0 0 rg BT 456.49 698.25 Td (While we believe we ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 686.25 Td (have considered all available information, actual results could af) Tj ET Q q 0 0 0 rg BT 311.77 686.25 Td (fect the reported amounts of assets and liabilities, disclosure ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 674.25 Td (of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 662.25 Td (during the reporting periods. ) Tj ET Q q 0 0 0 rg BT 170.74 662.25 Td (W) Tj ET Q q 0 0 0 rg BT 179.38 662.25 Td (e believe that, of the significant accounting policies discussed in Note ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 460.96 662.25 Td (1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 465.96 662.25 Td (, Basis of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 650.25 Td (Presentation and Summary of Significant ) Tj ET Q q 0 0 0 rg BT 220.92 650.25 Td (Accounting Policies, to our consolidated financial statements, the following ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 638.25 Td (accounting policies require our most subjective or complex judgments: ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 620.25 Td (Revenue Recognition: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 170.60 620.25 Td (W) Tj ET Q q 0 0 0 rg BT 179.24 620.25 Td (e deliver digital, print and hybrid educational solutions for universities, students, professors, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 608.25 Td (libraries, professionals and corporations around the world. ) Tj ET Q q 0 0 0 rg BT 289.59 608.25 Td (These solutions are delivered through specialized content, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 596.25 Td (applications and services. ) Tj ET Q q 0 0 0 rg BT 158.41 596.25 Td (Although printed materials continue to be the most widely-sold) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 411.70 596.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 414.20 596.25 Td (learning resource, we are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 584.25 Td (increasingly providing customers with digital resources and a significant portion of our revenues is derived from sales of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 572.25 Td (digital solutions, including digital versions of our print products. ) Tj ET Q q 0 0 0 rg BT 314.63 572.25 Td (W) Tj ET Q q 0 0 0 rg BT 323.27 572.25 Td (e recognize revenues when all of the following four ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 560.25 Td (criteria are met:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 542.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 542.25 Td (Persuasive evidence of an arrangement exists,) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 524.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 524.25 Td (Delivery has occurred or services have been rendered,) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 506.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 506.25 Td (The price to the buyer is fixed or determinable, and) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 488.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 488.25 Td (Collectability is reasonably assured.) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 72.00 470.25 Td (Digital Content) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 143.39 470.25 Td (Revenue from sales of digital content without any future performance obligations for us is recognized ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 458.25 Td (upon activation. Revenue from sales of digital solutions that contain future performance obligations by us is primarily ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 446.25 Td (deferred and recognized ratably over the appropriate period. Incremental costs that are directly related to the deferred digital ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 434.25 Td (revenues are deferred and amortized over the subscription period.) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 72.00 416.25 Td (Print and Other Materials) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 186.17 416.25 Td (W) Tj ET Q q 0 0 0 rg BT 194.80 416.25 Td (e recognize revenues from the sale of print and other materials, less estimated returns, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 404.25 Td (when the product is delivered and title, including the risks and rewards of ownership, passes to the customer) Tj ET Q q 0 0 0 rg BT 486.40 404.25 Td (.) Tj ET Q q 0 0 0 rg BT 491.22 404.25 Td (W) Tj ET Q q 0 0 0 rg BT 499.85 404.25 Td (e classify ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 392.25 Td (amounts billed to customers for shipping and handling as revenues. ) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 72.00 374.25 Td (Subscription-Based Pr) Tj ET Q q 0 0 0 rg BT 162.45 374.25 Td (oducts) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 197.45 374.25 Td (W) Tj ET Q q 0 0 0 rg BT 206.09 374.25 Td (e recognize revenues from sales of subscription-based products, including hosted ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 362.25 Td (digital solutions, ratably over the term of the subscription. Subscription revenues received or receivable in advance of the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 350.25 Td (delivery of services or publications is included in deferred revenue. Incremental costs that are directly related to the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 338.25 Td (subscription revenues are deferred and amortized over the subscription period.) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 72.00 320.25 Td (Multiple Element ) Tj ET Q q 0 0 0 rg BT 143.46 320.25 Td (Arrangements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 209.02 320.25 Td (When a sales arrangement requires the delivery of more than one product or service, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 308.25 Td (the individual elements are accounted for separately) Tj ET Q q 0 0 0 rg BT 261.59 308.25 Td (, if applicable criteria are met. Specifically) Tj ET Q q 0 0 0 rg BT 431.41 308.25 Td (, the revenues are allocated to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 296.25 Td (each element that qualifies as a unit of accounting based on the relative selling price of each element. ) Tj ET Q q 0 0 0 rg BT 461.15 296.25 Td (The amount allocated ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 284.25 Td (to each unit is then recognized when each unit is delivered, provided that all other relevant revenue recognition criteria are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 272.25 Td (met with respect to that unit.) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 72.00 254.25 Td (Rental Revenue ) Tj ET Q q 0 0 0 rg BT 136.79 254.25 Td (Arrangements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 202.34 254.25 Td (W) Tj ET Q q 0 0 0 rg BT 210.97 254.25 Td (e have rental and rental revenue share arrangements, including rentals of consigned ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 242.25 Td (inventory of printed products. ) Tj ET Q q 0 0 0 rg BT 175.74 242.25 Td (W) Tj ET Q q 0 0 0 rg BT 184.38 242.25 Td (e record rental revenue, or our share of rental revenue, when it is earned provided that all ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 230.25 Td (revenue recognition criteria are met.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 212.25 Td (Reserve for) Tj ET Q q 0 0 0 rg BT 120.96 212.25 Td ( Sales Returns: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 190.40 212.25 Td (Accounts receivable are reflected net of a reserve for sales returns. ) Tj ET Q q 0 0 0 rg BT 458.96 212.25 Td (The reserve for sales ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 200.25 Td (returns is based on a review of our historical sales returns experience and our estimate of future returns associated with ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 188.25 Td (various product types and sales channels, as well as current industry trends in the businesses in which we operate. ) Tj ET Q q 0 0 0 rg BT 510.83 188.25 Td (A) Tj ET Q q 0 0 0 rg BT 517.50 188.25 Td ( change ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 176.25 Td (in the pattern or trends in returns could af) Tj ET Q q 0 0 0 rg BT 219.88 176.25 Td (fect our estimated reserve for sales returns. If our estimate does not reflect actual ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 164.25 Td (returns in future periods, revenues could be understated or overstated for a particular period by the dif) Tj ET Q q 0 0 0 rg BT 461.17 164.25 Td (ference between actual ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 152.25 Td (returns and our original estimate. ) Tj ET Q q 0 0 0 rg BT 188.41 152.25 Td (Actual sales returns are char) Tj ET Q q 0 0 0 rg BT 301.50 152.25 Td (ged against the reserve as products are returned to inventory) Tj ET Q q 0 0 0 rg BT 541.60 152.25 Td (. In ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 140.25 Td (conjunction with the sales return reserve, we also record estimated increases in inventory) Tj ET Q q 0 0 0 rg BT 409.62 140.25 Td (, to the extent that product returns ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 128.25 Td (are resalable, and estimated recoupable royalty costs. ) Tj ET Q q 0 0 0 rg BT 269.00 128.25 Td (The sales returns reserve as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 392.29 128.25 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 455.88 128.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.32 128.25 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.32 128.25 Td ( was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 515.88 128.25 Td ($42.8 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 116.25 Td (million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 82.89 116.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 102.33 116.25 Td ($70.8 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 156.22 116.25 Td (, respectively) Tj ET Q q 0 0 0 rg BT 208.88 116.25 Td (. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 98.25 Td (Reserve for) Tj ET Q q 0 0 0 rg BT 120.96 98.25 Td ( Inventory Obsolescence: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 233.16 98.25 Td (Inventories, which are principally comprised of books and other print products, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 86.25 Td (are stated at the lower of cost or market value, with cost determined generally using the weighted average method. Reserves ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 74.25 Td (are established to reduce the cost of excess and obsolete inventories to their estimated net realizable value. ) Tj ET Q q 0 0 0 rg BT 481.99 74.25 Td (The reserve is ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 62.25 Td (based upon our historical unit sales by title as compared to the number of units on hand, and considers our assessment of ) Tj ET Q endstream endobj 121 0 obj <> endobj 122 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 217.00 760.75 Td (Management) Tj ET Q q 0 0 0 rg BT 276.06 760.75 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 348.04 760.75 Td (Analysis of) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.65 748.75 Td (Financial Condition and Results of Operations) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 55 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 731.10 Td (current industry conditions, including estimates of customer demand, and publication revision cycles. ) Tj ET Q q 0 0 0 rg BT 461.96 731.10 Td (A) Tj ET Q q 0 0 0 rg BT 468.63 731.10 Td ( change in sales ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (trends could af) Tj ET Q q 0 0 0 rg BT 113.24 719.10 Td (fect our estimated reserve. ) Tj ET Q q 0 0 0 rg BT 221.07 719.10 Td (W) Tj ET Q q 0 0 0 rg BT 229.70 719.10 Td (e periodically assess the obsolescence reserve by evaluating general factors such ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 707.10 Td (as inventory levels, historical sales, and the remaining life of our products. Inventory losses and destroys are char) Tj ET Q q 0 0 0 rg BT 507.02 707.10 Td (ged against ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 695.10 Td (the reserve. ) Tj ET Q q 0 0 0 rg BT 102.40 695.10 Td (The reserve for inventory obsolescence as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 283.72 695.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 347.32 695.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 366.75 695.10 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 386.75 695.10 Td ( was $42.7 million and $53.0 million, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 683.10 Td (respectively) Tj ET Q q 0 0 0 rg BT 101.66 683.10 Td (.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 665.10 Td (Impairment of Long-Lived ) Tj ET Q q 0 0 0 rg BT 188.95 665.10 Td (Assets: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 223.94 665.10 Td (W) Tj ET Q q 0 0 0 rg BT 232.58 665.10 Td (e evaluate long-lived assets for impairment whenever events or changes in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 653.10 Td (circumstances indicate that the carrying amounts of the lowest level asset grouping, for which identifiable cash flows are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 641.10 Td (independent of other assets, may not be recoverable.) Tj ET Q q 0 0 0 rg BT 265.96 641.10 Td (The initial test for impairment compares the asset carrying amounts with ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 629.10 Td (the sum of undiscounted cash flows related to that asset grouping.If the carrying value is greater than the undiscounted cash ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 617.10 Td (flows, the individual assets are impaired proportionately) Tj ET Q q 0 0 0 rg BT 278.57 617.10 Td (, limited to their respective carrying values.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 599.10 Td (Goodwill: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 119.23 599.10 Td (W) Tj ET Q q 0 0 0 rg BT 127.86 599.10 Td (e test the carrying value of goodwill for impairment at a reporting unit level annually in the fourth quarter ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 587.10 Td (of each fiscal year) Tj ET Q q 0 0 0 rg BT 126.61 587.10 Td (, or whenever an event occurs or circumstances change that would more likely than not reduce the fair ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 575.10 Td (value of a reporting unit below its carrying amount. For impairment tests performed after January 1, 2017, we early adopted ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 563.10 Td (the guidance issued in May 2017 by the F) Tj ET Q q 0 0 0 rg BT 220.46 563.10 Td (ASB, which simplifies accounting for goodwill impairment. ) Tj ET Q q 0 0 0 rg BT 463.30 563.10 Td (The guidance removes ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 551.10 Td (the second step of the goodwill impairment test, which requires a hypothetical purchase price allocation. ) Tj ET Q q 0 0 0 rg BT 473.59 551.10 Td (A) Tj ET Q q 0 0 0 rg BT 480.26 551.10 Td ( goodwill ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 539.10 Td (impairment is the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 527.10 Td (of goodwill. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 509.10 Td (For reporting units that passed their most recent impairment test by a substantial mar) Tj ET Q q 0 0 0 rg BT 410.91 509.10 Td (gin, we may consider performing a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 497.10 Td (detailed qualitative assessment, considering various company-specific, industry) Tj ET Q q 0 0 0 rg BT 371.60 497.10 Td (, and macro-economic factors, to determine ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 485.10 Td (whether it is necessary to perform the quantitative goodwill impairment test in the current year) Tj ET Q q 0 0 0 rg BT 432.22 485.10 Td (. If, as a result of weighing the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 473.10 Td (evidence under the qualitative assessment, we conclude that it is not more likely than not the reporting unit) Tj ET Q q 0 0 0 rg BT 484.44 473.10 Td (s fair value is less ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 461.10 Td (than its carrying value, the quantitative impairment test is not performed. For those reporting units where a significant change ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 449.10 Td (or event occurs, and where potential impairment indicators exist, we continue to utilize the quantitative assessment to test ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 437.10 Td (goodwill for impairment. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 419.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 419.10 Td (e performed goodwill impairment testing on our reporting units in the fourth quarter of fiscal year ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 474.42 419.10 Td (2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 494.42 419.10 Td (. In order to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 407.10 Td (estimate the fair value of each reporting unit, we used an equal-weighted application of the discounted cash flow and market ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 395.10 Td (approach methodologies. ) Tj ET Q q 0 0 0 rg BT 156.85 395.10 Td (The discounted cash flow method estimates the value of a reporting unit by calculating the present ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 383.10 Td (value of expected future unlevered after) Tj ET Q q 0 0 0 rg BT 213.43 383.10 Td (-tax free cash flows to be generated by such reporting unit. ) Tj ET Q q 0 0 0 rg BT 450.95 383.10 Td (This methodology ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 371.10 Td (requires the use of significant estimates, including discount rates, estimated residual growth rates, and projections of revenue ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 359.10 Td (growth, profit mar) Tj ET Q q 0 0 0 rg BT 127.41 359.10 Td (gins, and working capital. ) Tj ET Q q 0 0 0 rg BT 233.32 359.10 Td (The projections underlying the valuation were based on our internal strategic ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 347.10 Td (forecasts for each reporting unit. Discount rates were calculated using the capital asset pricing model based on a weighted ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 335.10 Td (average cost of capital of comparable companies. ) Tj ET Q q 0 0 0 rg BT 253.73 335.10 Td (The estimated residual growth rate was developed considering the long-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 323.10 Td (term economic outlook of the industry and geographical region in which each reporting unit operates. ) Tj ET Q q 0 0 0 rg BT 462.58 323.10 Td (The discount rate ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 311.10 Td (assumptions used in our fourth quarter goodwill impairment review ranged from ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 378.65 311.10 Td (1) Tj ET Q q 0 0 0 rg BT 383.28 311.10 Td (1.5%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 404.11 311.10 Td ( to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.89 311.10 Td (16.0%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 442.72 311.10 Td ( and residual growth rate ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 299.10 Td (assumptions used in our fourth quarter goodwill impairment review ranged from ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 378.65 299.10 Td (1.0%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 399.48 299.10 Td ( to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 412.26 299.10 Td (4.0%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 433.09 299.10 Td (. In addition to the discounted ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 287.10 Td (cash flow analysis, we perform the market approach which is a comparison of both trailing and forward financial multiples ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 275.10 Td (implied by the estimated reporting unit fair value to a range of multiples of publicly held companies with similar ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 263.10 Td (characteristics. If recent mer) Tj ET Q q 0 0 0 rg BT 167.64 263.10 Td (ger and acquisition transactions for industry or peer companies are available, the financial ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 251.10 Td (multiples implied by the estimated reporting unit fair value are also compared to the range of multiples from such precedent ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 239.10 Td (transactions. ) Tj ET Q q 0 0 0 rg BT 106.58 239.10 Td (W) Tj ET Q q 0 0 0 rg BT 115.22 239.10 Td (e apply comparable revenue and EBITDA) Tj ET Q q 0 0 0 rg BT 283.21 239.10 Td ( multiples under this methodology as we consider these measures ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 227.10 Td (the most relevant to our business. For the impairment test performed in the fourth quarter of fiscal year ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 468.05 227.10 Td (2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 488.05 227.10 Td (, we applied ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 215.10 Td (forward multiples of projected revenues in a range of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 269.20 215.10 Td (1.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 281.70 215.10 Td (x - ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.03 215.10 Td (2.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 307.53 215.10 Td (x and forward multiples of projected EBITDA) Tj ET Q q 0 0 0 rg BT 492.48 215.10 Td ( in a range of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 203.10 Td (8.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 66.50 203.10 Td (x - ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 79.83 203.10 Td (12.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 97.33 203.10 Td (x. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 185.10 Td (Based on the quantitative test of the fiscal year ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 261.66 185.10 Td (2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 281.66 185.10 Td ( annual impairment test, we concluded the fair values of all reporting ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 173.10 Td (units exceeded their respective carrying values. ) Tj ET Q q 0 0 0 rg BT 245.68 173.10 Td (There were no goodwill impairment char) Tj ET Q q 0 0 0 rg BT 409.61 173.10 Td (ges recorded during the fiscal years ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 161.10 Td (ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 80.38 161.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 143.98 161.10 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 148.98 161.10 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 168.98 161.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 188.41 161.10 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 208.41 161.10 Td (. In 2018, the estimated fair value of the Learning reporting unit exceeded its carrying ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 149.10 Td (value by 5.0%. ) Tj ET Q q 0 0 0 rg BT 116.30 149.10 Td (The discount rate applied to the Learning reporting unit discounted cash flow was 1) Tj ET Q q 0 0 0 rg BT 450.56 149.10 Td (1.5% and the residual ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 137.10 Td (growth rate was 2.0%. ) Tj ET Q q 0 0 0 rg BT 146.02 137.10 Td (W) Tj ET Q q 0 0 0 rg BT 154.65 137.10 Td (e had performed a sensitivity analysis on our significant assumptions used to determine the fair ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 125.10 Td (value of the Learning reporting unit and determined that a more than nominal change to our significant assumptions could ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 113.10 Td (have impacted our conclusion. In 2019, the estimated fair value of our Learning reporting unit over its carrying value ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 101.10 Td (increased to 10.0%. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 83.10 Td (During the fourth quarter of fiscal year 2019, subsequent to the completion of the annual impairment test of goodwill, we ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 71.10 Td (identified two new operating segments based on newly available discrete financial information. ) Tj ET Q q 0 0 0 rg BT 437.86 71.10 Td (The two new operating ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 59.10 Td (segments are Higher Ed \(representing the academic and skills industries\) and School, whom together comprises the Learning ) Tj ET Q endstream endobj 123 0 obj <> endobj 124 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 217.00 760.75 Td (Management) Tj ET Q q 0 0 0 rg BT 276.06 760.75 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 348.04 760.75 Td (Analysis of) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.65 748.75 Td (Financial Condition and Results of Operations) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 56 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 731.10 Td (reportable segment. In accordance with ) Tj ET Q q 0 0 0 rg BT 213.38 731.10 Td (ASC 350-20-35-3C, there are several potential events and circumstances that could ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (be indicators of goodwill impairment. ) Tj ET Q q 0 0 0 rg BT 207.31 719.10 Td (A) Tj ET Q q 0 0 0 rg BT 213.98 719.10 Td ( change in a company's reporting unit structure is one of these events, and when this ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 707.10 Td (does occur) Tj ET Q q 0 0 0 rg BT 96.64 707.10 Td (, a company must perform a before and after test of the reporting units.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 689.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 689.10 Td (e followed the same methodology) Tj ET Q q 0 0 0 rg BT 215.51 689.10 Td (, as described above for the annual impairment review) Tj ET Q q 0 0 0 rg BT 431.72 689.10 Td (, for the impairment review of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 677.10 Td (the new reporting units. Our discount rate assumptions ranged from 9.5% to 12.5% and residual growth rate assumptions ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 665.10 Td (ranged from 1.0% to 2.0%. ) Tj ET Q q 0 0 0 rg BT 164.90 665.10 Td (W) Tj ET Q q 0 0 0 rg BT 173.54 665.10 Td (e applied forward multiples of projected revenues in a range of 1.6x - 2.5x and forward ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 653.10 Td (multiples of projected EBITDA) Tj ET Q q 0 0 0 rg BT 180.36 653.10 Td ( in a range of 8.0x - 12.5x. For this impairment test, we concluded that the fair values of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 641.10 Td (Higher Ed and School reporting units exceeded their respective carrying values.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 623.10 Td (The estimated fair value of our School reporting unit exceeded its carrying value by 4.0%. ) Tj ET Q q 0 0 0 rg BT 435.31 623.10 Td (The discount rate applied to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 611.10 Td (the School reporting unit discounted cash flow was 9.5% and the residual growth rate was 1.0%. ) Tj ET Q q 0 0 0 rg BT 442.34 611.10 Td (W) Tj ET Q q 0 0 0 rg BT 450.98 611.10 Td (e performed a sensitivity ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 599.10 Td (analysis on our significant assumptions used to determine the fair value of the School reporting unit and determined that a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 587.10 Td (more than nominal change to our significant assumptions would impact our conclusion. If actual results dif) Tj ET Q q 0 0 0 rg BT 482.06 587.10 Td (fer from the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 575.10 Td (projections and assumptions used in the calculation of the School reporting unit fair value, we could be required to record ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 563.10 Td (future non-cash impairment char) Tj ET Q q 0 0 0 rg BT 184.60 563.10 Td (ges. ) Tj ET Q q 0 0 0 rg BT 202.75 563.10 Td (W) Tj ET Q q 0 0 0 rg BT 211.39 563.10 Td (e will continue to evaluate goodwill on an annual basis and whenever events or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 551.10 Td (changes in circumstances indicate that there may be potential indicators of impairment. If expectations for revenues and cash ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 539.10 Td (flows decline or if actual results are less than our revised forecasts, we may not be able to realize the carrying value of our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 527.10 Td (goodwill and could be required to record future impairment char) Tj ET Q q 0 0 0 rg BT 311.78 527.10 Td (ges. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 73.00 509.10 Td (Legal Contingencies: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 165.22 509.10 Td ( From time to time, we may become involved in various claims, disputes and legal or regulatory ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 497.10 Td (proceedings that arise in the ordinary course of business and relate to contractual and other obligations. ) Tj ET Q q 0 0 0 rg BT 468.97 497.10 Td (W) Tj ET Q q 0 0 0 rg BT 477.60 497.10 Td (e assess our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 485.10 Td (potential contingent and other liabilities by analyzing our claims, disputes and legal and regulatory matters using all available ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 473.10 Td (information, and develop our views on estimated losses in consultation with our legal and other advisors. ) Tj ET Q q 0 0 0 rg BT 476.51 473.10 Td (W) Tj ET Q q 0 0 0 rg BT 485.15 473.10 Td (e determine ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 461.10 Td (whether a loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 449.10 Td (estimated. If the contingency is not probable or cannot be reasonably estimated, disclosure of the contingency shall be made ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 437.10 Td (when there is at least a reasonable possibility that a material loss may have been incurred. Proceeds from legal settlements are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 425.10 Td (gain contingencies and are recognized in the income statement when all contingencies have been resolved. ) Tj ET Q q 0 0 0 rg BT 482.17 425.10 Td (As such, gains ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 413.10 Td (from legal settlements are recorded once they are received.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 73.00 395.10 Td (Equity-Based Compensation Plan: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 225.25 395.10 Td (W) Tj ET Q q 0 0 0 rg BT 233.88 395.10 Td (e account for our equity-based compensation plan under the fair value ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 383.10 Td (recognition provisions for share-based payments. ) Tj ET Q q 0 0 0 rg BT 253.21 383.10 Td (W) Tj ET Q q 0 0 0 rg BT 261.85 383.10 Td (e adopted the 2014 Cengage Learning Equity Incentive Plan \(the 2014 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 371.10 Td (Equity Incentive Plan\) on March 31, 2014, and issued grants in the form of restricted stock units \(RSUs\), incentive stock ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 359.10 Td (options \(ISOs\), non-qualified stock options \(NQSOs\) and performance awards. Ef) Tj ET Q q 0 0 0 rg BT 400.11 359.10 Td (fective as of November 15, 2018, the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 347.10 Td (Company's Board of Directors and the majority shareholders adopted an equity incentive plan \(the 2018 Equity Incentive ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 335.10 Td (Plan\). ) Tj ET Q q 0 0 0 rg BT 84.37 335.10 Td (The 2018 Equity Incentive Plan provides for the grant of incentive stock options, certain other options, RSUs, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 323.10 Td (restricted stock, and other stock-based awards to directors, of) Tj ET Q q 0 0 0 rg BT 298.74 323.10 Td (ficers, and employees of the Company) Tj ET Q q 0 0 0 rg BT 451.93 323.10 Td (. Following the approval ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 311.10 Td (of the 2018 Equity Incentive Plan, the Company does not intend to grant any additional awards under the 2014 Equity ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 299.10 Td (Incentive Plan.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 281.10 Td (Our outstanding common stock is privately held and not traded on any public exchange market. ) Tj ET Q q 0 0 0 rg BT 456.72 281.10 Td (Therefore, to value ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 269.10 Td (equity-based awards granted under the 2014 Equity Incentive Plan and the 2018 Equity Incentive Plan, we followed ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 257.10 Td (guidelines set forth in the ) Tj ET Q q 0 0 0 rg BT 157.59 257.10 Td (American Institute of Certified Public ) Tj ET Q q 0 0 0 rg BT 311.17 257.10 Td (Accountants \(AICP) Tj ET Q q 0 0 0 rg BT 393.29 257.10 Td (A\) ) Tj ET Q q 0 0 0 rg BT 410.23 257.10 Td (Accounting & ) Tj ET Q q 0 0 0 rg BT 469.48 257.10 Td (V) Tj ET Q q 0 0 0 rg BT 475.59 257.10 Td (aluation Guide, ) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 54.00 245.10 Td (V) Tj ET Q q 0 0 0 rg BT 59.00 245.10 Td (aluation of Privately-Held Company Equity Securities Issued as Compensation) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 375.62 245.10 Td (. ) Tj ET Q q 0 0 0 rg BT 380.44 245.10 Td (T) Tj ET Q q 0 0 0 rg BT 385.85 245.10 Td (o estimate the fair value of RSUs on the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 233.10 Td (date of grant we are first required to estimate the value of our equity) Tj ET Q q 0 0 0 rg BT 326.30 233.10 Td (. Our estimate of equity value is based on an estimate of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 221.10 Td (our enterprise value, reduced by the fair value of our outstanding indebtedness net of cash and cash equivalents. ) Tj ET Q q 0 0 0 rg BT 503.67 221.10 Td (The value is ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 209.10 Td (then allocated to the outstanding common stock, RSUs, and stock options on a fully diluted basis using the Option-Pricing ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 197.10 Td (Method \(OPM\). Under the OPM, the value of each equity security is determined via a series of call options on our total ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 185.10 Td (equity value with exercise prices based on value thresholds, or breakpoints, at which value begins to be shared dif) Tj ET Q q 0 0 0 rg BT 509.24 185.10 Td (ferently ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 173.10 Td (between the holders of each type of equity security) Tj ET Q q 0 0 0 rg BT 257.16 173.10 Td (. ) Tj ET Q q 0 0 0 rg BT 261.98 173.10 Td (These call options are valued using a Black-Scholes option-pricing model ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 161.10 Td (with the following key inputs: equity value, risk-free interest rate, volatility factor) Tj ET Q q 0 0 0 rg BT 381.01 161.10 Td (, and time period from date of grant to a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 149.10 Td (liquidity event. ) Tj ET Q q 0 0 0 rg BT 116.50 149.10 Td (After determining the value allocated to RSUs, an appropriate discount for the lack of marketability was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 137.10 Td (applied to arrive at fair value of the outstanding awards. ) Tj ET Q q 0 0 0 rg BT 280.13 137.10 Td (The following table summarizes the weighted-average grant date fair ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 125.10 Td (value of RSUs and performance-based RSUs granted under the 2014 Equity Incentive Plan and performance-based RSUs ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 113.10 Td (granted under the 2018 Equity Incentive Plan in the periods presented: ) Tj ET Q endstream endobj 125 0 obj <> endobj 126 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 217.00 760.75 Td (Management) Tj ET Q q 0 0 0 rg BT 276.06 760.75 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 348.04 760.75 Td (Analysis of) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.65 748.75 Td (Financial Condition and Results of Operations) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 57 -) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 307.5 720.5 m 387.5 720.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 387.5 720.5 m 391.5 720.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 391.5 720.5 m 471.5 720.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 471.5 720.5 m 475.5 720.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 475.5 720.5 m 555.5 720.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 307.5 720.5 m 387.5 720.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 307.5 705.5 m 387.5 705.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 387.5 720.5 m 391.5 720.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 391.5 720.5 m 471.5 720.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 391.5 705.5 m 471.5 705.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 471.5 720.5 m 475.5 720.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 475.5 720.5 m 555.5 720.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 475.5 705.5 m 555.5 705.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 307.5 705.5 m 387.5 705.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 391.5 705.5 m 471.5 705.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 475.5 705.5 m 555.5 705.5 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 375.45 724.95 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 400.03 724.95 Td (Y) Tj ET Q q 0 0 0 rg BT 405.86 724.95 Td (ear) Tj ET Q q 0 0 0 rg BT 417.77 724.95 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 464.11 724.95 Td (ch 31,) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 338.00 709.95 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 422.00 709.95 Td (2018) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 505.00 710.18 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 695.17 Td (W) Tj ET Q q 0 0 0 rg BT 66.64 695.17 Td (eighted-average grant date fair value) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 310.00 695.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 356.15 695.17 Td (17.33) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 394.00 695.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 440.15 695.17 Td (16.59) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 478.00 695.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 524.15 695.17 Td (17.44) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 673.00 Td (The estimated fairvalue of the stock options granted is based on the Black-Scholes option pricing model. ) Tj ET Q q 0 0 0 rg BT 495.60 673.00 Td (T) Tj ET Q q 0 0 0 rg BT 501.01 673.00 Td (o determine ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 661.00 Td (the value of the stock options, we used the results from the OPM allocation of equity value to common stock. ) Tj ET Q q 0 0 0 rg BT 493.73 661.00 Td (The risk-free ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 649.00 Td (interest rate was based on interpolated yields of U.S ) Tj ET Q q 0 0 0 rg BT 264.32 649.00 Td (T) Tj ET Q q 0 0 0 rg BT 270.07 649.00 Td (reasury securities with a 4.75 year term as of the date of grant. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 637.00 Td (Estimates of our volatility were based on available information on the volatility of peer group public companies, with ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 625.00 Td (adjustments specific to our capital structure on the date of grant. Expected term was estimated using the weighted-average ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 613.00 Td (mid-point of the vesting date and date of expiration. ) Tj ET Q q 0 0 0 rg BT 264.32 613.00 Td (The following table summarizes the weighted-average fair value of stock ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 601.00 Td (options granted under the 2014 Equity Incentive Plan and performance-based stock options granted under the 2018 Equity ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 589.00 Td (Incentive Plan in the periods presented as well as the weighted average of the applicable assumptions used to value the stock ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 577.00 Td (options: ) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 307.5 543.5 m 387.5 543.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 387.5 543.5 m 391.5 543.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 391.5 543.5 m 471.5 543.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 471.5 543.5 m 475.5 543.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 475.5 543.5 m 555.5 543.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 307.5 543.5 m 387.5 543.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 307.5 529.5 m 387.5 529.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 387.5 543.5 m 391.5 543.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 391.5 543.5 m 471.5 543.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 391.5 529.5 m 471.5 529.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 471.5 543.5 m 475.5 543.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 475.5 543.5 m 555.5 543.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 475.5 529.5 m 555.5 529.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 307.5 529.5 m 387.5 529.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 391.5 529.5 m 471.5 529.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 475.5 529.5 m 555.5 529.5 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 375.45 547.95 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 400.03 547.95 Td (Y) Tj ET Q q 0 0 0 rg BT 405.86 547.95 Td (ear) Tj ET Q q 0 0 0 rg BT 417.77 547.95 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 464.11 547.95 Td (ch 31,) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 338.00 533.95 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 422.00 533.95 Td (2018) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 505.00 534.18 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 519.17 Td (W) Tj ET Q q 0 0 0 rg BT 67.04 519.17 Td (eighted-average grant date fair value) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 310.00 519.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 361.15 519.17 Td (6.57) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 394.00 519.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 445.15 519.17 Td (6.08) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 478.00 519.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 529.15 519.17 Td (6.08) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 58.00 504.17 Td (W) Tj ET Q q 0 0 0 rg BT 66.64 504.17 Td (eighted-average assumptions:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 489.17 Td (Risk-free interest rate) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 366.15 489.17 Td (2.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 378.65 489.17 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 450.15 489.17 Td (1.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.65 489.17 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 534.15 489.17 Td (1.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 489.17 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 474.17 Td (Dividend yield) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 366.15 474.17 Td (0.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 378.65 474.17 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 450.15 474.17 Td (0.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.65 474.17 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 534.15 474.17 Td (0.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 474.17 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 459.17 Td (Expected volatility) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 361.15 459.17 Td (40.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 378.65 459.17 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 445.15 459.17 Td (40.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.65 459.17 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 529.15 459.17 Td (35.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.65 459.17 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 70.00 444.17 Td (Expected life \(years\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 361.15 444.17 Td (4.75) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 445.15 444.17 Td (4.75) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 529.15 444.17 Td (4.75) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 422.00 Td (Our enterprise value was determined using the same valuation techniques we employ when we conduct our annual ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 410.00 Td (goodwill impairment test.Our valuation is based on a weighted-average application of discounted cash flows, market related ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 398.00 Td (multiples and comparable transaction-related multiples.) Tj ET Q q 0 0 0 rg BT 278.75 398.00 Td (The significant assumptions used as inputs in the valuation ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 386.00 Td (calculations reflect our best estimates at the time of the date of grant.) Tj ET Q q 0 0 0 rg BT 331.68 386.00 Td (A) Tj ET Q q 0 0 0 rg BT 338.35 386.00 Td ( change in any of the assumptions and inputs may ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 374.00 Td (have a significant impact on our estimated enterprise value.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 356.00 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 96.44 356.00 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 160.04 356.00 Td (, there was aggregate unrecognized compensation cost of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 390.78 356.00 Td ($10.3 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 444.68 356.00 Td ( related to outstanding stock ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 344.00 Td (option and RSU awards, granted under the 2014 Equity Incentive Plan, that is expected to be recognized over a remaining ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 332.00 Td (weighted-average period of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 166.45 332.00 Td (2.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 178.95 332.00 Td ( years. ) Tj ET Q q 0 0 0 rg BT 206.99 332.00 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 231.44 332.00 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.04 332.00 Td (, there was aggregate unrecognized compensation cost of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 525.78 332.00 Td ($4.2 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 320.00 Td (million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 82.89 320.00 Td ( related to performance-based RSUs granted under the 2014 Equity Incentive Plan and aggregate unrecognized ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 308.00 Td (compensation cost of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 141.48 308.00 Td ($4.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 190.37 308.00 Td ( related to the performance-based stock options and performance-based RSUs granted ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 296.00 Td (under the 2018 Equity Incentive Plan, respectively) Tj ET Q q 0 0 0 rg BT 255.79 296.00 Td (. No compensation cost related to the performance-based stock options and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 284.00 Td (performance-based RSUs under any equity incentive plan will be recognized until it is probable that the performance ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 272.00 Td (condition will be met.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 254.00 Td (Income ) Tj ET Q q 0 0 0 rg BT 105.98 254.00 Td (T) Tj ET Q q 0 0 0 rg BT 111.73 254.00 Td (axes: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 138.39 254.00 Td (W) Tj ET Q q 0 0 0 rg BT 147.03 254.00 Td (e account for income taxes using the asset and liability method of ) Tj ET Q q 0 0 0 rg BT 410.85 254.00 Td (ASC ) Tj ET Q q 0 0 0 rg BT 432.62 254.00 Td (T) Tj ET Q q 0 0 0 rg BT 438.03 254.00 Td (opic 740, Income ) Tj ET Q q 0 0 0 rg BT 514.49 254.00 Td (T) Tj ET Q q 0 0 0 rg BT 519.90 254.00 Td (axes. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 242.00 Td (Under the asset and liability method, deferred tax assets and liabilities are recognized for the estimated future tax ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 230.00 Td (consequences attributable to dif) Tj ET Q q 0 0 0 rg BT 180.72 230.00 Td (ferences between the financial statement carrying amounts of existing assets and liabilities ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 218.00 Td (and their respective tax bases. In addition, deferred tax assets are recorded with respect to net operating losses and other tax ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 206.00 Td (attribute carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in ef) Tj ET Q q 0 0 0 rg BT 452.81 206.00 Td (fect for the year in which ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 194.00 Td (those temporary dif) Tj ET Q q 0 0 0 rg BT 132.13 194.00 Td (ferences are expected to be recovered or settled. ) Tj ET Q q 0 0 0 rg BT 326.56 194.00 Td (V) Tj ET Q q 0 0 0 rg BT 332.67 194.00 Td (aluation allowances are established when realization of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 182.00 Td (the benefit of deferred tax assets is not deemed to be more likely than not. ) Tj ET Q q 0 0 0 rg BT 352.06 182.00 Td (The ef) Tj ET Q q 0 0 0 rg BT 377.69 182.00 Td (fect on deferred tax assets and liabilities of a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 170.00 Td (change in income tax rates is recognized in income in the period that includes the enactment date.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 152.00 Td (New ) Tj ET Q q 0 0 0 rg BT 92.83 152.00 Td (Accounting Standards and ) Tj ET Q q 0 0 0 rg BT 208.70 152.00 Td (Accounting Changes) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 131.00 Td (See Note ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 110.88 131.00 Td (1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 115.88 131.00 Td (, Basis of Presentation and Summary of Significant ) Tj ET Q q 0 0 0 rg BT 327.23 131.00 Td (Accounting Policies, to our consolidated financial ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 119.00 Td (statements for a description of new accounting standards and accounting changes.) Tj ET Q endstream endobj 127 0 obj <> endobj 128 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 760.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F1 12.00 Tf ET q 0 0 0 rg BT 293.00 41.20 Td (- 58 -) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 127.30 731.25 Td (QUANTIT) Tj ET Q q 0 0 0 rg BT 173.23 731.25 Td (A) Tj ET Q q 0 0 0 rg BT 179.71 731.25 Td (TIVE ) Tj ET Q q 0 0 0 rg BT 206.11 731.25 Td (AND QUALIT) Tj ET Q q 0 0 0 rg BT 268.99 731.25 Td (A) Tj ET Q q 0 0 0 rg BT 275.47 731.25 Td (TIVE DISCLOSURES ) Tj ET Q q 0 0 0 rg BT 374.95 731.25 Td (ABOUT) Tj ET Q q 0 0 0 rg BT 410.33 731.25 Td ( MARKET) Tj ET Q q 0 0 0 rg BT 457.65 731.25 Td ( RISK) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 707.25 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 707.25 Td (e are exposed to market risk from foreign currency exchange rates and interest rates, which could af) Tj ET Q q 0 0 0 rg BT 480.01 707.25 Td (fect our operating ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 695.25 Td (results, financial position and cash flows. ) Tj ET Q q 0 0 0 rg BT 221.56 695.25 Td (W) Tj ET Q q 0 0 0 rg BT 230.20 695.25 Td (e manage exposure to these market risks through our regular operating and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 683.25 Td (financing activities and, when appropriate, through the use of derivative financial instruments to hedge economic exposures ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 671.25 Td (as well as reduce our earnings and cash flow volatility resulting from shifts in market rates. ) Tj ET Q q 0 0 0 rg BT 421.22 671.25 Td (V) Tj ET Q q 0 0 0 rg BT 427.15 671.25 Td (olatility in our results of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 659.25 Td (operations will vary with the type and amount of derivative hedges outstanding, as well as fluctuations in the currency and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 647.25 Td (interest rate market during the period. Our derivative financial instruments, when held, are solely risk management tools and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 635.25 Td (not for trading or speculative purposes. ) Tj ET Q q 0 0 0 rg BT 212.95 635.25 Td (W) Tj ET Q q 0 0 0 rg BT 221.58 635.25 Td (e have not entered into any derivative financial instruments in any period presented ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 623.25 Td (in the consolidated financial statements. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 605.25 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 605.25 Td (e continue to review liquidity suf) Tj ET Q q 0 0 0 rg BT 212.93 605.25 Td (ficiency by performing various stress test scenarios, such as cash flow forecasting ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 593.25 Td (which considers hypothetical interest rate movements. Furthermore, we continue to closely monitor current events and the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 581.25 Td (financial institutions that support our credit facility) Tj ET Q q 0 0 0 rg BT 257.19 581.25 Td (, including monitoring their credit ratings and outlooks, credit default swap ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 569.25 Td (levels, capital raising and mer) Tj ET Q q 0 0 0 rg BT 173.50 569.25 Td (ger activity) Tj ET Q q 0 0 0 rg BT 218.11 569.25 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 551.25 Td (For the fiscal years ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 177.24 551.25 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 240.84 551.25 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 245.84 551.25 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 265.84 551.25 Td (, and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 287.78 551.25 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 307.78 551.25 Td (, we derived approximately 22%, 22%, and 20%, respectively) Tj ET Q q 0 0 0 rg BT 554.27 551.25 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 539.25 Td (of our ) Tj ET Q q 0 0 0 rg BT 80.11 539.25 Td (Adjusted Revenues from countries outside of the United States, with a significant portion of the related costs based in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 527.25 Td (United States dollars, British pounds and ) Tj ET Q q 0 0 0 rg BT 219.83 527.25 Td (Australian dollars. ) Tj ET Q q 0 0 0 rg BT 296.02 527.25 Td (W) Tj ET Q q 0 0 0 rg BT 304.65 527.25 Td (e anticipate that our future results will continue to be af) Tj ET Q q 0 0 0 rg BT 526.07 527.25 Td (fected ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 515.25 Td (by market risks, including changes in political and economic conditions in foreign markets and fluctuations in currency rates, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 503.25 Td (primarily the British pound and ) Tj ET Q q 0 0 0 rg BT 182.04 503.25 Td (Australian dollar) Tj ET Q q 0 0 0 rg BT 248.97 503.25 Td (. ) Tj ET Q q 0 0 0 rg BT 253.42 503.25 Td (A) Tj ET Q q 0 0 0 rg BT 260.09 503.25 Td ( hypothetical 10% adverse change in foreign currency rates relative to the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 491.25 Td (U.S. dollar would not have had a material impact on our net loss.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 473.25 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 96.44 473.25 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 160.04 473.25 Td (, we had ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 196.14 473.25 Td ($1,663.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 262.53 473.25 Td ( in outstanding variable rate debt under our ) Tj ET Q q 0 0 0 rg BT 437.30 473.25 Td (T) Tj ET Q q 0 0 0 rg BT 442.71 473.25 Td (erm Loan at face value. ) Tj ET Q q 0 0 0 rg BT 539.14 473.25 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 461.25 Td (ef) Tj ET Q q 0 0 0 rg BT 61.59 461.25 Td (fective interest rate for our ) Tj ET Q q 0 0 0 rg BT 170.52 461.25 Td (T) Tj ET Q q 0 0 0 rg BT 175.93 461.25 Td (erm Loan is based on a contractual minimum base interest rate, or LIBOR floor of 1.0%, plus ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 449.25 Td (the applicable mar) Tj ET Q q 0 0 0 rg BT 127.67 449.25 Td (gin. Currently) Tj ET Q q 0 0 0 rg BT 183.13 449.25 Td (, LIBOR is above the LIBOR floor and the debt is subject to variable rates. ) Tj ET Q q 0 0 0 rg BT 485.00 449.25 Td (A) Tj ET Q q 0 0 0 rg BT 491.67 449.25 Td ( 50 basis point ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 437.25 Td (increase in LIBOR on our current ) Tj ET Q q 0 0 0 rg BT 191.00 437.25 Td (T) Tj ET Q q 0 0 0 rg BT 196.41 437.25 Td (erm Loan balance would increase our annual interest expense by approximately $8.3 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 425.25 Td (million. ) Tj ET Q q 0 0 0 rg BT 87.34 425.25 Td (Additionally) Tj ET Q q 0 0 0 rg BT 137.24 425.25 Td (, as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 163.90 425.25 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 227.50 425.25 Td (, we had ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 263.60 425.25 Td ($620.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.49 425.25 Td ( in outstanding debt at a fixed rate of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.17 425.25 Td (9.50%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 498.00 425.25 Td (.) 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Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 605.25 Td (W) Tj ET Q q 0 0 0 rg BT 62.64 605.25 Td (e have audited the accompanying consolidated financial statements of Cengage Learning Holdings II, Inc. and its ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 593.25 Td (subsidiaries, which comprise the) Tj ET Q BT /F2 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL q 1 0 0 rg BT 184.53 593.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL q 0 0 0 rg BT 187.03 593.25 Td (consolidated) Tj ET Q BT /F2 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL q 1 0 0 rg BT 237.57 593.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL q 0 0 0 rg BT 240.07 593.25 Td (balance sheets) Tj ET Q BT /F2 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL q 1 0 0 rg BT 297.54 593.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL q 0 0 0 rg BT 300.04 593.25 Td (as of March 31, 2019) Tj ET Q BT /F2 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL q 1 0 0 rg BT 385.30 593.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL q 0 0 0 rg BT 387.80 593.25 Td (and 2018, and the related consolidated ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 581.25 Td (statements of operations, comprehensive \(loss\) income, stockholders) Tj ET Q q 0 0 0 rg BT 331.52 581.25 Td ( equity and cash flows) Tj ET Q BT /F2 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL q 1 0 0 rg BT 420.94 581.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL q 0 0 0 rg BT 423.44 581.25 Td (for each of the three years in the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 569.25 Td (period ended March 31, 2019.) 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Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 461.25 Td (Auditors) Tj ET Q q 0 0 0 rg BT 92.16 461.25 Td ( Responsibility) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 437.25 Td (Our responsibility is to express an opinion on the consolidated financial statements based on our audits. ) Tj ET Q q 0 0 0 rg BT 473.18 437.25 Td (W) Tj ET Q q 0 0 0 rg BT 481.82 437.25 Td (e conducted our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 425.25 Td (audits in accordance with auditing standards generally accepted in the United States of ) Tj ET Q q 0 0 0 rg BT 402.50 425.25 Td (America. ) Tj ET Q q 0 0 0 rg BT 444.24 425.25 Td (Those standards require that ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 413.25 Td (we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 401.25 Td (from material misstatement. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 377.25 Td (An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 365.25 Td (financial statements. ) Tj ET Q q 0 0 0 rg BT 141.01 365.25 Td (The procedures selected depend on our judgment, including the assessment of the risks of material ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 353.25 Td (misstatement of the consolidated) Tj ET Q BT /F2 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL q 1 0 0 rg BT 185.36 353.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL q 0 0 0 rg BT 187.86 353.25 Td (financial statements, whether due to fraud or error) Tj ET Q q 0 0 0 rg BT 387.78 353.25 Td (. In making those risk assessments, we ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 341.25 Td (consider internal control relevant to the Company's preparation and fair presentation of the consolidated financial statements ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 329.25 Td (in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 317.25 Td (on the ef) Tj ET Q q 0 0 0 rg BT 88.80 317.25 Td (fectiveness of the Company's internal control. ) Tj ET Q q 0 0 0 rg BT 276.67 317.25 Td (Accordingly) Tj ET Q q 0 0 0 rg BT 326.01 317.25 Td (, we express no such opinion. ) Tj ET Q q 0 0 0 rg BT 448.49 317.25 Td (An audit also includes ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 305.25 Td (evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 293.25 Td (by management, as well as evaluating the overall presentation of the consolidated financial statements. ) Tj ET Q q 0 0 0 rg BT 470.07 293.25 Td (W) Tj ET Q q 0 0 0 rg BT 478.71 293.25 Td (e believe that the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 281.25 Td (audit evidence we have obtained is suf) Tj ET Q q 0 0 0 rg BT 208.21 281.25 Td (ficient and appropriate to provide a basis for our audit opinion.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 54.00 257.25 Td (Opinion) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 233.25 Td (In our opinion, the consolidated financial statements referred to above present fairly) Tj ET Q q 0 0 0 rg BT 389.34 233.25 Td (, in all material respects, the financial ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 221.25 Td (position of Cengage Learning Holdings II, Inc. and its subsidiaries as of March 31, 2019 and 2018, and the results of their ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 209.25 Td (operations and their cash flows for each of the three years in the period ended March 31, 2019 in accordance with accounting ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 197.25 Td (principles generally accepted in the United States of ) Tj ET Q q 0 0 0 rg BT 264.48 197.25 Td (America.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 173.25 Td (/s/ PricewaterhouseCoopers LLP) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 149.25 Td (May 30, 2019) Tj ET Q /GS0 gs q 98.13 0 0 83.00 54.00 696.50 cm /I11 Do Q endstream endobj 133 0 obj <> endobj 134 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 244.85 760.75 Td (Consolidated Balance Sheets) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 175.20 42.60 Td (See accompanying notes to the consolidated financial statements.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 293.90 18.60 Td ( - 61 -) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 723.5 m 483.5 723.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 723.5 m 487.5 723.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 723.5 m 557.5 723.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 709.5 m 483.5 709.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 709.5 m 557.5 709.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 635.5 m 483.5 635.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 635.5 m 557.5 635.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 635.5 m 483.5 635.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 635.5 m 557.5 635.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 496.5 m 483.5 496.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 496.5 m 557.5 496.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 496.5 m 483.5 496.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 482.5 m 483.5 482.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 480.5 m 483.5 480.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 496.5 m 557.5 496.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 482.5 m 557.5 482.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 480.5 m 557.5 480.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 388.5 m 483.5 388.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 388.5 m 557.5 388.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 388.5 m 483.5 388.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 388.5 m 557.5 388.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 324.5 m 483.5 324.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 324.5 m 557.5 324.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 324.5 m 483.5 324.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 309.5 m 483.5 309.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 324.5 m 557.5 324.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 309.5 m 557.5 309.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 180.5 m 483.5 180.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 180.5 m 557.5 180.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 180.5 m 483.5 180.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 180.5 m 557.5 180.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 165.5 m 483.5 165.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 151.5 m 483.5 151.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 149.5 m 483.5 149.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 165.5 m 557.5 165.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 151.5 m 557.5 151.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 149.5 m 557.5 149.5 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 465.30 727.95 Td (Mar) Tj ET Q q 0 0 0 rg BT 482.21 727.95 Td (ch 31,) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 713.75 Td (\(in millions, except shar) Tj ET Q q 0 0 0 rg BT 133.02 713.75 Td (e and per shar) Tj ET Q q 0 0 0 rg BT 179.17 713.75 Td (e amounts\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 439.00 713.95 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 513.00 713.95 Td (2018) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 700.18 Td (Assets) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 685.17 Td (Cash and cash equivalents) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 685.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 685.17 Td (335.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 685.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 685.17 Td (319.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 670.17 Td (Accounts receivable, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 670.17 Td (202.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 670.17 Td (180.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 655.17 Td (Inventories) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 655.17 Td (109.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 655.17 Td (1) Tj ET Q q 0 0 0 rg BT 536.15 655.17 Td (16.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 640.17 Td (Prepaid expenses and other current assets) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 640.17 Td (77.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 640.17 Td (58.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 625.17 Td (T) Tj ET Q q 0 0 0 rg BT 67.76 625.17 Td (otal current assets) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 625.17 Td (725.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 625.17 Td (675.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 606.17 Td (Property) Tj ET Q q 0 0 0 rg BT 90.11 606.17 Td (, equipment and capitalized internal-use software, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 606.17 Td (146.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 606.17 Td (164.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 591.17 Td (Pre-publication costs, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 591.17 Td (215.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 591.17 Td (232.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 576.17 Td (Author advances) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 576.17 Td (16.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 576.17 Td (22.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 561.17 Td (Identifiable intangible assets, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 561.17 Td (912.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 561.17 Td (1,009.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 546.17 Td (Goodwill) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 449.65 546.17 Td (1,629.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 546.17 Td (1,633.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 531.17 Td (Deferred tax assets) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 531.17 Td (6.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 531.17 Td (7.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 516.17 Td (Deferred financing costs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 516.17 Td (2.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 516.17 Td (3.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 501.17 Td (Other non-current assets) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 501.17 Td (23.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 501.17 Td (24.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 486.17 Td (T) Tj ET Q q 0 0 0 rg BT 67.76 486.17 Td (otal assets) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 486.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 449.65 486.17 Td (3,678.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 486.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 486.17 Td (3,772.8) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 468.18 Td (Liabilities and Stockholders) Tj ET Q q 0 0 0 rg BT 178.06 468.18 Td ( Equity) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 453.17 Td (Accounts payable and accrued expenses) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 453.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 453.17 Td (312.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 453.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 453.17 Td (276.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 438.17 Td (Deferred revenue) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 438.17 Td (182.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 438.17 Td (178.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 423.17 Td (Current portion of long-term debt) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 423.17 Td (17.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 423.17 Td (6.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 408.17 Td (Income taxes payable) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 408.17 Td (5.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 408.17 Td (3.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 393.17 Td (Other current liabilities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 393.17 Td (25.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 393.17 Td (18.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 378.17 Td (T) Tj ET Q q 0 0 0 rg BT 67.76 378.17 Td (otal current liabilities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 378.17 Td (543.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 378.17 Td (484.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 359.17 Td (Long-term debt) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 449.65 359.17 Td (2,234.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 359.17 Td (2,244.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 344.17 Td (Deferred tax liabilities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 344.17 Td (38.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 344.17 Td (78.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 329.17 Td (Other non-current liabilities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 329.17 Td (57.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 329.17 Td (50.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 314.17 Td (T) Tj ET Q q 0 0 0 rg BT 67.76 314.17 Td (otal liabilities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 449.65 314.17 Td (2,874.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 314.17 Td (2,857.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 295.17 Td (Commitments and contingencies \(Note 18\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 265.17 Td (Preferred stock \($0.01 par value, 50,000,000 shares authorized, none issued\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 265.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.65 265.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 250.17 Td (Common stock \($0.01 par value, 300,000,000 shares authorized, 61,547,310 and) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 240.17 Td (61,009,916 shares issued and outstanding as of March 31, 2019 and March 31, 2018,) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 230.17 Td (respectively\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 230.17 Td (0.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 230.17 Td (0.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 215.17 Td (Additional paid-in capital) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 449.65 215.17 Td (1,225.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 215.17 Td (1,224.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 200.17 Td (Accumulated deficit) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 453.80 200.22 Td (\(367.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 200.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.80 200.22 Td (\(270.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 200.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 185.17 Td (Accumulated other comprehensive loss) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 185.22 Td (\(54.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 185.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 185.22 Td (\(39.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 185.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 170.17 Td (T) Tj ET Q q 0 0 0 rg BT 67.76 170.17 Td (otal stockholders) Tj ET Q q 0 0 0 rg BT 138.41 170.17 Td ( equity) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 170.17 Td (804.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 170.17 Td (915.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 155.17 Td (T) Tj ET Q q 0 0 0 rg BT 67.41 155.17 Td (otal liabilities and stockholders) Tj ET Q q 0 0 0 rg BT 194.70 155.17 Td ( equity) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 155.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 449.65 155.17 Td (3,678.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 155.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 155.17 Td (3,772.8) Tj ET Q BT /F1 10.00 Tf ET endstream endobj 135 0 obj <> endobj 136 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 222.50 760.75 Td (Consolidated Statements of Operations ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 175.20 42.60 Td (See accompanying notes to the consolidated financial statements.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 293.90 18.60 Td ( - 62 -) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 723.5 m 409.5 723.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 723.5 m 413.5 723.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 723.5 m 483.5 723.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 723.5 m 487.5 723.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 723.5 m 557.5 723.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 723.5 m 409.5 723.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 709.5 m 409.5 709.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 723.5 m 483.5 723.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 709.5 m 483.5 709.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 723.5 m 557.5 723.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 709.5 m 557.5 709.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 625.5 m 409.5 625.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 625.5 m 483.5 625.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 625.5 m 557.5 625.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 625.5 m 409.5 625.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 625.5 m 483.5 625.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 625.5 m 557.5 625.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 521.5 m 409.5 521.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 521.5 m 483.5 521.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 521.5 m 557.5 521.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 521.5 m 409.5 521.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 506.5 m 409.5 506.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 521.5 m 483.5 521.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 506.5 m 483.5 506.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 521.5 m 557.5 521.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 506.5 m 557.5 506.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 408.5 m 409.5 408.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 408.5 m 483.5 408.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 408.5 m 557.5 408.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 408.5 m 409.5 408.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 408.5 m 483.5 408.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 408.5 m 557.5 408.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 378.5 m 409.5 378.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 364.5 m 409.5 364.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 362.5 m 409.5 362.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 378.5 m 483.5 378.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 364.5 m 483.5 364.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 362.5 m 483.5 362.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 378.5 m 557.5 378.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 364.5 m 557.5 364.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 362.5 m 557.5 362.5 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 392.45 727.95 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 417.03 727.95 Td (Y) Tj ET Q q 0 0 0 rg BT 422.86 727.95 Td (ear) Tj ET Q q 0 0 0 rg BT 434.77 727.95 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 481.11 727.95 Td (ch 31,) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 713.75 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 365.00 713.95 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 439.00 713.95 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 513.00 713.95 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 699.17 Td (Revenues) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 699.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 375.65 699.17 Td (1,445.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 699.17 Td 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Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 293.90 18.60 Td ( - 64 -) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 724.5 m 409.5 724.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 724.5 m 413.5 724.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 724.5 m 483.5 724.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 724.5 m 487.5 724.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 724.5 m 557.5 724.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 724.5 m 409.5 724.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 711.5 m 409.5 711.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 724.5 m 483.5 724.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 711.5 m 483.5 711.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 724.5 m 557.5 724.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 711.5 m 557.5 711.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 462.5 m 409.5 462.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 462.5 m 483.5 462.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 462.5 m 557.5 462.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 462.5 m 409.5 462.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 447.5 m 409.5 447.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 462.5 m 483.5 462.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 447.5 m 483.5 447.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 462.5 m 557.5 462.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 447.5 m 557.5 447.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 326.5 m 409.5 326.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 326.5 m 483.5 326.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 326.5 m 557.5 326.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 326.5 m 409.5 326.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 311.5 m 409.5 311.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 326.5 m 483.5 326.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 311.5 m 483.5 311.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 326.5 m 557.5 326.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 311.5 m 557.5 311.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 172.5 m 409.5 172.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 172.5 m 483.5 172.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 172.5 m 557.5 172.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 172.5 m 409.5 172.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 157.5 m 409.5 157.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 172.5 m 483.5 172.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 157.5 m 483.5 157.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 172.5 m 557.5 172.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 157.5 m 557.5 157.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 157.5 m 409.5 157.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 133.5 m 409.5 133.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 157.5 m 483.5 157.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 133.5 m 483.5 133.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 157.5 m 557.5 157.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 133.5 m 557.5 133.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 133.5 m 409.5 133.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 133.5 m 483.5 133.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 133.5 m 557.5 133.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 89.5 m 409.5 89.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 89.5 m 483.5 89.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 89.5 m 557.5 89.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 89.5 m 409.5 89.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 75.5 m 409.5 75.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 73.5 m 409.5 73.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 89.5 m 483.5 89.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 75.5 m 483.5 75.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 73.5 m 483.5 73.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 89.5 m 557.5 89.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 75.5 m 557.5 75.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 73.5 m 557.5 73.5 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 392.45 728.90 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 417.03 728.90 Td (Y) Tj ET Q q 0 0 0 rg BT 422.86 728.90 Td (ear) Tj ET Q q 0 0 0 rg BT 434.77 728.90 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 481.11 728.90 Td (ch 31,) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 715.75 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 365.00 715.90 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 439.00 715.90 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 513.00 715.90 Td (2017) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 702.18 Td (Cash Flows fr) Tj ET Q q 0 0 0 rg BT 115.35 702.18 Td (om Operating ) Tj ET Q q 0 0 0 rg BT 177.20 702.18 Td (Activities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 687.17 Td (Net loss) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 687.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 384.80 687.22 Td (\(97.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 687.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 687.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 687.22 Td (\(1.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 687.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 687.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 687.22 Td (\(43.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 687.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 672.17 Td (Adjustments to reconcile net loss to net cash provided by operating) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 60.50 662.17 Td (activities:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 647.17 Td (Amortization of pre-publication costs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.15 647.17 Td (109.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 647.17 Td (127.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 647.17 Td (150.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 632.17 Td (Depreciation) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 632.17 Td (76.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 632.17 Td (72.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 632.17 Td (83.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 617.17 Td (Amortization of identifiable intangible assets) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 617.17 Td (94.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 617.17 Td (94.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 617.17 Td (92.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 602.17 Td (Amortization of debt discounts and deferred financing costs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 602.17 Td (8.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 602.17 Td (8.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 602.17 Td (7.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 587.17 Td (Non-cash equity-based compensation expense) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 587.17 Td (8.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 587.17 Td (17.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 587.17 Td (13.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 572.17 Td (Operational restructuring and other char) Tj ET Q q 0 0 0 rg BT 228.40 572.17 Td (ges) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 572.17 Td (17.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 572.17 Td (10.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 572.17 Td (26.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 557.17 Td (Cash payments for operational restructuring char) Tj ET Q q 0 0 0 rg BT 263.68 557.17 Td (ges) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 384.80 557.22 Td (\(12.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 557.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 557.22 Td (\(14.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 557.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 557.22 Td (\(26.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 557.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 542.17 Td (Loss on early extinguishment of debt, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.65 542.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 542.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 542.17 Td (10.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 527.17 Td (Reor) Tj ET Q q 0 0 0 rg BT 87.35 527.17 Td (ganization items, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.65 527.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 527.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 527.17 Td (0.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 512.17 Td (Cash payments for reor) Tj ET Q q 0 0 0 rg BT 161.40 512.17 Td (ganization items, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.65 512.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 512.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 512.22 Td (\(3.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 512.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 497.17 Td (Deferred income taxes) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 384.80 497.22 Td (\(39.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 497.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 497.22 Td (\(87.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 497.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 497.22 Td (\(46.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 497.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 482.17 Td (Changes in operating assets and liabilities, net of acquisitions) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 482.17 Td (22.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 482.17 Td (26.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 482.17 Td (48.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 467.17 Td (Other) Tj ET Q q 0 0 0 rg BT 90.37 467.17 Td (, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 467.17 Td (1.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 467.22 Td (\(0.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 467.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 467.17 Td (1.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 452.17 Td (Net cash provided by operating activities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.15 452.17 Td (189.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 452.17 Td (253.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 452.17 Td (316.6) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 429.18 Td (Cash Flows fr) Tj ET Q q 0 0 0 rg BT 115.35 429.18 Td (om Investing ) Tj ET Q q 0 0 0 rg BT 172.77 429.18 Td (Activities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 414.17 Td (Acquisitions of businesses, net of cash acquired) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.80 414.22 Td (\(1.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 414.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 414.22 Td (\(3.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 414.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 414.22 Td (\(45.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 414.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 399.17 Td (Additions to pre-publication costs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 384.80 399.22 Td (\(95.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 399.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 453.80 399.22 Td (\(103.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 399.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.80 399.22 Td (\(122.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 399.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 384.17 Td (Additions to property) Tj ET Q q 0 0 0 rg BT 141.78 384.17 Td (, equipment and capitalized internal-use) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 65.00 374.17 Td (software) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 384.80 374.22 Td (\(53.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 374.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 374.22 Td (\(63.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 374.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 374.22 Td (\(53.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 374.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 359.17 Td (Acquisition of author content rights) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.80 359.22 Td (\(1.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 359.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 359.22 Td (\(21.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 359.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.65 359.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 344.17 Td (Use of restricted cash) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.65 344.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 344.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 344.17 Td (3.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 330.07 Td (Other) Tj ET Q q 0 0 0 rg BT 78.57 330.07 Td (, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.80 330.12 Td (\(0.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 330.07 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 330.07 Td (0.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 330.07 Td (0.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 316.17 Td (Net cash used in investing activities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 379.80 316.22 Td (\(152.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 316.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 453.80 316.22 Td (\(191.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 316.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.80 316.22 Td (\(217.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 316.17 Td (\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 293.18 Td (Cash Flows fr) Tj ET Q q 0 0 0 rg BT 115.35 293.18 Td (om Financing ) Tj ET Q q 0 0 0 rg BT 176.10 293.18 Td (Activities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 278.17 Td (Proceeds from issuance of debt) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.65 278.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 278.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 278.17 Td (2,312.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 263.17 Td (Repayments of long-term debt) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.80 263.22 Td (\(6.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 263.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 263.22 Td (\(28.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 263.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 520.30 263.22 Td (\(2,023.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 263.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 248.17 Td (Proceeds from issuance of common stock) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.65 248.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 248.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 248.17 Td (0.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 233.17 Td (Debt issuance costs and other financing fees) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.65 233.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 233.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 233.22 Td (\(35.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 233.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 218.17 Td (Dividends and dividend equivalents paid) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.80 218.22 Td (\(4.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 218.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 218.22 Td (\(0.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 218.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.80 218.22 Td (\(200.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 218.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 202.17 Td (Common stock repurchases for tax withholding for net settlement of) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 65.00 192.17 Td (equity awards) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.80 192.22 Td (\(7.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 192.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 192.22 Td (\(5.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 192.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 192.22 Td (\(0.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 192.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 177.17 Td (Common stock repurchases under share repurchase program) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.65 177.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 177.22 Td (\(60.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 177.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 177.22 Td (\(54.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 177.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 162.17 Td (Net cash used in financing activities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 384.80 162.22 Td (\(19.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 162.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 162.22 Td (\(95.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 162.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 162.22 Td (\(0.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 162.17 Td (\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 148.18 Td (Impact on Cash and Cash Equivalents fr) Tj ET Q q 0 0 0 rg BT 229.75 148.18 Td (om Changes in For) Tj ET Q q 0 0 0 rg BT 310.96 148.18 Td (eign) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 60.50 138.18 Td (Curr) Tj ET Q q 0 0 0 rg BT 81.98 138.18 Td (ency) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.80 138.22 Td (\(1.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 138.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 138.17 Td (0.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 138.22 Td (\(0.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 138.17 Td (\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 123.18 Td (Net Incr) Tj ET Q q 0 0 0 rg BT 91.73 123.18 Td (ease \(Decr) Tj ET Q q 0 0 0 rg BT 135.69 123.18 Td (ease\) in Cash and Cash Equivalents) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 123.17 Td (16.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 123.22 Td (\(33.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 123.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 123.17 Td (98.8) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 109.18 Td (Cash and Cash Equivalents) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 94.17 Td (Beginning of year) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.15 94.17 Td (319.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 94.17 Td (352.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 94.17 Td (253.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 79.17 Td (End of year) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 79.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.15 79.17 Td (335.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 79.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 79.17 Td (319.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 79.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 79.17 Td (352.3) Tj ET Q BT /F1 10.00 Tf ET endstream endobj 141 0 obj <> endobj 142 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 296.25 592.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 291.60 580.75 Td (Consolidated Statements of Stockholders) Tj ET Q q 0 0 0 rg BT 468.91 580.75 Td ( Equity ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 265.20 42.60 Td (See accompanying notes to the consolidated financial statements.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.90 18.60 Td ( - 65 -) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 273.5 543.5 m 333.5 543.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 333.5 543.5 m 337.5 543.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 337.5 543.5 m 397.5 543.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 273.5 520.5 m 333.5 520.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 337.5 520.5 m 397.5 520.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 401.5 520.5 m 461.5 520.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 465.5 520.5 m 525.5 520.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 529.5 520.5 m 589.5 520.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 593.5 520.5 m 663.5 520.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 667.5 520.5 m 737.5 520.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 273.5 520.5 m 333.5 520.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 337.5 520.5 m 397.5 520.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 401.5 520.5 m 461.5 520.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 465.5 520.5 m 525.5 520.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 529.5 520.5 m 589.5 520.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 593.5 520.5 m 663.5 520.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 667.5 520.5 m 737.5 520.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 273.5 353.5 m 333.5 353.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 337.5 353.5 m 397.5 353.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 401.5 353.5 m 461.5 353.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 465.5 353.5 m 525.5 353.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 529.5 353.5 m 589.5 353.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 593.5 353.5 m 663.5 353.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 667.5 353.5 m 737.5 353.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 273.5 353.5 m 333.5 353.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 337.5 353.5 m 397.5 353.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 401.5 353.5 m 461.5 353.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 465.5 353.5 m 525.5 353.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 529.5 353.5 m 589.5 353.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 593.5 353.5 m 663.5 353.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 667.5 353.5 m 737.5 353.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 273.5 216.5 m 333.5 216.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 337.5 216.5 m 397.5 216.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 401.5 216.5 m 461.5 216.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 465.5 216.5 m 525.5 216.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 529.5 216.5 m 589.5 216.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 593.5 216.5 m 663.5 216.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 667.5 216.5 m 737.5 216.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 273.5 216.5 m 333.5 216.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 337.5 216.5 m 397.5 216.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 401.5 216.5 m 461.5 216.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 465.5 216.5 m 525.5 216.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 529.5 216.5 m 589.5 216.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 593.5 216.5 m 663.5 216.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 667.5 216.5 m 737.5 216.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 273.5 79.5 m 333.5 79.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 273.5 65.5 m 333.5 65.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 273.5 63.5 m 333.5 63.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 337.5 79.5 m 397.5 79.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 337.5 65.5 m 397.5 65.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 337.5 63.5 m 397.5 63.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 401.5 79.5 m 461.5 79.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 401.5 65.5 m 461.5 65.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 401.5 63.5 m 461.5 63.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 465.5 79.5 m 525.5 79.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 465.5 65.5 m 525.5 65.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 465.5 63.5 m 525.5 63.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 529.5 79.5 m 589.5 79.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 529.5 65.5 m 589.5 65.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 529.5 63.5 m 589.5 63.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 593.5 79.5 m 663.5 79.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 593.5 65.5 m 663.5 65.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 593.5 63.5 m 663.5 63.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 667.5 79.5 m 737.5 79.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 667.5 65.5 m 737.5 65.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 667.5 63.5 m 737.5 63.5 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 305.35 547.95 Td (Common Stock) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 474.45 542.95 Td (Additional) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 480.45 533.95 Td (Paid-In ) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 480.70 524.95 Td (Capital) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 533.50 533.95 Td (Accumulated) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 546.25 524.95 Td (Deficit) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 602.50 548.90 Td (Accumulated) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 616.55 539.90 Td (Other) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 598.05 530.90 Td (Compr) Tj ET Q q 0 0 0 rg BT 625.47 530.90 Td (ehensive) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 619.20 521.95 Td (Loss) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 692.15 542.95 Td (T) Tj ET Q q 0 0 0 rg BT 697.33 542.95 Td (otal) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 675.80 533.95 Td (Stockholders) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 688.95 524.95 Td (Equity) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 524.75 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 276.65 524.95 Td (Shar) Tj ET Q q 0 0 0 rg BT 295.07 524.95 Td (es Issued) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 348.20 524.95 Td (Par) Tj ET Q q 0 0 0 rg BT 362.11 524.95 Td ( ) Tj ET Q q 0 0 0 rg BT 364.20 524.95 Td (V) Tj ET Q q 0 0 0 rg BT 370.20 524.95 Td (alue) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 413.65 533.95 Td (T) Tj ET Q q 0 0 0 rg BT 418.98 533.95 Td (r) Tj ET Q q 0 0 0 rg BT 422.82 533.95 Td (easury) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 420.20 524.95 Td (Stock) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 510.17 Td (Balance at March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.15 510.17 Td (70.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 340.00 510.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 381.15 510.17 Td (0.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 404.00 510.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 510.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 468.00 510.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 491.65 510.17 Td (1,519.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.00 510.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 559.80 510.17 Td (\(226.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 585.65 510.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 596.00 510.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 638.80 510.17 Td (\(39.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 659.65 510.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 670.00 510.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 703.65 510.17 Td (1,254.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 495.17 Td (Net loss) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.65 495.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.65 495.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 495.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 511.65 495.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 564.80 495.17 Td (\(43.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 585.65 495.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 649.65 495.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 712.80 495.17 Td (\(43.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 733.65 495.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 480.17 Td (Foreign currency translation adjustment) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.65 480.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.65 480.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 480.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 511.65 480.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 575.65 480.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 638.80 480.17 Td (\(1) Tj ET Q q 0 0 0 rg BT 647.13 480.17 Td (1.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 659.65 480.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 712.80 480.17 Td (\(1) Tj ET Q q 0 0 0 rg BT 721.13 480.17 Td (1.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 733.65 480.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 465.17 Td (Dividends paid) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.65 465.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.65 465.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 465.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.80 465.22 Td (\(200.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 521.65 465.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 575.65 465.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 649.65 465.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 707.80 465.17 Td (\(200.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 733.65 465.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 450.17 Td (Purchase of treasury stock) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 313.80 450.22 Td (\(2.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 329.65 450.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.65 450.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 436.80 450.22 Td (\(54.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.65 450.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 511.65 450.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 575.65 450.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 649.65 450.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 712.80 450.17 Td (\(54.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 733.65 450.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 435.17 Td (Retirement of treasury stock) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.65 435.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.65 435.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 440.15 435.17 Td (54.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 500.80 435.22 Td (\(54.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 521.65 435.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 575.65 435.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 649.65 435.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 723.65 435.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 420.17 Td (Restricted stock unit dividend equivalents) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.65 420.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.65 420.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 420.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 505.80 420.22 Td (\(5.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 521.65 420.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 575.65 420.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 649.65 420.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 717.80 420.17 Td (\(5.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 733.65 420.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 406.07 Td (Issuance of common stock under share based) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 396.07 Td (compensation plan and shares withheld to cover tax) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 386.12 Td (withholding requirements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 388.17 Td (0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.65 388.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 388.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 505.80 388.22 Td (\(0.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 521.65 388.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 575.65 388.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 649.65 388.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 717.80 388.17 Td (\(0.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 733.65 388.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 373.17 Td (Issuance of common stock) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.65 373.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.65 373.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 373.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 509.15 373.17 Td (0.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 575.65 373.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 649.65 373.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 721.15 373.17 Td (0.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 358.17 Td (Equity-based compensation) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.65 358.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.65 358.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 358.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 504.15 358.17 Td (13.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 575.65 358.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 649.65 358.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 716.15 358.17 Td (13.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 343.17 Td (Balance at March 31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.15 343.17 Td (68.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 381.15 343.17 Td (0.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 343.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 491.65 343.17 Td (1,273.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 559.80 343.17 Td (\(269.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 585.65 343.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 638.80 343.17 Td (\(50.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 659.65 343.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 711.15 343.17 Td (954.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 328.17 Td (Net loss) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.65 328.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.65 328.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 328.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 511.65 328.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 569.80 328.17 Td (\(1.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 585.65 328.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 649.65 328.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 717.80 328.17 Td (\(1.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 733.65 328.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 313.17 Td (Foreign currency translation adjustment) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.65 313.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.65 313.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 313.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 511.65 313.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 575.65 313.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 642.15 313.17 Td (1) Tj ET Q q 0 0 0 rg BT 647.15 313.17 Td (1.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 716.15 313.17 Td (1) Tj ET Q q 0 0 0 rg BT 721.15 313.17 Td (1.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 298.17 Td (Purchase of treasury stock) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 313.80 298.22 Td (\(7.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 329.65 298.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.65 298.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 436.80 298.22 Td (\(60.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.65 298.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 511.65 298.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 575.65 298.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 649.65 298.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 712.80 298.17 Td (\(60.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 733.65 298.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 283.17 Td (Retirement of treasury stock) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.65 283.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 377.80 283.22 Td (\(0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.65 283.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 440.15 283.17 Td (60.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 500.80 283.22 Td (\(60.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 521.65 283.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 575.65 283.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 649.65 283.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 723.65 283.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 268.17 Td (Restricted stock unit dividend equivalents) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.65 268.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.65 268.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 268.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 509.15 268.17 Td (0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 575.65 268.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 649.65 268.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 721.15 268.17 Td (0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 254.07 Td (Issuance of common stock under share based) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 244.07 Td (compensation plan and shares withheld to cover tax) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 234.12 Td (withholding requirements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 236.17 Td (0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.65 236.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 236.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 505.80 236.22 Td (\(5.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 521.65 236.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 575.65 236.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 649.65 236.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 717.80 236.17 Td (\(5.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 733.65 236.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 221.17 Td (Equity-based compensation) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.65 221.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.65 221.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 221.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 504.15 221.17 Td (17.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 575.65 221.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 649.65 221.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 716.15 221.17 Td (17.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 206.17 Td (Balance at March 31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.15 206.17 Td (61.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 381.15 206.17 Td (0.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 206.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 491.65 206.17 Td (1,224.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 559.80 206.17 Td (\(270.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 585.65 206.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 638.80 206.17 Td (\(39.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 659.65 206.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 711.15 206.17 Td (915.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 191.17 Td (Net loss) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.65 191.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.65 191.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 191.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 511.65 191.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 564.80 191.17 Td (\(97.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 585.65 191.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 649.65 191.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 712.80 191.17 Td (\(97.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 733.65 191.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 176.17 Td (Foreign currency translation adjustment) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.65 176.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.65 176.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 176.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 511.65 176.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 575.65 176.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 638.80 176.17 Td (\(14.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 659.65 176.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 712.80 176.17 Td (\(14.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 733.65 176.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 161.17 Td (Purchase of treasury stock) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.65 161.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.65 161.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 161.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 511.65 161.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 575.65 161.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 649.65 161.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 723.65 161.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 146.17 Td (Retirement of treasury stock) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.65 146.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.65 146.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 146.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 511.65 146.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 575.65 146.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 649.65 146.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 723.65 146.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 131.17 Td (Restricted stock unit dividend equivalents) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.65 131.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.65 131.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 131.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 511.65 131.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 575.65 131.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 649.65 131.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 723.65 131.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 117.07 Td (Issuance of common stock under share based) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 107.07 Td (compensation plan and shares withheld to cover tax) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 97.12 Td (withholding requirements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 99.17 Td (0.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.65 99.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 99.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 505.80 99.22 Td (\(7.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 521.65 99.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 575.65 99.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 649.65 99.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 717.80 99.17 Td (\(7.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 733.65 99.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 84.17 Td (Equity-based compensation) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.65 84.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.65 84.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 84.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 509.15 84.17 Td (8.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 575.65 84.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 649.65 84.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 721.15 84.17 Td (8.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 69.17 Td (Balance at March 31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.15 69.17 Td (61.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 340.00 69.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 381.15 69.17 Td (0.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 404.00 69.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.65 69.17 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 468.00 69.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 491.65 69.17 Td (1,225.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.00 69.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 559.80 69.17 Td (\(367.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 585.65 69.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 596.00 69.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 638.80 69.17 Td (\(54.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 659.65 69.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 670.00 69.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 711.15 69.17 Td (804.0) Tj ET Q BT /F1 10.00 Tf ET endstream endobj 143 0 obj <> endobj 144 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 213.20 760.75 Td (Notes to Consolidated Financial Statements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.15 30.60 Td (- 66 -) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (1) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 59.00 719.10 Td (. BASIS OF) Tj ET Q q 0 0 0 rg BT 108.92 719.10 Td ( PRESENT) Tj ET Q q 0 0 0 rg BT 156.80 719.10 Td (A) Tj ET Q q 0 0 0 rg BT 163.28 719.10 Td (TION ) Tj ET Q q 0 0 0 rg BT 190.79 719.10 Td (AND SUMMAR) Tj ET Q q 0 0 0 rg BT 260.71 719.10 Td (Y) Tj ET Q q 0 0 0 rg BT 267.56 719.10 Td ( OF) Tj ET Q q 0 0 0 rg BT 283.58 719.10 Td ( SIGNIFICANT) Tj ET Q q 0 0 0 rg BT 352.57 719.10 Td ( ) Tj ET Q q 0 0 0 rg BT 354.52 719.10 Td (ACCOUNTING POLICIES) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 695.10 Td (Description ) Tj ET Q q 0 0 0 rg BT 123.94 695.10 Td (of ) Tj ET Q q 0 0 0 rg BT 134.77 695.10 Td (Business ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 677.10 Td (Cengage Learning Holdings II, Inc., together with its consolidated subsidiaries \(Cengage or the Company\) is a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 665.10 Td (leading education and technology company built for learners, serving the higher education, school, professional, library and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 653.10 Td (workforce training markets worldwide. ) Tj ET Q q 0 0 0 rg BT 212.94 653.10 Td (The Company is a publisher of course materials in the United States higher education ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 641.10 Td (market, with strong positions across all major disciplines. Increasingly) Tj ET Q q 0 0 0 rg BT 335.52 641.10 Td (, the Company is expanding its of) Tj ET Q q 0 0 0 rg BT 470.04 641.10 Td (ferings in technology ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 629.10 Td (and academic services, including digital homework solutions and support services for use of its digital products, in response ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 617.10 Td (to industry demand for more fully integrated solutions. In addition, operating under its Gale brand, the Company is a leading ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 605.10 Td (global provider of library reference materials with a vast collection of primary source content.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 584.10 Td (Basis ) Tj ET Q q 0 0 0 rg BT 96.73 584.10 Td (of ) Tj ET Q q 0 0 0 rg BT 107.56 584.10 Td (Pr) Tj ET Q q 0 0 0 rg BT 117.93 584.10 Td (esentation) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 566.10 Td (The Company prepares its financial statements and related disclosures in conformity with accounting principles ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 554.10 Td (generally accepted in the United States of ) Tj ET Q q 0 0 0 rg BT 222.55 554.10 Td (America \(GAAP\). ) Tj ET Q q 0 0 0 rg BT 307.06 554.10 Td (The consolidated financial statements include the accounts of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 542.10 Td (Cengage and its majority and wholly-owned subsidiaries. ) Tj ET Q q 0 0 0 rg BT 285.63 542.10 Td (All intercompany accounts and transactions have been eliminated. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 521.10 Td (Use of Estimates) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 500.10 Td (The preparation of financial statements in conformity with GAAP) Tj ET Q q 0 0 0 rg BT 335.45 500.10 Td ( requires management to make estimates and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 488.10 Td (assumptions that af) Tj ET Q q 0 0 0 rg BT 131.03 488.10 Td (fect the amounts reported in these consolidated financial statements and accompanying notes. ) Tj ET Q q 0 0 0 rg BT 507.30 488.10 Td (Although ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 476.10 Td (these estimates are based on management) Tj ET Q q 0 0 0 rg BT 223.10 476.10 Td (s best knowledge of current events and actions that the Company may undertake in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 464.10 Td (the future, actual results could dif) Tj ET Q q 0 0 0 rg BT 188.22 464.10 Td (fer from those estimates. ) Tj ET Q q 0 0 0 rg BT 289.40 464.10 Td (These estimates include, but are not limited to, reserves for sales ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 452.10 Td (returns and inventory obsolescence, the allowance for doubtful accounts, deferred tax assets and liabilities, the valuation ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 440.10 Td (allowances for deferred tax assets, operational restructuring and other char) Tj ET Q q 0 0 0 rg BT 352.02 440.10 Td (ges, legal and tax contingencies, purchase ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 428.10 Td (accounting and equity-based compensation, as well as future cash flows and fair values used in the assessment of the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 416.10 Td (realizability of long-lived assets, goodwill and identifiable intangible assets.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 395.10 Td (Seasonality and Comparability) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 374.10 Td (The Company) Tj ET Q q 0 0 0 rg BT 131.71 374.10 Td (s revenues, operating profit and operating cash flows are impacted by the inherent seasonality of the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 362.10 Td (academic calendar) Tj ET Q q 0 0 0 rg BT 127.56 362.10 Td (. ) Tj ET Q q 0 0 0 rg BT 132.38 362.10 Td (This seasonality af) Tj ET Q q 0 0 0 rg BT 207.18 362.10 Td (fects the Company) Tj ET Q q 0 0 0 rg BT 284.94 362.10 Td (s working capital requirements and hence its overall financing ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 350.10 Td (needs. For example, the Company typically incurs a net cash deficit from all of its activities in the first and fourth fiscal ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 338.10 Td (quarters of the fiscal year) Tj ET Q q 0 0 0 rg BT 155.06 338.10 Td (. In addition, changes in customer ordering patterns may impact the comparison of the Company) Tj ET Q q 0 0 0 rg BT 543.85 338.10 Td (s ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 326.10 Td (results in a quarter with the same quarter of the previous year) Tj ET Q q 0 0 0 rg BT 298.79 326.10 Td (, or in a fiscal year with the prior fiscal year) Tj ET Q q 0 0 0 rg BT 473.59 326.10 Td (, where its ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 314.10 Td (customers may shift the timing of material orders for a number of reasons, including, but not limited to, changes in academic ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 302.10 Td (semester start dates, changes in inventory management practices, and a shift in customer base driven by an increase in direct ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 290.10 Td (to student subscription products. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 272.10 Td (As the Company continues to migrate its service of) Tj ET Q q 0 0 0 rg BT 276.78 272.10 Td (ferings towards hosted digital solutions that are delivered over a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 260.10 Td (period of time, the associated revenues will be recognized ratably over the applicable subscription period, with amounts ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 248.10 Td (billed in excess of revenues recognized reflected as deferred revenue. ) Tj ET Q q 0 0 0 rg BT 333.95 248.10 Td (This represents a change from traditional print products ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 236.10 Td (where revenues are typically recognized upon shipment of the material to the customer) Tj ET Q q 0 0 0 rg BT 401.09 236.10 Td (. Reported revenues will shift from ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 224.10 Td (being driven by sales in the same period to deferred recognition as revenues attributable to hosted digital solutions are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 212.10 Td (recognized in subsequent periods. Deferred revenue represents amounts billed in advance to customers that will be ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 200.10 Td (recognized as revenues in subsequent periods as products and services are delivered to customers. ) Tj ET Q q 0 0 0 rg BT 447.85 200.10 Td (The current portion of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 188.10 Td (deferred revenue was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 142.00 188.10 Td ($182.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 200.89 188.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 220.33 188.10 Td ($178.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 279.22 188.10 Td ( as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 303.38 188.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 366.98 188.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 386.42 188.10 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 406.42 188.10 Td (, respectively) Tj ET Q q 0 0 0 rg BT 459.08 188.10 Td (, and the non-current ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 176.10 Td (portion of deferred revenue was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 184.22 176.10 Td ($32.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 238.11 176.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 257.55 176.10 Td ($30.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 311.44 176.10 Td ( as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 335.60 176.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 399.20 176.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 418.64 176.10 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 438.64 176.10 Td (, respectively) Tj ET Q q 0 0 0 rg BT 491.30 176.10 Td (.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 155.10 Td (Summary of Significant ) Tj ET Q q 0 0 0 rg BT 175.62 155.10 Td (Accounting Policies) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 134.10 Td (Revenue Recognition: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 170.60 134.10 Td (The Company delivers digital, print and hybrid educational solutions for universities, students, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 122.10 Td (professors, libraries, professionals, and corporations around the world. ) Tj ET Q q 0 0 0 rg BT 338.19 122.10 Td (These solutions are delivered through specialized ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 110.10 Td (content, applications and services. ) Tj ET Q q 0 0 0 rg BT 192.85 110.10 Td (A) Tj ET Q q 0 0 0 rg BT 199.52 110.10 Td ( significant portion of the Company) Tj ET Q q 0 0 0 rg BT 345.33 110.10 Td (s revenues is derived from sales of digital solutions, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 98.10 Td (including digital versions of its print products. ) Tj ET Q q 0 0 0 rg BT 241.58 98.10 Td (The Company recognizes revenues when all of the following four criteria are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 86.10 Td (met:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 68.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 68.10 Td (Persuasive evidence of an arrangement exists,) Tj ET Q endstream endobj 145 0 obj <> endobj 146 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 213.20 760.75 Td (Notes to Consolidated Financial Statements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.15 30.60 Td (- 67 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 731.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 731.10 Td (Delivery has occurred or services have been rendered,) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 713.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 713.10 Td (The price to the buyer is fixed or determinable, and) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 695.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 695.10 Td (Collectability is reasonably assured.) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 72.00 677.10 Td (Digital Content) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 143.39 677.10 Td (Revenue from sales of digital content without any future service obligations for the Company is ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 665.10 Td (recognized upon activation. Revenue from sales of digital solutions that contain future service obligations by the Company is ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 653.10 Td (primarily deferred and recognized ratably over the appropriate period. Incremental costs that are directly related to the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 641.10 Td (deferred digital revenues are deferred and amortized over the subscription period. ) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 72.00 623.10 Td (Print and Other Materials) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 186.17 623.10 Td (The Company recognizes revenues from the sale of print and other materials, less estimated ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 611.10 Td (returns, when the product is delivered and title, including the risks and rewards of ownership, passes to the customer) Tj ET Q q 0 0 0 rg BT 519.17 611.10 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 599.10 Td (Amounts billed to customers for shipping and handling are classified as revenues.) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 72.00 581.10 Td (Subscription-Based Pr) Tj ET Q q 0 0 0 rg BT 162.45 581.10 Td (oducts) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 197.45 581.10 Td (The Company recognizes revenues from the sale of subscription-based products, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 569.10 Td (including hosted digital solutions, ratably over the term of the subscription. Subscription proceeds received or receivable in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 557.10 Td (advance of the delivery of services or publications are included in deferred revenue. Incremental costs that are directly related ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 545.10 Td (to the subscription revenues are deferred and amortized over the subscription period.) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 72.00 527.10 Td (Multiple Element ) Tj ET Q q 0 0 0 rg BT 143.46 527.10 Td (Arrangements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 209.02 527.10 Td (When a sales arrangement requires the delivery of more than one product or service, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 515.10 Td (the individual elements are accounted for separately) Tj ET Q q 0 0 0 rg BT 261.59 515.10 Td (, if applicable criteria are met. Specifically) Tj ET Q q 0 0 0 rg BT 431.41 515.10 Td (, the revenues are allocated to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 503.10 Td (each element that qualifies as a unit of accounting based on the relative selling price of each element. ) Tj ET Q q 0 0 0 rg BT 461.15 503.10 Td (The amount allocated ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 491.10 Td (to each unit is then recognized when each unit is delivered, provided that all other relevant revenue recognition criteria are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 479.10 Td (met with respect to that unit.) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 72.00 461.10 Td (Rental Revenue ) Tj ET Q q 0 0 0 rg BT 136.79 461.10 Td (Arrangements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 202.34 461.10 Td (The Company enters into rental and rental revenue share arrangements, including rentals ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 449.10 Td (of consigned inventory of printed products. ) Tj ET Q q 0 0 0 rg BT 229.62 449.10 Td (The Company records rental revenue, or its share of rental revenue, when it is ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 437.10 Td (earned, provided that all revenue recognition criteria are met. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 419.10 Td (Advertising Costs: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 156.17 419.10 Td (Costs incurred for producing and communicating advertising are expensed when incurred. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 407.10 Td (Advertising expenses, which include the cost of complimentary print products provided to professors in advance of a title ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 395.10 Td (release, amounted to the following:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 340.5 370.6 m 410.5 370.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 410.5 370.6 m 414.5 370.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 414.5 370.6 m 484.5 370.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 484.5 370.6 m 488.5 370.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 488.5 370.6 m 558.5 370.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 340.5 370.6 m 410.5 370.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 340.5 356.6 m 410.5 356.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 410.5 370.6 m 414.5 370.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 414.5 370.6 m 484.5 370.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 414.5 356.6 m 484.5 356.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 484.5 370.6 m 488.5 370.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 488.5 370.6 m 558.5 370.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 488.5 356.6 m 558.5 356.6 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 393.45 375.05 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 417.86 375.05 Td (Y) Tj ET Q q 0 0 0 rg BT 423.36 375.05 Td (ear) Tj ET Q q 0 0 0 rg BT 435.69 375.05 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 482.03 375.05 Td (ch 31,) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 57.00 360.85 Td (\(in millions\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 365.00 361.28 Td (2019) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 439.00 361.28 Td (2018) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 513.00 361.28 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 347.17 Td (Advertising costs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 343.00 347.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.15 347.17 Td (27.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 417.00 347.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.15 347.17 Td (28.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 491.00 347.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.15 347.17 Td (26.6) Tj ET Q BT /F1 10.00 Tf ET BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 325.10 Td (Cash and Cash Equivalents: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 197.87 325.10 Td (Cash consists of cash on deposit in banks. Cash equivalents are generally high-quality) Tj ET Q q 0 0 0 rg BT 541.32 325.10 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 313.10 Td (short-term money market instruments with original maturities of three months or less. Cash equivalents are stated at cost plus ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 301.10 Td (accrued interest, which approximates fair value.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 283.10 Td (Allowance for) Tj ET Q q 0 0 0 rg BT 131.53 283.10 Td ( Doubtful ) Tj ET Q q 0 0 0 rg BT 174.32 283.10 Td (Accounts and Reserve for) Tj ET Q q 0 0 0 rg BT 283.84 283.10 Td ( Sales Returns: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 353.28 283.10 Td (Most of the Company) Tj ET Q q 0 0 0 rg BT 443.56 283.10 Td (s accounts receivable are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 271.10 Td (due from universities, bookstores, wholesalers, libraries, professionals, and corporations. ) Tj ET Q q 0 0 0 rg BT 411.79 271.10 Td (T) Tj ET Q q 0 0 0 rg BT 417.55 271.10 Td (rade accounts receivable are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 259.10 Td (recorded at the invoiced amount and do not bear interest. ) Tj ET Q q 0 0 0 rg BT 283.64 259.10 Td (Accounts receivable are reflected net of a reserve for sales returns ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 247.10 Td (of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 64.83 247.10 Td ($42.8 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 118.72 247.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 138.16 247.10 Td ($70.8 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 192.05 247.10 Td ( on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 207.05 247.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 270.65 247.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 290.09 247.10 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 310.09 247.10 Td (, respectively) Tj ET Q q 0 0 0 rg BT 362.75 247.10 Td (, and an allowance for doubtful accounts of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 235.10 Td ($12.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 107.89 235.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 127.33 235.10 Td ($12.7 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 181.22 235.10 Td ( on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 196.22 235.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 259.82 235.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 279.26 235.10 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 299.26 235.10 Td (, respectively) Tj ET Q q 0 0 0 rg BT 351.92 235.10 Td (. ) Tj ET Q q 0 0 0 rg BT 356.74 235.10 Td (The Company assesses the allowance for doubtful ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 223.10 Td (accounts by evaluating general factors, such as historical sales returns experience, the length of time individual receivables ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 211.10 Td (are past due, historical collection experience and credit evaluations of its customers as well as the economic and competitive ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 199.10 Td (environments. ) Tj ET Q q 0 0 0 rg BT 113.25 199.10 Td (The Company periodically estimates the amount of future returns. ) Tj ET Q q 0 0 0 rg BT 379.66 199.10 Td (The provision for sales returns is reflected ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 187.10 Td (as a reduction to revenues in the consolidated statements of operations. Sales returns are char) Tj ET Q q 0 0 0 rg BT 426.19 187.10 Td (ged against the reserve as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 175.10 Td (products are returned to inventory) Tj ET Q q 0 0 0 rg BT 189.42 175.10 Td (. ) Tj ET Q q 0 0 0 rg BT 193.86 175.10 Td (Accounts receivable losses for bad debt are written-of) Tj ET Q q 0 0 0 rg BT 409.43 175.10 Td (f against the allowance when the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 163.10 Td (receivable is determined to be uncollectible.) Tj ET Q endstream endobj 147 0 obj <> endobj 148 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 213.20 760.75 Td (Notes to Consolidated Financial Statements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.15 30.60 Td (- 68 -) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 731.25 Td (Concentration of Cr) Tj ET Q q 0 0 0 rg BT 158.47 731.25 Td (edit Risk: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 713.25 Td (Customers accounting for 10% or more of the Company's total gross accounts receivable were as follows:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 407.5 678.75 m 480.5 678.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 480.5 678.75 m 484.5 678.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 484.5 678.75 m 557.5 678.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 407.5 660.75 m 480.5 660.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 484.5 660.75 m 557.5 660.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 407.5 660.75 m 480.5 660.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 484.5 660.75 m 557.5 660.75 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 451.30 683.20 Td (As of Mar) Tj ET Q q 0 0 0 rg BT 490.21 683.20 Td (ch 31,) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 74.00 665.00 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 434.50 665.20 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 511.50 665.20 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 74.00 650.42 Td (Customer ) Tj ET Q q 0 0 0 rg BT 115.11 650.42 Td (A) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 460.30 650.42 Td (N/A) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 538.65 650.42 Td (1) Tj ET Q q 0 0 0 rg BT 543.65 650.42 Td (1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 548.65 650.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 74.00 635.42 Td (Customer B) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 460.30 635.42 Td (N/A) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 538.65 635.42 Td (12) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 548.65 635.42 Td (%) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 613.25 Td (N/A) Tj ET Q q 0 0 0 rg BT 88.67 613.25 Td ( - not applicable as % is less than 10%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 595.25 Td (No customer was individually greater than 10% of the Company's consolidated revenues in the periods presented. ) Tj ET Q q 0 0 0 rg BT 529.33 595.25 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 583.25 Td (Company's top three customers accounted for 13%, 14%, and 15% of our consolidated revenues for the fiscal years ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 571.25 Td (2019, 2018, and 2017, respectively) Tj ET Q q 0 0 0 rg BT 193.60 571.25 Td (.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 553.25 Td (Inventories: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 128.66 553.25 Td (Inventories, which are principally comprised of books and other print products, are stated at the lower of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 541.25 Td (cost or net realizable value, with cost determined using the weighted-average method. Reserves are established to reduce the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 529.25 Td (cost of excess and obsolete inventories to their estimated net realizable value and are reflected in cost of revenues in the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 517.25 Td (consolidated statements of operations. ) Tj ET Q q 0 0 0 rg BT 209.06 517.25 Td (The Company periodically assesses the obsolescence reserve by evaluating factors ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 505.25 Td (such as inventory levels, historical sales, and the remaining life of its products. Inventory losses and destroys are written-of) Tj ET Q q 0 0 0 rg BT 546.75 505.25 Td (f ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 493.25 Td (against the reserve. ) Tj ET Q q 0 0 0 rg BT 133.23 493.25 Td (The inventory obsolescence reserve is reported as a reduction of the inventory balance in the consolidated ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 481.25 Td (balance sheets and was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 148.96 481.25 Td ($42.7 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 202.85 481.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 222.29 481.25 Td ($53.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 276.18 481.25 Td ( as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 300.34 481.25 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 363.94 481.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.38 481.25 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 403.38 481.25 Td (, respectively) Tj ET Q q 0 0 0 rg BT 456.04 481.25 Td (.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 463.25 Td (Pr) Tj ET Q q 0 0 0 rg BT 82.37 463.25 Td (operty) Tj ET Q q 0 0 0 rg BT 109.58 463.25 Td (, Equipment and Capitalized Internal-Use Softwar) Tj ET Q q 0 0 0 rg BT 324.97 463.25 Td (e: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 337.74 463.25 Td (Property) Tj ET Q q 0 0 0 rg BT 371.53 463.25 Td (, equipment and capitalized internal-use ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 451.25 Td (software is stated at cost less accumulated depreciation and amortization. Computer hardware under capital lease is stated at ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 439.25 Td (fair value at inception of the lease, less accumulated amortization. Internal-use software includes customer) Tj ET Q q 0 0 0 rg BT 480.02 439.25 Td (-facing platforms ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 427.25 Td (used to deliver certain of the Company) Tj ET Q q 0 0 0 rg BT 212.29 427.25 Td (s digital products and services. Major updates and improvements are capitalized, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 415.25 Td (while maintenance and repairs, which do not extend functionality or useful life, are expensed as incurred.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 397.25 Td (Costs incurred for computer software developed or obtained for internal use are expensed during the preliminary project ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 385.25 Td (stage, which includes conceptual formulation and review of alternatives. Once that stage is complete, the application ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 373.25 Td (development stage, which includes design, coding and testing, begins. Direct internal and external costs incurred during this ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 361.25 Td (stage are capitalized. Internal costs that are capitalized represent amounts paid to employees through wages, salaries and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 349.25 Td (salary-related costs. Capitalization of costs ceases when the software is ready for its intended use and all substantial testing is ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 337.25 Td (completed. Upgrades and enhancements which provide significant added functionality are accounted for in the same manner) Tj ET Q q 0 0 0 rg BT 551.60 337.25 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 325.25 Td (Amortization expense on capitalized internal-use software was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 307.52 325.25 Td ($52.3 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 361.41 325.25 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 366.41 325.25 Td ($53.3 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 420.30 325.25 Td (, and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 442.24 325.25 Td ($62.2 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 496.13 325.25 Td ( for the fiscal ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 313.25 Td (years ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.98 313.25 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 167.57 313.25 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 172.57 313.25 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 192.57 313.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 212.01 313.25 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 232.01 313.25 Td (, respectively) Tj ET Q q 0 0 0 rg BT 284.67 313.25 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 295.25 Td (Upon disposal of property) Tj ET Q q 0 0 0 rg BT 176.06 295.25 Td (, equipment and capitalized internal-use software, the cost of the assets and related ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 283.25 Td (accumulated depreciation are removed from the accounts and the resulting gain or loss is reflected in earnings. ) Tj ET Q q 0 0 0 rg BT 498.65 283.25 Td (The Company ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 271.25 Td (periodically evaluates the depreciation methods, rates, and remaining lives of such assets, which are dependent upon the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 259.25 Td (economic useful life of the asset.) Tj ET Q q 0 0 0 rg BT 187.94 259.25 Td (When the Company determines to abandon an asset that is in use, the Company records ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 247.25 Td (accelerated depreciation through the date of abandonment. ) Tj ET Q q 0 0 0 rg BT 290.38 247.25 Td (When the Company commits to a plan to abandon an asset before ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 235.25 Td (the end of its previously estimated useful life, future depreciation is revised to reflect the use of the asset over its shortened ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 223.25 Td (remaining useful life. ) Tj ET Q q 0 0 0 rg BT 141.75 223.25 Td (An asset to be abandoned is disposed of when it ceases to be used. During fiscal year 2017, the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 211.25 Td (Company recorded accelerated depreciation of approximately $6.3 million associated with the abandonment of certain ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 199.25 Td (internally-developed software projects during the fiscal year) Tj ET Q q 0 0 0 rg BT 294.46 199.25 Td (. During fiscal years 2019 and 2018, the amount of accelerated ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 187.25 Td (depreciation associated with the abandonment of certain projects was inconsequential.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 169.25 Td (Depreciation and amortization is computed on a straight-line basis over the following estimated useful lives:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 143.32 Td (Purchased and internally-developed software) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.00 143.32 Td (310 years) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 129.32 Td (Computer hardware) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.00 129.32 Td (35 years) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 115.32 Td (Buildings and building improvements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.00 115.32 Td (1040 years) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 101.32 Td (Furniture and equipment) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.00 101.32 Td (310 years) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 87.32 Td (Leasehold improvements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.00 87.32 Td (Lesser of lease term or estimated useful life) Tj ET Q BT /F1 10.00 Tf ET endstream endobj 149 0 obj <> endobj 150 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 213.20 760.75 Td (Notes to Consolidated Financial Statements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.15 30.60 Td (- 69 -) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 731.25 Td (Pr) Tj ET Q q 0 0 0 rg BT 82.37 731.25 Td (e-publication Costs: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 172.65 731.25 Td (Pre-publication costs are incurred prior to the publication date of a title or release date of a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.25 Td (product and represent activities associated with product development. ) Tj ET Q q 0 0 0 rg BT 335.12 719.25 Td (These may be performed internally or outsourced to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 707.25 Td (subject matter specialists and include, but are not limited to, editorial review and fact verification, graphic art design and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 695.25 Td (layout and the process of conversion from print to digital media or within various formats of digital media. In addition, pre-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 683.25 Td (publication costs include the cost to procure rights for the use of content which have been developed by third parties and are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 671.25 Td (to be included in the Company) Tj ET Q q 0 0 0 rg BT 179.81 671.25 Td (s products. Costs are capitalized when the title is expected to generate probable future ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 659.25 Td (economic benefits and are amortized upon publication of the title over its estimated operating life cycle, with a higher ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 647.25 Td (proportion of the amortization typically taken in the earlier years. Internal costs that are capitalized represent amounts paid to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 635.25 Td (employees through wages, salaries and salary-related costs. ) Tj ET Q q 0 0 0 rg BT 293.64 635.25 Td (As the Company's business continues to evolve from traditional ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 623.25 Td (print to digital, its pre-publication costs continue to decline. ) Tj ET Q q 0 0 0 rg BT 295.16 623.25 Td (The Company continues to evaluate its product portfolio and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 611.25 Td (make strategic decisions as to which titles to invest in. ) Tj ET Q q 0 0 0 rg BT 273.50 611.25 Td (The cost of putting together the initial edition of a print product and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 599.25 Td (subsequent new editions drives the majority of pre-publication spending. Digital products are continuously updated, which ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 587.25 Td (results in smaller investments. Minor adjustments to digital products are typically expensed and not capitalized.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 569.25 Td (The Company periodically evaluates the amortization methods, rates and remaining amortization periods of such costs, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 557.25 Td (which are dependent on its forecast of sales throughout the operating life cycle of the title.) Tj ET Q q 0 0 0 rg BT 417.31 557.25 Td (The Company also considers ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 545.25 Td (current assessments of the industry) Tj ET Q q 0 0 0 rg BT 193.32 545.25 Td (, industry trends and the projected success of programs. ) Tj ET Q q 0 0 0 rg BT 417.80 545.25 Td (When the Company determines to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 533.25 Td (abandon an asset that is in use, the Company records accelerated amortization through the date of abandonment. ) Tj ET Q q 0 0 0 rg BT 505.05 533.25 Td (When the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 521.25 Td (Company commits to a plan to abandon an asset before the end of its previously estimated useful life, future amortization is ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 509.25 Td (revised to reflect the use of the asset over its shortened remaining useful life. ) Tj ET Q q 0 0 0 rg BT 363.07 509.25 Td (An asset to be abandoned is disposed of when it ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 497.25 Td (ceases to be used. During fiscal years 2019, 2018, and 2017 the Company recorded accelerated amortization of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 485.25 Td (prepublication costs of approximately $2.9 million, $10.4 million, and $17.7 million, respectively) Tj ET Q q 0 0 0 rg BT 444.12 485.25 Td (, associated with the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 473.25 Td (abandonment of certain content projects during the fiscal year) Tj ET Q q 0 0 0 rg BT 301.13 473.25 Td (. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 455.25 Td (Royalties and ) Tj ET Q q 0 0 0 rg BT 132.01 455.25 Td (Author) Tj ET Q q 0 0 0 rg BT 162.94 455.25 Td ( ) Tj ET Q q 0 0 0 rg BT 164.89 455.25 Td (Advances: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 214.33 455.25 Td (The Company pays royalty advances to its authors in connection with future sales. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 443.25 Td (The advances are initially capitalized as assets and subsequently expensed as related revenues are earned or when the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 431.25 Td (Company determines future recovery is not probable. ) Tj ET Q q 0 0 0 rg BT 269.49 431.25 Td (Advances are expensed at the contracted royalty rate and such expenses ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 419.25 Td (are recognized as a component of cost of revenues on the consolidated statements of operations as revenues from the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 407.25 Td (associated products or services are recognized.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 389.25 Td (As part of the ongoing assessment of recoverability) Tj ET Q q 0 0 0 rg BT 277.13 389.25 Td (, the Company considers the age of the content since publication. ) Tj ET Q q 0 0 0 rg BT 539.93 389.25 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 377.25 Td (longer the unearned portion of the advance remains outstanding, the less likely it is that the Company will recover the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 365.25 Td (advance through the sale of the publication. ) Tj ET Q q 0 0 0 rg BT 230.98 365.25 Td (The Company considers future sales projections for new authors and prior sales ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 353.25 Td (history for recurring authors and monitors the projection of future sales based on the current environment and the author) Tj ET Q q 0 0 0 rg BT 535.34 353.25 Td () Tj ET Q q 0 0 0 rg BT 538.12 353.25 Td (s ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 341.25 Td (ability to meet his or her contractual obligations. Based on this information, the portion of any advance that the Company ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 329.25 Td (believes to be not recoverable is expensed.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 311.25 Td (Identifiable Intangible ) Tj ET Q q 0 0 0 rg BT 169.80 311.25 Td (Assets: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 204.79 311.25 Td (Upon acquisition, identifiable intangible assets are recorded at fair value.Identifiable ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 299.25 Td (intangible assets with finite lives are amortized over their estimated useful lives on a straight-line basis. ) Tj ET Q q 0 0 0 rg BT 470.09 299.25 Td (The Company ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 287.25 Td (periodically evaluates the amortization methods, rates, and remaining amortization periods of the assets, which are dependent ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 275.25 Td (upon the economic useful life of the asset.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 257.25 Td (Amortization is computed on a straight-line basis over the following estimated useful lives:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 231.32 Td (T) Tj ET Q q 0 0 0 rg BT 61.93 231.32 Td (rademarks and tradenames) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.00 231.32 Td (815 years) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 217.32 Td (Copyrights) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.00 217.32 Td (324 years) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 203.32 Td (Customer relationships) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.00 203.32 Td (1420 years) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 189.32 Td (T) Tj ET Q q 0 0 0 rg BT 61.76 189.32 Td (echnology) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.00 189.32 Td (48 years) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 175.32 Td (Author/content rights) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.00 175.32 Td (525 years) Tj ET Q BT /F1 10.00 Tf ET BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 153.25 Td (Goodwill: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 116.73 153.25 Td ( Goodwill represents the excess of the Company) Tj ET Q q 0 0 0 rg BT 313.07 153.25 Td (s reor) Tj ET Q q 0 0 0 rg BT 335.38 153.25 Td (ganization value over the fair value of identifiable ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 141.25 Td (tangible and intangible assets upon emer) Tj ET Q q 0 0 0 rg BT 216.28 141.25 Td (gence from Chapter 1) Tj ET Q q 0 0 0 rg BT 302.81 141.25 Td (1 of the United States Bankruptcy Code \(Chapter 1) Tj ET Q q 0 0 0 rg BT 511.28 141.25 Td (1\) on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 129.25 Td (March 31, 2014 \(the Ef) Tj ET Q q 0 0 0 rg BT 151.84 129.25 Td (fective Date\), as well as the excess purchase price and related costs over the fair value of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 117.25 Td (identifiable assets acquired and liabilities assumed in a business combination. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 99.25 Td (The Company tests the carrying value of goodwill for impairment at a reporting unit level, annually in the fourth quarter ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 87.25 Td (of each fiscal year) Tj ET Q q 0 0 0 rg BT 126.61 87.25 Td (, or whenever an event occurs or circumstances change that would more likely than not reduce the fair ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 75.25 Td (value of a reporting unit below its carrying amount.) Tj ET Q endstream endobj 151 0 obj <> endobj 152 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 213.20 760.75 Td (Notes to Consolidated Financial Statements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.15 30.60 Td (- 70 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 731.10 Td (Under certain circumstances, the Company may elect to first assess qualitative factors to determine whether it is ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (necessary to perform the two-step quantitative goodwill impairment test. For reporting units in which the qualitative ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 707.10 Td (assessment indicates it is more likely than not that the fair value is more than its carrying value, the Company would not be ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 695.10 Td (required to perform further quantitative goodwill impairment testing.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 677.10 Td (For impairment tests performed after January 1, 2017, the Company early adopted the guidance issued in May 2017 by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 665.10 Td (the F) Tj ET Q q 0 0 0 rg BT 73.54 665.10 Td (ASB, which simplifies accounting for goodwill impairment.) Tj ET Q q 0 0 0 rg BT 316.38 665.10 Td (The guidance removes the second step of the goodwill ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 653.10 Td (impairment test, which requires a hypothetical purchase price allocation. ) Tj ET Q q 0 0 0 rg BT 346.40 653.10 Td (A) Tj ET Q q 0 0 0 rg BT 353.07 653.10 Td ( goodwill impairment will now be the amount by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 641.10 Td (which a reporting unit) Tj ET Q q 0 0 0 rg BT 145.37 641.10 Td (s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. See Note ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 529.96 641.10 Td (7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 534.96 641.10 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 629.10 Td (Goodwill, for further information related to the Company) Tj ET Q q 0 0 0 rg BT 295.60 629.10 Td (s goodwill and impairment testing.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 611.10 Td (Impairment of Long-Lived ) Tj ET Q q 0 0 0 rg BT 188.95 611.10 Td (Assets: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 223.94 611.10 Td (The Company evaluates long-lived assets for impairment whenever events or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 599.10 Td (changes in circumstances indicate that the carrying amounts may not be recoverable. ) Tj ET Q q 0 0 0 rg BT 395.07 599.10 Td (The Company reviews its long-lived ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 587.10 Td (assets for impairment at the lowest level for which identifiable cash flows are independent of the cash flows of other groups ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 575.10 Td (of assets and liabilities.) Tj ET Q q 0 0 0 rg BT 149.63 575.10 Td (The initial test for impairment of long-lived assets held for use is a recoverability test that compares ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 563.10 Td (the asset) Tj ET Q q 0 0 0 rg BT 90.93 563.10 Td (s carrying value with the sum of undiscounted cash flows related to that reporting unit.If the carrying value is ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 551.10 Td (greater than the undiscounted cash flows, impairment is recorded based on estimated fair value. Individual long-lived assets ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 539.10 Td (are impaired proportionately) Tj ET Q q 0 0 0 rg BT 167.75 539.10 Td (, limited to their respective carrying values.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 521.10 Td (Investments in ) Tj ET Q q 0 0 0 rg BT 136.45 521.10 Td (Affiliates: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 183.66 521.10 Td (Investments in business entities in which the Company does not have control, but in which it ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 509.10 Td (has the ability to exercise significant influence over operating and financial policies \(generally 20% to 50% ownership of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 497.10 Td (voting equity\), are accounted for using the equity method of accounting. Under the equity method, investments are initially ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 485.10 Td (recorded at cost and the carrying amounts are adjusted to reflect the Company) Tj ET Q q 0 0 0 rg BT 368.88 485.10 Td (s share of net earnings or losses of the investee ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 473.10 Td (companies, and are reduced by distributions received. Investments in business entities in which the Company has significant ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 461.10 Td (influence over operating and financial policies, but its investment is not in common stock or in-substance common stock, are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 449.10 Td (accounted for using the cost method of accounting. ) Tj ET Q q 0 0 0 rg BT 260.70 449.10 Td (When the estimated fair values of investments fall below their carrying ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 437.10 Td (values, the investments are written down if such declines are considered to be other than temporary) Tj ET Q q 0 0 0 rg BT 450.44 437.10 Td (. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 419.10 Td (Operational Restructuring and Other) Tj ET Q q 0 0 0 rg BT 232.64 419.10 Td ( Charges: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 279.03 419.10 Td (The Company records a liability for significant costs associated with ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 407.10 Td (exit or disposal activities, including lease termination costs, certain employee severance costs associated with formal ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 395.10 Td (restructuring plans, facility closings or other similar activities and related asset impairments, when the liability is incurred. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 383.10 Td (The determination of when the Company accrues for severance and related costs depends on whether the termination benefits ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 371.10 Td (are provided under a one-time benefit arrangement or under an ongoing benefit arrangement. ) Tj ET Q q 0 0 0 rg BT 428.11 371.10 Td (Where the Company has either ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 359.10 Td (a formal severance plan or a practice of consistently providing severance benefits, it recognizes severance costs when they ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 347.10 Td (are both probable and estimable. Costs associated with restructuring actions that include one-time severance benefits are only ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 335.10 Td (recorded once a liability has been incurred, including when management with the proper level of authority has committed to a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 323.10 Td (restructuring plan and the plan has been communicated to employees. ) Tj ET Q q 0 0 0 rg BT 335.12 323.10 Td (These char) Tj ET Q q 0 0 0 rg BT 378.52 323.10 Td (ges are included in operational restructuring ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 311.10 Td (and other char) Tj ET Q q 0 0 0 rg BT 111.01 311.10 Td (ges on the consolidated statements of operations. Other char) Tj ET Q q 0 0 0 rg BT 351.59 311.10 Td (ges include knowledge transfer costs and business ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 299.10 Td (process reengineering consulting costs that are directly related to the restructuring initiatives and are expensed as incurred. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 281.10 Td (Reorganization Items:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 167.26 281.10 Td ( Reor) Tj ET Q q 0 0 0 rg BT 191.52 281.10 Td (ganization items represent expense or income amounts that were directly related to the plan ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 269.10 Td (and process of restructuring under Chapter 1) Tj ET Q q 0 0 0 rg BT 231.91 269.10 Td (1, and were separately disclosed as reor) Tj ET Q q 0 0 0 rg BT 390.27 269.10 Td (ganization items, net, on the consolidated ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 257.10 Td (statements of operations. Prior to fiscal years 2019 and 2018 reor) Tj ET Q q 0 0 0 rg BT 314.59 257.10 Td (ganization items incurred during the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 245.10 Td (March 31, 2017 were ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 142.03 245.10 Td ($0.4 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 190.92 245.10 Td ( and consisted of professional and administrative fees associated with the Company) Tj ET Q q 0 0 0 rg BT 527.78 245.10 Td (s ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 233.10 Td (Chapter 1) Tj ET Q q 0 0 0 rg BT 92.78 233.10 Td (1 reor) Tj ET Q q 0 0 0 rg BT 116.20 233.10 Td (ganization ef) Tj ET Q q 0 0 0 rg BT 167.94 233.10 Td (forts. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 215.10 Td (Legal Contingencies: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 164.22 215.10 Td ( From time to time, the Company may become involved in various claims, disputes and legal or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 203.10 Td (regulatory proceedings that arise in the ordinary course of business and relate to contractual and other obligations. ) Tj ET Q q 0 0 0 rg BT 512.56 203.10 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 191.10 Td (Company assesses its potential contingent and other liabilities by analyzing its claims, disputes and legal and regulatory ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 179.10 Td (matters using all available information, and develops its views on estimated losses in consultation with its legal and other ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 167.10 Td (advisors. ) Tj ET Q q 0 0 0 rg BT 92.15 167.10 Td (The Company determines whether a loss from a contingency should be accrued by assessing whether a loss is ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 155.10 Td (deemed probable and can be reasonably estimated. If the contingency is not probable or cannot be reasonably estimated, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 143.10 Td (disclosure of the contingency shall be made when there is at least a reasonable possibility that a material loss may be ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 131.10 Td (incurred. See Note ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 131.19 131.10 Td (18) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 141.19 131.10 Td (, Commitments and Contingencies, for further information. Proceeds from legal settlements are gain ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 119.10 Td (contingencies and are recognized in the income statement when all contingencies have been resolved. ) Tj ET Q q 0 0 0 rg BT 462.45 119.10 Td (As such, gains from ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 107.10 Td (legal settlements are recorded once they are received.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 89.10 Td (Fair) Tj ET Q q 0 0 0 rg BT 90.14 89.10 Td ( ) Tj ET Q q 0 0 0 rg BT 92.46 89.10 Td (V) Tj ET Q q 0 0 0 rg BT 98.77 89.10 Td (alue Measur) Tj ET Q q 0 0 0 rg BT 151.63 89.10 Td (ements: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 189.95 89.10 Td (Fair value is determined based on the exchange price that would be received for an asset or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 77.10 Td (paid to transfer a liability \(an exit price\) in the principal market for the asset or liability in an orderly transaction between ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 65.10 Td (market participants. ) Tj ET Q q 0 0 0 rg BT 135.36 65.10 Td (Authoritative guidance specifies a hierarchy of valuation techniques based upon whether the inputs to ) Tj ET Q endstream endobj 153 0 obj <> endobj 154 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 213.20 760.75 Td (Notes to Consolidated Financial Statements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.15 30.60 Td (- 71 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 731.10 Td (those valuation techniques reflect assumptions other market participants would use based upon market data obtained from ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (independent sources \(observable inputs\) or reflect the Company) Tj ET Q q 0 0 0 rg BT 312.53 719.10 Td (s own assumptions of market participant valuation ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 707.10 Td (\(unobservable inputs\). ) Tj ET Q q 0 0 0 rg BT 145.74 707.10 Td (The fair value hierarchy consists of three levels:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 689.10 Td (Level 1 Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 677.10 Td (unrestricted assets or liabilities.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 659.10 Td (Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 647.10 Td (in markets that are not active, or inputs that are observable or can be corroborated by observable market data for ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 635.10 Td (substantially the full term of the assets or liabilities.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 617.10 Td (Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 605.10 Td (of the assets or liabilities.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 587.10 Td (The authoritative guidance requires the use of observable market data if such data is available without undue cost and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 575.10 Td (ef) Tj ET Q q 0 0 0 rg BT 61.59 575.10 Td (fort. ) Tj ET Q q 0 0 0 rg BT 80.85 575.10 Td (When available, the Company uses unadjusted quoted market prices to measure fair value and classify such items ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 563.10 Td (within Level 1. If quoted market prices are not available, fair value is based upon internally developed models that use, where ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 551.10 Td (possible, current market-based or independently-sourced market parameters, such as interest and currency rates and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 539.10 Td (comparable transactions. Items valued using internally generated models are classified according to the lowest level input or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 527.10 Td (value driver that is significant to the valuation. ) Tj ET Q q 0 0 0 rg BT 242.94 527.10 Td (Thus, items may be classified in Level 3 even though there may be inputs that ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 515.10 Td (are readily observable. If quoted market prices are not available, the valuation model used generally depends on the specific ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 503.10 Td (asset or liability being valued.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 485.10 Td (Some assets and liabilities are required to be recorded at fair value on a recurring basis, while other assets and liabilities ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 473.10 Td (are recorded at fair value on a nonrecurring basis. ) Tj ET Q q 0 0 0 rg BT 254.83 473.10 Td (The Company records the fair value of long-lived assets, goodwill and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 461.10 Td (other intangible assets on a nonrecurring basis. ) Tj ET Q q 0 0 0 rg BT 243.77 461.10 Td (The carrying amounts of current financial instruments, which include ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 449.10 Td (accounts receivable and accounts payable, approximate their fair values due to the short-term nature of these instruments.) Tj ET Q q 0 0 0 rg BT 542.25 449.10 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 437.10 Td (fair value of long-term debt is determined based upon either the most recent quoted market prices, the average bid and ask ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 425.10 Td (price or the most recent trade price, provided it was within the prior five trading days, of the Company) Tj ET Q q 0 0 0 rg BT 466.66 425.10 Td (s debt securities or the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 413.10 Td (use of comparable debt prices of similarly rated public companies. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 395.10 Td (The Company reviews the carrying value of long-lived assets, goodwill and other intangible assets on an annual basis or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 383.10 Td (whenever events or changes in circumstances indicate the fair value of the asset is below its carrying amount. Fair value is ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 371.10 Td (determined using various valuation techniques, including discounted cash flows, market-related multiples, and recently ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 359.10 Td (reported transactions for similar assets in the market place.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 341.10 Td (See Note ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 110.88 341.10 Td (15) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 120.88 341.10 Td (, Fair ) Tj ET Q q 0 0 0 rg BT 148.74 341.10 Td (V) Tj ET Q q 0 0 0 rg BT 154.86 341.10 Td (alue Measurements, for additional detail on the fair value hierarchy) Tj ET Q q 0 0 0 rg BT 427.98 341.10 Td (.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 323.10 Td (Equity-Based Compensation Plan: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 224.25 323.10 Td (The Company accounts for awards granted under its equity-based compensation ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 311.10 Td (plan using the grant date fair value recognition provisions of authoritative guidance for share-based payments. See Note ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.07 311.10 Td (13) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.07 311.10 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 299.10 Td (Equity-Based Compensation, for further information related to the plans and awards. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 281.10 Td (For) Tj ET Q q 0 0 0 rg BT 87.37 281.10 Td (eign Curr) Tj ET Q q 0 0 0 rg BT 129.12 281.10 Td (ency: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 156.89 281.10 Td (The functional currencies of certain foreign operations have been determined to be the respective ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 269.10 Td (local currencies of those foreign locations. Balance sheet accounts of these foreign operations are translated from foreign ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 257.10 Td (currencies into the reporting currency \(U.S. dollar\) at period-end exchange rates, while revenues and expenses are translated ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 245.10 Td (at average exchange rates during the period. ) Tj ET Q q 0 0 0 rg BT 232.62 245.10 Td (T) Tj ET Q q 0 0 0 rg BT 238.38 245.10 Td (ranslation adjustments resulting from dif) Tj ET Q q 0 0 0 rg BT 400.95 245.10 Td (ferences between period-end and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 233.10 Td (average exchange rates when translating functional currency financial statements into the reporting currency are recorded as a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 221.10 Td (separate component of accumulated other comprehensive loss. Remeasurement adjustments are recorded in other income ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 209.10 Td (\(expense\), net, below operating income \(loss\) when the U.S. dollar) Tj ET Q q 0 0 0 rg BT 321.03 209.10 Td (, and not the local currency) Tj ET Q q 0 0 0 rg BT 429.22 209.10 Td (, is the functional currency) Tj ET Q q 0 0 0 rg BT 535.47 209.10 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 197.10 Td (Currency gains or losses arising from transactions denominated in a currency other than the functional currency are recorded ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 185.10 Td (in other \(expense\) income, net, below operating income \(loss\) and were as follows:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 154.60000000000002 m 409.5 154.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 154.60000000000002 m 413.5 154.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 154.60000000000002 m 483.5 154.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 154.60000000000002 m 487.5 154.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 154.60000000000002 m 557.5 154.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 154.60000000000002 m 409.5 154.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 140.60000000000002 m 409.5 140.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 154.60000000000002 m 413.5 154.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 154.60000000000002 m 483.5 154.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 140.60000000000002 m 483.5 140.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 154.60000000000002 m 487.5 154.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 154.60000000000002 m 557.5 154.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 140.60000000000002 m 557.5 140.60000000000002 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 392.45 159.05 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 416.86 159.05 Td (Y) Tj ET Q q 0 0 0 rg BT 422.36 159.05 Td (ear) Tj ET Q q 0 0 0 rg BT 434.69 159.05 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 481.03 159.05 Td (ch 31,) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 144.85 Td (\(in millions\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 364.00 145.28 Td (2019) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 438.00 145.28 Td (2018) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 512.00 145.28 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 131.17 Td (Foreign currency transaction gains \(losses\), net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 131.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 131.17 Td (2.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 131.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 131.22 Td (\(1.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 131.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 131.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 131.17 Td (2.2) Tj ET Q BT /F1 10.00 Tf ET BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 109.10 Td (T) Tj ET Q q 0 0 0 rg BT 77.75 109.10 Td (axes Collected fr) Tj ET Q q 0 0 0 rg BT 148.66 109.10 Td (om Customers and Remitted to Governmental ) Tj ET Q q 0 0 0 rg BT 348.07 109.10 Td (Agencies: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 391.67 109.10 Td ( ) Tj ET Q q 0 0 0 rg BT 393.99 109.10 Td (The Company records taxes on customer ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 97.10 Td (transactions due to governmental agencies as a receivable and a liability on the consolidated balance sheets.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 79.10 Td (Income ) Tj ET Q q 0 0 0 rg BT 105.98 79.10 Td (T) Tj ET Q q 0 0 0 rg BT 111.73 79.10 Td (axes: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 138.39 79.10 Td (Significant judgment is required in determining the Company) Tj ET Q q 0 0 0 rg BT 387.51 79.10 Td (s annual provision for income taxes and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 67.10 Td (evaluating its income tax positions. ) Tj ET Q q 0 0 0 rg BT 197.69 67.10 Td (The Company) Tj ET Q q 0 0 0 rg BT 257.40 67.10 Td (s tax rates are impacted by the tax laws, regulations and policies in federal, ) Tj ET Q endstream endobj 155 0 obj <> endobj 156 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 213.20 760.75 Td (Notes to Consolidated Financial Statements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.15 30.60 Td (- 72 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 731.10 Td (state and local and international territories where its businesses operate. Changes to these laws and regulations and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (uncertainty generated by the prospect of future tax legislation may also af) Tj ET Q q 0 0 0 rg BT 348.43 719.10 Td (fect the Company) Tj ET Q q 0 0 0 rg BT 422.30 719.10 Td (s income tax positions, in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 707.10 Td (addition to other factors, including its global mix of earnings, acquisitions and dispositions, as well as the tax characteristics ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 695.10 Td (of its income. In determining its income tax provisions on a jurisdiction basis, the Company is required to make judgments on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 683.10 Td (the need to record deferred tax assets and liabilities, including the realizability of deferred tax assets. ) Tj ET Q q 0 0 0 rg BT 458.29 683.10 Td (A) Tj ET Q q 0 0 0 rg BT 464.96 683.10 Td ( valuation allowance ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 671.10 Td (for deferred tax assets is established if it is more likely than not that a deferred tax asset will not be realized. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 653.10 Td (In evaluating uncertain tax positions, the Company makes determinations of the application of complex tax rules, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 641.10 Td (regulations and practices. ) Tj ET Q q 0 0 0 rg BT 158.22 641.10 Td (The Company evaluates its uncertain tax positions quarterly based on many factors including, but ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 629.10 Td (not limited to, new facts, changes in tax law and information received from regulators. ) Tj ET Q q 0 0 0 rg BT 401.95 629.10 Td (A) Tj ET Q q 0 0 0 rg BT 408.62 629.10 Td ( change in any one of these factors ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 617.10 Td (could change the evaluation of an existing uncertain tax position, resulting in the recognition of an additional char) Tj ET Q q 0 0 0 rg BT 509.80 617.10 Td (ge or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 605.10 Td (benefit to the Company) Tj ET Q q 0 0 0 rg BT 150.92 605.10 Td (s income tax provision, sometimes including applicable interest and penalties, and may result in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 593.10 Td (fluctuations in the Company) Tj ET Q q 0 0 0 rg BT 170.37 593.10 Td (s ef) Tj ET Q q 0 0 0 rg BT 184.35 593.10 Td (fective income tax rate. ) Tj ET Q q 0 0 0 rg BT 280.14 593.10 Td (Additionally) Tj ET Q q 0 0 0 rg BT 330.04 593.10 Td (, the Company) Tj ET Q q 0 0 0 rg BT 391.42 593.10 Td (s income tax returns are routinely audited ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 581.10 Td (and settlements of issues raised in these audits sometimes af) Tj ET Q q 0 0 0 rg BT 294.60 581.10 Td (fect its income tax provisions. ) Tj ET Q q 0 0 0 rg BT 417.17 581.10 Td (The resolution of audit issues and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 569.10 Td (income tax positions taken may take extended periods of time due to the length of examinations by tax authorities and the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 557.10 Td (possible extension of statutes of limitations.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 539.10 Td (Accumulated Other) Tj ET Q q 0 0 0 rg BT 156.53 539.10 Td ( Compr) Tj ET Q q 0 0 0 rg BT 189.40 539.10 Td (ehensive \(Loss\) Income: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 296.61 539.10 Td (Accumulated other comprehensive \(loss\) income consisted of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 527.10 Td (cumulative foreign currency translation adjustments at both ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 294.76 527.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 358.36 527.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 377.80 527.10 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 397.80 527.10 Td (.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 509.10 Td (Merger) Tj ET Q q 0 0 0 rg BT 104.01 509.10 Td ( Related Costs: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 173.45 509.10 Td (Mer) Tj ET Q q 0 0 0 rg BT 189.92 509.10 Td (ger related costs are expensed as incurred and were $6.8 million for the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 497.10 Td (March 31, 2019, included in selling, general and administrative expenses on the Consolidated Statements of Operations. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 476.10 Td (New ) Tj ET Q q 0 0 0 rg BT 92.83 476.10 Td (Accounting Standards and ) Tj ET Q q 0 0 0 rg BT 208.70 476.10 Td (Accounting Changes) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 455.10 Td (In ) Tj ET Q q 0 0 0 rg BT 82.28 455.10 Td (August 2018, the Financial ) Tj ET Q q 0 0 0 rg BT 192.55 455.10 Td (Accounting Standards Board \(F) Tj ET Q q 0 0 0 rg BT 323.17 455.10 Td (ASB\) issued guidance on accounting for implementation ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 443.10 Td (costs incurred in a cloud computing arrangement that is a service contract. ) Tj ET Q q 0 0 0 rg BT 353.43 443.10 Td (This update aligns the requirements for ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 431.10 Td (capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 419.10 Td (capitalizing implementation costs incurred to develop or obtain internal-use software \(and hosting arrangements that include ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 407.10 Td (an internal use software license\). ) Tj ET Q q 0 0 0 rg BT 187.65 407.10 Td (The amendments in this update are ef) Tj ET Q q 0 0 0 rg BT 337.42 407.10 Td (fective for fiscal years beginning after December 15, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 395.10 Td (2020 and interim periods within fiscal years beginning after December 15, 2021, with early adoption permitted. ) Tj ET Q q 0 0 0 rg BT 502.86 395.10 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 383.10 Td (Company is evaluating the impact of this update on its consolidated financial position, results of operations and cash flows.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 362.10 Td (In November 2016, the F) Tj ET Q q 0 0 0 rg BT 172.07 362.10 Td (ASB issued guidance on the classification and presentation of restricted cash in the statement of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 350.10 Td (cash flows which requires that a statement of cash flows explain the change during the period in the total of cash, cash ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 338.10 Td (equivalents, and amounts generally described as restricted cash or restricted cash equivalents. ) Tj ET Q q 0 0 0 rg BT 430.35 338.10 Td (The guidance is ef) Tj ET Q q 0 0 0 rg BT 503.75 338.10 Td (fective for ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 326.10 Td (fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 314.10 Td (with early adoption permitted. ) Tj ET Q q 0 0 0 rg BT 177.40 314.10 Td (The adoption of this guidance is not expected to have a material impact on the Company) Tj ET Q q 0 0 0 rg BT 534.24 314.10 Td (s ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 302.10 Td (consolidated cash flows.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 281.10 Td (In ) Tj ET Q q 0 0 0 rg BT 82.28 281.10 Td (August 2016, the F) Tj ET Q q 0 0 0 rg BT 158.21 281.10 Td (ASB issued guidance on the classification of certain cash flow transactions, consisting of the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 269.10 Td (following: debt prepayment or debt extinguishment costs; the settlement of zero-coupon debt instruments; contingent ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 257.10 Td (consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 245.10 Td (the settlement of corporate-owned life insurance policies; distributions received from equity method investees; beneficial ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 233.10 Td (interests in securitization transactions; and separately identifiable cash flows and the application of the predominance ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 221.10 Td (principle. ) Tj ET Q q 0 0 0 rg BT 94.36 221.10 Td (The amendments provide guidance for each of the eight issues for which GAAP) Tj ET Q q 0 0 0 rg BT 414.45 221.10 Td ( guidance was previously unclear ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 209.10 Td (or did not exist, thereby reducing the current and potential future diversity in practice. ) Tj ET Q q 0 0 0 rg BT 399.82 209.10 Td (The guidance is ef) Tj ET Q q 0 0 0 rg BT 473.21 209.10 Td (fective for fiscal ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 197.10 Td (years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019, with ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 185.10 Td (early adoption permitted. ) Tj ET Q q 0 0 0 rg BT 157.12 185.10 Td (The Company is evaluating the impact of this update on its consolidated financial position, results ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 173.10 Td (of operations and cash flows.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 152.10 Td (In June 2016, the F) Tj ET Q q 0 0 0 rg BT 148.20 152.10 Td (ASB issued guidance and an update to add ) Tj ET Q q 0 0 0 rg BT 320.94 152.10 Td (Accounting Standard Codification \(ASC\) ) Tj ET Q q 0 0 0 rg BT 497.94 152.10 Td (T) Tj ET Q q 0 0 0 rg BT 503.35 152.10 Td (opic 326, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 140.10 Td (Credit Losses. ) Tj ET Q q 0 0 0 rg BT 122.41 140.10 Td (There was a subsequent amendment in November 2018 to amend and clarify the initial guidance. ) Tj ET Q q 0 0 0 rg BT 513.22 140.10 Td (T) Tj ET Q q 0 0 0 rg BT 518.63 140.10 Td (opic 326 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 128.10 Td (requires measurement and recognition of expected credit losses for financial assets held. Under this model, entities will be ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 116.10 Td (required to estimate the lifetime expected credit loss on such instruments and record an allowance to of) Tj ET Q q 0 0 0 rg BT 466.46 116.10 Td (fset the amortized cost ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 104.10 Td (basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. ) Tj ET Q q 0 0 0 rg BT 530.60 104.10 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 92.10 Td (guidance is ef) Tj ET Q q 0 0 0 rg BT 109.35 92.10 Td (fective for fiscal years beginning after December 15, 2021, and interim periods within that fiscal year) Tj ET Q q 0 0 0 rg BT 514.63 92.10 Td (, with ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 80.10 Td (early adoption permitted for fiscal years beginning after December 15, 2018. ) Tj ET Q q 0 0 0 rg BT 363.43 80.10 Td (The Company is evaluating the impact of this ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 68.10 Td (update on its consolidated financial statements.) Tj ET Q endstream endobj 157 0 obj <> endobj 158 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 213.20 760.75 Td (Notes to Consolidated Financial Statements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.15 30.60 Td (- 73 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 731.10 Td (In February 2016, the F) Tj ET Q q 0 0 0 rg BT 165.96 731.10 Td (ASB issued an updated standard to add ) Tj ET Q q 0 0 0 rg BT 324.55 731.10 Td (Accounting Standard Codification ) Tj ET Q q 0 0 0 rg BT 463.69 731.10 Td (ASC ) Tj ET Q q 0 0 0 rg BT 485.47 731.10 Td (T) Tj ET Q q 0 0 0 rg BT 490.88 731.10 Td (opic 842, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (Leases, which will replace most of the existing leasing guidance in U.S. GAAP) Tj ET Q q 0 0 0 rg BT 379.94 719.10 Td ( when it becomes ef) Tj ET Q q 0 0 0 rg BT 459.73 719.10 Td (fective. One of the most ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 707.10 Td (significant changes this update will institute is that for all leases the lessees will be required to recognize at the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 695.10 Td (commencement date: a\) a lease liability; and b\) a right-of-use asset. ) Tj ET Q q 0 0 0 rg BT 326.49 695.10 Td (The lease liability represents the lessee) Tj ET Q q 0 0 0 rg BT 485.04 695.10 Td (s obligation to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 683.10 Td (make lease payments and it is measured on a discounted basis. ) Tj ET Q q 0 0 0 rg BT 306.53 683.10 Td (The right-of-use asset represents the lessee) Tj ET Q q 0 0 0 rg BT 480.63 683.10 Td (s right to use, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 671.10 Td (control the use of, the underlying leased asset during the term of the lease. ) Tj ET Q q 0 0 0 rg BT 352.80 671.10 Td (Additionally) Tj ET Q q 0 0 0 rg BT 402.70 671.10 Td (, the guidance requires improved ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 659.10 Td (disclosures to help users of financial statements better understand the nature and magnitude of lessees) Tj ET Q q 0 0 0 rg BT 463.69 659.10 Td ( lease obligations. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 647.10 Td (Entities were required to adopt the new leases standard using a modified retrospective transition method, initially applying ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 635.10 Td (the new leases standard \(subject to specific transition requirements and optional practical expedients\) at the beginning of the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 623.10 Td (earliest period presented in the financial statements. In July 2018, the F) Tj ET Q q 0 0 0 rg BT 338.46 623.10 Td (ASB issued updated guidance, which provided an ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 611.10 Td (additional transition option that allows companies to continue applying the guidance under the current lease standard in the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 599.10 Td (comparative periods presented in the consolidated financial statements. Companies that elect this option would record a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 587.10 Td (cumulative-ef) Tj ET Q q 0 0 0 rg BT 109.35 587.10 Td (fect adjustment to the opening balance of retained earnings on the date of adoption. ) Tj ET Q q 0 0 0 rg BT 444.88 587.10 Td (The amendments in this ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 575.10 Td (update are ef) Tj ET Q q 0 0 0 rg BT 105.45 575.10 Td (fective for the Company for fiscal years beginning after December 15, 2019 and interim periods within fiscal ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 563.10 Td (years beginning after December 15, 2020. ) Tj ET Q q 0 0 0 rg BT 224.31 563.10 Td (The Company is in the process of determining which transition method to apply ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 551.10 Td (and evaluating the impact of this update on its consolidated financial position, balance sheet, results of operations and cash ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 539.10 Td (flows.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 521.10 Td (In May 2014, the F) Tj ET Q q 0 0 0 rg BT 148.20 521.10 Td (ASB issued an update to add ) Tj ET Q q 0 0 0 rg BT 265.41 521.10 Td (ASC ) Tj ET Q q 0 0 0 rg BT 287.18 521.10 Td (T) Tj ET Q q 0 0 0 rg BT 292.59 521.10 Td (opic 606, Revenue from Contracts with Customers, which will ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 509.10 Td (replace most existing revenue recognition guidance in U.S. GAAP) Tj ET Q q 0 0 0 rg BT 319.67 509.10 Td ( when it becomes ef) Tj ET Q q 0 0 0 rg BT 399.46 509.10 Td (fective. ) Tj ET Q q 0 0 0 rg BT 431.49 509.10 Td (The authoritative guidance ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 497.10 Td (provides that an entity should recognize revenues to depict the transfer of promised goods or services to customers in an ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 485.10 Td (amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 473.10 Td (through the application of the following steps:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 455.10 Td ( ) Tj ET Q q 0 0 0 rg BT 86.00 455.10 Td (Step 1: Identify the contract\(s\) with a customer) Tj ET Q q 0 0 0 rg BT 274.00 455.10 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 443.10 Td ( ) Tj ET Q q 0 0 0 rg BT 86.00 443.10 Td (Step 2: Identify the performance obligations in the contract.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 431.10 Td ( ) Tj ET Q q 0 0 0 rg BT 86.00 431.10 Td (Step 3: Determine the transaction price.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 419.10 Td ( ) Tj ET Q q 0 0 0 rg BT 86.00 419.10 Td (Step 4: ) Tj ET Q q 0 0 0 rg BT 116.00 419.10 Td (Allocate the transaction price to the performance obligations in the contract.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 407.10 Td ( ) Tj ET Q q 0 0 0 rg BT 86.00 407.10 Td (Step 5: Recognize revenue when \(or as\) the entity satisfies a performance obligation.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 383.10 Td (Additionally) Tj ET Q q 0 0 0 rg BT 121.90 383.10 Td (, the guidance requires improved disclosures to help users of financial statements better understand the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 371.10 Td (nature, amount, timing, and uncertainty of revenues that are recognized. ) Tj ET Q q 0 0 0 rg BT 344.26 371.10 Td (The amendments in this update are to be applied on a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 359.10 Td (retrospective basis, utilizing one of two dif) Tj ET Q q 0 0 0 rg BT 225.17 359.10 Td (ferent alternatives. Entities can adopt the standard using a full retrospective ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 347.10 Td (approach, which requires statements of comparative prior periods, or modified retrospective approach, in which the standard ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 335.10 Td (is applied to open contracts at the date of adoption. In ) Tj ET Q q 0 0 0 rg BT 270.61 335.10 Td (August 2015, the F) Tj ET Q q 0 0 0 rg BT 346.53 335.10 Td (ASB approved a one year deferral of the ef) Tj ET Q q 0 0 0 rg BT 518.50 335.10 Td (fective ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 323.10 Td (date of the amended revenue recognition guidance. ) Tj ET Q q 0 0 0 rg BT 260.03 323.10 Td (As a result, the amendments in this update are ef) Tj ET Q q 0 0 0 rg BT 454.23 323.10 Td (fective for the Company ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 311.10 Td (in the annual reporting periods beginning after December 15, 2018, and interim periods within annual periods beginning after ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 299.10 Td (December 15, 2019. Early application is permitted, with certain limitations. ) Tj ET Q q 0 0 0 rg BT 358.74 299.10 Td (The Company is evaluating the potential ef) Tj ET Q q 0 0 0 rg BT 531.29 299.10 Td (fect of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 287.10 Td (this new standard on its major revenue streams and contracts with customers, as well as the impact on its consolidated ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 275.10 Td (financial position, results of operations and cash flows. ) Tj ET Q q 0 0 0 rg BT 276.55 275.10 Td (The new standard provides explicit guidance on how to account for ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 263.10 Td (contract modifications, eliminates the cash basis accounting model, requires an estimate of variable consideration, an ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 251.10 Td (assessment of any significant financing components, and provides criteria for assessing whether a performance obligation is ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 239.10 Td (satisfied at a point in time or over time. In addition to impacting the way we recognize revenue, the new standard will also ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 227.10 Td (impact the accounting for direct and incremental commission costs of obtaining contracts. Under the new standard, we will ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 215.10 Td (defer incremental commission costs on contracts greater than one year in duration. ) Tj ET Q q 0 0 0 rg BT 386.20 215.10 Td (W) Tj ET Q q 0 0 0 rg BT 394.84 215.10 Td (e expect to amortize these costs on a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 203.10 Td (straight-line basis over the period of economic benefit. ) Tj ET Q q 0 0 0 rg BT 275.14 203.10 Td (The Company plans to utilize the modified retrospective approach in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 191.10 Td (implementing the new standard.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 167.10 Td (2) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 59.00 167.10 Td (. ) Tj ET Q q 0 0 0 rg BT 63.45 167.10 Td (ACQUISITIONS) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 146.10 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 99.12 146.10 Td (Y) Tj ET Q q 0 0 0 rg BT 105.24 146.10 Td (ear) Tj ET Q q 0 0 0 rg BT 118.93 146.10 Td ( 2017 ) Tj ET Q q 0 0 0 rg BT 143.38 146.10 Td (Acquisition) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 125.10 Td (On September 23, 2016, the Company acquired all of the outstanding equity of ) Tj ET Q q 0 0 0 rg BT 389.99 125.10 Td (Advanced Instructional Systems, Inc. \(d/) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 113.10 Td (b/a W) Tj ET Q q 0 0 0 rg BT 81.79 113.10 Td (ebAssign\), a leading provider of digital learning solutions for higher education based in Raleigh, N.C., for total ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 101.10 Td (consideration of $50.9 million, which consisted of $50.2 million of cash paid at closing and the fair value of the ef) Tj ET Q q 0 0 0 rg BT 511.21 101.10 Td (fective ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 89.10 Td (settlement of an accrued liability and other preexisting contractual obligations. ) Tj ET Q q 0 0 0 rg BT 370.66 89.10 Td (The acquisition of ) Tj ET Q q 0 0 0 rg BT 445.74 89.10 Td (W) Tj ET Q q 0 0 0 rg BT 454.38 89.10 Td (ebAssign strengthens the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 77.10 Td (Company) Tj ET Q q 0 0 0 rg BT 95.67 77.10 Td (s position as an industry leader in science, technology and math, of) Tj ET Q q 0 0 0 rg BT 363.47 77.10 Td (fering three unique platforms for faculty and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 65.10 Td (institutions. ) Tj ET Q endstream endobj 159 0 obj <> endobj 160 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 213.20 760.75 Td (Notes to Consolidated Financial Statements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.15 30.60 Td (- 74 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 731.10 Td (The operating results of ) Tj ET Q q 0 0 0 rg BT 169.57 731.10 Td (W) Tj ET Q q 0 0 0 rg BT 178.21 731.10 Td (ebAssign were included in the operating results of the Company) Tj ET Q q 0 0 0 rg BT 437.87 731.10 Td (s Learning segment from the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (acquisition date and were not material for the fiscal year ended March 31, 2017. ) Tj ET Q q 0 0 0 rg BT 376.48 719.10 Td (The pro forma impact of the acquisition was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 707.10 Td (not significant to the Company) Tj ET Q q 0 0 0 rg BT 180.65 707.10 Td (s results for the fiscal year ended March31, 2017.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 689.10 Td (As a result of the final purchase price allocation, the Company recognized ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 371.06 689.10 Td ($29.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 424.95 689.10 Td ( of goodwill, which was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 677.10 Td (primarily due to the expected syner) Tj ET Q q 0 0 0 rg BT 195.16 677.10 Td (gies of the combined entities and the workforce in place. ) Tj ET Q q 0 0 0 rg BT 424.06 677.10 Td (The transaction was structured as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 665.10 Td (an asset acquisition for tax purposes, therefore, the goodwill created by the transaction is deductible for tax purposes. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 647.10 Td (3) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 59.00 647.10 Td (. INVENT) Tj ET Q q 0 0 0 rg BT 102.72 647.10 Td (ORIES ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 626.10 Td (Inventories consist of the following:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 595.6 m 488.5 595.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 488.5 595.6 m 492.5 595.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 595.6 m 557.5 595.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 581.6 m 488.5 581.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 581.6 m 557.5 581.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 581.6 m 488.5 581.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 581.6 m 557.5 581.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 539.6 m 488.5 539.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 539.6 m 557.5 539.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 539.6 m 488.5 539.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 526.6 m 488.5 526.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 524.6 m 488.5 524.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 539.6 m 557.5 539.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 526.6 m 557.5 526.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 524.6 m 557.5 524.6 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 459.30 600.05 Td (As of Mar) Tj ET Q q 0 0 0 rg BT 498.21 600.05 Td (ch 31,) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 585.85 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 446.50 586.05 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 515.50 586.05 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 572.17 Td (Raw materials) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 426.00 572.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.15 572.17 Td (0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.00 572.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 572.17 Td (0.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 558.17 Td (W) Tj ET Q q 0 0 0 rg BT 65.04 558.17 Td (ork-in-progress) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.15 558.17 Td (0.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 558.17 Td (0.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 544.17 Td (Finished goods) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 544.17 Td (109.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 544.17 Td (1) Tj ET Q q 0 0 0 rg BT 536.15 544.17 Td (16.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 530.17 Td (T) Tj ET Q q 0 0 0 rg BT 61.41 530.17 Td (otal inventories) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 426.00 530.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 530.17 Td (109.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.00 530.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 530.17 Td (1) Tj ET Q q 0 0 0 rg BT 536.15 530.17 Td (16.8) Tj ET Q BT /F1 10.00 Tf ET BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 508.10 Td (4) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 59.00 508.10 Td (. RESTRICTED CASH) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 487.10 Td (During the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 187.79 487.10 Td (March31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 251.38 487.10 Td (, the Company withdrew the remaining $3.4 million of funds from the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 475.10 Td (restricted escrow accounts to complete the final distribution related to the Chapter 1) Tj ET Q q 0 0 0 rg BT 389.07 475.10 Td (1 claims. See Note ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.55 475.10 Td (18) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.55 475.10 Td (, Commitments ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 463.10 Td (and Contingencies.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 445.10 Td (5) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 59.00 445.10 Td (. PROPER) Tj ET Q q 0 0 0 rg BT 104.76 445.10 Td (TY) Tj ET Q q 0 0 0 rg BT 117.73 445.10 Td (, EQUIPMENT) Tj ET Q q 0 0 0 rg BT 184.22 445.10 Td ( ) Tj ET Q q 0 0 0 rg BT 186.17 445.10 Td (AND CAPIT) Tj ET Q q 0 0 0 rg BT 240.70 445.10 Td (ALIZED INTERNAL-USE SOFTW) Tj ET Q q 0 0 0 rg BT 394.63 445.10 Td (ARE) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 424.10 Td (Property) Tj ET Q q 0 0 0 rg BT 105.79 424.10 Td (, ) Tj ET Q q 0 0 0 rg BT 110.79 424.10 Td (equipment ) Tj ET Q q 0 0 0 rg BT 155.50 424.10 Td (and ) Tj ET Q q 0 0 0 rg BT 172.44 424.10 Td (capitalized ) Tj ET Q q 0 0 0 rg BT 218.25 424.10 Td (internal-use ) Tj ET Q q 0 0 0 rg BT 267.95 424.10 Td (software, ) Tj ET Q q 0 0 0 rg BT 307.38 424.10 Td (net ) Tj ET Q q 0 0 0 rg BT 322.09 424.10 Td (consist ) Tj ET Q q 0 0 0 rg BT 352.37 424.10 Td (of ) Tj ET Q q 0 0 0 rg BT 363.20 424.10 Td (the ) Tj ET Q q 0 0 0 rg BT 377.92 424.10 Td (following:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 393.6 m 488.5 393.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 488.5 393.6 m 492.5 393.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 393.6 m 557.5 393.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 379.6 m 488.5 379.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 379.6 m 557.5 379.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 379.6 m 488.5 379.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 379.6 m 557.5 379.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 295.6 m 488.5 295.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 295.6 m 557.5 295.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 267.6 m 488.5 267.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 267.6 m 557.5 267.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 267.6 m 488.5 267.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 254.60000000000002 m 488.5 254.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 252.60000000000002 m 488.5 252.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 267.6 m 557.5 267.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 254.60000000000002 m 557.5 254.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 252.60000000000002 m 557.5 252.60000000000002 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 459.30 398.05 Td (As of Mar) Tj ET Q q 0 0 0 rg BT 498.21 398.05 Td (ch 31,) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 383.85 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 446.50 384.05 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 515.50 384.05 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 370.17 Td (Purchased and internally-developed software) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 426.00 370.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 370.17 Td (356.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.00 370.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 370.17 Td (313.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 356.17 Td (Computer hardware) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 356.17 Td (42.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 356.17 Td (40.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 342.17 Td (Leasehold improvements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 342.17 Td (42.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 342.17 Td (35.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 328.17 Td (Buildings and building improvements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 328.17 Td (27.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 328.17 Td (27.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 314.17 Td (Furniture and equipment) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 314.17 Td (26.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 314.17 Td (24.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 300.17 Td (Land and land improvements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.15 300.17 Td (3.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 300.17 Td (3.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 286.17 Td (T) Tj ET Q q 0 0 0 rg BT 61.76 286.17 Td (otal property) Tj ET Q q 0 0 0 rg BT 112.46 286.17 Td (, equipment and capitalized internal-use software, gross) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 286.17 Td (498.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 286.17 Td (443.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 272.17 Td (Less: ) Tj ET Q q 0 0 0 rg BT 79.33 272.17 Td (Accumulated depreciation and amortization) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 272.22 Td (\(352.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 484.65 272.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.80 272.22 Td (\(279.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 272.17 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 258.17 Td (T) Tj ET Q q 0 0 0 rg BT 61.41 258.17 Td (otal property) Tj ET Q q 0 0 0 rg BT 112.13 258.17 Td (, equipment and capitalized internal-use software, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 426.00 258.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 258.17 Td (146.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.00 258.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 258.17 Td (164.4) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 236.10 Td (The amounts above include computer hardware under capital lease of $0.9 million with accumulated amortization of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 224.10 Td ($0.8 million as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 127.05 224.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 190.65 224.10 Td (. ) Tj ET Q endstream endobj 161 0 obj <> endobj 162 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 213.20 760.75 Td (Notes to Consolidated Financial Statements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.15 30.60 Td (- 75 -) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 731.25 Td (6) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 59.00 731.25 Td (. IDENTIFIABLE INT) Tj ET Q q 0 0 0 rg BT 156.34 731.25 Td (ANGIBLE ) Tj ET Q q 0 0 0 rg BT 204.41 731.25 Td (ASSETS ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 710.25 Td (Identifiable intangible assets, net consist of the following:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 201.5 676.75 m 256.5 676.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 256.5 676.75 m 260.5 676.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 260.5 676.75 m 319.5 676.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 319.5 676.75 m 323.5 676.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 323.5 676.75 m 378.5 676.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 382.5 676.75 m 437.5 676.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 437.5 676.75 m 441.5 676.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 441.5 676.75 m 499.5 676.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 499.5 676.75 m 503.5 676.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 503.5 676.75 m 558.5 676.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 201.5 662.75 m 256.5 662.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 256.5 662.75 m 260.5 662.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 260.5 662.75 m 319.5 662.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 319.5 662.75 m 323.5 662.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 323.5 662.75 m 378.5 662.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 382.5 662.75 m 437.5 662.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 437.5 662.75 m 441.5 662.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 441.5 662.75 m 499.5 662.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 499.5 662.75 m 503.5 662.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 503.5 662.75 m 558.5 662.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 201.5 639.75 m 256.5 639.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 260.5 639.75 m 319.5 639.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 323.5 639.75 m 378.5 639.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 382.5 639.75 m 437.5 639.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 441.5 639.75 m 499.5 639.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 503.5 639.75 m 558.5 639.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 201.5 639.75 m 256.5 639.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 260.5 639.75 m 319.5 639.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 323.5 639.75 m 378.5 639.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 382.5 639.75 m 437.5 639.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 441.5 639.75 m 499.5 639.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 503.5 639.75 m 558.5 639.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 201.5 570.75 m 256.5 570.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 260.5 570.75 m 319.5 570.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 323.5 570.75 m 378.5 570.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 382.5 570.75 m 437.5 570.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 441.5 570.75 m 499.5 570.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 503.5 570.75 m 558.5 570.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 201.5 570.75 m 256.5 570.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 201.5 556.75 m 256.5 556.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 201.5 554.75 m 256.5 554.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 260.5 570.75 m 319.5 570.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 260.5 556.75 m 319.5 556.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 260.5 554.75 m 319.5 554.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 323.5 570.75 m 378.5 570.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 323.5 556.75 m 378.5 556.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 323.5 554.75 m 378.5 554.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 382.5 570.75 m 437.5 570.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 382.5 556.75 m 437.5 556.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 382.5 554.75 m 437.5 554.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 441.5 570.75 m 499.5 570.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 441.5 556.75 m 499.5 556.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 441.5 554.75 m 499.5 554.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 503.5 570.75 m 558.5 570.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 503.5 556.75 m 558.5 556.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 503.5 554.75 m 558.5 554.75 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 258.80 681.20 Td (As of Mar) Tj ET Q q 0 0 0 rg BT 297.71 681.20 Td (ch 31,) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 439.30 681.20 Td (As of Mar) Tj ET Q q 0 0 0 rg BT 478.21 681.20 Td (ch 31,) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 280.50 667.20 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 461.00 667.20 Td (2018) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 57.00 644.00 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 219.75 644.20 Td (Cost) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 264.00 653.20 Td (Accumulated) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 264.75 644.20 Td (amortization) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 333.10 653.20 Td (Net book) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 340.20 644.20 Td (value) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 400.75 644.20 Td (Cost) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 444.50 653.20 Td (Accumulated) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 445.25 644.20 Td (amortization) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 513.10 653.20 Td (Net book) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 520.20 644.20 Td (value) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 629.42 Td (Copyrights) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 204.00 629.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 230.15 629.42 Td (727.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 263.00 629.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 289.80 629.47 Td (\(249.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 315.65 629.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 326.00 629.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 352.15 629.42 Td (478.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 385.00 629.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 411.15 629.42 Td (730.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 444.00 629.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.80 629.47 Td (\(200.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.65 629.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 506.00 629.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.15 629.42 Td (529.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 614.42 Td (Customer relationships) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 230.15 614.42 Td (367.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 289.80 614.47 Td (\(121.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 315.65 614.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 352.15 614.42 Td (245.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 411.15 614.42 Td (368.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 474.80 614.47 Td (\(97.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.65 614.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.15 614.42 Td (270.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 599.42 Td (T) Tj ET Q q 0 0 0 rg BT 62.93 599.42 Td (rademarks) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 230.15 599.42 Td (232.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 294.80 599.47 Td (\(77.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 315.65 599.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 352.15 599.42 Td (155.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 411.15 599.42 Td (233.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 474.80 599.47 Td (\(62.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.65 599.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.15 599.42 Td (171.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 585.32 Td (T) Tj ET Q q 0 0 0 rg BT 62.76 585.32 Td (echnology and author/content) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 575.32 Td (rights) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 235.15 575.42 Td (45.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 294.80 575.47 Td (\(12.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 315.65 575.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 357.15 575.42 Td (33.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.15 575.42 Td (45.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.80 575.47 Td (\(7.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.65 575.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.15 575.42 Td (38.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 560.42 Td (T) Tj ET Q q 0 0 0 rg BT 62.41 560.42 Td (otal identifiable intangible assets) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 204.00 560.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 222.65 560.42 Td (1,373.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 263.00 560.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 289.80 560.47 Td (\(460.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 315.65 560.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 326.00 560.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 352.15 560.42 Td (912.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 385.00 560.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 403.65 560.42 Td (1,377.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 444.00 560.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.80 560.47 Td (\(367.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.65 560.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 506.00 560.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 524.65 560.42 Td (1,009.9) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 538.25 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 96.44 538.25 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 160.04 538.25 Td (, estimated annual amortization expense for each of the next five fiscal years is as follows:) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 513.70 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 56.00 500.20 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 80.41 500.20 Td (Y) Tj ET Q q 0 0 0 rg BT 85.91 500.20 Td (ears Ending Mar) Tj ET Q q 0 0 0 rg BT 151.25 500.20 Td (ch 31,) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 486.32 Td (2020) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.00 486.32 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 486.32 Td (82.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 472.32 Td (2021) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 472.32 Td (81.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 458.32 Td (2022) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 458.32 Td (81.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 444.32 Td (2023) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 444.32 Td (81.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 430.32 Td (2024) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 430.32 Td (80.3) Tj ET Q BT /F1 10.00 Tf ET BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 405.25 Td (7) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 59.00 405.25 Td (. GOODWILL) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 387.25 Td (The following table shows the changes in the carrying amounts of goodwill by segment. ) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 261.5 362.75 m 332.5 362.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 336.5 362.75 m 407.5 362.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 411.5 362.75 m 482.5 362.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 486.5 362.75 m 557.5 362.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 261.5 362.75 m 332.5 362.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 336.5 362.75 m 407.5 362.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 411.5 362.75 m 482.5 362.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 486.5 362.75 m 557.5 362.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 261.5 317.75 m 332.5 317.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 336.5 317.75 m 407.5 317.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 411.5 317.75 m 482.5 317.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 486.5 317.75 m 557.5 317.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 261.5 317.75 m 332.5 317.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 336.5 317.75 m 407.5 317.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 411.5 317.75 m 482.5 317.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 486.5 317.75 m 557.5 317.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 261.5 272.75 m 332.5 272.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 336.5 272.75 m 407.5 272.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 411.5 272.75 m 482.5 272.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 486.5 272.75 m 557.5 272.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 261.5 272.75 m 332.5 272.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 261.5 258.75 m 332.5 258.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 261.5 256.75 m 332.5 256.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 336.5 272.75 m 407.5 272.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 336.5 258.75 m 407.5 258.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 336.5 256.75 m 407.5 256.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 411.5 272.75 m 482.5 272.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 411.5 258.75 m 482.5 258.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 411.5 256.75 m 482.5 256.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 486.5 272.75 m 557.5 272.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 486.5 258.75 m 557.5 258.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 486.5 256.75 m 557.5 256.75 l s BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 367.00 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 278.70 367.20 Td (Learning) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 362.50 367.20 Td (Gale) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 420.95 367.20 Td (International) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 511.65 367.20 Td (T) Tj ET Q q 0 0 0 rg BT 516.83 367.20 Td (otal) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 352.43 Td (Balance at Mar) Tj ET Q q 0 0 0 rg BT 122.00 352.43 Td (ch 31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 264.00 352.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 298.65 352.42 Td (1,326.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 339.00 352.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 381.15 352.42 Td (203.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 414.00 352.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 461.15 352.42 Td (98.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 489.00 352.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 352.42 Td (1,627.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 337.42 Td (Foreign currency translation and other) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.65 337.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 391.15 337.42 Td (1.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.15 337.42 Td (3.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 337.42 Td (5.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 322.42 Td (Goodwill acquired during the period) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.65 322.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.65 322.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 468.65 322.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.65 322.42 Td () Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 307.43 Td (Balance at Mar) Tj ET Q q 0 0 0 rg BT 122.00 307.43 Td (ch 31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 298.65 307.42 Td (1,326.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 381.15 307.42 Td (204.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 456.15 307.42 Td (102.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 307.42 Td (1,633.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 292.42 Td (Foreign currency translation) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.65 292.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 387.80 292.47 Td (\(0.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 403.65 292.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.80 292.47 Td (\(3.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 478.65 292.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 292.47 Td (\(4.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 292.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 277.42 Td (Goodwill acquired during the period) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.65 277.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.65 277.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 468.65 277.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.65 277.42 Td () Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 262.43 Td (Balance at Mar) Tj ET Q q 0 0 0 rg BT 121.91 262.43 Td (ch 31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 264.00 262.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 298.65 262.42 Td (1,326.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 339.00 262.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 381.15 262.42 Td (203.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 414.00 262.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 461.15 262.42 Td (99.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 489.00 262.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 262.42 Td (1,629.1) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 240.25 Td (The Company conducts its annual impairment test of goodwill for each reporting unit during the fourth quarter of its ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 228.25 Td (fiscal year) Tj ET Q q 0 0 0 rg BT 94.81 228.25 Td (. During the fourth quarter of fiscal year 2019, subsequent to the annual impairment test of goodwill, the Company ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 216.25 Td (identified two new operating segments based on newly discrete financial information. ) Tj ET Q q 0 0 0 rg BT 399.27 216.25 Td (The two new operating segments are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 204.25 Td (Higher Ed \(representing the academic and skills industries\) and School, whom together comprised the Learning reportable ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 192.25 Td (segment. ) Tj ET Q q 0 0 0 rg BT 92.14 192.25 Td (The reporting units are Higher Ed and School, within the Learning reportable segment, Gale reportable segment, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 180.25 Td (and North ) Tj ET Q q 0 0 0 rg BT 96.22 180.25 Td (America, EMEA) Tj ET Q q 0 0 0 rg BT 163.42 180.25 Td ( \(Europe, Middle East and ) Tj ET Q q 0 0 0 rg BT 270.62 180.25 Td (Africa\), ) Tj ET Q q 0 0 0 rg BT 303.93 180.25 Td (Asia, Latin ) Tj ET Q q 0 0 0 rg BT 350.31 180.25 Td (America and ) Tj ET Q q 0 0 0 rg BT 403.62 180.25 Td (Australia, within the International ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 168.25 Td (reportable segment. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 150.25 Td (The Company performed goodwill impairment testing on its reporting units in the fourth quarter of fiscal year ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 514.39 150.25 Td (2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 534.39 150.25 Td (. In ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 138.25 Td (order to estimate the fair value of each reporting unit, the Company used an equal-weighted application of the discounted ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 126.25 Td (cash flow and market approach methodologies. ) Tj ET Q q 0 0 0 rg BT 245.15 126.25 Td (The discounted cash flow method estimates the value of a reporting unit by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 114.25 Td (calculating the present value of expected future unlevered after) Tj ET Q q 0 0 0 rg BT 305.89 114.25 Td (-tax free cash flows to be generated by such reporting unit. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 102.25 Td (This methodology requires the use of significant estimates, including discount rates, estimated residual growth rates, and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 90.25 Td (projections of revenue growth, profit mar) Tj ET Q q 0 0 0 rg BT 219.32 90.25 Td (gins, and working capital. ) Tj ET Q q 0 0 0 rg BT 325.23 90.25 Td (The projections underlying the valuation were based on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 78.25 Td (the internal strategic forecasts for each reporting unit. Discount rates were calculated using the capital asset pricing model ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 66.25 Td (based on a weighted-average cost of capital of comparable companies. ) Tj ET Q q 0 0 0 rg BT 338.42 66.25 Td (The estimated residual growth rate was developed ) Tj ET Q endstream endobj 163 0 obj <> endobj 164 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 213.20 760.75 Td (Notes to Consolidated Financial Statements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.15 30.60 Td (- 76 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 731.10 Td (considering the long-term economic outlook of the industry and geographical region in which each reporting unit operates. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (The fourth quarter goodwill impairment review discount rate assumptions ranged from ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 403.63 719.10 Td (1) Tj ET Q q 0 0 0 rg BT 408.26 719.10 Td (1.5%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 429.09 719.10 Td ( to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 441.87 719.10 Td (16.0%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.70 719.10 Td ( and residual growth ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 707.10 Td (rate assumptions ranged from ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 175.08 707.10 Td (1.0%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 195.91 707.10 Td ( to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 208.69 707.10 Td (4.0%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 229.52 707.10 Td (. In addition to the discounted cash flow analysis, the Company performs the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 695.10 Td (market approach, which is a comparison of both trailing and forward financial multiples implied by the estimated reporting ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 683.10 Td (unit fair value to a range of multiples of publicly held companies with similar characteristics. If recent mer) Tj ET Q q 0 0 0 rg BT 480.34 683.10 Td (ger and acquisition ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 671.10 Td (transactions for industry or peer companies are available, the financial multiples implied by the estimated reporting unit fair ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 659.10 Td (value are also compared to the range of multiples from such precedent transactions. ) Tj ET Q q 0 0 0 rg BT 390.36 659.10 Td (The Company applies comparable ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 647.10 Td (revenue and EBITDA) Tj ET Q q 0 0 0 rg BT 141.19 647.10 Td ( multiples under this methodology as it considers these measures the most relevant to its business. For ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 635.10 Td (the impairment test performed in the fourth quarter of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 271.43 635.10 Td (2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 291.43 635.10 Td (, the Company applied forward multiples of projected revenues in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 623.10 Td (a range of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 96.48 623.10 Td (1.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 108.98 623.10 Td (x - ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 122.31 623.10 Td (2.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 134.81 623.10 Td (x and forward multiples of projected EBITDA) Tj ET Q q 0 0 0 rg BT 319.76 623.10 Td ( in a range of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 375.01 623.10 Td (8.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 387.51 623.10 Td (x - ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 400.84 623.10 Td (12.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 418.34 623.10 Td (x. For the annual impairment test ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 611.10 Td (for fiscal years ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 115.91 611.10 Td (2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 135.91 611.10 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 140.91 611.10 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 160.91 611.10 Td (, and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 182.85 611.10 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 202.85 611.10 Td (, the Company concluded that the fair values of all reporting units exceeded their ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 599.10 Td (respective carrying values. In 2018, the estimated fair value of the Learning reporting unit exceeded its carrying value by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 587.10 Td (5.0%. ) Tj ET Q q 0 0 0 rg BT 79.65 587.10 Td (The discount rate applied to the Learning reporting unit discounted cash flow was 1) Tj ET Q q 0 0 0 rg BT 413.91 587.10 Td (1.5% and the residual growth rate ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 575.10 Td (was 2.0%. ) Tj ET Q q 0 0 0 rg BT 97.70 575.10 Td (The Company had performed a sensitivity analysis on its significant assumptions used to determine the fair value ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 563.10 Td (of the Learning reporting unit and determined that a more than nominal change to the Company's significant assumptions ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 551.10 Td (could have impacted its conclusion. In 2019, the estimated fair value of the Company's Learning reporting unit over its ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 539.10 Td (carrying value increased to 10.0%. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 521.10 Td (During the fourth quarter of fiscal year 2019, subsequent to the completion of the annual impairment test of goodwill, the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 509.10 Td (Company identified two new operating segments based on newly available discrete financial information. ) Tj ET Q q 0 0 0 rg BT 481.75 509.10 Td (The two new ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 497.10 Td (operating segments are Higher Ed \(representing the academic and skills industries\) and School, whom together comprises the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 485.10 Td (Learning reportable segment. In accordance with ) Tj ET Q q 0 0 0 rg BT 254.47 485.10 Td (ASC 350-20-35-3C, there are several potential events and circumstances ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 473.10 Td (that could be indicators of goodwill impairment. ) Tj ET Q q 0 0 0 rg BT 249.52 473.10 Td (A) Tj ET Q q 0 0 0 rg BT 256.19 473.10 Td ( change in a company's reporting unit structure is one of these events, and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 461.10 Td (when this does occur) Tj ET Q q 0 0 0 rg BT 137.75 461.10 Td (, a company must perform a before and after test of the reporting units.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 443.10 Td (The Company followed the same methodology) Tj ET Q q 0 0 0 rg BT 259.37 443.10 Td (, as described above for the annual impairment review) Tj ET Q q 0 0 0 rg BT 475.58 443.10 Td (, for the impairment ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 431.10 Td (review of the new reporting units. ) Tj ET Q q 0 0 0 rg BT 194.34 431.10 Td (The Company) Tj ET Q q 0 0 0 rg BT 254.05 431.10 Td (s discount rate assumptions ranged from 9.5% to 12.5% and residual ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 419.10 Td (growth rate assumptions ranged from 1.0% to 2.0%. ) Tj ET Q q 0 0 0 rg BT 270.17 419.10 Td (The Company applied forward multiples of projected revenues in a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 407.10 Td (range of 1.6x - 2.5x and forward multiples of projected EBITDA) Tj ET Q q 0 0 0 rg BT 312.82 407.10 Td ( in a range of 8.0x - 12.5x. For this impairment test, the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 395.10 Td (Company concluded that the fair values of the Higher Ed and School reporting units exceeded their respective carrying ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 383.10 Td (values.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 365.10 Td (The estimated fair value of the Company's School reporting unit exceeded its carrying value by 4.0%. ) Tj ET Q q 0 0 0 rg BT 481.28 365.10 Td (The discount rate ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 353.10 Td (applied to the School reporting unit discounted cash flow was 9.5% and the residual growth rate was 1.0%. ) Tj ET Q q 0 0 0 rg BT 484.55 353.10 Td (The Company ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 341.10 Td (performed a sensitivity analysis on its significant assumptions used to determine the fair value of the School reporting unit ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 329.10 Td (and determined that a more than nominal change to the Company's significant assumptions would impact its conclusion. If ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 317.10 Td (actual results dif) Tj ET Q q 0 0 0 rg BT 119.91 317.10 Td (fer from the projections and assumptions used in the calculation of the School reporting unit fair value, the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 305.10 Td (Company could be required to record future non-cash impairment char) Tj ET Q q 0 0 0 rg BT 336.77 305.10 Td (ges.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 287.10 Td (8) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 59.00 287.10 Td (. ) Tj ET Q q 0 0 0 rg BT 63.45 287.10 Td (ACCOUNTS P) Tj ET Q q 0 0 0 rg BT 127.43 287.10 Td (A) Tj ET Q q 0 0 0 rg BT 133.74 287.10 Td (Y) Tj ET Q q 0 0 0 rg BT 140.04 287.10 Td (ABLE ) Tj ET Q q 0 0 0 rg BT 169.22 287.10 Td (AND ) Tj ET Q q 0 0 0 rg BT 192.83 287.10 Td (ACCRUED EXPENSES) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 266.10 Td (Accounts payable and accrued expenses consisted of the following:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 235.60000000000002 m 473.5 235.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473.5 235.60000000000002 m 477.5 235.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 235.60000000000002 m 557.5 235.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 221.60000000000002 m 473.5 221.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 221.60000000000002 m 557.5 221.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 221.60000000000002 m 473.5 221.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 221.60000000000002 m 557.5 221.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 146.60000000000002 m 473.5 146.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 146.60000000000002 m 557.5 146.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 146.60000000000002 m 473.5 146.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 132.60000000000002 m 473.5 132.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 130.60000000000002 m 473.5 130.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 146.60000000000002 m 557.5 146.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 132.60000000000002 m 557.5 132.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 130.60000000000002 m 557.5 130.60000000000002 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 444.30 240.05 Td (As of Mar) Tj ET Q q 0 0 0 rg BT 483.21 240.05 Td (ch 31,) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 225.85 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 424.00 226.05 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 508.00 226.05 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 211.27 Td (Accounts payable) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 396.00 211.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.15 211.27 Td (104.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.00 211.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 211.27 Td (79.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 196.27 Td (Accrued royalties) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 452.15 196.27 Td (61.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 196.27 Td (58.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 181.27 Td (Accrued bonuses) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 452.15 181.27 Td (66.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 181.27 Td (58.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 166.27 Td (Accrued interest payable) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 452.15 166.27 Td (20.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 166.27 Td (22.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 151.27 Td (Other accrued expenses) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 452.15 151.27 Td (59.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 151.27 Td (57.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 396.00 136.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.15 136.27 Td (312.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.00 136.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 136.27 Td (276.6) Tj ET Q BT /F1 10.00 Tf ET endstream endobj 165 0 obj <> endobj 166 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 213.20 760.75 Td (Notes to Consolidated Financial Statements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.15 19.60 Td (- 77 -) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 742.25 Td (9) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 59.00 742.25 Td (. OPERA) Tj ET Q q 0 0 0 rg BT 98.26 742.25 Td (TIONAL) Tj ET Q q 0 0 0 rg BT 137.16 742.25 Td ( RESTRUCTURING ) Tj ET Q q 0 0 0 rg BT 229.40 742.25 Td (AND OTHER CHARGES) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 721.25 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 99.88 721.25 Td (Y) Tj ET Q q 0 0 0 rg BT 104.88 721.25 Td (ear 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 700.25 Td (During the fourth quarter of fiscal year 2019, the Company initiated a restructuring program in its Learning segment to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 688.25 Td (streamline operations. ) Tj ET Q q 0 0 0 rg BT 144.63 688.25 Td (The Company incurred $3.6 million of severance related costs, with related cash payments expected to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 676.25 Td (be made through the fourth quarter of fiscal year 2020. ) Tj ET Q q 0 0 0 rg BT 275.31 676.25 Td (Additionally) Tj ET Q q 0 0 0 rg BT 325.22 676.25 Td (, as part of this initiative, the Company vacated and ceased ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 664.25 Td (use of one if its of) Tj ET Q q 0 0 0 rg BT 126.30 664.25 Td (fices and recorded a restructuring char) Tj ET Q q 0 0 0 rg BT 279.65 664.25 Td (ge of $0.2 million, representing the relative portion of remaining ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 652.25 Td (future lease payments, net of estimated sublease income, along with other exit costs related to the facility closure, and net of a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 640.25 Td ($5.0 million non-cash write-of) Tj ET Q q 0 0 0 rg BT 176.02 640.25 Td (f of the related deferred rent and landlord inducement liability) Tj ET Q q 0 0 0 rg BT 423.32 640.25 Td (. ) Tj ET Q q 0 0 0 rg BT 428.14 640.25 Td (The remaining future lease ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 628.25 Td (payments will be paid over the underlying remaining lease terms.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 607.25 Td (Also, during the fourth quarter of fiscal year 2019, the Company adjusted its estimated cease use liability on the floors ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 595.25 Td (within its of) Tj ET Q q 0 0 0 rg BT 102.15 595.25 Td (fices that were vacated during the third and fourth quarters of fiscal year 2018. ) Tj ET Q q 0 0 0 rg BT 418.79 595.25 Td (The Company recorded a $0.4 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 583.25 Td (million increase in the estimated future sublease income.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 562.25 Td (During the third quarter of fiscal year 2019, the Company initiated a restructuring program in its Learning and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 550.25 Td (International segments to continue the alignment of its operations to support the evolution of its changing business model, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 538.25 Td (including Cengage Unlimited and its customer) Tj ET Q q 0 0 0 rg BT 240.15 538.25 Td (-focused approach. ) Tj ET Q q 0 0 0 rg BT 318.55 538.25 Td (The Company incurred $8.0 million of severance related ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 526.25 Td (costs during the fiscal year ended March 31, 2019, with related cash payments expected to be made through the fourth quarter ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 514.25 Td (of fiscal year 2020. ) Tj ET Q q 0 0 0 rg BT 133.51 514.25 Td (The Company incurred $0.6 million of process reengineering consulting costs during the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 502.25 Td (March 31, 2019. ) Tj ET Q q 0 0 0 rg BT 122.42 502.25 Td (These char) Tj ET Q q 0 0 0 rg BT 165.82 502.25 Td (ges are expensed as incurred. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 481.25 Td (During the second quarter of fiscal year 2019, the Company initiated a restructuring program in its Learning segment to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 469.25 Td (streamline its operations. ) Tj ET Q q 0 0 0 rg BT 156.20 469.25 Td (Associated with these actions, the Company incurred $1.0 million of severance related costs during ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 457.25 Td (the fiscal year ended March 31, 2019. ) Tj ET Q q 0 0 0 rg BT 207.00 457.25 Td (As of March 31, 2019, this program was substantially completed, with related cash ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 445.25 Td (payments expected to be made through the first quarter of fiscal year 2020.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 424.25 Td (During the first quarter of fiscal year 2019, the Company initiated a restructuring program in its Gale and International ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 412.25 Td (segments to better align its operations to current industry conditions and position the business for growth. ) Tj ET Q q 0 0 0 rg BT 478.48 412.25 Td (The Company ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 400.25 Td (incurred $4.5 million of severance related costs during the fiscal year ended March 31, 2019. ) Tj ET Q q 0 0 0 rg BT 427.76 400.25 Td (As of March 31, 2019, this ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 388.25 Td (program was substantially completed, with cash payments expected to be made through the third quarter of fiscal year 2020.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 367.25 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 99.88 367.25 Td (Y) Tj ET Q q 0 0 0 rg BT 104.88 367.25 Td (ear 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 346.25 Td (During the fourth quarter of fiscal year 2018, the Company initiated a restructuring program to better align our operations ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 334.25 Td (and positioning for growth in anticipation of our continued shift to a subscription/digital model. ) Tj ET Q q 0 0 0 rg BT 441.54 334.25 Td (The Company incurred ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 322.25 Td (aggregate char) Tj ET Q q 0 0 0 rg BT 112.39 322.25 Td (ges of $0.6 million. ) Tj ET Q q 0 0 0 rg BT 192.39 322.25 Td (As of March 31, 2019, this program had been completed. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 301.25 Td (Also during the fourth quarter of fiscal year 2018, the Company initiated a restructuring program in our International ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 289.25 Td (segment to streamline and better align our operations to current industry conditions. ) Tj ET Q q 0 0 0 rg BT 391.79 289.25 Td (The Company incurred aggregate char) Tj ET Q q 0 0 0 rg BT 545.43 289.25 Td (ges ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 277.25 Td (of $1.7 million associated with these actions. ) Tj ET Q q 0 0 0 rg BT 235.91 277.25 Td (As of March 31, 2019, this program had been completed.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 256.25 Td (Also during the fourth quarter of fiscal year 2018, the Company vacated and ceased use of a floor within one of its of) Tj ET Q q 0 0 0 rg BT 540.84 256.25 Td (fices ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 244.25 Td (and recorded a restructuring char) Tj ET Q q 0 0 0 rg BT 185.97 244.25 Td (ge of $1.5 million, representing the relative portion of remaining future lease payments, net of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 232.25 Td (estimated sublease income, and net of a $0.1 million non-cash write-of) Tj ET Q q 0 0 0 rg BT 337.07 232.25 Td (f of the related portion of the landlord inducement ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 220.25 Td (liability) Tj ET Q q 0 0 0 rg BT 84.46 220.25 Td (. ) Tj ET Q q 0 0 0 rg BT 89.28 220.25 Td (The remaining future lease payments will be paid over the underlying remaining lease terms.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 199.25 Td (During the third quarter of fiscal year 2018, the Company vacated and ceased use of another floor within another one of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 187.25 Td (its of) Tj ET Q q 0 0 0 rg BT 74.10 187.25 Td (fices and recorded a restructuring char) Tj ET Q q 0 0 0 rg BT 227.45 187.25 Td (ge of $2.1 million, representing the relative portion of remaining future lease ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 175.25 Td (payments, net of estimated sublease income, and net of a $0.3 million non-cash write-of) Tj ET Q q 0 0 0 rg BT 405.94 175.25 Td (f of the related portion of the landlord ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 163.25 Td (inducement liability) Tj ET Q q 0 0 0 rg BT 133.61 163.25 Td (. ) Tj ET Q q 0 0 0 rg BT 138.43 163.25 Td (The remaining future lease payments will be paid over the underlying remaining lease terms. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 142.25 Td (During the first quarter of fiscal year 2018, the Company initiated a restructuring program related to its initiatives to better ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 130.25 Td (align discipline and delivery strategies, to improve the development and enhancements of its digital products and assess its ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 118.25 Td (operations, and to further support the shift from a textbook to a software sales and support model. ) Tj ET Q q 0 0 0 rg BT 446.78 118.25 Td (The Company incurred ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 106.25 Td (aggregate char) Tj ET Q q 0 0 0 rg BT 112.39 106.25 Td (ges $3.4 million of severance related costs related and aggregate char) Tj ET Q q 0 0 0 rg BT 389.59 106.25 Td (ges of $7.4 million of process ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 94.25 Td (reengineering consulting costs related to these actions. ) Tj ET Q q 0 0 0 rg BT 273.94 94.25 Td (As of March 31, 2019, the program had been completed.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 73.25 Td (Also during the first quarter of fiscal year 2018, the Company exited an existing lease and ceased use of the space. ) Tj ET Q q 0 0 0 rg BT 531.58 73.25 Td (As a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 61.25 Td (result, the Company recorded a $3.5 million non-cash char) Tj ET Q q 0 0 0 rg BT 288.75 61.25 Td (ge to write-of) Tj ET Q q 0 0 0 rg BT 342.99 61.25 Td (f the existing landlord inducement liability) Tj ET Q q 0 0 0 rg BT 513.14 61.25 Td (. In ) Tj ET Q endstream endobj 167 0 obj <> endobj 168 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 213.20 760.75 Td (Notes to Consolidated Financial Statements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.15 19.60 Td (- 78 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 742.10 Td (connection with exiting the existing facility) Tj ET Q q 0 0 0 rg BT 227.48 742.10 Td (, the Company received a $12 million incentive payment from a third party that ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 730.10 Td (was included in other income \(expense\), net, in the accompanying consolidated statement of operations.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 709.10 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 99.88 709.10 Td (Y) Tj ET Q q 0 0 0 rg BT 104.88 709.10 Td (ear 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 688.10 Td (During the first quarter of fiscal year 2017, the Company initiated a restructuring program designed to streamline ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 676.10 Td (operations and improve its cost structure. ) Tj ET Q q 0 0 0 rg BT 221.28 676.10 Td (This program included actions across the Company) Tj ET Q q 0 0 0 rg BT 429.57 676.10 Td (s segments and its corporate ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 664.10 Td (functions. Such actions included streamlining the Company) Tj ET Q q 0 0 0 rg BT 295.35 664.10 Td (s or) Tj ET Q q 0 0 0 rg BT 309.89 664.10 Td (ganizational structure and spending at the functional, business ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 652.10 Td (and geographic levels. ) Tj ET Q q 0 0 0 rg BT 146.01 652.10 Td (The Company incurred aggregate char) Tj ET Q q 0 0 0 rg BT 299.64 652.10 Td (ges of $23.8 million associated with these actions. ) Tj ET Q q 0 0 0 rg BT 502.39 652.10 Td (As of March ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 640.10 Td (31, 2018, the program was complete. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 619.10 Td (Operational restructuring and other char) Tj ET Q q 0 0 0 rg BT 232.31 619.10 Td (ges recognized in the consolidated statement of operations by segment were as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 607.10 Td (follows:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 329.5 582.6 m 396.5 582.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 396.5 582.6 m 400.5 582.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 400.5 582.6 m 468.5 582.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 468.5 582.6 m 472.5 582.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 472.5 582.6 m 540.5 582.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 329.5 582.6 m 396.5 582.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 329.5 568.6 m 396.5 568.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 400.5 582.6 m 468.5 582.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 400.5 568.6 m 468.5 568.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 472.5 582.6 m 540.5 582.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 472.5 568.6 m 540.5 568.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 329.5 568.6 m 396.5 568.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 400.5 568.6 m 468.5 568.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 472.5 568.6 m 540.5 568.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 329.5 508.6 m 396.5 508.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 400.5 508.6 m 468.5 508.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 472.5 508.6 m 540.5 508.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 329.5 478.6 m 396.5 478.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 400.5 478.6 m 468.5 478.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 472.5 478.6 m 540.5 478.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 329.5 478.6 m 396.5 478.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 329.5 464.6 m 396.5 464.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 329.5 462.6 m 396.5 462.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 400.5 478.6 m 468.5 478.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 400.5 464.6 m 468.5 464.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 400.5 462.6 m 468.5 462.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 472.5 478.6 m 540.5 478.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 472.5 464.6 m 540.5 464.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 472.5 462.6 m 540.5 462.6 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 378.95 587.05 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 403.53 587.05 Td (Y) Tj ET Q q 0 0 0 rg BT 409.36 587.05 Td (ear) Tj ET Q q 0 0 0 rg BT 421.27 587.05 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 467.61 587.05 Td (ch 31,) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 57.00 572.85 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 353.50 573.05 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 425.00 573.05 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 497.00 573.05 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 558.27 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 332.00 558.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 380.15 558.27 Td (9.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 403.00 558.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 452.15 558.27 Td (4.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.00 558.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 519.15 558.27 Td (15.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 543.27 Td (Gale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 380.15 543.27 Td (4.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 454.65 543.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 524.15 543.27 Td (0.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 528.27 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 380.15 528.27 Td (1.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 452.15 528.27 Td (1.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 526.65 528.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 513.27 Td (Corporate) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 380.15 513.27 Td (2.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 452.15 513.27 Td (4.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 519.15 513.27 Td (10.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 498.27 Td (T) Tj ET Q q 0 0 0 rg BT 62.76 498.27 Td (otal operational restructuring and other char) Tj ET Q q 0 0 0 rg BT 238.08 498.27 Td (ges, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 332.00 498.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 375.15 498.27 Td (17.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 403.00 498.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.15 498.27 Td (10.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.00 498.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 519.15 498.27 Td (26.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 483.27 Td (Less: non-cash write-of) Tj ET Q q 0 0 0 rg BT 163.23 483.27 Td (fs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 376.80 483.32 Td (\(5.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 392.65 483.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 448.80 483.32 Td (\(3.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 464.65 483.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 526.65 483.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 468.27 Td (T) Tj ET Q q 0 0 0 rg BT 62.41 468.27 Td (otal char) Tj ET Q q 0 0 0 rg BT 96.93 468.27 Td (ges expected to be settled in cash) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 332.00 468.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 375.15 468.27 Td (22.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 403.00 468.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.15 468.27 Td (14.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.00 468.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 519.15 468.27 Td (26.7) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 429.30 Td (The following table summarizes cash activity for restructuring reserves, which is included in other current liabilities and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 417.30 Td (other non-current liabilities in the accompanying consolidated balance sheets:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 326.79999999999995 m 558.5 326.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 262.5 326.79999999999995 m 333.5 326.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 337.5 326.79999999999995 m 408.5 326.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 412.5 326.79999999999995 m 483.5 326.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 326.79999999999995 m 558.5 326.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 262.5 270.79999999999995 m 333.5 270.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 337.5 270.79999999999995 m 408.5 270.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 412.5 270.79999999999995 m 483.5 270.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 270.79999999999995 m 558.5 270.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 262.5 200.79999999999995 m 333.5 200.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 262.5 187.79999999999995 m 333.5 187.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 262.5 185.79999999999995 m 333.5 185.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 337.5 200.79999999999995 m 408.5 200.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 337.5 187.79999999999995 m 408.5 187.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 337.5 185.79999999999995 m 408.5 185.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 412.5 200.79999999999995 m 483.5 200.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 412.5 187.79999999999995 m 483.5 187.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 412.5 185.79999999999995 m 483.5 185.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 200.79999999999995 m 558.5 200.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 187.79999999999995 m 558.5 187.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 185.79999999999995 m 558.5 185.79999999999995 l s BT /F4 8.00 Tf ET q 0 0 0 rg BT 57.00 373.05 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 278.00 373.25 Td (Severance) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 358.05 391.25 Td (Pr) Tj ET Q q 0 0 0 rg BT 367.46 391.25 Td (ocess) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 346.05 382.25 Td (r) Tj ET Q q 0 0 0 rg BT 349.96 382.25 Td (eengineering) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 352.70 373.25 Td (consulting) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 418.95 382.25 Td (Lease Exit and) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 436.05 373.25 Td (Other) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 512.65 373.25 Td (T) Tj ET Q q 0 0 0 rg BT 517.83 373.25 Td (otal) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 359.37 Td (Balance at March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 265.00 359.37 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 359.37 Td (4.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 340.00 359.37 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 394.65 359.37 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 415.00 359.37 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 359.37 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 359.37 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 542.15 359.37 Td (4.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 345.37 Td (Char) Tj ET Q q 0 0 0 rg BT 76.35 345.37 Td (ges) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.15 345.37 Td (15.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 387.15 345.37 Td (10.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 345.37 Td (0.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.15 345.37 Td (26.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 331.37 Td (Cash Payments) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 308.80 331.42 Td (\(17.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 329.65 331.37 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.80 331.42 Td (\(7.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 404.65 331.37 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 331.42 Td (\(0.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 331.37 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 533.80 331.42 Td (\(25.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 554.65 331.37 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 317.37 Td (Balance at March 31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 265.00 317.37 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 317.37 Td (3.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 340.00 317.37 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 392.15 317.37 Td (2.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 415.00 317.37 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 317.37 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 317.37 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 542.15 317.37 Td (5.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 303.37 Td (Char) Tj ET Q q 0 0 0 rg BT 76.35 303.37 Td (ges, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 303.37 Td (5.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 392.15 303.37 Td (4.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 303.37 Td (0.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.15 303.37 Td (10.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 289.37 Td (Cash Payments) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 313.80 289.42 Td (\(6.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 329.65 289.37 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.80 289.42 Td (\(7.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 404.65 289.37 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 289.42 Td (\(0.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 289.37 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 533.80 289.42 Td (\(14.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 554.65 289.37 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 275.37 Td (Non-cash write-of) Tj ET Q q 0 0 0 rg BT 129.85 275.37 Td (fs ) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 139.57 279.90 Td (\(1\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.65 275.37 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 394.65 275.37 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 275.37 Td (3.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 542.15 275.37 Td (3.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 261.37 Td (Balance at March 31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 265.00 261.37 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.15 261.37 Td (2.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 340.00 261.37 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 394.65 261.37 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 415.00 261.37 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 261.37 Td (3.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 261.37 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 542.15 261.37 Td (6.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 247.37 Td (Char) Tj ET Q q 0 0 0 rg BT 76.35 247.37 Td (ges, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.15 247.37 Td (17.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 392.15 247.37 Td (0.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 247.42 Td (\(0.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 247.37 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.15 247.37 Td (17.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 233.37 Td (Accretion Expense) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.65 233.37 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 394.65 233.37 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 233.37 Td (0.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 542.15 233.37 Td (0.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 219.37 Td (Cash Payments) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 313.80 219.42 Td (\(9.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 329.65 219.37 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.80 219.42 Td (\(0.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 404.65 219.37 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 219.42 Td (\(1.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 219.37 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 533.80 219.42 Td (\(12.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 554.65 219.37 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 205.37 Td (Non-cash write-of) Tj ET Q q 0 0 0 rg BT 129.85 205.37 Td (fs ) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 139.57 209.90 Td (\(1\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.65 205.37 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 394.65 205.37 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 205.37 Td (5.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 542.15 205.37 Td (5.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 191.37 Td (Balance at March 31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 265.00 191.37 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.15 191.37 Td (10.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 340.00 191.37 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 394.65 191.37 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 415.00 191.37 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 191.37 Td (7.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 191.37 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.15 191.37 Td (17.0) Tj ET Q BT /F1 10.00 Tf ET BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 160.58 Td (\(1\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 156.50 Td (Represents write-of) Tj ET Q q 0 0 0 rg BT 160.56 156.50 Td (fs of landlord inducement liabilities in connection with facility and lease exit activities ) Tj ET Q endstream endobj 169 0 obj <> endobj 170 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 213.20 760.75 Td (Notes to Consolidated Financial Statements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.15 19.60 Td (- 79 -) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 54.00 742.10 Td (The Company's total restructuring liability was reported as follows:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 297.07 742.10 Td ( ) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 412.5 708.6 m 486.5 708.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 490.5 708.6 m 564.5 708.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 412.5 685.6 m 486.5 685.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 490.5 685.6 m 564.5 685.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 412.5 657.6 m 486.5 657.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 490.5 657.6 m 564.5 657.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 412.5 657.6 m 486.5 657.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 412.5 643.6 m 486.5 643.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 412.5 641.6 m 486.5 641.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 490.5 657.6 m 564.5 657.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 490.5 643.6 m 564.5 643.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 490.5 641.6 m 564.5 641.6 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 457.30 713.05 Td (As of Mar) Tj ET Q q 0 0 0 rg BT 496.21 713.05 Td (ch 31,) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 57.00 689.85 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 440.00 690.05 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 518.00 690.05 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 676.17 Td (Other current liabilities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 415.00 676.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 465.15 676.17 Td (14.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 493.00 676.17 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 548.15 676.17 Td (4.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 662.17 Td (Other non-current liabilities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 470.15 662.17 Td (3.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 548.15 662.17 Td (2.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 647.27 Td (T) Tj ET Q q 0 0 0 rg BT 62.41 647.27 Td (otal restructuring liability) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 415.00 647.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 465.15 647.27 Td (17.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 493.00 647.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 548.15 647.27 Td (6.4) Tj ET Q BT /F1 10.00 Tf ET BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 608.30 Td (10) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 64.00 608.30 Td (. DEBT) Tj ET Q q 0 0 0 rg BT 96.05 608.30 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 587.30 Td (Debt, related maturities and interest rates were as follows as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 325.80 587.30 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.40 587.30 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 408.84 587.30 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 428.84 587.30 Td (:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 305.5 542.8 m 365.5 542.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 365.5 542.8 m 369.5 542.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 369.5 542.8 m 429.5 542.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 433.5 542.8 m 493.5 542.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 493.5 542.8 m 497.5 542.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 497.5 542.8 m 557.5 542.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 241.5 528.8 m 301.5 528.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 305.5 542.8 m 365.5 542.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 305.5 528.8 m 365.5 528.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 369.5 542.8 m 429.5 542.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 369.5 528.8 m 429.5 528.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 433.5 542.8 m 493.5 542.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 433.5 528.8 m 493.5 528.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 497.5 542.8 m 557.5 542.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 497.5 528.8 m 557.5 528.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 433.5 483.8 m 493.5 483.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 497.5 483.8 m 557.5 483.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 433.5 468.8 m 493.5 468.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 497.5 468.8 m 557.5 468.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 433.5 378.8 m 493.5 378.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 497.5 378.8 m 557.5 378.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 433.5 363.8 m 493.5 363.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 497.5 363.8 m 557.5 363.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 433.5 345.8 m 493.5 345.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 433.5 343.8 m 493.5 343.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 497.5 345.8 m 557.5 345.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 497.5 343.8 m 557.5 343.8 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 337.05 561.25 Td (Inter) Tj ET Q q 0 0 0 rg BT 356.46 561.25 Td (est Rate at) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 254.70 547.25 Td (Original) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 347.30 547.25 Td (Mar) Tj ET Q q 0 0 0 rg BT 364.21 547.25 Td (ch 31,) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 475.30 547.25 Td (Mar) Tj ET Q q 0 0 0 rg BT 492.21 547.25 Td (ch 31,) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 533.05 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 253.50 533.25 Td (Maturity) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 326.00 533.25 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 390.00 533.25 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 454.00 533.25 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 518.00 533.25 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 518.47 Td (Current portion:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 503.47 Td (T) Tj ET Q q 0 0 0 rg BT 73.76 503.47 Td (erm Loan) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 261.00 503.47 Td (2023) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.05 503.47 Td (6.74%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 386.05 503.47 Td (6.04%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 436.00 503.47 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.15 503.47 Td (17.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 500.00 503.47 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 503.47 Td (6.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 488.47 Td (Capital lease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 261.00 488.47 Td (2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 477.15 488.47 Td (0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 488.47 Td (0.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 473.47 Td (T) Tj ET Q q 0 0 0 rg BT 61.76 473.47 Td (otal current portion of long-term debt) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.15 473.47 Td (17.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 473.47 Td (6.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 458.47 Td (Non-current portion:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 443.47 Td (Senior Notes) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 261.00 443.47 Td (2024) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.05 443.47 Td (9.50%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 386.05 443.47 Td (9.50%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 443.47 Td (620.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 443.47 Td (620.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 428.47 Td (T) Tj ET Q q 0 0 0 rg BT 73.76 428.47 Td (erm Loan) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 261.00 428.47 Td (2023) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.05 428.47 Td (6.74%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 386.05 428.47 Td (6.04%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 459.65 428.47 Td (1,645.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 428.47 Td (1,663.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 413.47 Td (Capital lease) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 261.00 413.47 Td (2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 413.47 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 413.47 Td (0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 398.47 Td (Unamortized ) Tj ET Q q 0 0 0 rg BT 122.52 398.47 Td (T) Tj ET Q q 0 0 0 rg BT 127.93 398.47 Td (erm Loan discount) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 468.80 398.52 Td (\(10.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 489.65 398.47 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 398.52 Td (\(12.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 398.47 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 383.47 Td (Unamortized deferred financing costs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 468.80 383.52 Td (\(20.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 489.65 383.47 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 383.52 Td (\(25.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 383.47 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 368.47 Td (T) Tj ET Q q 0 0 0 rg BT 61.41 368.47 Td (otal non-current portion of long-term debt) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 459.65 368.47 Td (2,234.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 368.47 Td (2,244.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 80.00 349.47 Td (T) Tj ET Q q 0 0 0 rg BT 85.41 349.47 Td (otal debt) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 436.00 349.47 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 459.65 349.47 Td (2,252.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 500.00 349.47 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 349.47 Td (2,251.6) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 327.30 Td (Scheduled principal payments due on the Company) Tj ET Q q 0 0 0 rg BT 280.84 327.30 Td (s debt as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 328.61 327.30 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 392.21 327.30 Td ( are as follows:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 190.79999999999995 m 557.5 190.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 176.79999999999995 m 557.5 176.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 174.79999999999995 m 557.5 174.79999999999995 l s BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 300.05 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 56.00 285.25 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 80.41 285.25 Td (Y) Tj ET Q q 0 0 0 rg BT 85.91 285.25 Td (ears Ending Mar) Tj ET Q q 0 0 0 rg BT 151.25 285.25 Td (ch 31,) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 270.47 Td (2020) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.00 270.47 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 270.47 Td (17.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 255.47 Td (2021) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 255.47 Td (17.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 240.47 Td (2022) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 240.47 Td (17.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 225.47 Td (2023) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 225.47 Td (17.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 210.47 Td (2024) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 210.47 Td (1,594.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 195.47 Td (Thereafter) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 195.47 Td (620.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 180.47 Td (T) Tj ET Q q 0 0 0 rg BT 61.41 180.47 Td (otal) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.00 180.47 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 180.47 Td (2,283.1) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 158.30 Td (On June 7, 2016, Cengage Learning, Inc., a wholly owned subsidiary of the Company) Tj ET Q q 0 0 0 rg BT 415.17 158.30 Td (, issued senior notes \(Senior) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 146.30 Td (Notes\) and amended and restated its senior secured term loan facility \(T) Tj ET Q q 0 0 0 rg BT 350.13 146.30 Td (erm Loan\) and its asset based lending revolving ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 134.30 Td (line of credit \(ABL) Tj ET Q q 0 0 0 rg BT 134.99 134.30 Td ( Revolving Credit Facility\). ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 116.30 Td (In connection with the issuance of the Senior Notes, ) Tj ET Q q 0 0 0 rg BT 282.88 116.30 Td (T) Tj ET Q q 0 0 0 rg BT 288.29 116.30 Td (erm Loan and ) Tj ET Q q 0 0 0 rg BT 345.77 116.30 Td (ABL) Tj ET Q q 0 0 0 rg BT 365.40 116.30 Td ( Revolving Credit Facility) Tj ET Q q 0 0 0 rg BT 469.46 116.30 Td (, the Company ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 104.30 Td (incurred fees with the arrangers, along with legal and other professional costs of approximately $35.4 million, which was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 92.30 Td (capitalized as deferred financing costs and will be amortized over the life of the associated debt. Of the $35.4 million, $1.4 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 80.30 Td (million related to the ) Tj ET Q q 0 0 0 rg BT 139.54 80.30 Td (ABL) Tj ET Q q 0 0 0 rg BT 159.17 80.30 Td ( Revolving Credit Facility and was included in non-current assets in the consolidated balance sheet ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 68.30 Td (at June 30, 2016. ) Tj ET Q q 0 0 0 rg BT 124.37 68.30 Td (The net proceeds from the of) Tj ET Q q 0 0 0 rg BT 239.97 68.30 Td (fering of the Senior Notes and the ) Tj ET Q q 0 0 0 rg BT 377.81 68.30 Td (T) Tj ET Q q 0 0 0 rg BT 383.22 68.30 Td (erm Loan, after deducting underwriting ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 56.30 Td (discounts and estimated of) Tj ET Q q 0 0 0 rg BT 160.19 56.30 Td (fering expenses, were approximately$2.3 billion and were used to repay the Company) Tj ET Q q 0 0 0 rg BT 509.53 56.30 Td (s $2.0 ) Tj ET Q endstream endobj 171 0 obj <> endobj 172 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 213.20 760.75 Td (Notes to Consolidated Financial Statements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.15 30.60 Td (- 80 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 731.10 Td (billion aggregate principal amount of the ) Tj ET Q q 0 0 0 rg BT 219.88 731.10 Td (T) Tj ET Q q 0 0 0 rg BT 225.29 731.10 Td (erm Loan due 2020 and to fund a share repurchase program and to pay a cash ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (dividend. See Note ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 132.87 719.10 Td (12) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 142.87 719.10 Td (, Equity) Tj ET Q q 0 0 0 rg BT 178.33 719.10 Td (, for additional details on the share repurchase program and cash dividend.During the fiscal ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 707.10 Td (year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 100.08 707.10 Td (March31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 163.68 707.10 Td (, the Company recorded a char) Tj ET Q q 0 0 0 rg BT 286.23 707.10 Td (ge of$10.8 millionin loss on early extinguishment of debt, net of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 695.10 Td (accelerated amortization of debt issuance and original issuance discount costs. In February 2017, the Company) Tj ET Q q 0 0 0 rg BT 500.53 695.10 Td (s board of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 683.10 Td (directors approved an authorization of up to $100 million to purchase in the open market its 9.50% senior notes and/or senior ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 671.10 Td (secured term loan.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 650.10 Td (Senior) Tj ET Q q 0 0 0 rg BT 99.60 650.10 Td ( Notes) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 632.10 Td (On June 7, 2016, Cengage Learning, Inc. issued $620.0 million aggregate principal amount Senior Notes in a private ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 620.10 Td (placement, maturing June 15, 2024. ) Tj ET Q q 0 0 0 rg BT 199.34 620.10 Td (The notes bear interest at a rate of 9.50% per annum, payable semi-annually in arrears on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 608.10 Td (June 15 and December 15 of each year) Tj ET Q q 0 0 0 rg BT 208.80 608.10 Td (, commencing on December 15, 2016. Cengage Learning, Inc. has the option to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 596.10 Td (redeem the Senior Notes, in whole or in part, at any time on or before June 15, 2019, at a redemption price equal to 100% of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 584.10 Td (the principal amount of the notes plus an applicable premium and accrued interest, as defined in the indenture. ) Tj ET Q q 0 0 0 rg BT 497.56 584.10 Td (The Company ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 572.10 Td (also has the option to redeem the Senior Notes, in whole or in part, at any time on or after June 15, 2019, at certain ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 560.10 Td (redemption prices as defined in the indenture. In addition, the Company may repurchase the Senior Notes in part, at any time, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 548.10 Td (in the open market, in accordance with federal securities regulations.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 530.10 Td (The indenture related to the Senior Notes contains certain covenants that the Company may be subject to which restrict ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 518.10 Td (its and its subsidiaries) Tj ET Q q 0 0 0 rg BT 144.64 518.10 Td ( ability to, among other things: incur additional indebtedness or issue certain disqualified shares and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 506.10 Td (preferred shares; create liens; pay dividends or distributions or redeem or repurchase equity; prepay subordinated debt or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 494.10 Td (make certain investments; transfer and sell assets; engage in a consolidation or mer) Tj ET Q q 0 0 0 rg BT 386.49 494.10 Td (ger or sell, transfer or otherwise dispose of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 482.10 Td (all or substantially all of its assets; and enter into transactions with af) Tj ET Q q 0 0 0 rg BT 329.87 482.10 Td (filiates. ) Tj ET Q q 0 0 0 rg BT 361.90 482.10 Td (The Company will not be subject to these ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 470.10 Td (covenants if \(i\) the Senior Notes have Investment Grade Ratings from the relevant rating agencies, as defined in the terms of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 458.10 Td (the Senior Notes, and \(ii\) no default has occurred and is continuing under the indenture. ) Tj ET Q q 0 0 0 rg BT 406.96 458.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 431.40 458.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.00 458.10 Td (, no default has ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 446.10 Td (occurred and the Company is compliant with all of the covenants of the indenture.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 428.10 Td (T) Tj ET Q q 0 0 0 rg BT 77.75 428.10 Td (erm Loan) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 410.10 Td (The ) Tj ET Q q 0 0 0 rg BT 89.87 410.10 Td (T) Tj ET Q q 0 0 0 rg BT 95.28 410.10 Td (erm Loan provides for senior secured term loans in an aggregate principal amount of $1,710.0 million and matures ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 398.10 Td (on June 7, 2023. In addition, the Company may request one or more incremental credit facilities in an aggregate amount of up ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 386.10 Td (to $500.0 million, plus additional amounts subject to certain requirements. Borrowings under the ) Tj ET Q q 0 0 0 rg BT 443.75 386.10 Td (T) Tj ET Q q 0 0 0 rg BT 449.16 386.10 Td (erm Loan bear interest at a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 374.10 Td (rate equal to, at the Company) Tj ET Q q 0 0 0 rg BT 174.52 374.10 Td (s option, either \(a\) a LIBOR rate determined by reference to the costs of funds for Eurodollar ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 362.10 Td (deposits for the interest period relevant to such borrowing, adjusted for certain additional costs, subject to a 1.00% floor ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 350.10 Td (\(Eurocurrency Rate Loan\), or \(b\) a base rate determined by reference to the highest of \(i\) the federal funds rate plus 0.50%, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 338.10 Td (\(ii\) the prime rate and \(iii\) the one-month adjusted LIBOR rate plus 1.00%, in each case plus an applicable mar) Tj ET Q q 0 0 0 rg BT 498.39 338.10 Td (gin. ) Tj ET Q q 0 0 0 rg BT 515.62 338.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 326.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 117.60 326.10 Td (, the Company elected to carry the ) Tj ET Q q 0 0 0 rg BT 257.36 326.10 Td (T) Tj ET Q q 0 0 0 rg BT 262.77 326.10 Td (erm Loan as a Eurocurrency Rate Loan with an ef) Tj ET Q q 0 0 0 rg BT 462.23 326.10 Td (fective interest rate of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 314.10 Td (6.74%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 79.83 314.10 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 296.10 Td (The Company is required to repay 0.25% of the original principal amount of the ) Tj ET Q q 0 0 0 rg BT 394.79 296.10 Td (T) Tj ET Q q 0 0 0 rg BT 400.20 296.10 Td (erm Loan on the last business day of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 284.10 Td (each quarter commencing with the quarter ended September30, 2016. Following the end of each fiscal year) Tj ET Q q 0 0 0 rg BT 485.11 284.10 Td (, commencing ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 272.10 Td (with the fiscal year ending March 31, 2017, the Company must prepay a percentage between 0% and 50%, based on its total ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 260.10 Td (leverage ratio, of its Excess Cash Flow) Tj ET Q q 0 0 0 rg BT 209.15 260.10 Td (, as defined in the ) Tj ET Q q 0 0 0 rg BT 282.28 260.10 Td (T) Tj ET Q q 0 0 0 rg BT 287.69 260.10 Td (erm Loan agreement, within five business days after delivery of the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 248.10 Td (financial statements. In fiscal year 2019, based on the Company's ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 317.95 248.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 381.55 248.10 Td ( consolidated financial statements, and in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 236.10 Td (fiscal year 2018, based on the Company's March 31, 2018 consolidated financial statements, the Company determined there ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 224.10 Td (were no prepayments due under the Excess Cash Flow provision. Prepayments made under the Excess Cash Flow provision ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 212.10 Td (are used to satisfy prospective mandatory quarterly principal repayments. ) Tj ET Q q 0 0 0 rg BT 349.83 212.10 Td (The Company is also required to prepay loans with ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 200.10 Td (net proceeds from asset sales, casualty events, or issuances of indebtedness, subject to, in the case of asset sales and casualty ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 188.10 Td (events, reinvestment rights by the Company within certain time restrictions. In accordance with the Excess Cash Flow ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 176.10 Td (provisions of the ) Tj ET Q q 0 0 0 rg BT 123.54 176.10 Td (T) Tj ET Q q 0 0 0 rg BT 128.95 176.10 Td (erm Loan facility) Tj ET Q q 0 0 0 rg BT 197.71 176.10 Td (, the Company made the fiscal year 2017 principal prepayment of $27.7 million to debt ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 164.10 Td (holders in June 2017. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 143.10 Td (ABL) Tj ET Q q 0 0 0 rg BT 92.01 143.10 Td ( Revolving Cr) Tj ET Q q 0 0 0 rg BT 151.27 143.10 Td (edit Facility) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 125.10 Td (The availability of credit under the amended and restated five-year ) Tj ET Q q 0 0 0 rg BT 340.77 125.10 Td (ABL) Tj ET Q q 0 0 0 rg BT 360.40 125.10 Td ( Revolving Credit Facility) Tj ET Q q 0 0 0 rg BT 464.46 125.10 Td (, which expires on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 113.10 Td (June 7, 2021, is equal to the lesser of \(i\) $250.0 million and \(ii\) the Company) Tj ET Q q 0 0 0 rg BT 365.62 113.10 Td (s borrowing base. ) Tj ET Q q 0 0 0 rg BT 438.76 113.10 Td (The borrowing base equals ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 101.10 Td (the sum of \(i\) 90% of eligible credit card receivables, plus \(ii\) 85% of eligible receivables, plus \(iii\) 85% of the orderly ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 89.10 Td (liquidation value of eligible inventory) Tj ET Q q 0 0 0 rg BT 204.98 89.10 Td (, plus \(iv\) 100% of cash not to exceed $35.0 million. ) Tj ET Q q 0 0 0 rg BT 417.17 89.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 441.61 89.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 505.21 89.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 77.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 117.60 77.10 Td (, the ) Tj ET Q q 0 0 0 rg BT 136.76 77.10 Td (ABL) Tj ET Q q 0 0 0 rg BT 156.39 77.10 Td ( Revolving Credit Facility had no outstanding borrowings and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 407.20 77.10 Td ($22.8 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 461.09 77.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.53 77.10 Td ($22.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 534.42 77.10 Td (, ) Tj ET Q endstream endobj 173 0 obj <> endobj 174 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 213.20 760.75 Td (Notes to Consolidated Financial Statements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.15 30.60 Td (- 81 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 731.10 Td (respectively) Tj ET Q q 0 0 0 rg BT 101.66 731.10 Td (, in issued and outstanding letters of credit. ) Tj ET Q q 0 0 0 rg BT 275.89 731.10 Td (The Company) Tj ET Q q 0 0 0 rg BT 335.60 731.10 Td (s available borrowing base as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.67 731.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 530.27 731.10 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (which is based on the balance sheet at ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 208.39 719.10 Td (February 28, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 281.99 719.10 Td (, was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 305.04 719.10 Td ($103.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 363.93 719.10 Td (, net of letters of credit. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 701.10 Td (The unused commitment fee will range between ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 267.21 701.10 Td (0.25%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 293.04 701.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.48 701.10 Td (0.375%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 343.31 701.10 Td (, based upon the average facility usage for the most ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 689.10 Td (recently ended fiscal quarter) Tj ET Q q 0 0 0 rg BT 167.00 689.10 Td (. Outstanding letters of credit are also subject to a quarterly letter of credit participation fee which ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 677.10 Td (will vary between ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 128.14 677.10 Td (1.75%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 153.97 677.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 173.41 677.10 Td (2.25%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 199.24 677.10 Td (, depending on the average daily availability) Tj ET Q q 0 0 0 rg BT 376.03 677.10 Td (. During the fiscal year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 496.81 677.10 Td (March31, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 665.10 Td (2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 74.00 665.10 Td (, the Company incurred approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 231.18 665.10 Td ($0.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 280.07 665.10 Td ( of unused commitment fees and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 412.81 665.10 Td ($0.4 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 461.71 665.10 Td ( of letter of credit ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 653.10 Td (participation fees.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 632.10 Td (1) Tj ET Q q 0 0 0 rg BT 58.45 632.10 Td (1) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 63.45 632.10 Td (. BENEFIT) Tj ET Q q 0 0 0 rg BT 112.17 632.10 Td ( PLANS) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 611.10 Td (The Company maintains a defined contribution 401\(k\) Savings Plan in the United States. ) Tj ET Q q 0 0 0 rg BT 430.65 611.10 Td (The plan covers substantially ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 599.10 Td (all United States based employees who meet minimum age and service requirements and allows participants to defer a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 587.10 Td (portion of their annual compensation on a pre-tax or post-tax basis. ) Tj ET Q q 0 0 0 rg BT 324.86 587.10 Td (The Company matches ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 419.56 587.10 Td (100%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 442.89 587.10 Td ( of employee contributions ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 575.10 Td (up to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 76.78 575.10 Td (4%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.11 575.10 Td ( of the employee) Tj ET Q q 0 0 0 rg BT 159.81 575.10 Td (s compensation, as defined in the plan. ) Tj ET Q q 0 0 0 rg BT 317.09 575.10 Td (These matching contributions vest based upon an ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 563.10 Td (employee) Tj ET Q q 0 0 0 rg BT 95.65 563.10 Td (s years of service and become fully vested after ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 288.07 563.10 Td (four) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 304.73 563.10 Td ( years of service. ) Tj ET Q q 0 0 0 rg BT 374.79 563.10 Td (The Company also has similar defined ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 551.10 Td (contribution plans for certain employees outside the United States. ) Tj ET Q q 0 0 0 rg BT 322.64 551.10 Td (The Company) Tj ET Q q 0 0 0 rg BT 382.35 551.10 Td (s contributions to all plans, net of plan ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 539.10 Td (forfeitures, were ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 122.57 539.10 Td ($13.8 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 176.47 539.10 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 181.47 539.10 Td ($13.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 235.36 539.10 Td (, and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 257.30 539.10 Td ($12.1 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 311.19 539.10 Td ( for the fiscal years ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.70 539.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.29 539.10 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 485.29 539.10 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 505.29 539.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 524.73 539.10 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 544.73 539.10 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 527.10 Td (respectively) Tj ET Q q 0 0 0 rg BT 101.66 527.10 Td (.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 506.10 Td (12) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 64.00 506.10 Td (. EQUITY) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 488.10 Td (Pursuant to the Company) Tj ET Q q 0 0 0 rg BT 176.16 488.10 Td (s Certificate of Incorporation, the Company is authorized to issue an aggregate of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 504.39 488.10 Td (350,000,000) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 554.39 488.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 476.10 Td (shares of capital stock, of which ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 185.35 476.10 Td (300,000,000) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 235.35 476.10 Td ( shares were designated as common stock and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 421.40 476.10 Td (50,000,000) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.40 476.10 Td ( shares designated as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 464.10 Td (preferred stock, each class having a par value of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 248.91 464.10 Td ($0.01) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 271.41 464.10 Td (. Holders of common stock are entitled to one vote per share on all ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 452.10 Td (matters to be voted upon by stockholders and shall vote together as a single class. ) Tj ET Q q 0 0 0 rg BT 382.63 452.10 Td (The Company) Tj ET Q q 0 0 0 rg BT 442.34 452.10 Td (s board of directors is ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 440.10 Td (authorized to issue shares of one or more series of preferred stock and establish the designation, powers, preferences, and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 428.10 Td (rights of the shares of each series and any qualifications, limitations, or restrictions thereof. ) Tj ET Q q 0 0 0 rg BT 420.84 428.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 445.28 428.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 508.88 428.10 Td (, the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 416.10 Td (Company has not issued any shares of preferred stock.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 398.10 Td (Equity Pur) Tj ET Q q 0 0 0 rg BT 101.33 398.10 Td (chase Plan) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 380.10 Td (The Company adopted an equity purchase plan during fiscal year 2015 \(the Equity Purchase Plan\) which allows the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 368.10 Td (compensation committee of its board of directors to designate directors, of) Tj ET Q q 0 0 0 rg BT 351.79 368.10 Td (ficers and employees of Cengage to purchase ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 356.10 Td (newly issued equity securities for fair value based on the Company) Tj ET Q q 0 0 0 rg BT 325.04 356.10 Td (s reor) Tj ET Q q 0 0 0 rg BT 347.35 356.10 Td (ganization value on the Ef) Tj ET Q q 0 0 0 rg BT 452.13 356.10 Td (fective Date.) Tj ET Q q 0 0 0 rg BT 505.53 356.10 Td (The sale of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 344.10 Td (these securities is not intended to raise capital for Cengage.Rather) Tj ET Q q 0 0 0 rg BT 319.90 344.10 Td (, the purpose of the plan is to provide additional ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 332.10 Td (opportunities to further align the interests of the Company) Tj ET Q q 0 0 0 rg BT 289.51 332.10 Td (s directors, of) Tj ET Q q 0 0 0 rg BT 344.03 332.10 Td (ficers and employees with the interests of its ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 320.10 Td (shareholders. ) Tj ET Q q 0 0 0 rg BT 108.99 320.10 Td (As the shares are issued at fair value, the Company considers the Equity Purchase Plan to be non-compensatory) Tj ET Q q 0 0 0 rg BT 554.88 320.10 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 308.10 Td (The compensation committee may impose certain sale and transfer restrictions on securities purchased under the Equity ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 296.10 Td (Purchase Plan.) Tj ET Q q 0 0 0 rg BT 115.20 296.10 Td (The board of directors authorized ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 251.53 296.10 Td (100,000) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 284.03 296.10 Td ( shares of the Company) Tj ET Q q 0 0 0 rg BT 381.23 296.10 Td (s common stock to be reserved for issuance ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 284.10 Td (under the Equity Purchase Plan. ) Tj ET Q q 0 0 0 rg BT 184.35 284.10 Td (There were no shares issued under the Equity Purchase Plan in the fiscal years ended March ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 272.10 Td (31, 2019, 2018 and 2017. ) Tj ET Q q 0 0 0 rg BT 157.89 272.10 Td (As of March 31, 2019, 24,000 shares remain available for issuance under the Equity Purchase Plan. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 254.10 Td (Dividends ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 233.10 Td (There were no dividends declared in the fiscal years ended March 31, 2019 and 2018. ) Tj ET Q q 0 0 0 rg BT 416.98 233.10 Td (W) Tj ET Q q 0 0 0 rg BT 425.61 233.10 Td (e may declare cash dividends in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 221.10 Td (the future.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 200.10 Td (On September 14, 2016, the Company) Tj ET Q q 0 0 0 rg BT 228.37 200.10 Td (s board of directors authorized management to pay a one-time cash dividend of up ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 188.10 Td (to $200.0 million payable to all common shareholders of record at the close of business on September 16, 2016 \(the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 176.10 Td (Dividend Record Date\), which was subsequently paid on September 30, 2016 using a portion of the proceeds from the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 164.10 Td (issuance of debt during the first quarter of fiscal year 2017. See Note ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 332.24 164.10 Td (10) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.24 164.10 Td (, Debt, for additional details on the debt issuance. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 152.10 Td (Based on the 67,922,206 shares of common stock outstanding on the Dividend Record Date, the dividend payment was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 140.10 Td (approximately $2.94 per share. ) Tj ET Q q 0 0 0 rg BT 180.45 140.10 Td (The dividend reduced additional paid-in capital as the Company did not have retained ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 128.10 Td (earnings at the time of the dividend.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 110.10 Td (Pur) Tj ET Q q 0 0 0 rg BT 69.93 110.10 Td (chases of Company Common Stock) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 92.10 Td (On June 20, 2016, the Company announced a share repurchase program under which the Company is authorized to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 80.10 Td (repurchase up to $265.0 million in shares of the Company) Tj ET Q q 0 0 0 rg BT 288.96 80.10 Td (s outstanding common stock. On September 14, 2016, in) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 68.10 Td (connection with the declaration of the one-time $200.0 million cash dividend, the Company announced the reduction of this) Tj ET Q endstream endobj 175 0 obj <> endobj 176 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 213.20 760.75 Td (Notes to Consolidated Financial Statements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.15 30.60 Td (- 82 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 731.10 Td (share repurchase program to $65.0 million. On June 6, 2017, the Company announced the authorization to extend this ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (program to May 31, 2018. ) Tj ET Q q 0 0 0 rg BT 160.93 719.10 Td (As of September 30, 2017, the Company completed this program, repurchasing 7,259,913 shares ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 707.10 Td (for $65.0 million in the aggregate. Under this program, approximately $4.1 million was paid in fiscal year 2017 and $60.9 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 695.10 Td (million was paid in the fiscal year 2018. Repurchased shares will be retired and returned to the status of authorized but ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 683.10 Td (unissued. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 665.10 Td (On March 14, 2016, the Company announced a share repurchase program under which the Company was authorized to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 653.10 Td (repurchase up to $50.0 million in shares of the Company) Tj ET Q q 0 0 0 rg BT 283.96 653.10 Td (s outstanding common stock. ) Tj ET Q q 0 0 0 rg BT 402.94 653.10 Td (The shares could be repurchased from ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 641.10 Td (time to time over the twelve months following the authorization in accordance with federal securities laws. On ) Tj ET Q q 0 0 0 rg BT 498.31 641.10 Td (April 22, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 629.10 Td (2016, the Company completed this program, repurchasing 2,663,825 shares for $50.0 million in the aggregate. Repurchased ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 617.10 Td (shares were retired and returned to the status of authorized but unissued.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 599.10 Td (Since December 2014, the Company) Tj ET Q q 0 0 0 rg BT 221.68 599.10 Td (s board of directors has authorized the Company to repurchase up to $290.0 million ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 587.10 Td (of the Company) Tj ET Q q 0 0 0 rg BT 121.21 587.10 Td (s outstanding common stock under share repurchase programs. ) Tj ET Q q 0 0 0 rg BT 375.13 587.10 Td (The shares could be repurchased from time ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 575.10 Td (to time over the twelve months following the authorization in accordance with federal securities laws. ) Tj ET Q q 0 0 0 rg BT 463.32 575.10 Td (As of March 31, 2018, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 563.10 Td (all of these programs had been completed. Repurchased shares were retired and returned to the status of authorized but ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 551.10 Td (unissued.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 533.10 Td (The following table presents the number of shares and dollar amount of shares acquired in aggregate under the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 521.10 Td (Company) Tj ET Q q 0 0 0 rg BT 95.67 521.10 Td (s share repurchase programs during the fiscal years ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 329.19 521.10 Td (March31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 392.78 521.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 412.22 521.10 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 432.22 521.10 Td (.) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 481.6 m 488.5 481.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 481.6 m 557.5 481.6 l s BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 485.85 Td (\(dollars in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 434.70 495.05 Td (Number) Tj ET Q q 0 0 0 rg BT 466.62 495.05 Td ( of) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 442.55 486.05 Td (Shar) Tj ET Q q 0 0 0 rg BT 460.97 486.05 Td (es) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 508.70 486.05 Td (Amount) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 472.28 Td (Shar) Tj ET Q q 0 0 0 rg BT 76.38 472.28 Td (e Repur) Tj ET Q q 0 0 0 rg BT 110.36 472.28 Td (chases:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 457.27 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 94.20 457.27 Td (Y) Tj ET Q q 0 0 0 rg BT 100.74 457.27 Td (ear 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 444.65 457.27 Td (7,097,974) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.00 457.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 457.27 Td (60.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 442.27 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 94.02 442.27 Td (Y) Tj ET Q q 0 0 0 rg BT 100.24 442.27 Td (ear 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 444.65 442.27 Td (2,825,764) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.00 442.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 442.27 Td (54.1) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 417.10 Td (In addition, the Company also repurchases shares from certain employees in order to satisfy employee tax withholding) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 405.10 Td (requirements in connection with the vesting of restricted stock units and delivery of shares. During the fiscal years ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 393.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 117.60 393.10 Td (, 2018 and 2017, the Company spent ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 266.75 393.10 Td ($7.8 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 315.64 393.10 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 320.64 393.10 Td ($5.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 369.53 393.10 Td (, and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 391.47 393.10 Td ($0.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 440.36 393.10 Td (, respectively) Tj ET Q q 0 0 0 rg BT 493.02 393.10 Td (, to acquire ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 381.10 Td (shares in connection with net settlement of equity-based awards.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 360.10 Td (13) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 64.00 360.10 Td (. EQUITY) Tj ET Q q 0 0 0 rg BT 107.54 360.10 Td (-BASED COMPENSA) Tj ET Q q 0 0 0 rg BT 203.19 360.10 Td (TION ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 339.10 Td (2014 Cengage Learning Equity Incentive Plan) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 318.10 Td (On the Ef) Tj ET Q q 0 0 0 rg BT 110.70 318.10 Td (fective Date, the Company adopted the 2014 Cengage Learning Equity Incentive Plan \(the 2014 Equity ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 306.10 Td (Incentive Plan\). ) Tj ET Q q 0 0 0 rg BT 124.07 306.10 Td (The 2014 Equity Incentive Plan was approved by the Bankruptcy Court and the Company) Tj ET Q q 0 0 0 rg BT 486.49 306.10 Td (s board of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 294.10 Td (directors and is administered by the Compensation Committee to the board of directors. Directors, of) Tj ET Q q 0 0 0 rg BT 457.61 294.10 Td (ficers, and employees of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 282.10 Td (the Company were eligible to receive awards under the 2014 Equity Incentive Plan. ) Tj ET Q q 0 0 0 rg BT 390.93 282.10 Td (The awards could be granted in the form ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 270.10 Td (of incentive stock options \(ISOs\), non-qualified stock options \(NQSOs\), restricted stock units \(RSUs\), restricted stock, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 258.10 Td (stock appreciation rights or performance awards. Upon the occurrence of a change in capital structure, as defined by the 2014 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 246.10 Td (Equity Incentive Plan, the board of directors is required to modify af) Tj ET Q q 0 0 0 rg BT 328.18 246.10 Td (fected awards to preserve their value, including adjusting ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 234.10 Td (the number of shares for awards then outstanding or to be granted, adjusting the exercise price \(or base price in the case of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 222.10 Td (stock appreciation rights\), or providing for an immediate cash payment to the holders of awards in consideration for ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 210.10 Td (cancellation of the awards. Upon the occurrence of a change in control, as defined by the 2014 Equity Incentive Plan, the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 198.10 Td (Company has the authority to cancel af) Tj ET Q q 0 0 0 rg BT 210.44 198.10 Td (fected awards and pay to each af) Tj ET Q q 0 0 0 rg BT 340.74 198.10 Td (fected 2014 Plan participant a cash amount equivalent ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 186.10 Td (to the award) Tj ET Q q 0 0 0 rg BT 106.20 186.10 Td (s fair value. In accordance with the terms of the 2014 Equity Incentive Plan, the Company reserved ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 505.79 186.10 Td (4,627,1) Tj ET Q q 0 0 0 rg BT 535.42 186.10 Td (18) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 545.42 186.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 174.10 Td (shares of common stock available for grant, representing approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 343.90 174.10 Td (5.6%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 364.73 174.10 Td ( of the fully diluted outstanding common stock. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 162.10 Td (As of March 31, 2015, in connection with the leveraged recapitalization of the Company) Tj ET Q q 0 0 0 rg BT 407.96 162.10 Td (, the total amount of shares ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 150.10 Td (authorized under the 2014 Equity Incentive Plan was increased to 5,103,650. ) Tj ET Q q 0 0 0 rg BT 363.74 150.10 Td (The total amount of shares authorized was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 138.10 Td (additionally increased to 7,052,550 as of March 31, 2017 as a result of the one-time cash dividend, in accordance with the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 126.10 Td (anti-dilution provisions of the plan, and the grant of performance-based RSUs during fiscal year 2017. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 105.10 Td (Stock options vest in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 158.11 105.10 Td (25%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 176.44 105.10 Td ( increments annually on the last day of the first four fiscal years following the grant date, and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 93.10 Td (expire seven years after the date of grant. RSUs vest in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 276.15 93.10 Td (20%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 294.48 93.10 Td ( increments annually on the last day of the first five fiscal years ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 81.10 Td (following the grant date. Shares are delivered to the RSU recipients upon the earliest of a change in control, as defined; ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 69.10 Td (termination, to the extent vested; or 50% on the fourth anniversary of the date of grant and the remaining 50% on the fifth ) Tj ET Q endstream endobj 177 0 obj <> endobj 178 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 213.20 760.75 Td (Notes to Consolidated Financial Statements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.15 30.60 Td (- 83 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 731.10 Td (anniversary) Tj ET Q q 0 0 0 rg BT 100.00 731.10 Td (. ) Tj ET Q q 0 0 0 rg BT 104.82 731.10 Td (The Company recognizes equity-based compensation expense on a straight-line basis over the applicable vesting ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (period. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 698.10 Td (2018 Cengage Learning Equity Incentive Plan) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 677.10 Td (Ef) Tj ET Q q 0 0 0 rg BT 81.26 677.10 Td (fective as of November 15, 2018, the Company's Board of Directors and the majority shareholders adopted an equity ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 665.10 Td (incentive plan \(the 2018 Equity Incentive Plan\). ) Tj ET Q q 0 0 0 rg BT 257.09 665.10 Td (The 2018 Equity Incentive Plan is administered by the Compensation ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 653.10 Td (Committee of the Board of Directors. ) Tj ET Q q 0 0 0 rg BT 206.28 653.10 Td (The plan provides for the grant of incentive stock options \(the ISOs\), certain other ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 641.10 Td (options, restricted stock units \(the RSUs\), restricted stock, and other stock-based awards to directors, of) Tj ET Q q 0 0 0 rg BT 477.04 641.10 Td (ficers, and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 629.10 Td (employees of the Company) Tj ET Q q 0 0 0 rg BT 163.05 629.10 Td (. Upon the occurrence of a change in capital structure, as defined by the 2018 Equity Incentive ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 617.10 Td (Plan, the Board of Directors is required to modify af) Tj ET Q q 0 0 0 rg BT 263.21 617.10 Td (fected awards to preserve their value, including adjusting the number of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 605.10 Td (shares for awards then outstanding or to be granted, adjusting the exercise price, or modifying applicable financial or other ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 593.10 Td (performance tar) Tj ET Q q 0 0 0 rg BT 117.39 593.10 Td (gets. Upon the occurrence of change in control, as defined by the 2018 Equity Incentive Plan, the Company ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 581.10 Td (has the authority to cancel af) Tj ET Q q 0 0 0 rg BT 169.05 581.10 Td (fected awards and pay to each af) Tj ET Q q 0 0 0 rg BT 299.35 581.10 Td (fected 2018 Equity Incentive Plan participant a cash amount ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 569.10 Td (equivalent to the award's fair value. Following the approval of the 2018 Equity Incentive Plan, the Company does not intend ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 557.10 Td (to grant any additional awards under the 2014 Equity Incentive Plan. Under the 2018 Equity Incentive Plan, the majority ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 545.10 Td (shareholders and the Board of Directors authorized the grant over time of up to an additional 2,550,000 shares of common ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 533.10 Td (stock over and above those approved under the 2014 Equity Incentive Plan, with a maximum of approximately 850,000 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 521.10 Td (shares available for grant in a given fiscal year) Tj ET Q q 0 0 0 rg BT 240.03 521.10 Td (. ) Tj ET Q q 0 0 0 rg BT 244.85 521.10 Td (The total amount of 850,000 shares were authorized for grant under the 2018 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 509.10 Td (Equity Incentive Plan and the aggregate number of shares authorized and available for grant under any equity incentive plan ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 497.10 Td (adopted by the Company to 9,602,550 shares as of March 31, 2019.) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 72.00 483.03 470.97 -9.09 re f /GS0 gs q 0 0 0 rg BT 72.00 476.10 Td (The awards under the 2018 Equity Incentive Plan vest upon meeting two \(2\) requirements: the service requirement is ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 471.03 383.22 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 464.10 Td (satisfied in 25% increments on the last day of the first four fiscal years following the grant date ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 437.22 464.10 Td (and the performance ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 452.10 Td (condition is satisfied upon a liquidity event in the form of either a change of control or initial public of) Tj ET Q q 0 0 0 rg BT 464.00 452.10 Td (fering, in either case ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 440.10 Td (occurring prior to the sixth anniversary of the grant date. See below for additional details on the performance-based stock ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 428.10 Td (options and performance-based RSUs.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 410.10 Td (Presented below is a summary of the compensation cost recognized in selling, general and administrative expenses, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 398.10 Td (excluding depreciation in the consolidated statements of operations:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 367.6 m 409.5 367.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 367.6 m 413.5 367.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 367.6 m 483.5 367.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 367.6 m 487.5 367.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 367.6 m 557.5 367.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 367.6 m 409.5 367.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 353.6 m 409.5 353.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 367.6 m 413.5 367.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 367.6 m 483.5 367.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 353.6 m 483.5 353.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 367.6 m 487.5 367.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 367.6 m 557.5 367.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 353.6 m 557.5 353.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 323.6 m 409.5 323.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 323.6 m 483.5 323.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 323.6 m 557.5 323.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 323.6 m 409.5 323.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 309.6 m 409.5 309.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 307.6 m 409.5 307.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 323.6 m 483.5 323.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 309.6 m 483.5 309.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 307.6 m 483.5 307.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 323.6 m 557.5 323.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 309.6 m 557.5 309.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 307.6 m 557.5 307.6 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 392.45 372.05 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 417.03 372.05 Td (Y) Tj ET Q q 0 0 0 rg BT 422.86 372.05 Td (ear) Tj ET Q q 0 0 0 rg BT 434.77 372.05 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 481.11 372.05 Td (ch 31,) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 357.85 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 365.00 358.05 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 439.00 358.05 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 513.00 358.05 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 343.27 Td (Restricted stock units) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 343.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 343.27 Td (6.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 343.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 343.27 Td (1) Tj ET Q q 0 0 0 rg BT 467.15 343.27 Td (1.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 343.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 343.27 Td (8.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 328.27 Td (Stock options) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 328.27 Td (1.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 328.27 Td (6.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 328.27 Td (5.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 313.27 Td (Equity-based compensation expense) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 313.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 313.27 Td (8.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 313.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 313.27 Td (17.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 313.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 313.27 Td (13.7) Tj ET Q BT /F1 10.00 Tf ET BT /F4 10.00 Tf ET q 0 0 0 rg BT 54.00 291.10 Td (2014 Equity Incentive Plan Performance-Based Restricted Stock Units) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 273.10 Td (During the fiscal years ended March 31, 2019, 2018, and 2017 the Company granted 58,200, 73,200 and 215,200 shares, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 261.10 Td (respectively) Tj ET Q q 0 0 0 rg BT 101.66 261.10 Td (, of performance-based RSUs with a weighted-average grant date fair value for the fiscal year 2019 of $17.33 per ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 249.10 Td (award and for the fiscal years 2018 and 2017, $16.59 per award. ) Tj ET Q q 0 0 0 rg BT 313.45 249.10 Td (The performance-based RSUs are subject to two vesting ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 237.10 Td (requirements: a service period \(four years\) and a performance condition \(a liquidity event in the form of either a change of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 225.10 Td (control or an initial public of) Tj ET Q q 0 0 0 rg BT 169.07 225.10 Td (fering, each as defined in the 2014 Equity Incentive Plan\) in order for the awards to fully vest. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 213.10 Td (The Company did not record any expense related to these awards during the fiscal years ended March 31, 2019, 2018 and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 201.10 Td (2017, as it was not probable that the performance condition would be met.) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 54.00 183.10 Td (2018 Equity Incentive Plan) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 165.10 Td (During the period from November 15, 2018 through March 31, 2019, under the 2018 Equity Incentive Plan, the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 153.10 Td (Company granted 525,370 stock options and 87,612 RSUs to certain employees with a weighted-average fair value of $17.33 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 141.10 Td (per award. ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 101.11 148.03 410.90 -9.09 re f /GS0 gs q 0 0 0 rg BT 101.02 141.10 Td (The awards under the 2018 Equity Incentive Plan vest upon meeting two \(2\) requirements: the service ) Tj ET Q BT /F1 10.00 Tf ET 1 1 1 rg /GS0 gs 54.00 136.03 443.20 -9.09 re f /GS0 gs q 0 0 0 rg BT 54.00 129.10 Td (requirement is satisfied in 25% increments on the last day of the first four fiscal years following the grant date ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 497.20 129.10 Td (and the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 117.10 Td (performance condition is satisfied upon a liquidity event in the form of either a change of control or initial public of) Tj ET Q q 0 0 0 rg BT 517.02 117.10 Td (fering, in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 105.10 Td (either case occurring prior to the sixth anniversary of the grant date. ) Tj ET Q q 0 0 0 rg BT 327.88 105.10 Td (The Company did not record any expense related to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 93.10 Td (these awards during the fiscal year ended March 31, 2019, as it was not probable that the performance condition would be ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 81.10 Td (met.) Tj ET Q endstream endobj 179 0 obj <> endobj 180 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 213.20 760.75 Td (Notes to Consolidated Financial Statements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.15 30.60 Td (- 84 -) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 54.00 731.10 Td (Shar) Tj ET Q q 0 0 0 rg BT 72.52 731.10 Td (es ) Tj ET Q q 0 0 0 rg BT 83.17 731.10 Td (A) Tj ET Q q 0 0 0 rg BT 88.73 731.10 Td (vailable for Grant or Issuance) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 710.10 Td (As of March 31, 2019, there were a total of 3,557,096 shares currently available for grant in respect of awards under the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 698.10 Td (2018 Equity Incentive Plan. In addition, as of March 31, 2019, under the 2014 Equity Incentive Plan, there were awards of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 686.10 Td (4,704,522 shares of stock options, performance-based RSUs and RSUs outstanding. Should the 4,704,522 shares again ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 674.10 Td (become available for grant, the shares would be available for grant under the 2018 Equity Incentive Plan. ) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 54.00 656.10 Td (Restricted Stock Units) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 638.10 Td (Cengage) Tj ET Q q 0 0 0 rg BT 109.76 638.10 Td (s outstanding common stock is privately held and not traded on any public exchange market. ) Tj ET Q q 0 0 0 rg BT 482.83 638.10 Td (Therefore, to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 626.10 Td (value its shared-based awards, the Company follows guidelines set forth in the ) Tj ET Q q 0 0 0 rg BT 370.32 626.10 Td (American Institute of Certified Public ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 614.10 Td (Accountants ) Tj ET Q q 0 0 0 rg BT 105.93 614.10 Td (Accounting & ) Tj ET Q q 0 0 0 rg BT 165.19 614.10 Td (V) Tj ET Q q 0 0 0 rg BT 171.30 614.10 Td (aluation Guide, ) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 235.45 614.10 Td (V) Tj ET Q q 0 0 0 rg BT 240.45 614.10 Td (aluation of Privately-Held Company Equity Securities Issued as ) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 54.00 602.10 Td (Compensation) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 111.78 602.10 Td (. ) Tj ET Q q 0 0 0 rg BT 116.60 602.10 Td (T) Tj ET Q q 0 0 0 rg BT 122.01 602.10 Td (o estimate the fair value of RSUs on the date of grant the Company is first required to estimate the value of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 590.10 Td (its equity) Tj ET Q q 0 0 0 rg BT 90.29 590.10 Td (. ) Tj ET Q q 0 0 0 rg BT 95.11 590.10 Td (The estimate of equity value was based on the estimated enterprise value of the Company adjusted for the fair ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 578.10 Td (value of its outstanding indebtedness. ) Tj ET Q q 0 0 0 rg BT 206.57 578.10 Td (The value was then allocated to the outstanding common stock, RSUs, and stock ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 566.10 Td (options on a fully diluted basis using the Option-Pricing Method \(OPM\). Under the OPM, the value of each equity security ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 554.10 Td (is determined via a series of call options on the total equity value of the Company with exercise prices based on value ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 542.10 Td (thresholds, or breakpoints, at which value begins to be shared dif) Tj ET Q q 0 0 0 rg BT 313.76 542.10 Td (ferently between the holders of each type of equity security) Tj ET Q q 0 0 0 rg BT 550.51 542.10 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 530.10 Td (These call options are valued using a Black-Scholes option-pricing model with the following key inputs: equity value, risk-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 518.10 Td (free interest rate, volatility factor) Tj ET Q q 0 0 0 rg BT 185.48 518.10 Td (, and time period from date of grant to a liquidity event. ) Tj ET Q q 0 0 0 rg BT 410.42 518.10 Td (After determining the value ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 506.10 Td (allocated to RSUs, an appropriate discount for the lack of marketability was applied to arrive at fair value of the outstanding ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 494.10 Td (awards. ) Tj ET Q q 0 0 0 rg BT 87.14 494.10 Td (The following table summarizes the weighted-average grant date fair value of RSUs and performance-based RSUs ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 482.10 Td (granted under the 2014 Equity Incentive Plan and performance-based RSUs granted under the 2018 Equity Incentive Plan in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 470.10 Td (the periods presented: ) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 439.6 m 409.5 439.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 439.6 m 413.5 439.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 439.6 m 483.5 439.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 439.6 m 487.5 439.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 439.6 m 557.5 439.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 439.6 m 409.5 439.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 425.6 m 409.5 425.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 439.6 m 413.5 439.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 439.6 m 483.5 439.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 425.6 m 483.5 425.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 439.6 m 487.5 439.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 439.6 m 557.5 439.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 425.6 m 557.5 425.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 425.6 m 409.5 425.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 425.6 m 483.5 425.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 425.6 m 557.5 425.6 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 392.45 444.05 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 417.03 444.05 Td (Y) Tj ET Q q 0 0 0 rg BT 422.86 444.05 Td (ear) Tj ET Q q 0 0 0 rg BT 434.77 444.05 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 481.11 444.05 Td (ch 31,) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 365.00 430.05 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 439.00 430.05 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 513.00 430.05 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 415.27 Td (W) Tj ET Q q 0 0 0 rg BT 64.64 415.27 Td (eighted-average grant date fair value) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 415.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 378.15 415.27 Td (17.33) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 415.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 452.15 415.27 Td (16.59) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 415.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 526.15 415.27 Td (17.44) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 393.10 Td (The following table summarizes the RSU and performance-based RSU activity under the 2014 Equity Incentive Plan and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 381.10 Td (the performance-based RSU activity under the 2018 Equity Incentive Plan:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 381.5 341.6 m 459.5 341.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 463.5 341.6 m 557.5 341.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 381.5 341.6 m 459.5 341.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 463.5 341.6 m 557.5 341.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 381.5 281.6 m 459.5 281.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 381.5 281.6 m 459.5 281.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 381.5 267.6 m 459.5 267.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 381.5 265.6 m 459.5 265.6 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 407.05 346.05 Td (Shar) Tj ET Q q 0 0 0 rg BT 425.47 346.05 Td (es) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 474.55 355.05 Td (W) Tj ET Q q 0 0 0 rg BT 483.05 355.05 Td (eighted-A) Tj ET Q q 0 0 0 rg BT 519.88 355.05 Td (verage) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 466.95 346.05 Td (Grant Date Fair) Tj ET Q q 0 0 0 rg BT 529.27 346.05 Td ( ) Tj ET Q q 0 0 0 rg BT 531.36 346.05 Td (V) Tj ET Q q 0 0 0 rg BT 537.03 346.05 Td (alue) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 331.27 Td (Non-vested as of March 31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.15 331.27 Td (958,359) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.00 331.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 331.27 Td (17.76) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 316.27 Td (Granted) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.15 316.27 Td (369,987) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 316.27 Td (17.33) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 301.27 Td (V) Tj ET Q q 0 0 0 rg BT 74.67 301.27 Td (ested) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 419.80 301.32 Td (\(430,831) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 455.65 301.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 301.27 Td (18.52) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 286.27 Td (Forfeited) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 424.80 286.32 Td (\(96,713) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 455.65 286.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 286.27 Td (17.45) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 271.27 Td (Non-vested as of March 31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.15 271.27 Td (800,802) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.00 271.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 271.27 Td (17.19) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 249.10 Td (T) Tj ET Q q 0 0 0 rg BT 77.41 249.10 Td (otal unrecognized compensation cost related to the 2014 Equity Incentive Plan non-vested RSUs as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 488.14 249.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 551.74 249.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 237.10 Td (was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.05 237.10 Td ($7.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 120.94 237.10 Td (, which is expected to be recognized over a weighted average period of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 407.49 237.10 Td (3.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 419.99 237.10 Td ( years.) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 446.08 237.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 448.58 237.10 Td (T) Tj ET Q q 0 0 0 rg BT 454.00 237.10 Td (otal unrecognized ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 225.10 Td (compensation cost related to the 2014 Equity Incentive Plan non-vested performance-based RSUs as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 470.00 225.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 533.59 225.10 Td ( was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 213.10 Td ($4.2 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 102.89 213.10 Td (. ) Tj ET Q q 0 0 0 rg BT 107.71 213.10 Td (T) Tj ET Q q 0 0 0 rg BT 113.12 213.10 Td (otal unrecognized compensation cost related to the 2018 Equity Incentive Plan non-vested performance-based ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 201.10 Td (RSUs as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 101.50 201.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 165.10 201.10 Td ( was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 185.66 201.10 Td ($1.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 234.55 201.10 Td (. No compensation cost related to the performance-based RSUs will be ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 189.10 Td (recognized until it is probable that the performance condition will be met.) Tj ET Q endstream endobj 181 0 obj <> endobj 182 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 213.20 760.75 Td (Notes to Consolidated Financial Statements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.15 30.60 Td (- 85 -) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 72.00 731.10 Td (Stock Options) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 713.10 Td (The estimated fairvalue of the stock options granted is based on the Black-Scholes option pricing model. ) Tj ET Q q 0 0 0 rg BT 495.60 713.10 Td (T) Tj ET Q q 0 0 0 rg BT 501.01 713.10 Td (o determine ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 701.10 Td (the value of the stock options, the Company used the results from the OPM allocation of equity value to common stock. ) Tj ET Q q 0 0 0 rg BT 535.67 701.10 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 689.10 Td (risk-free interest rate was based on interpolated yields of U.S. ) Tj ET Q q 0 0 0 rg BT 303.18 689.10 Td (T) Tj ET Q q 0 0 0 rg BT 308.94 689.10 Td (reasury securities with a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 408.35 689.10 Td (4.75) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 425.85 689.10 Td ( year term as of the date of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 677.10 Td (grant. Estimates of the Company) Tj ET Q q 0 0 0 rg BT 188.14 677.10 Td (s volatility were based on available information on the volatility of peer group public ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 665.10 Td (companies, with adjustments specific to the Company) Tj ET Q q 0 0 0 rg BT 272.57 665.10 Td (s capital structure on the date of grant. ) Tj ET Q q 0 0 0 rg BT 428.17 665.10 Td (The expected term was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 653.10 Td (estimated using the weighted-average mid-point of the vesting date and date of expiration. ) Tj ET Q q 0 0 0 rg BT 417.59 653.10 Td (The following table summarizes ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 641.10 Td (the weighted-average fair value of stock options granted under the 2014 Equity Incentive Plan and performance-based stock ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 629.10 Td (options granted under the 2018 Equity Incentive Plan in the periods presented as well as the weighted average of the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 617.10 Td (applicable assumptions used to value the stock options: ) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 329.5 592.6 m 396.5 592.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 396.5 592.6 m 400.5 592.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 400.5 592.6 m 468.5 592.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 468.5 592.6 m 472.5 592.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 472.5 592.6 m 540.5 592.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 329.5 592.6 m 396.5 592.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 329.5 578.6 m 396.5 578.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 396.5 592.6 m 400.5 592.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 400.5 592.6 m 468.5 592.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 400.5 578.6 m 468.5 578.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 468.5 592.6 m 472.5 592.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 472.5 592.6 m 540.5 592.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 472.5 578.6 m 540.5 578.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 329.5 578.6 m 396.5 578.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 400.5 578.6 m 468.5 578.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 472.5 578.6 m 540.5 578.6 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 378.95 597.05 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 403.53 597.05 Td (Y) Tj ET Q q 0 0 0 rg BT 409.36 597.05 Td (ear) Tj ET Q q 0 0 0 rg BT 421.27 597.05 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 467.61 597.05 Td (ch 31,) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 353.50 583.05 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 425.00 583.05 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 497.00 583.05 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 568.27 Td (W) Tj ET Q q 0 0 0 rg BT 66.04 568.27 Td (eighted-average grant date fair value) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 332.00 568.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 370.15 568.27 Td (6.57) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 403.00 568.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 442.15 568.27 Td (6.08) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.00 568.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 514.15 568.27 Td (6.08) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 57.00 553.27 Td (W) Tj ET Q q 0 0 0 rg BT 65.64 553.27 Td (eighted-average assumptions:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 538.27 Td (Risk-free interest rate) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 375.15 538.27 Td (2.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 387.65 538.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.15 538.27 Td (1.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 459.65 538.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 519.15 538.27 Td (1.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.65 538.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 523.27 Td (Dividend yield) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 375.15 523.27 Td (0.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 387.65 523.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.15 523.27 Td (0.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 459.65 523.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 519.15 523.27 Td (0.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.65 523.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 508.27 Td (Expected volatility) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 370.15 508.27 Td (40.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 387.65 508.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 442.15 508.27 Td (40.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 459.65 508.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 514.15 508.27 Td (35.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.65 508.27 Td (%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.00 493.27 Td (Expected life \(years\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 370.15 493.27 Td (4.75) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 442.15 493.27 Td (4.75) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 514.15 493.27 Td (4.75) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 471.10 Td (The following table summarizes the stock option activity under the 2014 Equity Incentive Plan and 2018 Equity ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 459.10 Td (Incentive Plan:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 381.5 419.6 m 459.5 419.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 463.5 419.6 m 557.5 419.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 381.5 419.6 m 459.5 419.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 463.5 419.6 m 557.5 419.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 381.5 359.6 m 459.5 359.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 381.5 345.6 m 459.5 345.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 381.5 343.6 m 459.5 343.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 381.5 343.6 m 459.5 343.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 381.5 345.6 m 459.5 345.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 381.5 330.6 m 459.5 330.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 381.5 328.6 m 459.5 328.6 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 407.05 424.05 Td (Shar) Tj ET Q q 0 0 0 rg BT 425.47 424.05 Td (es) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 474.55 433.05 Td (W) Tj ET Q q 0 0 0 rg BT 483.05 433.05 Td (eighted-A) Tj ET Q q 0 0 0 rg BT 519.88 433.05 Td (verage) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 482.70 424.05 Td (Exer) Tj ET Q q 0 0 0 rg BT 501.03 424.05 Td (cise Price) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 409.27 Td (Outstanding as of March 31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 415.65 409.27 Td (3,863,676) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.00 409.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 409.27 Td (18.16) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 394.27 Td (Granted) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.15 394.27 Td (863,701) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 394.27 Td (17.33) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 379.27 Td (Exercised) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 437.30 379.32 Td (\(138) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 455.65 379.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 379.27 Td (17.33) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 364.27 Td (Forfeitures and cancellations) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 419.80 364.32 Td (\(638,512) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 455.65 364.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 364.27 Td (17.46) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 349.27 Td (Outstanding as of March 31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 415.65 349.27 Td (4,088,727) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.00 349.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 349.27 Td (18.09) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 334.27 Td (V) Tj ET Q q 0 0 0 rg BT 62.11 334.27 Td (ested and exercisable as of March 31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 415.65 334.27 Td (2,936,358) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.00 334.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 334.27 Td (18.48) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 312.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 96.44 312.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 160.04 312.10 Td (, vested and non-vested stock options outstanding have a weighted-average remaining contractual ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 300.10 Td (life of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 80.66 300.10 Td (2.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 93.16 300.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.59 300.10 Td (3.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 125.09 300.10 Td ( years, respectively) Tj ET Q q 0 0 0 rg BT 201.35 300.10 Td (. ) Tj ET Q q 0 0 0 rg BT 206.17 300.10 Td (T) Tj ET Q q 0 0 0 rg BT 211.58 300.10 Td (otal unrecognized compensation cost related to the 2014 Equity Incentive Plan non-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 288.10 Td (vested stock options as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 159.26 288.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 222.86 288.10 Td ( was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 243.41 288.10 Td ($3.3 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 292.31 288.10 Td (, which is expected to be recognized over a weighted-average ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 276.10 Td (period of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 92.88 276.10 Td (2.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 105.38 276.10 Td ( years. ) Tj ET Q q 0 0 0 rg BT 133.79 276.10 Td (T) Tj ET Q q 0 0 0 rg BT 139.21 276.10 Td (otal unrecognized compensation cost related to the 2018 Equity Incentive Plan non-vested performance-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 264.10 Td (based incentive stock options as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 195.64 264.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 259.23 264.10 Td ( was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 279.79 264.10 Td ($3.4 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 328.68 264.10 Td (. No compensation cost related to the performance-based ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 252.10 Td (incentive stock options will be recognized until it is probable that the performance condition will be met.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 231.10 Td (14) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 64.00 231.10 Td (. INCOME ) Tj ET Q q 0 0 0 rg BT 113.54 231.10 Td (T) Tj ET Q q 0 0 0 rg BT 119.47 231.10 Td (AXES) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 210.10 Td (The components of loss before taxes by jurisdiction are as follows:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 179.60000000000002 m 409.5 179.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 179.60000000000002 m 413.5 179.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 179.60000000000002 m 483.5 179.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 179.60000000000002 m 487.5 179.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 179.60000000000002 m 557.5 179.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 179.60000000000002 m 409.5 179.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 165.60000000000002 m 409.5 165.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 179.60000000000002 m 483.5 179.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 165.60000000000002 m 483.5 165.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 179.60000000000002 m 557.5 179.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 165.60000000000002 m 557.5 165.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 135.60000000000002 m 409.5 135.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 135.60000000000002 m 483.5 135.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 135.60000000000002 m 557.5 135.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 135.60000000000002 m 409.5 135.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 121.60000000000002 m 409.5 121.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 119.60000000000002 m 409.5 119.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 135.60000000000002 m 483.5 135.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 121.60000000000002 m 483.5 121.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 119.60000000000002 m 483.5 119.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 135.60000000000002 m 557.5 135.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 121.60000000000002 m 557.5 121.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 119.60000000000002 m 557.5 119.60000000000002 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 392.45 184.05 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 417.03 184.05 Td (Y) Tj ET Q q 0 0 0 rg BT 422.86 184.05 Td (ear) Tj ET Q q 0 0 0 rg BT 434.77 184.05 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 481.11 184.05 Td (ch 31,) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 169.85 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 365.00 170.05 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 439.00 170.05 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 513.00 170.05 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 155.27 Td (United States) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 155.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 379.80 155.32 Td (\(163.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 155.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 155.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 453.80 155.32 Td (\(101.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 155.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 155.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.80 155.32 Td (\(106.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 155.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 140.27 Td (Other jurisdictions) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 140.27 Td (39.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 140.27 Td (26.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 140.27 Td (27.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 125.27 Td (Loss before taxes) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 125.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 379.80 125.32 Td (\(124.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 125.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 125.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 125.32 Td (\(74.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 125.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 125.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 125.32 Td (\(79.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 125.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET endstream endobj 183 0 obj <> endobj 184 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 213.20 760.75 Td (Notes to Consolidated Financial Statements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.15 30.60 Td (- 86 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 731.10 Td (The benefit from income taxes by jurisdiction is as follows:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 700.6 m 409.5 700.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 700.6 m 413.5 700.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 700.6 m 483.5 700.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 700.6 m 487.5 700.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 700.6 m 557.5 700.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 700.6 m 409.5 700.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 686.6 m 409.5 686.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 700.6 m 413.5 700.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 700.6 m 483.5 700.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 686.6 m 483.5 686.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 700.6 m 487.5 700.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 700.6 m 557.5 700.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 686.6 m 557.5 686.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 626.6 m 409.5 626.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 611.6 m 409.5 611.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 626.6 m 483.5 626.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 611.6 m 483.5 611.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 626.6 m 557.5 626.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 611.6 m 557.5 611.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 547.6 m 409.5 547.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 532.6 m 409.5 532.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 547.6 m 483.5 547.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 532.6 m 483.5 532.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 547.6 m 557.5 547.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 532.6 m 557.5 532.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 514.6 m 409.5 514.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 512.6 m 409.5 512.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 514.6 m 483.5 514.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 512.6 m 483.5 512.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 514.6 m 557.5 514.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 512.6 m 557.5 512.6 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 392.45 705.05 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 417.03 705.05 Td (Y) Tj ET Q q 0 0 0 rg BT 422.86 705.05 Td (ear) Tj ET Q q 0 0 0 rg BT 434.77 705.05 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 481.11 705.05 Td (ch 31,) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 690.85 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 365.00 691.05 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 439.00 691.05 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 513.00 691.05 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 676.27 Td (Current:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 661.27 Td (United StatesFederal) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 661.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.80 661.32 Td (\(1.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 661.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 661.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 661.32 Td (\(1.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 661.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 661.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 661.32 Td (\(1.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 661.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 646.27 Td (United StatesState) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.80 646.32 Td (\(0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 646.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 646.27 Td (0.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 646.32 Td (\(1.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 646.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 631.27 Td (Other jurisdictions) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 384.80 631.32 Td (\(10.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 631.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 631.32 Td (\(13.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 631.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 631.32 Td (\(8.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 631.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 616.27 Td (T) Tj ET Q q 0 0 0 rg BT 61.76 616.27 Td (otal current) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 384.80 616.32 Td (\(12.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 616.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 616.32 Td (\(14.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 616.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 616.32 Td (\(10.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 616.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 597.27 Td (Deferred:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 582.27 Td (United StatesFederal) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 582.27 Td (32.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 582.27 Td (77.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 582.27 Td (34.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 567.27 Td (United StatesState) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 567.27 Td (5.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 567.27 Td (7.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 567.27 Td (8.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 552.27 Td (Other jurisdictions) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 552.27 Td (1.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 552.27 Td (1.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 552.27 Td (3.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 537.27 Td (T) Tj ET Q q 0 0 0 rg BT 61.41 537.27 Td (otal deferred) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 537.27 Td (39.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 537.27 Td (87.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 537.27 Td (46.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 518.27 Td (Benefit from income taxes) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 518.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 518.27 Td (27.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 518.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 518.27 Td (73.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 518.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 518.27 Td (36.0) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 496.10 Td (The cumulative tax ef) Tj ET Q q 0 0 0 rg BT 159.28 496.10 Td (fects of significant temporary dif) Tj ET Q q 0 0 0 rg BT 290.72 496.10 Td (ferences giving rise to deferred tax assets and liabilities are as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 484.10 Td (follows:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 453.6 m 488.5 453.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 488.5 453.6 m 492.5 453.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 453.6 m 557.5 453.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 439.6 m 488.5 439.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 439.6 m 557.5 439.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 261.6 m 488.5 261.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 261.6 m 557.5 261.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 261.6 m 488.5 261.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 261.6 m 557.5 261.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 152.60000000000002 m 488.5 152.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 152.60000000000002 m 557.5 152.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 152.60000000000002 m 488.5 152.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 152.60000000000002 m 557.5 152.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 99.60000000000002 m 488.5 99.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 99.60000000000002 m 557.5 99.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 81.60000000000002 m 488.5 81.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 79.60000000000002 m 488.5 79.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 81.60000000000002 m 557.5 81.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 79.60000000000002 m 557.5 79.60000000000002 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 459.30 458.05 Td (As of Mar) Tj ET Q q 0 0 0 rg BT 498.21 458.05 Td (ch 31,) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 443.85 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 446.50 444.05 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 515.50 444.05 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 430.17 Td (Deferred tax assets:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 416.27 Td (Net operating losses) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 426.00 416.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 416.27 Td (151.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.00 416.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 416.27 Td (107.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 401.27 Td (Accrued expenses and reserves) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 401.27 Td (44.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 401.27 Td (50.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 386.27 Td (Nondeductible interest) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 386.27 Td (12.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.65 386.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 371.27 Td (Author advances) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 371.27 Td (1) Tj ET Q q 0 0 0 rg BT 472.15 371.27 Td (1.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 371.27 Td (9.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 356.27 Td (Equity compensation) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.15 356.27 Td (6.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 356.27 Td (10.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 341.27 Td (Deferred revenue) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.15 341.27 Td (7.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 341.27 Td (7.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 326.27 Td (Fixed assets) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.15 326.27 Td (6.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 326.27 Td (4.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 311.27 Td (Deferred financing costs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.15 311.27 Td (1.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 311.27 Td (2.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 296.27 Td (Inventory) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.15 296.27 Td (1.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 296.27 Td (1.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 281.27 Td (Pre-publication costs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.15 281.27 Td (2.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.65 281.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 266.27 Td (Other) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.15 266.27 Td (0.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 266.27 Td (0.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 251.27 Td (T) Tj ET Q q 0 0 0 rg BT 61.76 251.27 Td (otal deferred tax assets) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 251.27 Td (246.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 251.27 Td (193.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 232.27 Td (Deferred tax liabilities:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 217.27 Td (Intangibles) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 217.32 Td (\(250.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 484.65 217.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.80 217.32 Td (\(232.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 217.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 202.27 Td (Internally-developed software) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 202.32 Td (\(20.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 484.65 202.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 202.32 Td (\(23.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 202.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 187.27 Td (Pre-publication costs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 474.65 187.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 187.32 Td (\(1.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 187.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 172.27 Td (Minority interests) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 474.65 172.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.65 172.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 157.27 Td (Other) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 468.80 157.32 Td (\(1.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 484.65 157.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 157.32 Td (\(0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 157.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 142.27 Td (T) Tj ET Q q 0 0 0 rg BT 61.76 142.27 Td (otal deferred tax liabilities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.80 142.32 Td (\(273.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 484.65 142.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.80 142.32 Td (\(257.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 142.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 123.27 Td (Net deferred tax liability) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 123.32 Td (\(26.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 484.65 123.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 123.32 Td (\(63.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 123.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 104.27 Td (Less: ) Tj ET Q q 0 0 0 rg BT 91.43 104.27 Td (V) Tj ET Q q 0 0 0 rg BT 97.54 104.27 Td (aluation allowance) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 468.80 104.32 Td (\(4.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 484.65 104.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 104.32 Td (\(7.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 104.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 85.27 Td (T) Tj ET Q q 0 0 0 rg BT 61.41 85.27 Td (otal net deferred tax liability) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 426.00 85.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 85.32 Td (\(31.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 484.65 85.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.00 85.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 85.32 Td (\(70.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 85.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET endstream endobj 185 0 obj <> endobj 186 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 213.20 760.75 Td (Notes to Consolidated Financial Statements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.15 30.60 Td (- 87 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 731.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 98.94 731.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 162.54 731.10 Td (, the Company had estimated federal net operating loss \(NOL\) carryforwards of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 492.70 731.10 Td ($566.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 551.59 731.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (that will begin to expire in 2035 if not utilized. In addition, the Company had estimated state NOL) Tj ET Q q 0 0 0 rg BT 447.16 719.10 Td ( carryforwards of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 519.07 719.10 Td ($765.6 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 707.10 Td (million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 82.89 707.10 Td ( that will begin to expire in 2020 if not utilized. ) Tj ET Q q 0 0 0 rg BT 274.90 707.10 Td (These NOL) Tj ET Q q 0 0 0 rg BT 321.46 707.10 Td ( carryforwards can be used to of) Tj ET Q q 0 0 0 rg BT 450.11 707.10 Td (fset taxable income in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 695.10 Td (future periods and reduce the Company's income taxes payable in those future periods. ) Tj ET Q q 0 0 0 rg BT 402.92 695.10 Td (At this time, the Company considers it ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 683.10 Td (more like than not that the Company will have suf) Tj ET Q q 0 0 0 rg BT 254.61 683.10 Td (ficient future taxable income in the form of reversals of existing taxable ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 671.10 Td (temporary dif) Tj ET Q q 0 0 0 rg BT 108.52 671.10 Td (ferences that will allow the Company to realize these tax attributes. However) Tj ET Q q 0 0 0 rg BT 416.34 671.10 Td (, it is possible that in a future ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 659.10 Td (period, the generation of deferred tax assets will exceed the taxable temporary dif) Tj ET Q q 0 0 0 rg BT 380.07 659.10 Td (ferences and at that point a valuation ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 647.10 Td (allowance against the Company's federal and state net deferred tax asset may be required. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 629.10 Td (Utilization of the U.S. federal and state NOL) Tj ET Q q 0 0 0 rg BT 251.30 629.10 Td ( carryforwards may be) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL q 0 0.6901960784313725 0.3137254901960784 rg BT 341.53 629.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL q 0 0 0 rg BT 344.03 629.10 Td (subject to a substantial annual limitation under ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 617.10 Td (Section 382 of the Internal Revenue Code of 1986, as amended, and corresponding provisions of state law) Tj ET Q q 0 0 0 rg BT 478.24 617.10 Td (, due to ownership ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 605.10 Td (changes that have occurred previously or that could occur in the future. ) Tj ET Q q 0 0 0 rg BT 341.21 605.10 Td (These ownership changes may limit the amount of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 593.10 Td (NOL) Tj ET Q q 0 0 0 rg BT 74.18 593.10 Td ( carryforwards that can be utilized annually to of) Tj ET Q q 0 0 0 rg BT 268.92 593.10 Td (fset future taxable income and tax liabilities, respectively) Tj ET Q q 0 0 0 rg BT 497.08 593.10 Td (. ) Tj ET Q q 0 0 0 rg BT 501.90 593.10 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 581.10 Td (Company has not completed a formal study to assess whether a change of ownership has occurred, or whether there have ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 569.10 Td (been multiple ownership changes since its formation, due to the significant cost and complexity associated with such a study) Tj ET Q q 0 0 0 rg BT 551.85 569.10 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 557.10 Td (Any limitation may result in expiration of a portion of the NOL) Tj ET Q q 0 0 0 rg BT 307.75 557.10 Td ( carryforwards before utilization. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 539.10 Td (The Company has recorded valuation allowances for certain deferred tax assets which are primarily related to net ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 527.10 Td (operating losses in foreign jurisdictions as it is more likely than not that these assets will not be realized.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 509.10 Td (The Company has not made any provisions for foreign withholding or income taxes on the undistributed earnings of its ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 497.10 Td (foreign subsidiaries since it is the Company) Tj ET Q q 0 0 0 rg BT 231.75 497.10 Td (s intention to indefinitely reinvest undistributed earnings of its foreign ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 485.10 Td (subsidiaries. Based on the Company) Tj ET Q q 0 0 0 rg BT 202.04 485.10 Td (s historical earnings, management believes that any changes to its assertion to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 473.10 Td (permanently reinvest the earnings of the Company) Tj ET Q q 0 0 0 rg BT 258.94 473.10 Td (s foreign subsidiaries would not have a material impact on the Company) Tj ET Q q 0 0 0 rg BT 551.37 473.10 Td (s ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 461.10 Td (tax provision.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 443.10 Td (Reconciliation of income taxes from the U.S. statutory rate of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 321.38 443.10 Td (21.0%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 347.21 443.10 Td ( to the consolidated ef) Tj ET Q q 0 0 0 rg BT 435.33 443.10 Td (fective tax rate is as follows:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 412.6 m 409.5 412.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 412.6 m 413.5 412.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 412.6 m 483.5 412.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 412.6 m 487.5 412.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 412.6 m 557.5 412.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 412.6 m 409.5 412.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 398.6 m 409.5 398.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 412.6 m 413.5 412.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 412.6 m 483.5 412.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 398.6 m 483.5 398.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 412.6 m 487.5 412.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 412.6 m 557.5 412.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 398.6 m 557.5 398.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 248.60000000000002 m 409.5 248.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 234.60000000000002 m 409.5 234.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 232.60000000000002 m 409.5 232.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 248.60000000000002 m 483.5 248.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 234.60000000000002 m 483.5 234.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 232.60000000000002 m 483.5 232.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 248.60000000000002 m 557.5 248.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 234.60000000000002 m 557.5 234.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 232.60000000000002 m 557.5 232.60000000000002 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 392.45 417.05 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 417.03 417.05 Td (Y) Tj ET Q q 0 0 0 rg BT 422.86 417.05 Td (ear) Tj ET Q q 0 0 0 rg BT 434.77 417.05 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 481.11 417.05 Td (ch 31,) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 402.85 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 365.00 403.05 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 439.00 403.05 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 513.00 403.05 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 388.27 Td (Benefit at the statutory rate) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 388.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 388.27 Td (26.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 388.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 388.27 Td (23.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 388.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 388.27 Td (27.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 373.27 Td (State taxes, net of federal benefit) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 373.27 Td (4.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 373.27 Td (2.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 373.27 Td (2.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 358.27 Td (Foreign tax rate dif) Tj ET Q q 0 0 0 rg BT 144.83 358.27 Td (ferential) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.80 358.32 Td (\(2.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 358.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 358.27 Td (0.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 358.27 Td (2.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 343.27 Td (W) Tj ET Q q 0 0 0 rg BT 77.24 343.27 Td (ithholding tax) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.80 343.32 Td (\(2.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 343.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 343.32 Td (\(4.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 343.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 343.32 Td (\(3.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 343.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 328.27 Td (Return-to-provision adjustments) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 328.27 Td (0.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 328.32 Td (\(1.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 328.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 328.27 Td (4.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 313.27 Td (Change in valuation allowance) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 313.27 Td (1.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 313.27 Td (3.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 313.27 Td (4.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 298.27 Td (Bankruptcy-related items) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.65 298.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 298.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 298.32 Td (\(0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 298.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 283.27 Td (Foreign exchange gain/\(loss\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.65 283.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 283.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 283.27 Td (0.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 268.27 Td (Change in tax rate) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.65 268.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 268.27 Td (49.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 268.27 Td (0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 253.27 Td (Other) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.80 253.32 Td (\(0.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 253.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 253.32 Td (\(2.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 253.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 253.32 Td (\(3.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 253.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 238.27 Td (Benefit at the ef) Tj ET Q q 0 0 0 rg BT 119.96 238.27 Td (fective income tax rate) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 238.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 238.27 Td (27.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 238.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 238.27 Td (73.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 238.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 238.27 Td (36.0) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 216.10 Td (A) Tj ET Q q 0 0 0 rg BT 78.67 216.10 Td ( reconciliation of the beginning and ending amounts of unrecognized tax benefits \(UTB\) is as follows:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 185.60000000000002 m 409.5 185.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 185.60000000000002 m 413.5 185.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 185.60000000000002 m 483.5 185.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 185.60000000000002 m 487.5 185.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 185.60000000000002 m 557.5 185.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 185.60000000000002 m 409.5 185.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 171.60000000000002 m 409.5 171.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 185.60000000000002 m 413.5 185.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 185.60000000000002 m 483.5 185.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 171.60000000000002 m 483.5 171.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 185.60000000000002 m 487.5 185.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 185.60000000000002 m 557.5 185.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 171.60000000000002 m 557.5 171.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 141.60000000000002 m 409.5 141.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 127.60000000000002 m 409.5 127.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 125.60000000000002 m 409.5 125.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 141.60000000000002 m 483.5 141.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 127.60000000000002 m 483.5 127.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 125.60000000000002 m 483.5 125.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 141.60000000000002 m 557.5 141.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 127.60000000000002 m 557.5 127.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 125.60000000000002 m 557.5 125.60000000000002 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 392.45 190.05 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 417.03 190.05 Td (Y) Tj ET Q q 0 0 0 rg BT 422.86 190.05 Td (ear) Tj ET Q q 0 0 0 rg BT 434.77 190.05 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 481.11 190.05 Td (ch 31,) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 175.85 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 365.00 176.05 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 439.00 176.05 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 513.00 176.05 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 161.27 Td (Balance at beginning of period) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 161.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.65 161.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 161.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 161.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 161.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.65 161.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 146.27 Td (Reductions of tax positions of prior years) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.65 146.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 146.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.65 146.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 131.27 Td (Balance at end of period) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 131.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.65 131.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 131.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 131.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 131.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.65 131.27 Td () Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 109.10 Td (There was no expense or benefit related to UTBs during the fiscal years ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.00 109.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 451.59 109.10 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 456.59 109.10 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.59 109.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 496.03 109.10 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 516.03 109.10 Td ( and no ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 97.10 Td (accrued interest and penalties. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 79.10 Td (The Company) Tj ET Q q 0 0 0 rg BT 131.71 79.10 Td (s income tax returns are currently under examination in various foreign jurisdictions. ) Tj ET Q q 0 0 0 rg BT 473.38 79.10 Td (The Company is no ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 67.10 Td (longer subject to U.S. federal tax examinations for the tax year ended March 31, 2015, and state tax examinations for the tax ) Tj ET Q endstream endobj 187 0 obj <> endobj 188 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 213.20 760.75 Td (Notes to Consolidated Financial Statements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.15 30.60 Td (- 88 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 731.10 Td (year ended March 31, 2014, all preceding tax years and, with limited exceptions, for periods preceding 2012 for foreign tax ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (examinations.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 701.10 Td (15) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 64.00 701.10 Td (. F) Tj ET Q q 0 0 0 rg BT 74.37 701.10 Td (AIR ) Tj ET Q q 0 0 0 rg BT 95.02 701.10 Td (V) Tj ET Q q 0 0 0 rg BT 100.95 701.10 Td (ALUE MEASUREMENTS) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 680.10 Td (Recurring Measur) Tj ET Q q 0 0 0 rg BT 132.96 680.10 Td (ements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 659.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 96.44 659.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 160.04 659.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 179.48 659.10 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 199.48 659.10 Td (, the Company had no assets and liabilities measured at fair value on a recurring basis.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 638.10 Td (Non-Recurring Measur) Tj ET Q q 0 0 0 rg BT 154.08 638.10 Td (ements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 617.10 Td (Non-financial assets and liabilities, which include goodwill, identifiable intangible assets, property and equipment, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 605.10 Td (capitalized internal-use software, net, and various liabilities, are not required to be measured at fair value on a recurring basis. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 593.10 Td (However) Tj ET Q q 0 0 0 rg BT 90.25 593.10 Td (, if an impairment test is required, the Company evaluates the non-financial assets and liabilities for impairment. If ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 581.10 Td (impairment is determined to have occurred, the asset or liability is required to be written down to its estimated fair value. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 569.10 Td (During fiscal years 2019 and 2018, the Company did not recognize any impairments of its non-financial assets and liabilities. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 557.10 Td (During fiscal year 2017, the Company determined that the fair value of one of its cost method investments was below its ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 545.10 Td (carrying value and that the carrying value of the investment was not expected to be recoverable within a reasonable period of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 533.10 Td (time. ) Tj ET Q q 0 0 0 rg BT 76.22 533.10 Td (Accordingly) Tj ET Q q 0 0 0 rg BT 125.56 533.10 Td (, the Company recognized an impairment char) Tj ET Q q 0 0 0 rg BT 310.59 533.10 Td (ge of $3.0 million related to this investment during fiscal ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 521.10 Td (year 2017. ) Tj ET Q q 0 0 0 rg BT 98.53 521.10 Td (The impairment char) Tj ET Q q 0 0 0 rg BT 182.20 521.10 Td (ge was included in other income \(expense\), net, below operating income \(loss\) in the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 509.10 Td (accompanying consolidated statement of operations. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 488.10 Td (Other) Tj ET Q q 0 0 0 rg BT 79.37 488.10 Td ( Fair) Tj ET Q q 0 0 0 rg BT 100.01 488.10 Td ( ) Tj ET Q q 0 0 0 rg BT 102.33 488.10 Td (V) Tj ET Q q 0 0 0 rg BT 108.63 488.10 Td (alue Disclosur) Tj ET Q q 0 0 0 rg BT 168.73 488.10 Td (es) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 467.10 Td (In addition to fair value disclosure requirements related to financial instruments carried at fair value, accounting ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 455.10 Td (standards require disclosures regarding the fair value of all of the Company) Tj ET Q q 0 0 0 rg BT 358.62 455.10 Td (s financial instruments. ) Tj ET Q q 0 0 0 rg BT 453.98 455.10 Td (The estimated carrying ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 443.10 Td (and fair value of long-term debt was as follows:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 412.6 m 368.5 412.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 368.5 412.6 m 372.5 412.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 372.5 412.6 m 431.5 412.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 435.5 412.6 m 494.5 412.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 494.5 412.6 m 498.5 412.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 498.5 412.6 m 557.5 412.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 412.6 m 368.5 412.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 398.6 m 368.5 398.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 368.5 398.6 m 372.5 398.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 372.5 398.6 m 431.5 398.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 435.5 412.6 m 494.5 412.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 435.5 398.6 m 494.5 398.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 494.5 398.6 m 498.5 398.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 498.5 398.6 m 557.5 398.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 398.6 m 368.5 398.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 375.6 m 368.5 375.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 372.5 398.6 m 431.5 398.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 372.5 375.6 m 431.5 375.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 435.5 398.6 m 494.5 398.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 435.5 375.6 m 494.5 375.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 498.5 398.6 m 557.5 398.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 498.5 375.6 m 557.5 375.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 375.6 m 368.5 375.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 372.5 375.6 m 431.5 375.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 435.5 375.6 m 494.5 375.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 498.5 375.6 m 557.5 375.6 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 339.30 417.05 Td (As of Mar) Tj ET Q q 0 0 0 rg BT 378.21 417.05 Td (ch 31,) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 465.30 417.05 Td (As of Mar) Tj ET Q q 0 0 0 rg BT 504.21 417.05 Td (ch 31,) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 361.00 403.05 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 487.00 403.05 Td (2018) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 379.85 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 320.75 389.05 Td (Carrying) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 322.70 380.05 Td (Amount) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 393.30 389.05 Td (Fair) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 390.65 380.05 Td (V) Tj ET Q q 0 0 0 rg BT 396.32 380.05 Td (alue) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 446.75 389.05 Td (Carrying) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 448.70 380.05 Td (Amount) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 519.30 389.05 Td (Fair) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 516.65 380.05 Td (V) Tj ET Q q 0 0 0 rg BT 522.32 380.05 Td (alue) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 365.27 Td (Senior Notes) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 107.94 369.80 Td (\(1\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.00 365.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.15 365.27 Td (614.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 375.00 365.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.15 365.27 Td (506.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 438.00 365.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 468.15 365.27 Td (612.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 501.00 365.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 365.27 Td (471.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 350.27 Td (T) Tj ET Q q 0 0 0 rg BT 61.41 350.27 Td (erm Loan) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 100.00 354.80 Td (\(2\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 334.65 350.27 Td (1,637.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 397.65 350.27 Td (1,470.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 460.65 350.27 Td (1,638.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 350.27 Td (1,486.8) Tj ET Q BT /F1 10.00 Tf ET BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 333.38 Td (\(1\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 329.30 Td (The carrying amount for the Senior Notes is presented net of the unamortized deferred financing costs of ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 469.62 329.30 Td ($6.0 million) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 513.62 329.30 Td ( and ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 531.12 329.30 Td ($7.1 ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 318.50 Td (million) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 116.00 318.50 Td ( as of ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 137.75 318.50 Td (March31, 2019) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 194.99 318.50 Td ( and ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 212.48 318.50 Td (March31, 2018) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 269.72 318.50 Td (, respectively) Tj ET Q q 0 0 0 rg BT 317.11 318.50 Td (.) Tj ET Q BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 305.78 Td (\(2\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 301.70 Td (The carrying amount for the ) Tj ET Q q 0 0 0 rg BT 193.55 301.70 Td (T) Tj ET Q q 0 0 0 rg BT 198.42 301.70 Td (erm Loan as of ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 254.90 301.70 Td (March31, 2019) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 312.13 301.70 Td ( and ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 329.63 301.70 Td (March31, 2018) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 386.87 301.70 Td ( is presented net of the unamortized original ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 290.90 Td (issue discount and deferred financing costs of ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 256.70 290.90 Td ($25.1 million) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 305.20 290.90 Td ( and ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 322.70 290.90 Td ($31.1 million) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 371.20 290.90 Td (, respectively) Tj ET Q q 0 0 0 rg BT 418.60 290.90 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 272.90 Td (The estimated fair value of the Company) Tj ET Q q 0 0 0 rg BT 238.61 272.90 Td (s Senior Notes and ) Tj ET Q q 0 0 0 rg BT 316.20 272.90 Td (T) Tj ET Q q 0 0 0 rg BT 321.61 272.90 Td (erm Loan is based on information from a pricing service ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 260.90 Td (or broker quotes and may not represent prices that can be transacted upon. ) Tj ET Q q 0 0 0 rg BT 353.16 260.90 Td (Therefore, the debt is classified as Level 3 in the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 248.90 Td (fair value hierarchy) Tj ET Q q 0 0 0 rg BT 131.64 248.90 Td (. ) Tj ET Q q 0 0 0 rg BT 136.46 248.90 Td (The carrying value of cash and cash equivalents approximated their fair values as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.21 248.90 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 538.81 248.90 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 236.90 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 74.00 236.90 Td ( due to the short-term nature of these instruments. ) Tj ET Q endstream endobj 189 0 obj <> endobj 190 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 213.20 760.75 Td (Notes to Consolidated Financial Statements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.15 30.60 Td (- 89 -) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 731.25 Td (16) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 64.00 731.25 Td (. SUPPLEMENT) Tj ET Q q 0 0 0 rg BT 136.60 731.25 Td (AL) Tj ET Q q 0 0 0 rg BT 149.94 731.25 Td ( CASH FLOW) Tj ET Q q 0 0 0 rg BT 213.10 731.25 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 263.74 731.25 Td (TION) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 710.25 Td (Details of Changes in operating assets and liabilities, net of acquisitions were:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 679.75 m 409.5 679.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 679.75 m 413.5 679.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 679.75 m 483.5 679.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 679.75 m 487.5 679.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 679.75 m 557.5 679.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 679.75 m 409.5 679.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 665.75 m 409.5 665.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 679.75 m 413.5 679.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 679.75 m 483.5 679.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 665.75 m 483.5 665.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 679.75 m 487.5 679.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 679.75 m 557.5 679.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 665.75 m 557.5 665.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 530.75 m 409.5 530.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 530.75 m 483.5 530.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 530.75 m 557.5 530.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 530.75 m 409.5 530.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 516.75 m 409.5 516.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 514.75 m 409.5 514.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 530.75 m 483.5 530.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 516.75 m 483.5 516.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 514.75 m 483.5 514.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 530.75 m 557.5 530.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 516.75 m 557.5 516.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 514.75 m 557.5 514.75 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 392.45 684.20 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 417.03 684.20 Td (Y) Tj ET Q q 0 0 0 rg BT 422.86 684.20 Td (ear) Tj ET Q q 0 0 0 rg BT 434.77 684.20 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 481.11 684.20 Td (ch 31,) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 670.00 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 365.00 670.20 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 439.00 670.20 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 513.00 670.20 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 655.42 Td (Accounts receivable, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 655.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 384.80 655.47 Td (\(23.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 655.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 655.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 655.47 Td (\(4.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 655.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 655.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 655.42 Td (23.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 640.42 Td (Inventories) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 640.42 Td (10.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 640.47 Td (\(3.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 640.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 640.42 Td (26.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 625.42 Td (Prepaid expenses and other current assets) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.80 625.47 Td (\(6.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 625.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 625.47 Td (\(6.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 625.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 625.47 Td (\(6.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 625.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 610.42 Td (Author advances, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 610.42 Td (5.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 610.47 Td (\(1.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 610.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 610.47 Td (\(2.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 610.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 595.42 Td (Accounts payable and accrued expenses) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 595.42 Td (26.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 595.42 Td (29.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 595.47 Td (\(22.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 595.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 580.42 Td (Accrued interest payable) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.80 580.47 Td (\(1.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.65 580.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.80 580.47 Td (\(1.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.65 580.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 580.42 Td (23.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 565.42 Td (Deferred revenue) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 565.42 Td (6.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 565.42 Td (8.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 565.42 Td (5.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 550.42 Td (Current taxes payable) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 550.42 Td (2.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 550.42 Td (0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 550.42 Td (1.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 535.42 Td (Other) Tj ET Q q 0 0 0 rg BT 78.37 535.42 Td (, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 535.42 Td (2.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 535.42 Td (5.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 535.47 Td (\(1.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 535.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 520.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 520.42 Td (22.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 520.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 520.42 Td (26.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 520.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 520.42 Td (48.5) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 498.25 Td (Cash ) Tj ET Q q 0 0 0 rg BT 94.50 498.25 Td (paid ) Tj ET Q q 0 0 0 rg BT 114.22 498.25 Td (for ) Tj ET Q q 0 0 0 rg BT 128.38 498.25 Td (interest ) Tj ET Q q 0 0 0 rg BT 160.31 498.25 Td (and ) Tj ET Q q 0 0 0 rg BT 177.25 498.25 Td (income ) Tj ET Q q 0 0 0 rg BT 209.18 498.25 Td (taxes ) Tj ET Q q 0 0 0 rg BT 232.23 498.25 Td (was:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 467.75 m 409.5 467.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 467.75 m 413.5 467.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 467.75 m 483.5 467.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 467.75 m 487.5 467.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 467.75 m 557.5 467.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 467.75 m 409.5 467.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 453.75 m 409.5 453.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 467.75 m 413.5 467.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 467.75 m 483.5 467.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 453.75 m 483.5 453.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 467.75 m 487.5 467.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 467.75 m 557.5 467.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 453.75 m 557.5 453.75 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 392.45 472.20 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 417.03 472.20 Td (Y) Tj ET Q q 0 0 0 rg BT 422.86 472.20 Td (ear) Tj ET Q q 0 0 0 rg BT 434.77 472.20 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 481.11 472.20 Td (ch 31,) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 458.00 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 365.00 458.20 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 439.00 458.20 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 513.00 458.20 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 443.42 Td (Net cash interest paid) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 443.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.15 443.42 Td (165.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 443.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.15 443.42 Td (152.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 443.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 443.42 Td (125.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 428.42 Td (Income taxes paid, net of refunds) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 428.42 Td (1) Tj ET Q q 0 0 0 rg BT 393.15 428.42 Td (1.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 428.42 Td (9.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 428.42 Td (5.9) Tj ET Q BT /F1 10.00 Tf ET BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 400.25 Td (Non-cash Investing ) Tj ET Q q 0 0 0 rg BT 137.91 400.25 Td (Activities ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 379.25 Td (Additions to pre-publication costs and property) Tj ET Q q 0 0 0 rg BT 260.48 379.25 Td (, equipment and capitalized internal-use software included in accounts ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 367.25 Td (payable and accrued expenses were as follows:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 333.75 m 409.5 333.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 333.75 m 413.5 333.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 333.75 m 483.5 333.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 333.75 m 487.5 333.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 333.75 m 557.5 333.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 333.75 m 409.5 333.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 319.75 m 409.5 319.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 333.75 m 413.5 333.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 333.75 m 483.5 333.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 319.75 m 483.5 319.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 333.75 m 487.5 333.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 333.75 m 557.5 333.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 319.75 m 557.5 319.75 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 392.45 338.20 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 417.03 338.20 Td (Y) Tj ET Q q 0 0 0 rg BT 422.86 338.20 Td (ear) Tj ET Q q 0 0 0 rg BT 434.77 338.20 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 481.11 338.20 Td (ch 31,) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 324.00 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 365.00 324.20 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 439.00 324.20 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 513.00 324.20 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 309.42 Td (Additions to pre-publication costs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 309.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 309.42 Td (8.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 309.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 309.42 Td (9.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 309.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 309.42 Td (8.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 294.42 Td (Additions to property) Tj ET Q q 0 0 0 rg BT 141.45 294.42 Td (, equipment and capitalized internal-use) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.50 284.42 Td (software) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 284.42 Td (8.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 284.42 Td (3.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 284.42 Td (14.2) Tj ET Q BT /F1 10.00 Tf ET BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 256.25 Td (Non-cash Financing ) Tj ET Q q 0 0 0 rg BT 141.24 256.25 Td (Activities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 235.25 Td (During the fiscal year ended March 31, 2017, in connection with the one-time $200.0 million cash dividend, the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 223.25 Td (Company accrued $5.4 million of dividend equivalents payable to holders of RSUs. ) Tj ET Q q 0 0 0 rg BT 391.53 223.25 Td (The accrued dividend was included in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 211.25 Td (other non-current liabilities in the consolidated balance sheet as March 31, 2017. During the fiscal year ended March 31, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 199.25 Td (2015, in connection with the 2014 leveraged recapitalization, the Company accrued ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 390.83 199.25 Td ($5.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 439.72 199.25 Td ( of dividend equivalents ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 187.25 Td (payable to holders of RSUs. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 166.25 Td (As of March 31, 2019, $3.7 million of dividend equivalents payable was included in other accrued expenses and $0.3 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 154.25 Td (million was included in other non-current liabilities in the consolidated balance sheet. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 133.25 Td (17) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 64.00 133.25 Td (. ) Tj ET Q q 0 0 0 rg BT 69.00 133.25 Td (RELA) Tj ET Q q 0 0 0 rg BT 96.04 133.25 Td (TED ) Tj ET Q q 0 0 0 rg BT 119.10 133.25 Td (P) Tj ET Q q 0 0 0 rg BT 124.47 133.25 Td (AR) Tj ET Q q 0 0 0 rg BT 138.56 133.25 Td (TY) Tj ET Q q 0 0 0 rg BT 152.08 133.25 Td ( ) Tj ET Q q 0 0 0 rg BT 154.40 133.25 Td (TRANSACTIONS) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 112.25 Td (Due to related party relationships, it is possible that the terms of certain of the Company) Tj ET Q q 0 0 0 rg BT 427.47 112.25 Td (s past transactions are not the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 100.25 Td (same as those that would result from transactions among wholly unrelated parties.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 82.25 Td (The Company has a master services agreement \(MSA\) and a master distribution and licensing agreement \(MDLA\) ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 70.25 Td (currently in place with a former af) Tj ET Q q 0 0 0 rg BT 190.98 70.25 Td (filiate of Cengage Learning Holdings II, L.P) Tj ET Q q 0 0 0 rg BT 367.60 70.25 Td (. \(the Predecessor of the Company\), the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 58.25 Td (terms of which were agreed upon at the time the Predecessor and the former af) Tj ET Q q 0 0 0 rg BT 368.69 58.25 Td (filiate were related parties. Under the MSA, ) Tj ET Q endstream endobj 191 0 obj <> endobj 192 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 213.20 760.75 Td (Notes to Consolidated Financial Statements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.15 30.60 Td (- 90 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 731.10 Td (the Company provides the former af) Tj ET Q q 0 0 0 rg BT 199.05 731.10 Td (filiate with various services including those relating to business and technology) Tj ET Q q 0 0 0 rg BT 516.11 731.10 Td (, content ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (management, customers and operations, management, fulfillment services and business information support. ) Tj ET Q q 0 0 0 rg BT 490.66 719.10 Td (The former ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 707.10 Td (af) Tj ET Q q 0 0 0 rg BT 61.59 707.10 Td (filiate provides the Company with certain real estate services. ) Tj ET Q q 0 0 0 rg BT 310.21 707.10 Td (The cost of each of the services provided under the MSA) Tj ET Q q 0 0 0 rg BT 537.92 707.10 Td ( is ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 695.10 Td (based on a fixed fee. ) Tj ET Q q 0 0 0 rg BT 138.41 695.10 Td (All services under the MSA) Tj ET Q q 0 0 0 rg BT 249.50 695.10 Td ( are provided for a specified period of time, subject to extension by mutual ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 683.10 Td (agreement of the parties. ) Tj ET Q q 0 0 0 rg BT 155.16 683.10 Td (The former af) Tj ET Q q 0 0 0 rg BT 210.50 683.10 Td (filiate can generally terminate those services in advance upon 90 days written notice ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 671.10 Td (without penalty) Tj ET Q q 0 0 0 rg BT 115.84 671.10 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 653.10 Td (Under the MDLA, the former af) Tj ET Q q 0 0 0 rg BT 200.66 653.10 Td (filiate is the Company) Tj ET Q q 0 0 0 rg BT 292.03 653.10 Td (s exclusive authorized distributor for sale and/or distribution of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 641.10 Td (most of its academic and professional digital and print publications in Canada. Subject to the Company) Tj ET Q q 0 0 0 rg BT 469.47 641.10 Td (s prior approval on a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 629.10 Td (product by product basis, the former af) Tj ET Q q 0 0 0 rg BT 209.61 629.10 Td (filiate also has the exclusive right to adapt, customize and translate the Company) Tj ET Q q 0 0 0 rg BT 535.90 629.10 Td (s ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 617.10 Td (publications for sale and distribution in Canada. ) Tj ET Q q 0 0 0 rg BT 248.22 617.10 Td (The agreement sets certain other restrictions on the use of the Company) Tj ET Q q 0 0 0 rg BT 537.85 617.10 Td (s ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 605.10 Td (content. ) Tj ET Q q 0 0 0 rg BT 88.25 605.10 Td (The former af) Tj ET Q q 0 0 0 rg BT 143.59 605.10 Td (filiate is required by the agreement to pay the Company royalties as a percentage of net sales for ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 593.10 Td (certain specified publications, adaptations of its textbooks, translations of its textbooks and certain of its customized ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 581.10 Td (products. ) Tj ET Q q 0 0 0 rg BT 93.26 581.10 Td (The agreement also requires the af) Tj ET Q q 0 0 0 rg BT 231.07 581.10 Td (filiate to pay fixed technology platform fees and variable technology unit fees.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 563.10 Td (The MSA) Tj ET Q q 0 0 0 rg BT 111.17 563.10 Td ( was assumed by the Company upon emer) Tj ET Q q 0 0 0 rg BT 279.57 563.10 Td (gence from Chapter 1) Tj ET Q q 0 0 0 rg BT 366.11 563.10 Td (1 bankruptcy on March 31, 2014 and renewed ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 551.10 Td (on December 1, 2017 for a term that will end on March 31, 2021, unless otherwise renewed. ) Tj ET Q q 0 0 0 rg BT 425.66 551.10 Td (The MDLA) Tj ET Q q 0 0 0 rg BT 472.60 551.10 Td ( was also assumed ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 539.10 Td (by the Company on March 31, 2014, on the same term length, but was amended ef) Tj ET Q q 0 0 0 rg BT 384.30 539.10 Td (fective March 17, 2017, and will end on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 527.10 Td (December 31, 2029, unless canceled by one of the parties. Both agreements may be terminated upon material breach, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 515.10 Td (bankruptcy or the mutual agreement of the parties. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 497.10 Td (In November 201) Tj ET Q q 0 0 0 rg BT 142.17 497.10 Td (1, the Predecessor entered into a new distribution agreement with the former af) Tj ET Q q 0 0 0 rg BT 458.26 497.10 Td (filiate, under which the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 485.10 Td (former af) Tj ET Q q 0 0 0 rg BT 91.29 485.10 Td (filiate is the Company) Tj ET Q q 0 0 0 rg BT 182.67 485.10 Td (s exclusive authorized distributor) Tj ET Q q 0 0 0 rg BT 315.29 485.10 Td (, subject to certain exceptions, for the sale and distribution ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 473.10 Td (of certain research digital and print products in Canada. ) Tj ET Q q 0 0 0 rg BT 278.74 473.10 Td (This agreement was terminated March 31, 2017, and henceforth ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 461.10 Td (Cengage will distribute these research products directly to Canadian customers.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 443.10 Td (The following is a summary of the Company) Tj ET Q q 0 0 0 rg BT 254.47 443.10 Td (s activity and balances with the former af) Tj ET Q q 0 0 0 rg BT 419.50 443.10 Td (filiate:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 412.6 m 409.5 412.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 412.6 m 413.5 412.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 412.6 m 483.5 412.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 412.6 m 487.5 412.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 412.6 m 557.5 412.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 412.6 m 409.5 412.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 398.6 m 409.5 398.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 412.6 m 413.5 412.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 412.6 m 483.5 412.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 398.6 m 483.5 398.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 412.6 m 487.5 412.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 412.6 m 557.5 412.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 398.6 m 557.5 398.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 398.6 m 409.5 398.6 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 392.45 417.05 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 417.03 417.05 Td (Y) Tj ET Q q 0 0 0 rg BT 422.86 417.05 Td (ear) Tj ET Q q 0 0 0 rg BT 434.77 417.05 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 481.11 417.05 Td (ch 31,) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 402.85 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 365.00 403.05 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 439.00 403.05 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 513.00 403.05 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 388.27 Td (Revenue from former af) Tj ET Q q 0 0 0 rg BT 152.81 388.27 Td (filiate) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 388.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 388.27 Td (16.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 388.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 388.27 Td (18.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 388.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 388.27 Td (19.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 373.27 Td (Expenses to former af) Tj ET Q q 0 0 0 rg BT 143.84 373.27 Td (filiate) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 393.15 373.27 Td (1.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 467.15 373.27 Td (1.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 373.27 Td (1.4) Tj ET Q BT /F1 10.00 Tf ET 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 338.6 m 488.5 338.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 488.5 338.6 m 492.5 338.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 338.6 m 557.5 338.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 423.5 324.6 m 488.5 324.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 324.6 m 557.5 324.6 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 459.30 343.05 Td (As of Mar) Tj ET Q q 0 0 0 rg BT 498.21 343.05 Td (ch 31,) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 328.85 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 446.50 329.05 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 515.50 329.05 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 314.27 Td (Accounts receivable) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 426.00 314.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.15 314.27 Td (0.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.00 314.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 314.27 Td (1.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 299.27 Td (Accounts payable and accrued expenses) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.15 299.27 Td (0.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 299.27 Td (0.3) Tj ET Q BT /F1 10.00 Tf ET BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 274.10 Td (18) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 64.00 274.10 Td (. ) Tj ET Q q 0 0 0 rg BT 69.00 274.10 Td (COMMITMENTS ) Tj ET Q q 0 0 0 rg BT 150.95 274.10 Td (AND ) Tj ET Q q 0 0 0 rg BT 175.11 274.10 Td (CONTINGENCIES) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 253.10 Td (Claims, Disputes and Legal and Regulatory ) Tj ET Q q 0 0 0 rg BT 259.52 253.10 Td (Actions) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 232.10 Td (From time to time, the Company may become involved in various claims, disputes and legal or regulatory proceedings ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 220.10 Td (that arise in the ordinary course of business or that relate to contractual and other obligations. ) Tj ET Q q 0 0 0 rg BT 429.54 220.10 Td (The Company assesses its ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 208.10 Td (potential contingent and other liabilities by analyzing its claims, disputes and legal and regulatory matters using available ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 196.10 Td (information, and develops its views on estimated losses in consultation with its legal and other advisors. ) Tj ET Q q 0 0 0 rg BT 472.64 196.10 Td (The Company ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 184.10 Td (determines whether a loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 172.10 Td (reasonably estimated. If the contingency is not probable or cannot be reasonably estimated, disclosure of the contingency ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 160.10 Td (shall be made when there is at least a reasonable possibility that a material loss for which the Company is responsible may ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 148.10 Td (have been incurred.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 130.10 Td (Adverse developments relating to claims, disputes and legal and regulatory proceedings in which the Company is or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 118.10 Td (becomes involved could cause a change in its determination as to an unfavorable outcome and result in the need to recognize ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 106.10 Td (a material accrual. Should any of these matters result in a final adverse judgment, settlement or other final resolution ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 94.10 Td (involving material amounts, it could have a material adverse ef) Tj ET Q q 0 0 0 rg BT 305.95 94.10 Td (fect on the Company) Tj ET Q q 0 0 0 rg BT 392.32 94.10 Td (s financial position, results of operations ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 82.10 Td (and cash flows.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 64.10 Td (As of March 31, 2017, all claims in connection with the Company) Tj ET Q q 0 0 0 rg BT 339.45 64.10 Td (s Chapter 1) Tj ET Q q 0 0 0 rg BT 384.63 64.10 Td (1 filing were settled, the resolution process) Tj ET Q endstream endobj 193 0 obj <> endobj 194 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 213.20 760.75 Td (Notes to Consolidated Financial Statements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.15 30.60 Td (- 91 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 731.10 Td (for general unsecured claims was completed and the final distribution was made in July 2016. ) Tj ET Q q 0 0 0 rg BT 431.50 731.10 Td (The Chapter 1) Tj ET Q q 0 0 0 rg BT 488.33 731.10 Td (1 cases were) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (formally closed in ) Tj ET Q q 0 0 0 rg BT 128.71 719.10 Td (August 2016.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 701.10 Td (Based on a review of the information available at this time, the Company does not expect the total cost of resolving all ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 689.10 Td (other current claims, disputes and legal and regulatory proceedings will have a material adverse ef) Tj ET Q q 0 0 0 rg BT 446.72 689.10 Td (fect on the consolidated ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 677.10 Td (financial position, results of operations or cash flows. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 656.10 Td (Leases) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 635.10 Td (The Company leases certain facilities and other operating equipment under non-cancelable operating lease arrangements ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 623.10 Td (expiring at various dates through 2029, except for one lease that expires in 2091. ) Tj ET Q q 0 0 0 rg BT 378.91 623.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 403.36 623.10 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.95 623.10 Td (, future minimum ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 611.10 Td (lease payments under these leases were as follows:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 477.6 m 557.5 477.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 477.6 m 557.5 477.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 447.6 m 557.5 447.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 447.6 m 557.5 447.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 433.6 m 557.5 433.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 431.6 m 557.5 431.6 l s BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 585.85 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 56.00 572.05 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 80.41 572.05 Td (Y) Tj ET Q q 0 0 0 rg BT 85.91 572.05 Td (ears Ending Mar) Tj ET Q q 0 0 0 rg BT 151.25 572.05 Td (ch 31,) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 557.27 Td (2020) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 76.00 561.80 Td (\(1\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.00 557.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 557.27 Td (27.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 542.27 Td (2021) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 542.27 Td (25.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 527.27 Td (2022) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 527.27 Td (20.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 512.27 Td (2023) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 512.27 Td (16.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 497.27 Td (2024) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 497.27 Td (16.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 482.27 Td (Thereafter) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 482.27 Td (67.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 467.27 Td (T) Tj ET Q q 0 0 0 rg BT 61.41 467.27 Td (otal minimum future lease payments) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 207.48 471.80 Td (\(2\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 467.27 Td (173.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 452.27 Td (Less: Sublease income) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 452.27 Td (1.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 437.27 Td (T) Tj ET Q q 0 0 0 rg BT 61.41 437.27 Td (otal minimum future lease payments, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.00 437.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 437.27 Td (172.4) Tj ET Q BT /F1 10.00 Tf ET BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 420.38 Td (\(1\)) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 78.82 416.30 Td ( ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 416.30 Td (The Company has $0.1 million of computer hardware under capital lease that expires in 2019.) Tj ET Q BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 406.58 Td (\(2\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 402.50 Td (Minimum rental payments do not take into account any expectations of future sublease income.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 384.50 Td (Rent expense by year was as follows:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 354 m 409.5 354 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 354 m 413.5 354 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 354 m 483.5 354 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 354 m 487.5 354 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 354 m 557.5 354 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 354 m 409.5 354 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 339.5 340 m 409.5 340 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 409.5 354 m 413.5 354 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 354 m 483.5 354 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 413.5 340 m 483.5 340 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 483.5 354 m 487.5 354 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 354 m 557.5 354 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 487.5 340 m 557.5 340 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 392.45 358.45 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 417.03 358.45 Td (Y) Tj ET Q q 0 0 0 rg BT 422.86 358.45 Td (ear) Tj ET Q q 0 0 0 rg BT 434.77 358.45 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 481.11 358.45 Td (ch 31,) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 344.25 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 365.00 344.45 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 439.00 344.45 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 513.00 344.45 Td (2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 329.67 Td (Rent expense) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.00 329.67 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.15 329.67 Td (28.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.00 329.67 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.15 329.67 Td (29.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 329.67 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 329.67 Td (27.0) Tj ET Q BT /F1 10.00 Tf ET BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 304.50 Td (Other) Tj ET Q q 0 0 0 rg BT 97.37 304.50 Td ( Commitments) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 283.50 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 96.44 283.50 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 160.04 283.50 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 179.48 283.50 Td (2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 199.48 283.50 Td (, the Company had approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 337.78 283.50 Td ($70.4 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 391.67 283.50 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 411.11 283.50 Td ($65.7 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 465.00 283.50 Td (, respectively) Tj ET Q q 0 0 0 rg BT 517.66 283.50 Td (, of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 271.50 Td (outstanding purchase commitments that are not recorded in the consolidated financial statements. Such agreements entered ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 259.50 Td (into with third parties primarily consisted of outsourcing arrangements related to general accounting, fixed asset and accounts ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 247.50 Td (payable functions, as well as purchased or licensed content to be used in the Company) Tj ET Q q 0 0 0 rg BT 401.96 247.50 Td (s educational products and royalty ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 235.50 Td (guarantees derived from minimum usage requirements in agreements with content providers.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 217.50 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 96.44 217.50 Td (March31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 160.04 217.50 Td (, the committed purchase amounts by year were as follows:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 467.5 82 m 557.5 82 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 467.5 82 m 557.5 82 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 467.5 68 m 557.5 68 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 467.5 66 m 557.5 66 l s BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 190.25 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 56.00 176.45 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 80.41 176.45 Td (Y) Tj ET Q q 0 0 0 rg BT 85.91 176.45 Td (ears Ending Mar) Tj ET Q q 0 0 0 rg BT 151.25 176.45 Td (ch 31,) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 161.67 Td (2020) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 470.00 161.67 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 161.67 Td (33.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 146.67 Td (2021) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 146.67 Td (18.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 131.67 Td (2022) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 131.67 Td (10.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 116.67 Td (2023) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 116.67 Td (2.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 101.67 Td (2024) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 101.67 Td (2.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 86.67 Td (Thereafter) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 86.67 Td (2.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 470.00 71.67 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 71.67 Td (70.4) Tj ET Q BT /F1 10.00 Tf ET endstream endobj 195 0 obj <> endobj 196 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 213.20 760.75 Td (Notes to Consolidated Financial Statements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.15 30.60 Td (- 92 -) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 731.25 Td (W) Tj ET Q q 0 0 0 rg BT 81.45 731.25 Td (arranties) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 710.25 Td (The Company) Tj ET Q q 0 0 0 rg BT 131.71 710.25 Td (s standard terms and conditions of sale, warrants ownership of and/or licensing rights to the Company's ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 698.25 Td (products and provides certain warranties and indemnifications. ) Tj ET Q q 0 0 0 rg BT 307.63 698.25 Td (The Company is not aware of any instances that would result ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 686.25 Td (in any material payments being made as a result of these warranties and indemnifications, and therefore, no reserve has been ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 674.25 Td (recorded in the consolidated financial statements.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 653.25 Td (19) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 64.00 653.25 Td (. SEGMENT) Tj ET Q q 0 0 0 rg BT 118.83 653.25 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 169.47 653.25 Td (TION) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 635.25 Td (The Company is or) Tj ET Q q 0 0 0 rg BT 148.75 635.25 Td (ganized into three reportable segments on the basis of production process and products and services ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 623.25 Td (provided by each segment, identified as follows:) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 72.00 605.25 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 117.56 605.25 Td (in the United States, the Company produces a variety of digital and print educational solutions and associated ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 593.25 Td (services for the academic, skills and school industries. ) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 72.00 575.25 Td (Gale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 100.33 575.25 Td (the Company of) Tj ET Q q 0 0 0 rg BT 164.58 575.25 Td (fers research platforms around the world which provide access to its original content, collections ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 563.25 Td (of primary source materials and aggregated periodicals to learners at libraries, colleges, universities, schools and businesses.) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 72.00 542.25 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 133.67 542.25 Td (the Company distributes educational solutions across all major academic disciplines, provides English ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 530.25 Td (language teaching \(EL) Tj ET Q q 0 0 0 rg BT 148.03 530.25 Td (T\) products and adapts its Learning of) Tj ET Q q 0 0 0 rg BT 305.03 530.25 Td (ferings for use in multiple countries and territories around the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 518.25 Td (world.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 497.25 Td (When determining reportable segments, the Company aggregated operating segments based on their similar economic ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 485.25 Td (and operating characteristics.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 467.25 Td (The accounting policies applied by the segments are the same as those applied by the Company) Tj ET Q q 0 0 0 rg BT 453.19 467.25 Td (. ) Tj ET Q q 0 0 0 rg BT 457.63 467.25 Td (All transactions between ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 455.25 Td (reportable segments are eliminated upon consolidation. ) Tj ET Q q 0 0 0 rg BT 277.36 455.25 Td (The Company allocates its corporate and shared services costs to each ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 443.25 Td (of its segments using either number of employees, specific identification or activity) Tj ET Q q 0 0 0 rg BT 387.15 443.25 Td (, or revenue. ) Tj ET Q q 0 0 0 rg BT 439.44 443.25 Td (The Company discloses ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 431.25 Td (information about its reportable segments based on the measures used in assessing the performance of those reportable ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 419.25 Td (segments. ) Tj ET Q q 0 0 0 rg BT 96.04 419.25 Td (These measures are on a constant currency basis, which removes the impact of changes in foreign currency ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 407.25 Td (exchange rates. ) Tj ET Q q 0 0 0 rg BT 117.95 407.25 Td (T) Tj ET Q q 0 0 0 rg BT 123.36 407.25 Td (o calculate constant currency basis, the Company converts current period and prior period results from local ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 395.25 Td (currency to U.S. dollars using standard internal currency exchange rates held constant for each year) Tj ET Q q 0 0 0 rg BT 451.62 395.25 Td (. ) Tj ET Q q 0 0 0 rg BT 456.07 395.25 Td (As needed, the Company ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 383.25 Td (recasts segment information for the prior period based on its internally-derived standard currency exchange rates used for the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 371.25 Td (current period in order to remove the impact of foreign currency exchange fluctuation.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 353.25 Td (The Company uses ) Tj ET Q q 0 0 0 rg BT 150.60 353.25 Td (Adjusted Revenues and ) Tj ET Q q 0 0 0 rg BT 246.98 353.25 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 321.69 353.25 Td ( less Pre-Publication Costs to measure the operating ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 341.25 Td (performance of its segments because it believes that these measures provide a meaningful basis for reviewing the results of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 329.25 Td (operations by eliminating the ef) Tj ET Q q 0 0 0 rg BT 181.01 329.25 Td (fects of financing decisions, as well as excluding the impact of activities not related to its ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 317.25 Td (ongoing operating business. ) Tj ET Q q 0 0 0 rg BT 167.88 317.25 Td (Adjusted Revenues is defined as revenues before the impact of changes in foreign currency ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 305.25 Td (exchange rates. ) Tj ET Q q 0 0 0 rg BT 117.58 305.25 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 192.30 305.25 Td ( less Pre-Publication Costs is defined as net income \(loss\) before: benefit from \(provision ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 293.25 Td (for\) income taxes; reor) Tj ET Q q 0 0 0 rg BT 145.17 293.25 Td (ganization items, net; interest expense, net; loss on early extinguishment of debt, net; other \(income\) ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 281.25 Td (expense, net in operating income \(loss\); amortization of identifiable intangible assets; depreciation; operational restructuring ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 269.25 Td (and other char) Tj ET Q q 0 0 0 rg BT 111.01 269.25 Td (ges; amortization of pre-publication costs; other income \(expense\), net, below operating income \(loss\); equity-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 257.25 Td (based compensation expense and non-core other operating expenses in the accompanying consolidated statements of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 245.25 Td (operations, less additions to pre-publication costs on an accrual basis. ) Tj ET Q q 0 0 0 rg BT 334.31 245.25 Td (This measure also removes the impact of changes in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 233.25 Td (foreign currency exchange rates on the items noted above. By reducing ) Tj ET Q q 0 0 0 rg BT 340.56 233.25 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 415.28 233.25 Td ( by pre-publication costs, the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 221.25 Td (Company includes the impact of re-investment within the segments, primarily for content and digital platform technology) Tj ET Q q 0 0 0 rg BT 540.46 221.25 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 209.25 Td (The prior periods have been revised to conform to current period presentation.) Tj ET Q endstream endobj 197 0 obj <> endobj 198 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 213.20 760.75 Td (Notes to Consolidated Financial Statements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.15 30.60 Td (- 93 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 731.10 Td (Selected financial information for the Company) Tj ET Q q 0 0 0 rg BT 266.11 731.10 Td (s segments is as follows:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 694.6 m 389.5 694.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389.5 694.6 m 393.5 694.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 694.6 m 473.5 694.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473.5 694.6 m 477.5 694.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 694.6 m 557.5 694.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 680.6 m 389.5 680.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389.5 680.6 m 393.5 680.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 680.6 m 473.5 680.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473.5 680.6 m 477.5 680.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 680.6 m 557.5 680.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 680.6 m 389.5 680.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 666.6 m 389.5 666.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 680.6 m 473.5 680.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 666.6 m 473.5 666.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 680.6 m 557.5 680.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 666.6 m 557.5 666.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 666.6 m 389.5 666.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 666.6 m 473.5 666.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 666.6 m 557.5 666.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 621.6 m 389.5 621.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 621.6 m 473.5 621.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 621.6 m 557.5 621.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 621.6 m 389.5 621.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 621.6 m 473.5 621.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 621.6 m 557.5 621.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 591.6 m 389.5 591.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 577.6 m 389.5 577.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 575.6 m 389.5 575.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 591.6 m 473.5 591.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 577.6 m 473.5 577.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 575.6 m 473.5 575.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 591.6 m 557.5 591.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 577.6 m 557.5 577.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 575.6 m 557.5 575.6 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 396.10 699.05 Td (Adjusted Revenues) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 377.45 685.05 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 402.03 685.05 Td (Y) Tj ET Q q 0 0 0 rg BT 407.86 685.05 Td (ear) Tj ET Q q 0 0 0 rg BT 419.77 685.05 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 466.11 685.05 Td (ch 31,) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 670.85 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 340.00 671.05 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 420.55 671.05 Td (2018) Tj ET Q BT /F2 9.00 Tf ET BT /F2 5.85 Tf ET q 0 0 0 rg BT 438.55 675.13 Td (\(1\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 504.55 671.05 Td (2017) Tj ET Q BT /F2 9.00 Tf ET BT /F2 5.85 Tf ET q 0 0 0 rg BT 522.55 675.13 Td (\(1\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 656.27 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.00 656.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 363.15 656.27 Td (934.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 396.00 656.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.15 656.27 Td (944.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.00 656.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 656.27 Td (978.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 641.27 Td (Gale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 363.15 641.27 Td (227.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.15 641.27 Td (234.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 641.27 Td (230.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 626.27 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 363.15 626.27 Td (297.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.15 626.27 Td (292.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 626.27 Td (260.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 611.27 Td (Segment ) Tj ET Q q 0 0 0 rg BT 99.22 611.27 Td (Adjusted Revenues) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 355.65 611.27 Td (1,460.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 439.65 611.27 Td (1,470.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 611.27 Td (1,469.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 596.27 Td (Impact of foreign currency) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 364.80 596.32 Td (\(14.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 385.65 596.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 453.80 596.32 Td (\(4.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 596.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 596.32 Td (\(9.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 596.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 581.27 Td (T) Tj ET Q q 0 0 0 rg BT 67.41 581.27 Td (otal revenues) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.00 581.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 355.65 581.27 Td (1,445.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 396.00 581.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 439.65 581.27 Td (1,466.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.00 581.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 581.27 Td (1,460.0) Tj ET Q BT /F1 10.00 Tf ET 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 535.8 m 389.5 535.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389.5 535.8 m 393.5 535.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 535.8 m 473.5 535.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473.5 535.8 m 477.5 535.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 535.8 m 557.5 535.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 535.8 m 389.5 535.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 521.8 m 389.5 521.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389.5 535.8 m 393.5 535.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389.5 521.8 m 393.5 521.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 535.8 m 473.5 535.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 521.8 m 473.5 521.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473.5 535.8 m 477.5 535.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473.5 521.8 m 477.5 521.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 535.8 m 557.5 535.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 521.8 m 557.5 521.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 521.8 m 389.5 521.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 507.8 m 389.5 507.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389.5 521.8 m 393.5 521.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 521.8 m 473.5 521.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 507.8 m 473.5 507.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473.5 521.8 m 477.5 521.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 521.8 m 557.5 521.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 507.8 m 557.5 507.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 507.8 m 389.5 507.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 507.8 m 473.5 507.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 507.8 m 557.5 507.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 462.8 m 389.5 462.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 462.8 m 473.5 462.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 462.8 m 557.5 462.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 462.8 m 389.5 462.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 462.8 m 473.5 462.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 462.8 m 557.5 462.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 417.8 m 389.5 417.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 403.8 m 389.5 403.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 401.8 m 389.5 401.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 417.8 m 473.5 417.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 403.8 m 473.5 403.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 401.8 m 473.5 401.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 417.8 m 557.5 417.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 403.8 m 557.5 403.8 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 401.8 m 557.5 401.8 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 366.45 540.25 Td (Additions to Pr) Tj ET Q q 0 0 0 rg BT 425.37 540.25 Td (e-Publication Costs) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 377.45 526.25 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 402.03 526.25 Td (Y) Tj ET Q q 0 0 0 rg BT 407.86 526.25 Td (ear) Tj ET Q q 0 0 0 rg BT 419.77 526.25 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 466.11 526.25 Td (ch 31,) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 512.05 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 340.00 512.25 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 420.55 512.25 Td (2018) Tj ET Q BT /F2 9.00 Tf ET BT /F2 5.85 Tf ET q 0 0 0 rg BT 438.55 516.33 Td (\(1\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 504.55 512.25 Td (2017) Tj ET Q BT /F2 9.00 Tf ET BT /F2 5.85 Tf ET q 0 0 0 rg BT 522.55 516.33 Td (\(1\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 497.47 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.00 497.47 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.15 497.47 Td (52.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 396.00 497.47 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 452.15 497.47 Td (54.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.00 497.47 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 497.47 Td (69.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 482.47 Td (Gale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.15 482.47 Td (21.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 452.15 482.47 Td (26.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 482.47 Td (30.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 467.47 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.15 467.47 Td (21.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 452.15 467.47 Td (23.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 467.47 Td (19.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 452.47 Td (Segment additions to pre-publication costs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.15 452.47 Td (95.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.15 452.47 Td (104.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 452.47 Td (120.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 437.47 Td (Impact of foreign currency) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 369.80 437.52 Td (\(0.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 385.65 437.47 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 453.80 437.52 Td (\(0.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 437.47 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 437.52 Td (\(0.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 437.47 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 422.47 Td (Impact of cash investing activities) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 192.63 427.00 Td (\(2\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 373.15 422.47 Td (0.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 453.80 422.52 Td (\(0.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 422.47 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 422.47 Td (2.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 407.47 Td (T) Tj ET Q q 0 0 0 rg BT 67.41 407.47 Td (otal additions to pre-publication costs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.00 407.47 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.15 407.47 Td (95.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 396.00 407.47 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.15 407.47 Td (103.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.00 407.47 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 407.47 Td (122.8) Tj ET Q BT /F1 10.00 Tf ET BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 390.58 Td (\(1\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 386.50 Td (Prior year amounts have been recast to current year standard internal currency exchange rates.) Tj ET Q BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 373.78 Td (\(2\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 369.70 Td (Net impact of prior period accrued pre-publication costs paid in current period and current period accrued pre-publication ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 358.90 Td (additions.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 340.90 Td (Segment ) Tj ET Q q 0 0 0 rg BT 108.94 340.90 Td (Adjusted Revenues only includes revenues from external customers and is presented by country of origin. ) Tj ET Q q 0 0 0 rg BT 534.76 340.90 Td (T) Tj ET Q q 0 0 0 rg BT 540.17 340.90 Td (otal ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 328.90 Td (asset information by segment is not shown because it is not provided to or reviewed by the chief operating decision maker) Tj ET Q q 0 0 0 rg BT 542.21 328.90 Td (.) Tj ET Q endstream endobj 199 0 obj <> endobj 200 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 213.20 760.75 Td (Notes to Consolidated Financial Statements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 295.15 30.60 Td (- 94 -) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 731.10 Td (The following table reconciles ) Tj ET Q q 0 0 0 rg BT 195.85 731.10 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 270.56 731.10 Td ( less Pre-Publication Costs to net loss per the consolidated statements ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 719.10 Td (of operations:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 688.6 m 389.5 688.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389.5 688.6 m 393.5 688.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 688.6 m 473.5 688.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473.5 688.6 m 477.5 688.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 688.6 m 557.5 688.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 688.6 m 389.5 688.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 674.6 m 389.5 674.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 688.6 m 473.5 688.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 674.6 m 473.5 674.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 688.6 m 557.5 688.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 674.6 m 557.5 674.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 674.6 m 389.5 674.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 674.6 m 473.5 674.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 674.6 m 557.5 674.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 629.6 m 389.5 629.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 629.6 m 473.5 629.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 629.6 m 557.5 629.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 404.6 m 389.5 404.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 390.6 m 389.5 390.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 388.6 m 389.5 388.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 404.6 m 473.5 404.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 390.6 m 473.5 390.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 388.6 m 473.5 388.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 404.6 m 557.5 404.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 390.6 m 557.5 390.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 388.6 m 557.5 388.6 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 377.45 693.05 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 402.03 693.05 Td (Y) Tj ET Q q 0 0 0 rg BT 407.86 693.05 Td (ear) Tj ET Q q 0 0 0 rg BT 419.77 693.05 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 466.11 693.05 Td (ch 31,) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 678.85 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 340.00 679.05 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 420.55 679.05 Td (2018) Tj ET Q BT /F2 9.00 Tf ET BT /F2 5.85 Tf ET q 0 0 0 rg BT 438.55 683.13 Td (\(1\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 504.55 679.05 Td (2017) Tj ET Q BT /F2 9.00 Tf ET BT /F2 5.85 Tf ET q 0 0 0 rg BT 522.55 683.13 Td (\(1\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 664.27 Td (Learning) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.00 664.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 363.15 664.27 Td (165.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 396.00 664.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.15 664.27 Td (183.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.00 664.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 664.27 Td (250.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 649.27 Td (Gale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.15 649.27 Td (61.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 452.15 649.27 Td (66.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 649.27 Td (63.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 634.27 Td (International) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.15 634.27 Td (50.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 452.15 634.27 Td (51.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 634.27 Td (39.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 619.27 Td (T) Tj ET Q q 0 0 0 rg BT 61.76 619.27 Td (otal Segment ) Tj ET Q q 0 0 0 rg BT 116.12 619.27 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 190.84 619.27 Td ( less Pre-Publication Costs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 363.15 619.27 Td (277.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.15 619.27 Td (301.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 619.27 Td (353.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 604.27 Td (Additions to pre-publication costs) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 203.82 608.80 Td (\(2\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.15 604.27 Td (95.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.15 604.27 Td (104.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 604.27 Td (120.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 589.27 Td (Impact of foreign currency) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 369.80 589.32 Td (\(4.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 385.65 589.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 453.80 589.32 Td (\(1.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 589.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 589.32 Td (\(3.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 589.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 574.27 Td (Equity-based compensation expense) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 369.80 574.32 Td (\(8.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 385.65 574.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 448.80 574.32 Td (\(17.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 574.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 574.32 Td (\(13.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 574.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 559.27 Td (Non-core other operating expenses) Tj ET Q BT /F1 10.00 Tf ET BT /F1 6.50 Tf ET q 0 0 0 rg BT 207.67 563.80 Td (\(3\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 369.80 559.32 Td (\(9.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 385.65 559.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 453.80 559.32 Td (\(7.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 559.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 559.32 Td (\(13.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 559.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 544.27 Td (Acquisition and mer) Tj ET Q q 0 0 0 rg BT 149.56 544.27 Td (ger) Tj ET Q q 0 0 0 rg BT 162.14 544.27 Td (-related costs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 369.80 544.32 Td (\(6.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 385.65 544.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 453.80 544.32 Td (\(0.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 544.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.65 544.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 529.27 Td (Loss on early extinguishment of debt, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 375.65 529.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 459.65 529.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 529.32 Td (\(10.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 529.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 514.27 Td (Amortization of pre-publication costs) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 359.80 514.32 Td (\(109.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 385.65 514.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 443.80 514.32 Td (\(127.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 514.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.80 514.32 Td (\(150.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 514.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 499.27 Td (Operational restructuring and other char) Tj ET Q q 0 0 0 rg BT 228.40 499.27 Td (ges) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 364.80 499.32 Td (\(17.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 385.65 499.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 448.80 499.32 Td (\(10.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 499.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 499.32 Td (\(26.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 499.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 484.27 Td (Depreciation) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 364.80 484.32 Td (\(76.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 385.65 484.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 448.80 484.32 Td (\(72.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 484.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 484.32 Td (\(83.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 484.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 469.27 Td (Amortization of identifiable intangible assets) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 364.80 469.32 Td (\(94.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 385.65 469.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 448.80 469.32 Td (\(94.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 469.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 469.32 Td (\(92.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 469.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 454.27 Td (Other income \(expense\), net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 373.15 454.27 Td (2.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 452.15 454.27 Td (10.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 454.32 Td (\(1.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 454.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 439.27 Td (Interest expense, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 359.80 439.32 Td (\(171.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 385.65 439.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 443.80 439.32 Td (\(159.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 439.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.80 439.32 Td (\(156.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 439.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 424.27 Td (Reor) Tj ET Q q 0 0 0 rg BT 87.35 424.27 Td (ganization items, net) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 375.65 424.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 459.65 424.27 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 424.32 Td (\(0.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 424.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 409.27 Td (Benefit from income taxes) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.15 409.27 Td (27.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 452.15 409.27 Td (73.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 409.27 Td (36.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.00 394.27 Td (Net loss) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.00 394.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 364.80 394.32 Td (\(97.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 385.65 394.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 396.00 394.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 453.80 394.32 Td (\(1.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.65 394.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.00 394.27 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.80 394.32 Td (\(43.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.65 394.27 Td (\)) Tj ET Q BT /F1 10.00 Tf ET BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 377.38 Td (\(1\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 373.30 Td (Prior year amounts have been recast to current year standard internal currency exchange rates.) Tj ET Q BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 363.58 Td (\(2\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 359.50 Td (Additions to pre-publication costs are excluded from segment ) Tj ET Q q 0 0 0 rg BT 313.95 359.50 Td (Adjusted EBITDA) Tj ET Q q 0 0 0 rg BT 381.19 359.50 Td ( less Pre-Publication Costs on a constant ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 348.70 Td (currency and accrual basis. ) Tj ET Q q 0 0 0 rg BT 189.54 348.70 Td (The impact of foreign currency exchange related to additions to pre-publication costs was ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 514.67 348.70 Td ($0.6 ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 337.90 Td (million) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 116.00 337.90 Td (, ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 120.50 337.90 Td ($0.3 million) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 164.50 337.90 Td (, and ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 184.25 337.90 Td ($0.4 million) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 228.25 337.90 Td ( for the fiscal years ended March 31, 2019, 2018 and 2017, respectively) Tj ET Q q 0 0 0 rg BT 485.84 337.90 Td (.) Tj ET Q BT /F1 9.00 Tf ET BT /F1 5.85 Tf ET q 0 0 0 rg BT 72.00 328.18 Td (\(3\) ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 324.10 Td (Non-core other operating expenses includes primarily bank fees, severance costs, duplicate rent expense, net, incurred during the ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 90.00 313.30 Td (build-out phase of the Company's new headquarters in Boston, contract termination costs, consulting costs and management fees.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 292.30 Td (Geographic Information) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 271.30 Td (Revenues and long-lived assets, consisting of property) Tj ET Q q 0 0 0 rg BT 289.36 271.30 Td (, equipment and capitalized internal-use software and pre-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 259.30 Td (publication costs, were as follows:) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 228.79999999999995 m 389.5 228.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389.5 228.79999999999995 m 393.5 228.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 228.79999999999995 m 473.5 228.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473.5 228.79999999999995 m 477.5 228.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 228.79999999999995 m 557.5 228.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 228.79999999999995 m 389.5 228.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 214.79999999999995 m 389.5 214.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389.5 228.79999999999995 m 393.5 228.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 228.79999999999995 m 473.5 228.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 214.79999999999995 m 473.5 214.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473.5 228.79999999999995 m 477.5 228.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 228.79999999999995 m 557.5 228.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 214.79999999999995 m 557.5 214.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 214.79999999999995 m 389.5 214.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 214.79999999999995 m 473.5 214.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 214.79999999999995 m 557.5 214.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 169.79999999999995 m 389.5 169.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 155.79999999999995 m 389.5 155.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 153.79999999999995 m 389.5 153.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 169.79999999999995 m 473.5 169.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 155.79999999999995 m 473.5 155.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 153.79999999999995 m 473.5 153.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 169.79999999999995 m 557.5 169.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 155.79999999999995 m 557.5 155.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 153.79999999999995 m 557.5 153.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 105.79999999999995 m 389.5 105.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 91.79999999999995 m 389.5 91.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 309.5 89.79999999999995 m 389.5 89.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 105.79999999999995 m 473.5 105.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 91.79999999999995 m 473.5 91.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393.5 89.79999999999995 m 473.5 89.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 105.79999999999995 m 557.5 105.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 91.79999999999995 m 557.5 91.79999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 89.79999999999995 m 557.5 89.79999999999995 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 377.45 233.25 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 402.03 233.25 Td (Y) Tj ET Q q 0 0 0 rg BT 407.86 233.25 Td (ear) Tj ET Q q 0 0 0 rg BT 419.77 233.25 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 466.11 233.25 Td (ch 31,) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 219.05 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 340.00 219.25 Td (2019) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 424.00 219.25 Td (2018) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 508.00 219.25 Td (2017) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 204.48 Td (Revenues:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 189.47 Td (United States) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.00 189.47 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 355.65 189.47 Td (1,133.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 396.00 189.47 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 439.65 189.47 Td (1,147.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.00 189.47 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.65 189.47 Td (1,182.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 174.47 Td 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q 0 0 0 rg BT 363.15 125.47 Td (336.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 396.00 125.47 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.15 125.47 Td (366.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.00 125.47 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 125.47 Td (405.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 110.47 Td (Rest of world) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.15 110.47 Td (25.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 452.15 110.47 Td (29.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 110.47 Td (31.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.00 95.47 Td (T) Tj ET Q q 0 0 0 rg BT 73.41 95.47 Td (otal long-lived assets) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.00 95.47 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 363.15 95.47 Td (362.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 396.00 95.47 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.15 95.47 Td (396.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.00 95.47 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.15 95.47 Td (437.3) Tj ET Q BT /F1 10.00 Tf ET endstream endobj 201 0 obj <> endobj 202 0 obj <> stream BT /F2 10.00 Tf ET q 0 0 0 rg BT 206.25 772.75 Td (CENGAGE LEARNING HOLDINGS II, INC.) 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338.5 665.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 342.5 665.75 m 392.5 665.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 396.5 665.75 m 447.5 665.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 451.5 665.75 m 502.5 665.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 506.5 665.75 m 557.5 665.75 l s BT /F4 8.00 Tf ET q 0 0 0 rg BT 56.00 702.00 Td (\(in millions\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 320.70 702.20 Td (Additions) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 56.00 670.20 Td (Description) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 237.35 688.20 Td (Balance at) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 237.95 679.20 Td (Beginning) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 239.85 670.20 Td (of Period) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 293.35 688.20 Td (Charge to) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 293.60 679.20 Td (Costs and) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 294.70 670.20 Td (Expenses) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 347.85 688.20 Td (Charge to) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 355.55 679.20 Td (Other) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 349.25 670.20 Td (Accounts) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 400.95 670.20 Td (W) Tj ET Q q 0 0 0 rg BT 409.87 670.20 Td (rite Offs) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 454.30 670.20 Td (T) Tj ET Q q 0 0 0 rg BT 459.97 670.20 Td (ranslation) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 511.35 688.20 Td (Balance at) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 518.60 679.20 Td (End of) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 518.75 670.20 Td (Period) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 56.00 656.20 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 80.58 656.20 Td (Y) Tj ET Q q 0 0 0 rg BT 86.41 656.20 Td (ear) Tj ET Q q 0 0 0 rg BT 98.32 656.20 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 144.66 656.20 Td (ch 31, 2019) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 641.42 Td (Allowance for doubtful accounts) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 235.00 641.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 262.15 641.42 Td (12.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 290.00 641.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.15 641.42 Td (5.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 345.00 641.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 378.65 641.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 399.00 641.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 427.80 641.47 Td (\(4.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 443.65 641.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 454.00 641.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 482.80 641.47 Td (\(0.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 498.65 641.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 509.00 641.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 641.42 Td (12.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 626.42 Td (Sales return reserves) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 262.15 626.42 Td (70.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.15 626.42 Td (173.4) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 372.80 626.47 Td (\(1.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.65 626.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 417.80 626.47 Td (\(198.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 443.65 626.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 482.80 626.47 Td (\(1.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 498.65 626.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 626.42 Td (42.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 611.42 Td (Deferred tax valuation allowance) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 267.15 611.42 Td (7.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.80 611.47 Td (\(1.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 334.65 611.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 378.65 611.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 433.65 611.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 482.80 611.47 Td (\(0.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 498.65 611.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 611.42 Td (4.9) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 56.00 593.20 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 80.58 593.20 Td (Y) Tj ET Q q 0 0 0 rg BT 86.41 593.20 Td (ear) Tj ET Q q 0 0 0 rg BT 98.32 593.20 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 144.66 593.20 Td (ch 31, 2018) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 578.42 Td (Allowance for doubtful accounts) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 235.00 578.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 267.15 578.42 Td (9.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 290.00 578.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.15 578.42 Td (5.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 345.00 578.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 378.65 578.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 399.00 578.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 427.80 578.47 Td (\(2.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 443.65 578.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 454.00 578.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 486.15 578.42 Td (0.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 509.00 578.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 578.42 Td (12.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 563.42 Td (Sales return reserves) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 262.15 563.42 Td (75.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.15 563.42 Td (232.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 372.80 563.47 Td (\(0.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.65 563.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 417.80 563.47 Td (\(237.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 443.65 563.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 486.15 563.42 Td (0.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 563.42 Td (70.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 548.42 Td (Deferred tax valuation allowance) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 262.15 548.42 Td (1) Tj ET Q q 0 0 0 rg BT 267.15 548.42 Td (1.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.80 548.47 Td (\(3.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 334.65 548.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 372.80 548.47 Td (\(0.9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.65 548.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 433.65 548.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 486.15 548.42 Td (0.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 548.42 Td (7.0) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 56.00 530.20 Td (Fiscal ) Tj ET Q q 0 0 0 rg BT 80.41 530.20 Td (Y) Tj ET Q q 0 0 0 rg BT 85.91 530.20 Td (ear) Tj ET Q q 0 0 0 rg BT 98.24 530.20 Td ( Ended Mar) Tj ET Q q 0 0 0 rg BT 144.58 530.20 Td (ch 31, 2017) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 515.42 Td (Allowance for doubtful accounts) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 235.00 515.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 262.15 515.42 Td (10.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 290.00 515.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 322.15 515.42 Td (5.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 345.00 515.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 378.65 515.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 399.00 515.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 427.80 515.47 Td (\(5.6) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 443.65 515.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 454.00 515.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 482.80 515.47 Td (\(0.2) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 498.65 515.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 509.00 515.42 Td ($) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.15 515.42 Td (9.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 500.42 Td (Sales return reserves) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 262.15 500.42 Td (92.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.15 500.42 Td (31) Tj ET Q q 0 0 0 rg BT 322.15 500.42 Td (1.5) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 372.80 500.47 Td (\(2.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.65 500.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 417.80 500.47 Td (\(324.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 443.65 500.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 482.80 500.47 Td (\(0.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 498.65 500.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 500.42 Td (75.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 62.00 485.42 Td (Deferred tax valuation allowance) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 262.15 485.42 Td (15.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.80 485.47 Td (\(4.7) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 334.65 485.42 Td (\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 378.65 485.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 433.65 485.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 488.65 485.42 Td () Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 536.15 485.42 Td (1) Tj ET Q q 0 0 0 rg BT 541.15 485.42 Td (1.0) Tj ET Q BT /F1 10.00 Tf ET BT /F2 10.00 Tf ET q 0 0 0 rg BT 54.00 443.45 Td (21) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 64.00 443.45 Td (. SUBSEQUENT) Tj ET Q q 0 0 0 rg BT 136.07 443.45 Td ( EVENTS ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 76.00 425.45 Td (On May 1, 2019, Cengage entered into a definitive agreement \(the Mer) Tj ET Q q 0 0 0 rg BT 364.88 425.45 Td (ger ) Tj ET Q q 0 0 0 rg BT 379.60 425.45 Td (Agreement\) with McGraw-Hill Education, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 413.45 Td (Inc. \(McGraw-Hill\), pursuant to which, at the Ef) Tj ET Q q 0 0 0 rg BT 257.08 413.45 Td (fective ) Tj ET Q q 0 0 0 rg BT 286.60 413.45 Td (T) Tj ET Q q 0 0 0 rg BT 292.36 413.45 Td (ime and subject to the terms and conditions of the Mer) Tj ET Q q 0 0 0 rg BT 510.46 413.45 Td (ger ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 401.45 Td (Agreement, Cengage and McGraw-Hill will combine in a mer) Tj ET Q q 0 0 0 rg BT 306.79 401.45 Td (ger of equals transaction and Cengage's stockholders will ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 389.45 Td (receive shares of capital stock representing exactly 50% of the issued and outstanding shares of voting common stock of the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 377.45 Td (combined company) Tj ET Q q 0 0 0 rg BT 131.94 377.45 Td (. Cengage has agreed to operate its business in the ordinary course during the period between the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 365.45 Td (execution of the Mer) Tj ET Q q 0 0 0 rg BT 137.40 365.45 Td (ger ) Tj ET Q q 0 0 0 rg BT 152.12 365.45 Td (Agreement and the Ef) Tj ET Q q 0 0 0 rg BT 239.95 365.45 Td (fective ) Tj ET Q q 0 0 0 rg BT 269.47 365.45 Td (T) Tj ET Q q 0 0 0 rg BT 275.23 365.45 Td (ime, subject to certain agreed exceptions. Completion of the Mer) Tj ET Q q 0 0 0 rg BT 534.69 365.45 Td (ger is ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 353.45 Td (subject to certain conditions, including receipt of regulatory approvals. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 76.00 335.45 Td (There were no other material subsequent events identified through May 30, 2019, the date these financial statements ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.00 323.45 Td (were issued. ) Tj ET Q endstream endobj 203 0 obj <> /View <>>>>> endobj 204 0 obj <> /View <>>>>> endobj 205 0 obj <> endobj 206 0 obj <> stream xy\E7~n{{w'd'52 HaGPPA!"" b-&h,+TLy?:uk?uΩoH""?W~.Xv3&rm 2\jMgwm'CڴzlycǏ\ rBjx\DsV@{twocmC{Iwl11z:1m!t-\q3D.:yz'Wɨp[_F=>E"ǢӦ/|K&_~=!wn-az3¦h$7,ؑ2Oo_eSFLlk}Fg[F>|;